SSTI Digest

Kentucky Governor Ernie Fletcher joined National Aeronautics and Space Administration (NASA) officials earlier this month to announce a partnership in support of the Moon-Mars initiative. The agreement pairs the Kentucky Science and Technology Corp. (KSTC) with the nation's principal agency for space exploration.

The joint effort between KSTC and NASA will involve research in living systems, information systems, automation, nanotech and celestial mining. To facilitate their work, KSTC will open and manage an office at the NASA Ames Research Center in Mountain View, Calif. The office, to be funded and managed by KSTC, is intended to expand access to new talent, venture capital firms, innovative companies and universities. Kentucky's own companies, faculty and students will have access to the office.

States must develop a supportive environment for entrepreneurs to prosper in an increasingly competitive global economy, according to A Governor’s Guide to Strengthening State Entrepreneurship and Policy, a recent report from the National Governors Association’s (NGA) Center for Best Practices.

Instead of developing competitive cluster-based models, the report observes, most state economic development efforts continue to be organized around traditional business retention and incentive-based industry recruitment programs. This approach leaves entrepreneurs to “fall between the cracks” of programs designed to support less agile business models, NGA says.

More harm can be done, however, if states attempt to be the exclusive providers of support services. In order to meet the needs of entrepreneurs, NGA argues, states should instead serve as brokers for a variety of private and nonprofit services.

The latest data from the U.S. Census Bureau, partially funded by the Small Business Administration's Office of Advocacy, shows firm births, deaths, and the net change for 2001, at the national and state level. Often called business "churning," the figures reflect one measure of entrepreneurial activity within a state.

The greatest positive net change as a percentage of all establishments within the state was California's 2.5 percent increase; on the other end of the spectrum was West Virginia's 1.4 percent decrease. Nationally, there was a 0.8 percent increase in the number of establishments between 2000 and 2001.

The tables also present change in employment by firm size and state for 1999, 2000 and 2001.

Although much collaborative work is underway in the United Kingdom, there is more to be done on the parts of universities, government and businesses, according to the Lambert Review of Business-University Collaboration. The conclusions and recommendations of the report span the Atlantic, offering advice of potential value for American university-industry relations.

Through research and various case studies, the review compiles the following broad recommendations for each individual sector:

A new report released by the U.S. Department of Transportation (DOT) suggests research and innovation will be key to the department’s success in fiscal year 2005.

In Fiscal Year 2004/2005 Performance Plan, DOT’s Office of Research Development and Technology (RD&T) sets forth numerous challenges and commitments, detailing 82 research initiatives for its infrastructure and safety program areas. RD&T also outlines 35 ongoing projects for its operations division. Anticipated goal impacts and target completion dates are established for all initiatives.

Within the RD&T plan are four basic challenges:

The Technology Administration (TA) has released the fourth edition of its guide of state science and technology (S&T) indicators. The Dynamics of Technology-based Economic Development provides an updated collection of data on the technology infrastructure of states, such as high school and advanced degree graduation levels, R&D investment and the numbers of patents issued. All 50 states, the District of Columbia and Puerto Rico are included in the report.

For the first time, Dynamics contains a new section showing data changes for periods up to 10 years, which TA hopes will help state and regional efforts to track trends in state performance and the impact of policy decisions. Thirty-eight metrics are included; 25 measure inputs and 13 measure outputs or performance.

On Feb. 12, the Department of Homeland Security (DHS) announced the first round of Phase I awards under the Small Business Innovation Research (SBIR) program competition. Administered by the Homeland Security Advanced Research Project Agency (HSARPA), the DHS SBIR 2004.1 solicitation selection process took only three months — quick by most SBIR standards. HSARPA selected 66 winning projects across 23 states from 368 proposals. Each awardee will receive a maximum of $100,000 to complete a six-month feasibility or proof-of-concept study.

Jonetta Fantroy, a management analyst with HSARPA, provided SSTI statistics for the distribution by state for the proposals received and awards made. The table is available at: http://www.ssti.org/Digest/Tables/031904t.htm

For just over eight years, the SSTI Weekly Digest has come to you every Friday...first it was by fax, then by e-mail.  Starting with this issue, the Digest makes a change and will be distributed each Monday.  We believe this change will help you get your week started right...and will give the SSTI staff something to do on the weekend.

The South Carolina Technology Alliance calls it the most significant victory for South Carolina's research universities and tech entrepreneurs in the last 50 years. An idle exaggeration? Probably not.

Senate Bill 0560 creates a $50 million venture capital (VC) fund for the state and offers tax credits and other incentives to attract large life science and pharmaceutical businesses. It also facilitates borrowing up to $250 million for university construction and improvement projects encouraging research and tech-based economic development (TBED). The bill, which passed overwhelmingly in both the state senate and house, includes three sections:

With the recent passage of much economic development legislation in South Dakota, Gov. Mike Rounds' 2010 Initiative would seem to be moving along as planned. The 2010 Initiative, an economic stimulus plan introduced last fall, outlines a series of goals for growth in South Dakota by the year 2010 (see the Oct. 31, 2003, issue of the Digest).

Gov. Rounds signed House Bill 1145 on March 3, setting up a $3 million loan program for entrepreneurs and start-up companies wanting to do business in their home state. Under the bill, any entrepreneur or start-up company located in South Dakota can apply for low interest loans. Start-up companies are defined as new technology, communications, service or manufacturing businesses.

The Indiana General Assembly recently passed legislation that would make permanent a 10 percent research and development (R&D) tax credit, if signed by Gov. Joe Kernan.

Indiana's Research Expense Tax Credit provides for a credit based upon a taxpayer's increased research activities conducted in Indiana. The credit is 10 percent of the increase in qualified research expenses paid or incurred in a taxable year over a taxpayer's base amount of research expenses.

Last month's action taken by the Indiana General Assembly is the latest development with the state's R&D tax credit. During the 2003 Legislative Session, the expiration date for the credit was extended from Dec. 31, 2004, to Dec. 31, 2013. The General Assembly also has doubled the credit from 5 percent to 10 percent.

The creation and subsidization of CAPCOs, certified capital corporations intended to encourage venture capital (VC) investment, is one of the more controversial policies some states have adopted to encourage the growth of tech-based economies. With substantial revisions to Colorado's short CAPCO experiment this month, questions are raised once again for other states that either have passed or are considering various approaches to increasing the availability of risk capital for new tech firms.

Colorado Governor Bill Owens signed two bills on March 4 effectively ending the state's two-year-old CAPCO program -- and blocking an additional $100 million in tax credits scheduled for distribution in April.