States Target Research, Commercialization for Economic Growth

A continued trend toward improved fiscal conditions gave rise to targeted and riskier investments in research for several states this legislative session. In particular, lawmakers dedicated funds for life sciences research and for initiatives aimed at commercialization through partnerships with higher education and the private sector. Other states dedicated additional funds to expand promising research and technology-focused initiatives already underway.

Lawmakers Support Efforts to Promote Research Commercialization
New funding commitments in life sciences occurred in Connecticut and Indiana. Connecticut lawmakers approved Gov. Dan Malloy’s proposal to create a $200 million fund to spur bioscience R&D as part of a broader economic development agenda announced in his State of the State address. With the passage of SB 842, Connecticut Innovations (CI), a quasi-public venture development organization, over 10 years will provide capital to early stage companies with the goal of driving efforts toward commercialization of new businesses and products. CI also plans to focus funds toward translational research and riskier investments for helping university faculty and students to commercialize bioscience research and ideas, reports the Hartford Business Journal.

Indiana lawmakers gave their stamp of approval to a major policy goal touted by Gov. Mike Pence during the campaign with a commitment of $25 million over the next two years to establish a biosciences institute. The governor and lawmakers hope to build an endowment of $300 million to $400 million over the next five to seven years drawn from corporate and philanthropic sources (see the May 29, 2013 issue of the Digest).

Investing in Knowledge-based Industries
Efforts to better nurture and grow startups recently have gained momentum in state legislatures, often times spearheaded by tech-based economic development groups. 

To help foster technology-based companies in Oregon, lawmakers want to capitalize on the emerging research and community connections of the state’s universities. SB 241 creates the Regional Accelerator and Innovation Network (RAIN) with the goal of accelerating regional business formation by linking and expanding programs and facilities anchored in “RAIN Centers” around Oregon State University and the University of Oregon. The two centers will combine incubator-type housing, university-community designed accelerator programs, and one-stop shops to access regional assets. As companies grow, the external linkages provided by the program are designed to help supply additional talent management and investment capital beyond the region. The state is providing $3.75 million to jump-start the initiative.

With an additional $12 million in FY14 funding, the Iowa State University Research Park will build a new facility to house services and agencies that assist Iowa businesses, which currently are “scattered” around the campus, according to a press release. The planned expansion will bring together the Small Business Development Center, the Pappajohn Center for Entrepreneurship, the Office of Intellectual Property and Technology Transfer, and the Iowa State University Research Foundation, among others. Funding was appropriated in HF 648, signed by Gov. Terry Branstad in June.

Earlier this year, Florida Gov. Rick Scott signed into law a measure to help attract more seed funding for startups. HB 705 expands the state's reach in working with innovative businesses by allowing Florida’s Institute for the Commercialization of Public Research to create corporate subsidies and develop or accrue ownership, royalty, patent or other rights in the companies it helps develop. The measure also creates a seed fund to encourage private-sector investment in startup companies. The enacted budget included $5.5 million for the effort (see the May 8, 2013 issue of the Digest).

Expanding Promising Research Initiatives
While many states continued to exercise austerity for established TBED initiatives, lawmakers in some states, including in Massachusetts and New Jersey, dedicated additional funding to expand the reach of promising research initiatives.

The Massachusetts Life Sciences Center, a quasi-public agency charged with implementing the state's 10-year, $1 billion Life Sciences Initiative, will receive $19.5 million in FY14 for the agency’s investment fund, a $4.5 million increase over last year. The appropriation, which is contingent upon a consolidated net surplus for FY13, represents the highest level of funding the center has received from the state legislature to date. The original commitment was $25 million a year when the legislation was passed in 2008. Through the investment fund the center provides research grants and accelerator loans to researchers and early stage companies and supports workforce development efforts in the life sciences sectors. The center also is authorized to award up to $25 million per year in tax incentives to life Massachusetts-based life sciences companies.

New Jersey’s FY14 budget includes $20 million in new funding for cancer research and support for two cancer facilities – the Cancer Institute of New Jersey and the South Jersey Cancer program.