SSTI Digest

The steady decline of venture capital abated in the fourth quarter of 2002 with total investments of $4.2 billion, essentially flat from the prior quarter of $4.5 billion, according to the PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree Survey. A total of 692 companies received funding in the fourth quarter compared to 671 companies in the third quarter. Venture capital investing has continued to decline since the run-up that peaked in 2000. For all of 2002, venture investing totaled $21.2 billion, approximately half of 2001's $41.3 billion. Investment levels in 2002 were similar to 1998, when $21.6 billion went to entrepreneurs. As it was for all of 2002, the life sciences sector remained the bright spot for the fourth quarter, increasing 15 percent over the prior quarter with $960 million in investments. Life sciences totaled $4.7 billion for all of 2002, accounting for 22 percent of all venture capital investing. The biotechnology and medical devices industries attracted $2.8 billion and $1.9 billion, respectively, in 2002. All other…

W. Glenn Cornell has been named commissioner of the Georgia Department of Industry, Trade and Tourism. Illinois Governor Rod Blagojevich has appointed Julie Curry as deputy chief of staff for economic development and labor. Andrew Kim is the new policy director for Tennessee Governor Phil Bredesen. Dr. Donald Smith has been named interim chief executive officer of the Pittsburgh Life Sciences Greenhouse.

W. Glenn Cornell has been named commissioner of the Georgia Department of Industry, Trade and Tourism.

Illinois Governor Rod Blagojevich has appointed Julie Curry as deputy chief of staff for economic development and labor.

Andrew Kim is the new policy director for Tennessee Governor Phil Bredesen.

Dr. Donald Smith has been named interim chief executive officer of the Pittsburgh Life Sciences Greenhouse.

Central California's Regional Technology Alliance has changed its name to the Inland Empire techSOURCE.

New and re-elected Governors gave inaugural addresses in Alabama, Oklahoma, Pennsylvania, South Dakota, Tennessee and Texas during the past 10 days. Additionally, State of the State addresses were made in Hawaii, Montana, Nevada, New Mexico, Ohio, South Carolina, South Dakota and Utah. Building tech-based economies remains a high priority for many Governors, as evidenced in the following: Nevada Governor Kenny Guinn, State of the State Address, January 20, 2003 "I want to see higher education in Nevada become a center for research and new partnerships between business and academia. A key step to enhance higher education and economic development will be the new Science, Engineering and Technology Center at UNLV. This project will be funded with $47 million in public dollars, and $25 million in private funds; this is truly a wonderful partnership. This project includes the short-term benefit of new construction jobs, and the long-term benefit of an expanded academic facility in science, engineering and technology: the wave of the future." New Mexico Governor Bill…

Many states and communities are focusing their limited technology-based economic development funds toward cluster development, concentrating on those sectors in which some assemblage already exists within the jurisdiction. Proponents of the approach suggest the public sector is able to maximize its investments in those areas already showing some strength. But what does a state with a new governor do when it is one of the top states in the country for two of the sexier tech sectors – biotechnology and information technology – and public resources are growing more scarce? In Massachusetts, perhaps fearing an either/or option in public policy direction awaits, both sectors recently issued studies charting the potential benefits or risks impact of state action or inaction. MassBiotech 2010: Achieving Global Leadership in the Life Sciences Economy has implications for any state or region hoping to develop a life sciences economic cluster. Similarly, The Telecommunications Industry in Massachusetts: A Time of Transition identifies common issues affecting future growth of the telecom industry.…

Whether the reason is to spur more innovation among students, fight the brain drain of graduates or simply help to build tech-based economies, many states, communities and universities are targeting a portion of their efforts toward encouraging tech-based entrepreneurship among their young residents and college students. If the purpose is to encourage students to consider more risk-taking career options like tech-based entrepreneurship after graduation, then business plan competitions may prove beneficial. While only a few team or individual business plans may win the award in a given award cycle, the process of developing the concept and preparing the plan for all applicants can be useful for launching a more entrepreneurial mindset in the college or university. For example, the Student Business Plan Competition recently launched by the Tennessee Technology Development Corporation (TTDC) promotes entrepreneurship at Tennessee colleges and universities by encouraging submission of plans of original business concepts. Business plans in technologies or life sciences are…

More rigorous evaluations of local economic development programs and policies are feasible argues a recently released working paper by Timothy Bartik, a senior economist at The W.E. Upjohn Institute for Employment Research. Evaluating the Impacts of Local Economic Development Policies On Local Economic Outcomes: What Has Been Done and What Is Doable? stresses the importance of evaluation in local economic development. The ability to distinguish the true impacts of proposed policy in providing economic development benefits is crucial in having well-functioning state and local governments, the report claims. Bartik contends that in the U.S., rigorous evaluation does occur, but it is the exception rather than the rule. When these evaluations are completed, Bartik states, they usually show that services to small and medium-sized firms can be effective in advancing the performance of these organizations. Economic development strategies targeting distressed areas tend to be ineffective if they only provide moderate resources, but are more successful if they offer broad resources over an extended time…

Midwest Angel Network Association Launched in Illinois Several Chicago area investors and numerous local organizations have launched MANA, or Midwest Angel Network Association, in an effort to make seed-stage investment a greater reality. MANA will be dedicated to strengthening the existing angel community and providing assistance and education to potential investors looking to join or form an angel fund or network. Although MANA does not provide angel funding directly, entrepreneurs can also look to MANA's website for direction in how to access angel funding and advisors or service providers who want to help start-ups. New Orleans Eliminates IT Tax The City of New Orleans has eliminated a 5 percent sales tax on custom software to aid the cause of local information technology firms, according to The Times-Picayune. As a result of the tax cut, the city is expected to lose $646,500 annually in tax revenue. Software executives in New Orleans say the ordinance will encourage business expansion and investment. Last spring, the Louisiana State Legislature voted to eliminate…