SSTI Digest

The line was drawn in the sand a year ago. Some felt Virginia's Center for Innovative Technology (CIT), the Commonwealth's lead organization for science and technology, had been set up for failure in a partisan fight for limited public revenues. Like the rest of Virginia's economic development portfolio, CIT took a big hit in the budget cycle as Virginia dealt with a multibillion-dollar deficit in fiscal year 2003. CIT's budget was slashed to $7.8 million, yet its targeted total impact for the year was $266.8 million. Could it be done? In a word, yes. Dismissing all doubters, CIT released a report last week of its audited FY 2003 performance that shows economic impact totaling $318.6 million, a return of more than 40 times the Commonwealth's $7.8 million investment. "These were aggressive targets, but CIT worked a sharply focused plan and the results demonstrate value that is measurable and immediate," said CIT board chairman Dr. Charles Steger, president of Virginia Polytechnic Institute and State University. "The $318.6 million is impact that the Commonwealth can count in this year…

Tech-based economic development remains high on the agendas of the most of the governors who gave State of the State or Budget Addresses this week. Selected excerpts are provided below: Delaware Gov. Ruth Ann Miner, State of the State Address, Jan. 22, 2004 "The era of opportunity we are entering presents us with the chance to diversify and fortify the Delaware economy. In February, I will unveil the details of an economic development package. "The 'New Economy Initiative' will be a comprehensive plan to put more than $46 million in state and matching private and federal funds to work bolstering the Delaware economy. It will include a Competitiveness Fund to spur new investments in existing manufacturing facilities; seed funding for technology-based small business start-ups; venture capital funding for Delaware firms on the edge of significant expansion; programs to boost Delaware’s standing in the areas of emerging technologies, clean energy and fuel cell research; and an investment aimed at improving Delaware’s research and development efforts, particularly…

On Jan. 18, the San Diego Union-Tribune ran a series of three interesting articles examining the biotech sector. One story considers, now that a number of local biotech firms are completing clinical trials, where will they develop their multimillion manufacturing facilities. The other two articles look at selected state and local efforts around the country to support the biotech industry, including Washington, D.C., St. Louis, and Marshfield, WI. Switching gears: As clinical trials for biotechs near completion, more companies will focus their efforts and funds on manufacturing: http://www.signonsandiego.com/news/business/biotech/20040118-9999_mz1b18gears.html Biotech's lure: Cities and states are spending billions to emulate the success of the San Diego, San Francisco and Boston biotech clusters: http://www.signonsandiego.com/news/business/biotech/20040119-9999-1n18biotech.html Three regions chasing biotech: http://www.signonsandiego.com/news/business/biotech/20040119-9999-1n18regions.html Note: All three of these articles are available for a limited time in the San Diego Union-Tribune online…

If the first full week of the 2004 state legislative season is any indicator of the year's tone and tempo for tech-based economic development initiatives (TBED), then we're in for quite a ride. Of the 18 governors presenting their State of the State or Budget Addresses between Jan. 6-14, all but four – Alaska, California, Vermont and Virginia – used the speech to highlight the importance of making future investments in science and technology to encourage economic growth. The supportive tone covered the political spectrum, with both conservative and progressive leaders touching on issues important to the TBED community. SSTI has highlighted excerpts from selected states in our first 2004 installment in the annual series, Tech Talkin' Govs. The saying goes that talk is cheap. Even in a tight fiscal environment, however, many governors outlined a slew of requests for new initiatives or increased funding for programs fostering research, innovation and entrepreneurship. In this issue, Idaho, New York, and North Dakota are highlighted in more depth, as is the creation of a major new program in Michigan…

Last Thursday, Gov. Jennifer Granholm signed bills to aid Michigan’s tool and die industry and to promote new venture capital investment in the state’s high-tech industries. One of Granholm’s key themes in last year’s State of the State address was the importance of leveraging Michigan’s financial power to bring investment capital to the state. The venture capital bills signed today – Senate Bill 834, Senate Bill 835 and House Bill 5322 – create the Michigan Early Stage Venture Capital Investment Fund and provide tax credits for investors in the fund. Money in the fund could be invested in venture capital companies to promote investment in qualified businesses. The $150 million Michigan Early Stage Venture Capital Investment Corporation (MVIC) will be directed by a seven-member board which will include the state treasurer, the chief executive officer of the Michigan Economic Development Corporation, two governor appointees, and one appointee each from the Michigan Senate, House, and the the Michigan Venture Capital Association. MVIC will provide money to venture capital firms…

North Dakota Governor John Hoeven dedicated the lion's share of his State of the State Address to promoting a vision of economic growth for the state based entirely on technology-based economic development. The proposals centered on more than a dozen new university-based Centers of Excellence and new tax credits. "I challenge all of us today to share a vision; a vision of what North Dakota can be. And I challenge all of us to work together to make that vision a reality. The future I speak of has Centers of Excellence multiplying across all of our state's college campuses, creating new enterprises, opportunity, and good paying jobs. It is a vision where a technology corridor drives growth in the east, where an energy corridor drives growth in the west and where value-added agriculture, advanced manufacturing and tourism enterprises flourish throughout our state." To back that up, Gov. Hoeven's budget request includes $50 million to support the creation of new Centers of Excellence on each of the state college campuses to accelerate the growth of targeted industries in all…

