SSTI Digest

SBA and the Department of Commerce launched Startup University in response to a series of roundtables with accelerators and universities that highlighted the need for a forum to share best practices and build connections between universities and startups. Users can post and comment on specific programs or general ideas that foster these positive relationships. Many programs listed in the forum will be presented at this week's NCET2 Conference. Explore the online forum here...

Rebecca Blank, the acting U.S. secretary of Commerce, is expected to be the next chancellor of the University of Wisconsin at Madison. The Board of Regents is scheduled to vote on the recommendation April 5. President Obama announced he has chosen Thomas Perez, the head of the U.S. Justice Department's Civil Rights Division, to be the next secretary of Labor. The nomination, announced Monday, will require Senate confirmation. Lars Hasselblad Torres has been named the director of the Vermont Department of Economic, Housing and Community Development's Office of the Creative Economy. David Goodman was appointed director of the Ohio Development Services Agency by Governor John R. Kasich. Previously, Chris Schmenk held the position. Vincent Mikolay has been hired as managing director of business outreach and international trade for the Utah Governor's Office of Economic Development. Tim Priest has been hired as Innovate Washington's chief marketing and development officer. Aram Nerpouni has been named president and chief executive officer of BioEnterprise. Last Sept., Nerpouni was named interim president of BioEnterprise in…

Measuring impact is critical to the success and sustainability of any economic development initiative, and as the national debate over fiscal austerity and taxpayer spending continues, TBED organizations can expect increased scrutiny and accountability for their investments. Amid growing skepticism from the public, lawmakers increasingly struggle with finding a balance for funding new efforts that may take awhile to pay off with more pressing state needs. This year, measures to encourage the creation or expansion of high-growth companies through the use of tax incentives have been unveiled in several states. At the same time, lawmakers in some states are pushing for greater disclosure requirements through transparency measures. SSTI has compiled pending and recently approved legislation below. Angel Tax CreditsTwo states, Kentucky and Missouri, will try again to pass angel investor tax credits that failed to garner enough support during last year's legislative sessions. Lawmakers in Kentucky want to extend an angel investor tax to individuals for investment in high-tech startups currently available only to companies (HB 280). The tax credit is capped at…

Over the past thirty years, state research and development (R&D) tax credits have become one of the most common state tools to boost their local technology economy. Few studies, however, have attempted to provide a comprehensive evaluation of their effectiveness. In this article, SSTI provides an overview of the literature on state R&D credits, examining why states introduce these incentives and whether or not tax credits are an effective policy tool to promote high-tech businesses and jobs. The first state R&D tax credits were introduced in the early 1980s. One year after the introduction of the federal Research and Experimentation Tax Credit in 1981, Minnesota passed its own credit, followed by six other states over the next five years. Earlier this year, a review by the Texas Legislative Budget Board reported that 43 states now offer R&D tax incentives. As the number of states offering R&D credits has increased, the generosity of the incentives has grown as well. A study by Dan Wilson of the Federal Reserve Bank of Boston found that between 1981 and 2005, the average effective credit rate in states offering R&D tax credits increased…

In his first speech as secretary of State, John Kerry declared that U.S. economic competitiveness should be the centerpiece of American foreign policy. In the weeks following his appointment, the U.S. government has signaled a push to work with international partners to enhance U.S. global competitiveness and protect tech innovation at home. Two key elements of this strategy include continued harmonization of global antitrust laws and new efforts to protect American intellectual property from theft. Recent developments in U.S. foreign relations have triggered federal action on antitrust policies and trade-theft protection: eminent U.S.-European Union (EU) free trade negotiations and the recent escalation of cyber crime against U.S. IP assets perpetrated by the governments of developing states like China and Iran. Current global antitrust laws are a patchwork of national laws that, despite decades of international cooperation to harmonize policies, still create substantial barriers to market entry and participation by foreign firms. The U.S. government, in an attempt to foster global trade and enhance U.S. competitiveness, has worked closely with many emerging…

A new strategy report from the Washington Economic Development Commission offers a roadmap for the state to differentiate itself and attract new investment by focusing on the long-term goal of becoming a world-class innovation system. The proposals, which are not dependent on new funding, call on state and local leaders to focus on five key drivers of competitiveness: talent, entrepreneurship, infrastructure, smart regulation and global exports. Download the report...

