SSTI Digest

UK Moves to Support Growing Social Innovation SectorThe United Kingdom (UK) recently announced that it will petition the European Commission, the European Union’s executive body, for permission to increase the size of tax relief for social investments that address significant social issues. The proposed plan would:

Expand the options for indirect investment in social enterprises; Establish a government-run accreditation scheme for Social Impact Bonds eligible for social investment tax relief; and,  Make changes to community interest companies’ regulations to promote the strategy to investors and social enterprises.

The proposed changes could spur up to £500 million (approximately $829.8 million USD) in social impact investments over the next five years. Read the announcement…

In response to public comments on SBIR/STTR rule changes resulting from the National Defense Authorization Act for FY12, the Small Business Administration (SBA) amended its policy directives for the programs, including changes to eligibility and the award process. The amendments also involve minor clarifying changes to ensure participants better understand certain program requirements.

SBA published a final SBIR policy directive on Aug. 6, 2012, implementing provisions of the Defense Reauthorization Act, which was signed into law by President Obama in December 2011. At that time, SBA asked for public input on the final directives, which made several key changes to eligibility, the award process, program administration, and fraud, waste and abuse. Outlined below are some of the resulting amendments for the SBIR program, which became effective Jan. 8, 2014.

Having world-class facilities to train workers or support research in fields most likely to benefit the state is a draw for many reasons. Attracting outside investment, retaining talent and generating buzz are just a few of the benefits. Last year, Connecticut lawmakers dedicated more than $2 billion to expand science and technology education on the campuses of the University of Connecticut, including construction of new STEM facilities and for build research and teaching labs. Michigan Gov. Rick Snyder is the latest state leader to announce funding proposals aimed at either building new facilities or making capital improvements for training students in high-wage, high-demand fields.

Rich Luank, President & CEO of Innovation Works, recently was elected to the State Science and Technology (SSTI) Board of Trustees. Lunak will assist in providing strategic guidance and oversight of SSTI’s operations as the group works to encourage economic growth through science, technology and innovation.

“Rich is an accomplished leader who brings policy experience and a technical background to the field,” said Dan Berglund, SSTI president and CEO. “We are honored to have him helping SSTI grow and further its mission.”

“I’m excited to join the SSTI Board of Trustees. As a leader of a venture development organization, I know first-hand the important role SSTI performs in identifying and setting best practices, connecting people, and advocating for innovative solutions to regional, statewide and national economic issues related to technology and science. I'm looking forward to helping SSTI and its members improve U.S. competitiveness and innovation,” Lunak said.

Robbie Melton has been named the executive director and CEO of the High Technology Development Corporation.

Gov. Bobby Jindal has appointed Louisiana Tech University president Les Guice to chair the Louisiana Innovation Council.

Brian Cummings, formerly Ohio State University’s vice president of technology commercialization, has joined Alta Ventures as the Midwest representative.

KP Reddy, community catalyst at ATDC, has been named interim general manager. Previously, Michael Hersh held the position of general manager.

The Michigan State University Foundation has named David Washburn, president and CEO of the University of Tennessee Research Foundation, as its executive director.

Companies that locate in the 42 communities known as historic manufacturing hubs would be given priority to receive funds for modernizing production, purchasing equipment, developing new technologies, and training workers under a proposal introduced by Connecticut Gov. Dan Malloy.

The Advanced Manufacturing Fund would be administered by the Department of Economic and Community Development with support from an advisory committee that includes industry experts. With an initial commitment of $25 million, expected to last two years, companies could apply for funds to grow and modernize operations and equipment. Funds also could be used to attract new companies to the state and support universities’ efforts to increase federally funded research activity, according to a press release. By giving priority to towns with a history rich in manufacturing, the governor hopes to help revive distressed communities and address high unemployment rates in those areas. Funding is included in the FY15 governor’s midterm capital budget adjustments.

Angel and venture capital firms invested more in seed and early stage companies last year than any time in the past decade (for details see the related Useful Stats article). Seed and early stage companies appear to be generating a great deal of attention from the venture capital industry, even as overall U.S. investment activity remains steady. Both seed and early stage investment continue to grow, a development that a recent CB Insights report attributes to the proliferation of new micro VC funds and multi-stage venture firms. Though year-end numbers are not yet available for angel investing, which represents a major source of financial support for seed and early stage companies, early reports indicate that activity levels continue their trend of steady growth.

Last year, U.S. venture capitalists invested about $10.7 billion in seed and early stage companies, 17.1 percent higher than 2012, according to data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PwC) Moneytree survey.  Though the overall venture capital (VC) market has returned to about the same level of activity as before the economic crisis, investment in seed and early stage companies has grown by more than a third. Most of this increase is attributable to growth in early stage investment, but seed activity has grown as well (as discussed in another article).

The fifth installment of SSTI’s Tech Talkin’ Govs series includes excerpts from speeches delivered in Connecticut, Maine, Oklahoma, and Tennessee. Read part I, part II, part III and part IV.  

Connecticut

Gov. Dan Malloy, State of the State Address, Feb. 6, 2014

“Here are three ways we can continue helping employers to grow jobs this session.

“First, we can continue to fund the Small Business Express program, which has a proven record of success.

Delaware Gov. Jack Markell outlined a FY15 budget proposal with further detail and funding levels for TBED priorities announced in his recent State of the State address. The budget would provide $1 million to create a faster path to degree or certificate completion in advanced manufacturing and establishes a $3 million cyber workforce initiative. Higher education institutions would be tapped as partners for the new initiatives, and also would receive an additional $2 million for federal R&D matching grants as part of the budget recommendations.

In his fifth State of the Union address, President Barack Obama touted the administration’s Institutes of Manufacturing Innovation program as central to its plan to reinvigorate the American economy. The president called on Congress to expand the manufacturing network beyond the two existing institutes in Ohio and North Carolina and the six additional institutes to be rolled out in 2014. He also requested legislative action to undo last year’s sequester-related cuts to basic research, to pass patent reform and to improve U.S. STEM education.

While much of the coverage following the address has focused on the president’s plan to make extensive use of executive orders to enact the administration’s agenda in the coming year, much of his plan to boost American innovation would require additional action from Congress.  Many of the policy options that the president linked to innovation and entrepreneurship in his address, including immigration reform, patent reform and boosting federal funding for research, would require legislative approval and have already met resistance in the House and/or Senate.

The fourth installment of SSTI’s Tech Talkin’ Govs series includes excerpts from speeches delivered in Illinois, Massachusetts and Utah. Read part I, part II and part III. 

Illinois

Gov. Pat Quinn, State of the State Address, Jan. 29, 2014

"Part of our jobs strategy is investing in industries that are the future of a 21st century economy. ...

"... And that's why now, we're going to invest in a new bio-hub for pharmaceutical, medical device, and health IT startups.”

Massachusetts

Gov. Deval Patrick, State of the Commonwealth Address, Jan. 28, 2014