New York Governor George Pataki, in his 10th State of the State Address last week, outlined a variety of initiatives designed to further promote tech-based economic development (TBED) in the state. From refining the state's Empire Zones program and strengthening the manufacturing sector to making New York a leader in renewable energy and academic research, the governor's agenda is not short on TBED items. To strengthen the state's Empire Zones, a target of much criticism lately, Gov. Pataki proposes revising it in such a way that reduces the potential for abuse. A comprehensive interagency reporting system, new methods to advance significant economic development projects with "substantial job-creating potential" and accountability measures would be undertaken. Economically challenged communities targeted for redevelopment also would benefit under the governor's plan, which would extend the tax credit program by five years to July 31, 2009. Gov. Pataki also reaffirmed his commitment to enhancing high tech in New York, announcing a series of initiatives collectively known as the second phase of the…

Idaho Governor Dirk Kempthorne dedicated a portion of Monday's State of the State and Budget Address to describing how tight the 2005 fiscal environment would be for his state. The temporary sales tax will lapse, costing the state $170 million in foregone revenue. The one-time $83 million in federal bailout funds are depleted. State employees will get a 27th biweekly paycheck this calendar year, resulting in an additional budgetary burden of approximately $20 million. That $273 million could represent 13 percent of the state's $2.083 billion budget. Add an $11 million expected increase in health insurance for state workers and the ever-escalating cost of Medicare, and the forecast is less than rosy. As a result, the opportunity to let a couple of small tax credits expire quietly – tax credits affecting only a small portion of the governor's constituency and costing more than $2.5 million – might be appealing. Instead, the governor singled out the Broadband Tax Credit and Research & Development Tax Credit in his speech to remind state legislators of the role the credits are playing…

"If our children are to have the kind of jobs we want them to, this type of facility is one of the finest advantages we can give them for many generations," said South Dakota Governor Mike Rounds in his 2004 State of the State Address on Tuesday. The governor is urging legislators to approve plans to help transform an exhausted 8,000-foot-deep gold mine into a one-of-a-kind national laboratory to study subatomic particles. Since May 2003, the National Science Foundation (NSF) has considered the Homestake Mine to be the preferred location nationally for the Deep Underground Science and Engineering Laboratory, according to the governor's office. The deal is not closed, however, because of several outstanding issues, including ownership, indemnity, structural integrity and financing. NSF could still decide not to establish the lab at all. Progress toward creating the underground lab in South Dakota moved a step forward this week when Gov. Rounds signed an agreement in principle with the mine's parent company. The agreement outlines the conditions and timeline for the transfer of…

Arizona Gov. Janet Napolitano, State of the State Address, Jan. 12, 2004 "The Governor's Council on Innovation and Technology recently released a blueprint for developing Arizona's tech industries, so that we can become pace setters in an increasingly competitive arena. [Note: See the Jan. 9 issue of the SSTI Weekly Digest for details.] "I plan to implement this strategy, which includes a package of legislation to establish early stage and venture capital investments in Arizona's growing innovative industry sectors. We must invest in these high-tech sectors and in our rural economies, to ensure growth in the number of high-paying jobs in Arizona. My legislation will help us to do just that, and it will not require money from the General Fund in 2005. "More than 20 states have made similar investments, and we must do the same if we are to compete for the future." Colorado Gov. Bill Owens, State of the State Address, Jan. 8, 2004 "Contrast the solid return on our tourism investment with the unacceptable record of the CAPCO…

Commerce Secretary Don Evans is expected to release today the Bush Administration's plan for economic growth in the manufacturing sector. According to today's Washington Post, the report will "throw President Bush's support to the Manufacturing Extension Partnership... Evans said he will support the program but will demand that the centers coordinate with other programs so they are more efficient." As the Digest goes to press, it is unclear whether the Administration's support of MEP will translate to restoring its budget to the $106.5 million it received in FY 2003. The Administration's FY 2004 budget proposed cutting the program to $12.9 million.

Kristin Jones recently was hired as senior manager for life sciences under the Indy Partnership, an economic development organization for the Indianapolis region. Kentucky Governor Ernie Fletcher has named Derrick Ramsey as deputy secretary of the Commerce Cabinet. Dr. Catherine Renault is the new program manager for the Center for Technology Applications at RTI International, Inc. Leland Speed has been named the new executive director of the Mississippi Development Authority. Janice St. Onge has resigned from the Vermont Department of Economic Development to pursue career opportunities at the University of Vermont. St. Onge, whose resignation is effective Jan. 30, served for four years as the state's technology business development director. Ann Quinn was recently named managing director of the Maryland Department of Business and Economic Development Venture Capital Fund. Andy Taggart has been appointed president and chief executive officer of the Mississippi Technology Alliance. Diane Wirth is new executive director of the Valley…