Invention is a driver of economic growth. That is the assertion of Brookings latest report on U.S. patenting and its effect on the country's economic prosperity entitled Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas. The U.S.'s innovative capacity and activity has increased steadily, but other nations are catching up and the U.S. must identify the implications of this fact to remain competitive. Authors Jonathan Rothwell, José Lobo, Deborah Strumsky, and Mark Muro compiled USPTO patent information from 1975 to 2012 detailing the quality of the patent, the metropolitan area of residence of the inventor, the industrial orientation of the patent and other relevant material. They found that high rates of patenting coincide with greater productivity, lower unemployment and the creation of publicly traded companies within U.S. Statistical Metropolitan Areas. The correlation is strong enough that the authors claim the effect of patents on growth is roughly equal to that of having a highly educated workforce. See the Brookings patenting data broken down by metropolitan area and by state. Unsurprisingly,…

A technically skilled workforce is one the key elements found in thriving, tech-based economies, and nurturing a pipeline of individuals that match employers' high-tech needs has become a priority for several states focused on competitiveness. Lawmakers in Utah recently threw their support behind an ambitious statewide educational attainment goal and dedicated new funds for targeted investments in science, technology, engineering and math (STEM). With the passage of the state budget last week came increased funding for public and higher education with an economic development focus. Lawmakers dedicated $8.5 million in one-time funds and $1.5 million in ongoing funds to establish a STEM Action Center within the Governor's Office of Economic Development. The STEM Center will promote best practices and become a repository of curriculum, programs and activities, according to the governor's office. This includes coordinating grant opportunities, providing resources to assist students and teachers, developing industry-government partnerships, and providing more pathways to STEM-related occupations. Ultimately, the goal is to ensure students are better prepared in…

Investing money from the state's pension fund, Colorado will partner with local CEOs and technology companies to create a $150 million VC fund to help get local tech startups off the ground, according to multiple news sources. The fund, expected to launch by summer, would be run by a consortium of business leaders who would contribute around $10 million each, while the state would be the largest LP, contributing money from pension funds, according to an article in TechCrunch. Colorado's fund would focus purely on tech and span all stages of funding, the article states. Read more...

In the January 2011 edition of the Harvard Business Review, Michael Porter and Mark Kramer called for a redesign of the existing business model and their role within society. Instead of simply embracing corporate responsibility and corporate giving, businesses should work to create shared value within their community by helping to support local clusters and institutions to address societal needs and issues. In the face of great uncertainty for the overall venture capital industry, it seems that some corporations might be heeding their advice. Over the last few years, there has been a rapid rise in the number of corporate-backed venture capital funds with long-term acquisition and absorption as the driving force. However, the lack of early stage capital in regions across the country also may be ushering in an era of public-private partnerships to create industry-led, locally focused venture capital funds. In the last three years almost 182 corporate venture funds (CVCs) have been launched and in 2012, 16 percent of all companies acquired had CVC backing, according to a recent article from Forbes magazine. Many multinationals headquartered in tech hubs (e.g., New York,…

Recent research on the evolving role of universities finds the emergence of an entrepreneurial society has contributed to a broader and more fundamental role for universities — that is to provide thinking, leadership and activity to enhance entrepreneurship capital. University-based entrepreneurship programs and initiatives seem to have gained steam following the recession with federal support for programs to enhance entrepreneurial efforts in states and regions and increased interest from students and out-of-work individuals. Freestanding entrepreneurship schools and creative programming to encourage risk taking are two recent examples of the evolving role of universities in the knowledge-driven economy. In From the Entrepreneurial University to the University for the Entrepreneurial Society, author David B. Audretsch argues that what distinguishes the entrepreneurial university from the role of the university in the entrepreneurial society is the scope of its mission. While the role of the entrepreneurial university is to create new businesses, ventures and commercialization where it previously did not exist, or to increase the amount of tech transfer from the…

Sharp decreases in the price of domestic natural gas have challenged growth in the U.S. renewable energy industry. In response, the White House, with support from national business leaders, has re-focused public-private investment toward smart grid technology — efforts focused on developing the infrastructure for decentralized power networks that communicate and coordinate information between energy producers and consumers. Since June 2011, the Obama administration has been working with energy industry partners to promote the adoption of smart grid technology. In an effort to reaffirm that relationship and make the case for prioritizing public investment in the project, the White House last week released A Policy Framework for the 21st Century Grid: A Progress Report, a guide to the administration's efforts to make the national power grid stronger, smarter and cleaner. The report highlights the role of federal investment in helping local power providers modernize their grid infrastructure, providing energy data for entrepreneurs and companies to develop commercial innovations, and restructuring regulations to spur private sector investment in the smart…