SSTI Digest

The Australian Government has enacted new rules to attract international private equity investment in the country’s venture capital community. The rules introduce tax concessions for international investors, including university endowment funds and venture capital fund-to-fund vehicles. The rules will treat these investors in the same way as pension funds, exempting them from capital gains tax on their Australian investments. The government’s impact analysis suggests the plan should attract $1 billion (Australian dollars) in foreign investment and add $350 million to the Australian annual gross domestic product. Venture capital proponents say the new rules levels the investment field with the U.S., the United Kingdom and other industrialized countries. More information is available from the Australian Venture Capital Association Limited by cllicking on News Releases at: http://www.avcal.com.au

The National Science Foundation has launched the new, online Industrial Research and Development Information System (IRIS) to provide easy access to information on industrial R&D performance across a broad range of years and criteria.



The historical database (1953–1998) contains more than 2,500 statistical tables presenting R&D expenditures as a percentage of company sales, by industry, size of company, size of R&D program, type of cost (e.g., wages or materials), state, and source of funds. Data also is arranged to allow easy manipulation of trends analyses and state-by-state comparisons.



A late-September Data Brief from the Foundation (NSF 01-338) describes the new system and provides examples of its value for the S&T community. For more information, see http://www.nsf.gov/sbe/srs/databrf/nsf01338/sdb01338.htm

Alabama

Senate Bill 130, which would create $80 million in tech-based venture capital funding if passed, was introduced during the current special session of the Alabama state legislature. Using the certified capital company or CapCo model, the bill allows insurance companies to redirect tax payments into qualified investment firms. According to a recent Birmingham Business Journal article, backers of the bill concede the current fiscal environment and short session will probably lead to the bill’s reintroduction when the regular session begins in January.



Atlanta, Georgia

The Metro Atlanta Chamber of Commerce has created a task force to develop a strategy to position the region as a center for biotech innovation, capital, talent and business. Working in conjunction with the Georgia Research Alliance, the task force includes leaders from the business community, academia, public health organizations and research. Implementation of the Atlanta region biotech strategy is expected to begin later in 2002. More information is available at: http://www.metroatlantachamber.com/

A Letter from Bozeman, Montana

The National Commission on Entrepreneurship publishes NCOE Update, a free, high-quality e-newsletter providing insightful looks into the factors and trends shaping the country’s entrepreneurial community. This week’s issue provides a useful examination of the public and private efforts to nurture technology entrepreneurship in Bozeman, Montana. The story and subscription information can be found on the NCOE website: http://www.ncoe.org/newsletter/update/10_16_01.html

The European Commission's 2001 European Innovation Scoreboard, characterizing the strengths and weaknesses in the capacity for innovation of the European Union (EU) and its member states, shows the EU continues to lag behind the U.S. and Japan. 



Released October 1, the scoreboard uses 17 indicators to rate each member state's capacity for encouraging innovative business and improving the competitiveness of their industry through innovation. The aspects of the innovation process measured by the scoreboard are: 



Availability and the use made of people with the right skills, using figures including the supply of new scientists and engineers and the percentage of the workforce employed in technology sectors of industry. 



Creation of new ideas, based on figures for R&D expenditure and patent applications. 



Innovation by firms as measured by statistics such as the percentage of small and medium-sized enterprises (SMEs) that develop product or process innovations themselves or in cooperation with other firms. 



A group of indicators covering a range of issues including the supply of high-tech venture capital, new-to-market products as a percentage of sales by manufacturers, and value-added in high-tech sectors. 



Comparing current EU and U.S. performance, the most significant U.S. advances over the EU include the level of R&D by business (74 percent higher than the EU mean), the amount of new capital raised (73 percent), the level of high-tech patenting (up to 65 percent), and the percentage of the working population with some form of post-secondary education (65 percent). The EU leads only in the supply of new science and engineering graduates (28 percent). 



Japan leads the EU in the level of R&D by business (almost double the EU average) and to a lesser extent in supply of science and engineering graduates and share of the working population with a post-secondary education. The EU leads Japan in the level of public spending on R&D and spending on information and communications technology equipment and services. 



The overall innovation performance of the EU is improving. Trends in the indicators show countries such as Finland and Denmark, whose performance already is considered strong, are moving ahead. Greece and Spain also are approaching the EU average, although from a relatively low level. The three largest EU economies – France, Germany and UK – are improving, but at rates below the EU average. 



Sufficient data on ten of the indicators allows assessment of each indicator's trend over the past four to six years. On average, these indicators have improved by about 30 percent, but three of them show a decline for the EU as a whole: levels of public R&D spending, spending by business on R&D, and value-added from high-tech manufacturing. 



Overall, the gap between the best-performing and weakest-performing member states appear to be growing. For most of the indicators for which comparable data is available, the U.S. and Japan are outperformed by at least one of the member states. 



The European Innovation Scoreboard was requested by the Lisbon European Council of March 2000 as part of its strategy for turning the EU into the most competitive and dynamic knowledge-based economy in the world within the next decade. The scoreboard, to be updated and published annually, is available at: http://www.cordis.lu/innovation-smes/scoreboard/home.html 

The Biotechnology Industry Organization (BIO) released State Government Initiatives in Biotechnology 2001, the results of the first comprehensive survey of state government efforts to attract and grow the biotechnology industry. The report, prepared by Battelle Memorial Institute and the State Science and Technology Institute (SSTI), contains information from 48 states and shows state governments becoming increasingly active in recruiting and supporting biotechnology companies. 



