SSTI Digest

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. Five critical factors that state governments can influence are diversity in sources of capital, an enabling culture, strong local networks, supportive infrastructure and entrepreneur-friendly…

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. A PDF version of the tables showing establishment changes by firm size and state is located at: http://www.sba.gov/advo/stats/data.html

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: Universities need to better identify their areas of competitive strength in research. Businesses should exploit the innovative ideas being developed in the university sector. And, Government needs to do more to support the collaboration between the two. Two developing trends reshaping the way companies undertake research could have positive implications for universities, the authors note. First, companies are moving away from a system in which research and development (R&D) is done in their own laboratories. Instead, they are seeking to collaborate with others in a new form of open innovation.…

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: Effectively deliver needed products and services through a.) development of quality research products and services that address individual needs of internal and external customers and b.) improvement of research and technology (R&T) collaboration and communication with the FHWA resource center. Improve business and administrative processes by implementing the FHWA plan within RD&T, to a.) refine the lab assessment process, b.) define methodologies or tools…

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. The PDF version of Dynamics of Technology-based Economic Development is available at: http://www.technology.gov/p_Reports.htm

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 A list of DHS's first class of SBIR Phase I recipients, including their proposal titles, is available at:  http://www.dhs.gov/interweb/assetlibrary/HSARPA_SBIR_Firms_Selected_Negotiation_021104.pdf The DHS HSARPA SBIR 2004.2 solicitation is anticipated for release on or about May 1, 2004. More information will be available…

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: The South Carolina Life Sciences Act provides multiple tax credits for recruitment and expansion of large life science facilities. To receive the credits, the business must invest more than $100 million in the new facility and create a minimum of 200 full time jobs that pay at least one-and-a-half to two times the annual per capita income for the state or county in which the facility is located. The Act also allows the state to issue up to $…

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. Some stipulations on HB 1145 apply. Loan applicants are required to provide matching funds equal to the amount of their loan, which could range from $30,000 to $50,000. Applicants also will be responsible for developing a three-year strategic plan for their innovative business concept. They must prove to a state economic development board "with a reasonable probability" their…

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. Proponents of the R&D tax credit are hopeful it will lead businesses to invest in new products, ultimately creating new jobs. Such products are expected to include computers or laboratory equipment. Other supporters believe the credit will enable more high-tech firms to be spun out of Indiana's…

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. Instead, the $100 million will be split equally between a new Colorado Venture Capital Authority (see Colorado Senate Bill 04-106) to provide capital to businesses throughout the state and CoverColorado, a program designed to provide health benefits to the chronically ill. Colorado state lawmakers originally enacted CAPCO to stimulate economic growth, giving tax credits to insurance companies…

Legislators in Utah have passed a constitutional amendment that, with approval by voters, would allow the state's universities to take ownership in private businesses in exchange for intellectual property. The proposed amendment cleared the Utah State Legislature with relative ease, despite some concerns it will thwart the incentive of researchers wanting to commercialize their results. Approved on March 3 with a unanimous vote by the senate, the amendment states that Utah and any of its schools may "acquire an equity interest in a private business entity as consideration for the sale, license, or other transfer to the private business entity of intellectual property developed in whole or in part" by state agencies or schools. The Utah Constitution would retain a ban on state investment in railroad, telegraph or other companies. Supporters of the amendment pointed to the success of the University of Florida's Gatorade, which has generated more than $80 million in royalties, according to the Associated Press. Critics, however, suggested the amendment would allow universities too much control…