SSTI Digest

This week, governors in Michigan, Ohio, Oklahoma, Tennessee, and Wisconsin unveiled their budget proposals. Included in the governors’ recommendations are several cases of agency restructuring and funds for workforce development, innovation tax credits, and other TBED-relevant issues.

In a new report, the Ohio Board of Regents highlights promising policies to build more competitive innovation economies by tapping into the skills, knowledge and entrepreneurship of women, African-Americans, rural residents and other underrepresented populations. The review includes models pioneered by community organizations, academic institutions, entrepreneurship support organizations, philanthropies and tech-based economic development groups that draw traditionally underrepresented residents into innovation networks and ensure that benefits of the high-tech economy reach people of all backgrounds. The board’s Subcommittee on Inclusive Competitiveness provides specific recommendations for the state’s university system, including support for the Believe in Ohio Youth STEM Commercialization and Entrepreneurship program and the Choose Ohio First Scholarship. Download the report…

In Q3 2014, venture capital (VC) investments in the U.S. dropped by 30 percent from Q2 totals, according a new report from CB Insights. Q3 VC deal levels also dropped by 10 percent from Q2 totals. The severe drop, however, can be attributed to Q2 being the most successful VC quarter since Q1 2001. The good news is that the first three quarters of 2014 saw the U.S. VC investment total reach $33.75 billion – an increase of 59 percent compared to the first nine months of last year.

The initial public offering (IPO) market fell off significantly in Q3 with just 18 U.S.-based, VC-backed companies going public. In comparison, 59 companies went public in Q1 and Q2 combined. CB Insight researchers also found while late-stage deal share remained consistent at about 16 percent with Q1 and Q2, the size of those investments in share of venture capital dollars by series dropped from 35 percent in Q1 to only 22 percent in Q3. Read the report…

Between 2000 and 2010, about one-third of U.S. manufacturing employment – approximately five million jobs – were lost as a result of new technologies in the manufacturing process or competition from abroad, according to The Brookings Institution. “The decoupling of innovation from manufacturing,” as described by Harvard Professor Venky Narayanamurti, where “Americans brought great ideas to light, but then left the execution – manufacturing, and jobs – to others” has left the United States in a job crunch throughout the supply chain. In recent years, however, U.S. companies are increasingly moving their manufacturing stateside.

In response to declining appropriations and the termination of the Space Shuttle program, NASA has had to re-orient its approach to commercial partnerships. Over the past decade, NASA has turned to private partnerships to further the agency’s goals of space research and exploration. This same impulse has driven NASA to create regional partnerships to cultivate private space industry clusters and drive the development of the Commercial Crew program, which is highlighted as a core component of the agency’s FY15 budget proposal. These efforts have changed NASA’s role in regional, high-tech economic development from that of a research laboratory to a direct partner.

University-focused initiatives that help bring new technologies and products to market help drive regional economic development and encourage an entrepreneurial culture on campuses. SSTI’s latest Trends in TBED report featured a number of commercialization efforts launched in 2013, including university-based funds to support ideas from faculty, staff and alumni. So far, 2014 also has proven active in this area with the announcement of several new initiatives to support university technology startups.

In the U.S. there is strong bi-partisan consensus that immigration is a key driver for entrepreneurship and regional competitiveness.  With federal immigration reform essentially shelved for 2014, cities and states are searching for their own solutions to attract and retain high-skilled immigrants. Proposals by Michigan Gov. Rick Snyder and other policymakers represent new approaches to immigration reform that can support local entrepreneurship and regional economic development.

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).

President Obama launched the Advanced Manufacturing Partnership Steering Committee “2.0.” Former SSTI board member Luis Proenza, president of The University of Akron is part of the steering committee chaired by Andrew Liveris, president, chairman, and CEO of the Dow Chemical Company, and Rafael Reif, president of the Massachusetts Institute of Technology.

Mark Kittrell has been appointed the president of the Iowa Innovation Corporation.

OK Gov. Mary Fallin has named Secretary of State Larry Parman as director of the Oklahoma Department of Commerce and secretary of commerce. Both positions require Senate confirmation.

Oklahoma Gov. Mary Fallin announced that Jonna Kirschner, executive director of the Oklahoma Commerce Department, will serve on a transition team to establish a new workers’ compensation system. Vaughn Clark , the Commerce Department’s director of community development, was named as interim executive director.

Colorado Gov. John Hickenlooper named Mark Sirangelo, who is head of Sierra Nevada Corp., as chair of the Colorado Innovation Network and the state's new chief innovation officer.

John Rhodes has been appointed as president and CEO of NYSERDA.

The winding down of the space shuttle program in Florida’s Space Coast by the Obama administration in 2010 spurred a transition in NASA’s areas of focus, including an increased emphasis on commercializing technologies and industry partnerships. NASA recently announced several new initiatives with tech firms, universities, and state agencies geared toward investing in cutting-edge research and technology and developing an educated workforce.

A recent report by Cleveland State University's Levin College of Urban Affairs details the economic impact of companies supported by JumpStart Inc. and the North Coast Angel Fund in the 2012 calendar year. The 127 companies included in the study created 2,140 jobs in Ohio (1,652 in Northeast Ohio), generated $269.7 million in economic benefits for the state, and produced $35.5 million in federal, state, and local taxes. Those studied included 63 "portfolio companies" that received technical and funding assistance and 64 "client companies" that received only technical assistance. Read the report...