As an example of state government innovation in biotechnology initiatives and the valuable information contained in the report, 16 states are utilizing their tobacco settlement funds for bioscience-related research and development. In addition, 28 states reported having at least one publicly supported venture fund that can invest in bioscience-related companies. The majority of states responding to the survey have research and development tax credits, sales and use tax exemptions, or investment tax credits related to biotechnology. 



The report shows trends in a variety of financing ventures, higher education initiatives, networking mechanisms, research parks and academic health centers involved in biotechnology. 



With profiles of each state, the full 224-page State Government Initiatives in Biotechnology 2001 is available on BIO's website: http://www.bio.org 

Nearly $43 million in grants were awarded October 1 to 74 non-profit organizations, including state and local governments, by the Commerce Department’s National Telecommunications and Information Administration (NTIA). 



NTIA made $42.8 million available through its Technology Opportunities Program (TOP), which extends the benefits of advanced telecommunications technologies to underserved communities and neighborhoods. The grants subsequently were matched by $46.7 million in contributions from the private sector and state and local organizations. 



Grant winners from across the U.S. and in Puerto Rico provide services in such areas as telemedicine, public safety, distance learning, community information, and other innovative services. 



A complete list of the TOP awards, including descriptions of the grant winners, is available on the TOP website: http://www.ntia.doc.gov/otiahome/top/index.html  For your convenience, SSTI has prepared a table showing award totals by state at: http://www.ssti.org/Digest/Tables/101201t.htm 

As Congress and the Bush Administration look at national economic stimulus packages, debate is beginning in some states to enact similar measures to reverse the direction of their local economies. Various tax cuts for businesses invariably are included in the states’ discussions. The most recent edition of the Federal Reserve Research Roundup (3rd Quarter, 2001) includes a timely review of a recent working paper from the Federal Reserve Bank in Boston that looks at the relationship between corporate investment decisions and state and local taxes. 



The Research Roundup article by Monique Morrissey follows in its entirety (reprinted with permission from the Financial Markets Center ): 

A Rhode Island Economic Strategy: 10 Ways to Succeed Without Losing Our Soul recently was released by the Rhode Island Economic Policy Council. The report outlines 10 economic development initiatives through four themes centered on places, people, clusters and connections. 



Rhode Island must "strike a balance between collaborating and competing with its neighboring states" if it wishes to remain a center of New Economy activity, according to the report. To do so, the state must secure its share of the Boston Metro's high-wage industries while addressing infrastructure and the region's global competitiveness. 



Some highlights among the report's 10 key strategies: 

California 

Capital Valley Ventures, a business accelerator with a three-month training program for tech entrepreneurs, is coming to the Sacramento region, the Sacramento Bee reported. The venture is being spearheaded by Jack Crawford Jr., founder of NetLink, NetSource, 2Publish and Campus Engine. Crawford reportedly plans to start a workshop series capable of holding 25 people interested in beginning new businesses. The series, scheduled to begin this month, will involve three-hour sessions held once a month for three months and offer training on raising capital, forming a management team and generating revenues. More information is available at: http://www.capitalvalleyventures.com 

SSTI's fifth annual conference, Creating Opportunity: Tools for Building Tech-based Economies, will take place December 3-4, 2001, at the Omni William Penn in Pittsburgh, Pennsylvania. The conference agenda remains intact from the original mid-September dates with almost all speakers reconfirmed. (see the conference agenda on SSTI's webpage: http://www.ssti.org/Conf01/agenda.htm [expired] ) 



More Seats Available! 

While the event was sold out for the September dates, the new schedule allows the conference to accommodate a greater number of participants because of the additional meeting space available. Interested parties are encouraged to register online through the conference web center: http://www.ssti.org/Conf01/conf01.htm [expired]

Gov. Don Sundquist has named Tony Grande to be the new Commissioner of the Tennessee Department of Economic and Community Development (ECD). Mr. Grande formerly was ECD Deputy Commissioner as well as its Assistant Commissioner of Tennessee business services and director of manufacturing services. 



Marianne Hudson is leaving her position as Vice President - Marketing & Communications with the Mid-America Manufacturing Technology Center to become a program manager at the Kauffman Center for Entrepreneurial Leadership. 



Bruce Johnson is the new Director of the Ohio Department of Development. Mr. Johnson formerly served in the Ohio Senate. 



Senate nomination hearings were held this week for John Marburger, President Bush's nominee for Director of the Office of Science and Technology Policy, and Phillip J. Bond, nominee for the position of Undersecretary of Technology for the Department of Commerce. 



Gov. Ronnie Musgrove is appointing Robert J. Rohrlack, Jr. as the new Director of the Mississippi Development Authority. Mr. Rohrlack is currently the Chief Executive for the Alliance for Economic Development in Gainesville, Florida. 



David Satterfield is the new Executive Director of the West Virginia Development Office. Mr. Satterfield was Gov. Bob Wise's chief of staff. 



The Information Technology Industry Council (ITIC) has announced that James Thurston has joined the ITIC team as Director of Technology Policy. Mr. Thurston has worked for NIST's Manufacturing Extension Partnership for several years. 



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