SSTI Digest

Venture capitalists invested almost $2.5 billion in China in 2007, according to a new report from Dow Jones VentureSource. That figure is a 5 percent increase over the 2006, and the highest since 2001, despite a decrease in the number of deals. Though investment is not growing quite as quickly as it is in the U.S., where venture investment rose by 8 percent last year, China is becoming a key global market for venture investment.   The decrease in the number of deals appears to be a sign of a maturing venture capital industry, according to the VentureSource report. Though seed and first-round investments still constitute 61 percent of the country's venture deals, more investors are looking at companies in their second round of financing or later. Fifty percent of total investment went to these later-stage companies. Second-round investment dollars increased by 15 percent over the previous year. Deal size may be decreasing as firms devote more money to investment in relatively mature companies.  

Last week, three venture capital firms were chosen by the Department of Energy (DOE) to participate in its new Entrepreneurship in Residence (EIR) program, a pilot initiative designed to get advanced energy technologies out of the federal labs and into the marketplace. In the program’s design, an entrepreneur affiliated with each venture capital firm will work with the selected DOE laboratory staff in order to identify and evaluate marketable technologies.   The selected venture capital firms and their respective federal laboratories are:

Gov. Bobby Jindal unveiled his fiscal year 2008-09 budget to the legislature last week, focusing heavily on improving the existing workforce and creating a business climate that encourages entrepreneurship.   The governor’s recommendation for the Louisiana Department of Economic Development (DED) is $29.2 million in general funds, down $11.2 million from last year. The recommendation for total funds is $85.9 million, down from $201 million last year. The reduction is largely due to nonrecurring funding and interagency transfers and will not impact the department’s services in the coming fiscal year, according to budget documents. Workforce and economic development initiatives slated for funding include:

Using the state’s regional advantage, the Rhode Island Economic Development Corporation (RIEDC) wants to create high-wage jobs in targeted industry sectors and establish new equity and financing programs that provide growth capital to sustain the ventures, the agency announced last week.   RIEDC released an economic growth plan with the goal of increasing the percentage of jobs that pay above the national average from its current 40 percent to 60 percent over the next 10 years. The average private sector wage in Rhode Island is $38,700 -- $4,600 less than the national average and much lower than neighboring states Connecticut and Massachusetts.  

The following overview is a synopsis of selected recent announcements from research parks across the nation, including new tenants, groundbreakings and tools for financing start-up companies.                         The chemical company BASF announced in January a $1 million contribution to the Brazosport College Foundation for construction of a new process technology center at the school’s planned Science Technology Corridor. The new facility will include analytical labs and classrooms for curriculum supporting the petrochemical, energy and nuclear energy. The BASF center groundbreaking is expected this summer as the first phase of the Science Technology Corridor, which will also include a health professions and science technology complex with laboratories, classrooms and department offices for health professions programs.  

The 2008 Excellence in TBED Awards call for applications is right around the corner, and this year, your organization could be recognized as a national leader in the TBED community.   As an award winner, you:

Earlier this month, the Canadian Minister of Industry announced the establishment of 11 new Centres of Excellence for Commercialization and Research (CECRs) to pursue multidisciplinary work in the areas of environmental science, natural resources and energy, health and life sciences, and information and communication technologies. This $163 million investment joins a $105 million investment last year that created seven other CECRs across Canada.   The CECR initiative is a component of Canada’s Science and Technology Strategy (see the May 21, 2007 issue of the Digest) and is administered by the Networks of Centres of Excellence (NCE) program. Organizations that are eligible for CECR funding are nonprofit corporations formed by universities, research organizations, private firms or other nongovernmental parties. The average grant size for each CECR was around $15 million, to be distributed over 3-5 years.   Four of the 11 new centers are based in Vancouver:

With the goals of reducing crude oil consumption by a whopping 72 percent and identifying clean energy sources to cover 70 percent of the state’s energy needs by 2030, Hawaii has signed a memorandum of understanding (MOU) with the U.S. Department of Energy (DOE) to figure out exactly how to get the job done under the Hawaii Clean Energy Initiative.   To call the plan merely ambitious seems like an understatement. Hawaii currently depends on imported fossil fuels to meet 90 percent of its energy needs, the MOU begins. Despite that, Hawaii already generates more of its energy from biomass than any other state.   Both the state and DOE believe the goal is reasonable, however, given the abundance of clean energy resources the islands naturally enjoy – sunshine, wind and geothermal sources. In addition, the cost of importing fossil fuels across the Pacific continues to make traditional energy sources less attractive economically. The MOU states “every 10 percent increase in world oil prices results in a 0.5 percent reduction in the state’s GDP.”  

Transforming as many small and medium-sized enterprises (SMEs) as possible into globally competitive firms is a challenge, as most TBED practitioners know. The complexity of combining all of Europe into a single market makes the work even more daunting.   To simplify the process for SMEs in more than 40 countries, the European Commission recently launched a consolidated Enterprise Europe Network. The network consolidates the older Euro Info Centres and the Innovation Relay Centres.   According to promotional materials, assistance services offered by the network include a business partner search within technology and business cooperation databases and access to information on funding opportunities. Network experts will provide “individual on-site visits to companies to assess their needs and a broad range of promotion and information material. Representatives of the network can also help businesses understand EU law, how it applies to their business and how to make the most the internal market and EU programs.”  

Gov. Rod Blagojevich unveiled a $25 billion capital plan supporting, in small part, several energy and technology projects, while at the same time eliminating funding in his fiscal year 2009 operating budget for several TBED-related programs within the Department of Commerce and Economic Opportunity (DCEO).   The bulk of the spending for the governor’s Illinois Works proposal would be spent on road and bridge construction ($14.4 billion), with $1.1 billion earmarked for both higher education and energy and technology projects. Gov. Blagojevich said during his Budget Address that the plan – which requires $11 billion in new state funds – would be funded primarily through a brief sale of the state lottery, which is expected to generate $10-12 billion. Of that amount, $7 billion would be used to fund the capital plan, and the state would issue bonds for another $3.8 billion, according to the governor’s office. The proposal invests in new and existing programs within DCEO, including:

This year's edition of the Angel Capital Association's (ACA) Angel Group Confidence Report reveals that angel investors are "cautiously optimistic" about their opportunities in 2008, despite recent predictions of a slowdown for the overall U.S. economy. In a survey of ACA members, nearly 55 percent predicted that the number of angel investments made by their group and the total dollars invested will increase this year. While most expect a decrease in the number of positive exits (through acquisitions or initial public offerings), 48 percent believe that both the quantity and quality of the deals they see in the coming year will be better than in 2007.  

Across the nation, policymakers, business leaders, private foundations and nonprofit groups are investing in science, technology, engineering, and mathematics (STEM) graduates to maintain a competitive U.S. workforce. From middle school math and science labs to engineering-centered summer camps and tuition reimbursement for undergraduates who pursue these fields, there is widespread support for STEM graduates.   The authors of a recent report from the national campaign Skills2Compete argue that while increasing the number of scientists and engineers is critical for the U.S. to remain a globally competitive force, researchers are underestimating middle skill job prospects and find that investments in these areas will likely generate important returns for the U.S. economy.