SSTI Digest

Several months of debate leading into a special legislative session late last year was not enough to convince lawmakers to approve funding for two of the governor’s major TBED priorities. With the release of the fiscal year 2008-09 budget recommendation, Gov. Ed Rendell is again asserting the importance of the alternative energy legislation and the Jonas Salk Legacy Fund, urging lawmakers to quickly enact the initiatives.   The alternative energy legislation calls for an $850 million bond issue securitized by an electric power public benefits charge to fund energy independence programs (see the Feb. 12, 2007 issue of the Digest). Additionally, the governor’s budget recommends $500 million – a portion of the state’s Tobacco Settlement Fund – in seed funding for the Jonas Salk Legacy Fund for biosciences research, biotechnology commercialization and investment capital.  

Measuring the strength of a state or region’s economy, particularly the elements related to tech-based economic development, is a tricky but vital tool for developing and updating TBED policies. Several challenges present themselves when deciding what information to present on the elements of the innovation system and assessing the region’s health and performance relative to appropriate surrogates.   Fortunately for the field, two states that have been leaders in using an index as a policy development tool, released reports last week which display an array of methods to analyze their own state’s relative TBED performance. Each report provides a unique perspective and can provide models for emulation and customization by other states.   Massachusetts

During the past two months, five reports have highlighted grim news for state budgets in fiscal year 2008, FY 2009 and beyond, brought on by declining revenues, the crisis in the housing market, increased oil prices, a potential national recession, and structure issues with state finances. 

This is your opportunity to shine in the spotlight! By hosting SSTI’s 14th Annual Conference in 2010, you can increase your national and international visibility by showcasing the success of your state and/or community’s tech-based economic development efforts to thousands of TBED professionals. Letters of intent are due next week! You still have time to contact Noelle Sheets, director of membership services, at 614.901.1690 or sheets@ssti.org to request the bid packet. Some of the host benefits include:

Georgia Gov. Sonny Perdue this month proposed a new $40 million Georgia Research Alliance (GRA) Venture Capital Fund to be fueled by $10 million from the state legislature and subsequently matched with $30 million from the private sector. Of the entire suite of GRA initiatives, this will be the first program not funded entirely by the state of Georgia.   The Venture Capital Fund will invest only in early-stage companies associated with GRA’s VentureLab program. The VentureLab program provides technology assessment, commercialization instruction and seed grants to marketable research developed at GRA’s partner universities. These partner universities are the University of Georgia, Medical College of Georgia, Emory University, Clark Atlanta University, Georgia Institute of Technology, and Georgia State University.  

Minnesota Gov. Tim Pawlenty recently unveiled four energy initiatives to promote clean energy R&D and the use of renewable energy technologies in the state. Through a combination of executive orders and legislative proposals, the programs are intended to push Minnesota towards its goals of having 25 percent of the state’s energy come from renewable sources by 2025 and reducing the state’s greenhouse emissions 80 percent by 2050. These new initiatives are:

Referring to his fiscal year 2008-09 budget recommendation as “back to basics,” Gov. Phil Bredesen proposed significant investments in research and workforce initiatives while vowing not to tap into reserves or raise taxes.   Earlier this week during his State of the State Address, Gov. Bredesen unveiled his ambitious budget proposal, which includes a total investment of $30.5 million in workforce initiatives. The Department of Economic and Community Development is slated to receive $29.3 million for the governor’s Next Steps Jobs strategy – $25.3 million for the FastTrack Infrastructure Development Program and Job Training Assistance and $4 million for business development. Additionally, $1.2 million – the same level as last year – is recommended for the Rural Opportunity Fund, a public-private partnership implementing a small business loan program targeted to small, minority and women-owned businesses in rural parts of the state.  

The fourth installment of the Tech Talkin’ Govs series includes excerpts from governors’ speeches delivered in Georgia, Kentucky, Massachusetts, Michigan, Tennessee, and Wisconsin.   Georgia – see article in this issue of the Digest.   Kentucky Gov. Steve Beshear, State Budget Address, Jan. 29, 2008 “I recommend a $60 million bond authorization for a new round of ‘Bucks for Brains.’ … This program has attracted and retained some of the brightest faculty and research teams in the nation. In times like these, we simply must invest in the future. …   “… It is time to revitalize our economic development efforts, and as chair of the Economic Development Partnership Board, I will work with the Secretary of that cabinet to review and revise our strategy, giving it a new focus on the entire state and on twenty-first century jobs.”  

Ten to forty percent of entrepreneurs launching businesses in high-income countries expect that more than a quarter of their customers will come from outside of their country, according to a new study of trends in global entrepreneurship.   The Global Entrepreneurship Monitor (GEM), a report prepared annually by researchers from Babson College and London Business School, provides insight into international entrepreneurship trends and the factors that influence the rate of new business creation. This year’s edition dedicates particular attention to the national regulatory environments and other policy-based factors that encourage entrepreneurs. It also provides a glimpse into the increasingly global nature of entrepreneurship.  

Considerable changes are affecting the structure of traditional manufacturing supply chains, and firms that do not adapt to these shifts will suffer economically, according to a recent report from the National Association of Manufacturers (NAM). Forging New Partnerships: How to Thrive in Today’s Global Value Chain provides information about specific programs and organizations, as well as suggestions and best practices, that may improve the difficulties small and medium manufacturers (SMMs) face as both their competitive markets and internal management needs are changing.   The report is the second release in NAM’s Small and Medium Manufacturers Series. The first report identified the challenges facing SMMs in the 21st century (see the March 6, 2006 issue of the Digest). Small manufacturers are considered to have less than 500 employees, and medium-sized manufacturers have between 500 and 2000 employees. Together, these two groups account for 99 percent of all manufacturers and 40 percent of U.S. production value.

Using data from the Small Business Administration's Office of Advocacy, SSTI has prepared a table showing how each state (and the District of Columbia) has ranked in business churning over the past seven years. Business churning is a measure of the creation of new companies and the death of existing companies as a share of total firms (small businesses with employees). Churning increases as the number of new start-ups and existing business failures per year increase. A high level of business churning can be a major driver of innovation and growth, since it can indicate the presence of entrepreneurial activity and the transition to new industries.   Over this period, Nevada, Utah and Washington have consistently occupied the top three spots, though they have traded places. Colorado and Arkansas have shown the most relative improvement, with Arkansas rising from 50th in 2000 to 16th in 2006. Maryland, Idaho and Tennessee were also consistent top performers.  

It is only through the involvement of the each and every one of our more than 185 members that SSTI is able to continue its mission -- to lead, support and strengthen efforts to improve state and regional economies through science, technology and innovation. Together, we’re growing a strong and vibrant tech-based economic development community. New members include: State Sponsors Kansas Bioscience Authority Oklahoma Department of Commerce Affiliates California State University, Office of Tech Transfer & Commercialization George Mason University, Office of Research Development Institute for Triple Helix Innovation Luther Forest Technology Campus