SSTI Digest

Interest by would-be entrepreneurs to start new businesses declined in 2001 as the economic recession and lingering effects of the dot.com crash dampened enthusiasm for launching new ventures, according to the Global Entrepreneurship Monitor (GEM) 2001 National Entrepreneurship Assessment for the United States of America. The trend is expected to continue for the near term with a strong rebound later in the year. Conducted by Babson College and the Kauffman Center for Entrepreneurial Leadership, the U.S. GEM study shows entrepreneurial activity in the U.S. last year plunged 30 percent to 11.7 percent of adults from 16.7 percent in 2000. The measurement reflects the percentage of the U.S. adult population involved in the start-up process or in a business less than four years old. Enthusiasm to take the entrepreneurial plunge fell even sharper, with little more than one out of every three adults (35 percent) believing that good opportunities will develop over the next six months. This compares to one out of every two adults (52 percent) in 2000 and 57 percent in 1999. Although the United…

Program expected to yield $15B in new capital for underserved communities Six national, community-based financial services organizations recently announced the formation of New Markets Advisors to help investors identify opportunities using the New Markets Tax Credit. The largest federal tax credit of its kind in nearly 20 years, the New Markets Tax Credit gives investors such as banks, insurers, investment funds, corporations and individuals a credit against federal income tax for new investments in eligible businesses and commercial projects in low- and moderate- income areas. The tax credit program is expected to stimulate the investment of $15 billion in new capital to accelerate the pace of business development in these areas. Among them, the New Markets Advisors member organizations have more than 35 years of combined experience leveraging private and public capital to drive economic development in America's untapped urban and rural markets. The organizations represent more than 1,000 community-based financial institutions, including national and local community…

Earlier this month, Kansas passed legislation to encourage $40 million in private equity investment. Alabama passed a $100 million bill for CAPCOs. Similar legislation aimed to increase the amount of venture capital available locally has passed at least one chamber in the South Carolina and Ohio state legislatures. Pennsylvania pension funds, after taking a bath in the dot.com crash and current recession are increasing the percentage of their portfolios placed in venture capital. States and localities across the country, seeing the quarterly surveys report the continuing decline in venture capital deals (such as the Moneytree survey reported in last week's Digest), are moving to encourage more VC investment. The theory is by increasing the supply of venture capital available, more deals will be made and economic growth will follow. But is it good public policy? Not in the current market, suggests Harvard Professor Joshua Lerner in his recent working paper, Short Term America Revisited? Boom and Bust in the Venture Capital Industry and the Impact on Innovation. Lerner contends…

Generating $48.7 million in tax revenues to local and state governments and 5,949 direct jobs, the 31 tenants of the University of Arizona Science & Technology Park had an estimated direct impact in excess of $1 billion in FY 2000-01, according to a new report from the university's Office of Economic Development. Impact of the University of Arizona Science and Technology Park on The Economy of Tucson and Pima County: An Economic and Revenue Impact Analysis for FY 2000-2001 lays out the local and regional direct and indirect impact of the sixth largest university research park in the U.S. In addition to tenant businesses, the park includes a high-tech incubator and high school. In comparison with the 1999 study of the park's impact, the researchers found: the number of tenants increased from 21 in 1999 to 31 in FY 2000-01, an increase of 48 percent; direct employment by the tenants grew 12 percent from 5,309 in 1999; total wage impact grew from $478 million in 1999 to $604 million n FY 2000-01; average annual salary for tenant employees was $57,500 (compared to the county's…

Lewis Attardo is the first director of the new Sacramento Regional Technology Alliance. Attardo formerly was a Florida-based private business and economic development consultant. Joseph Hornett has been selected to serve as senior vice president and treasurer of the nonprofit Purdue Research Foundation (PRF). Hornett currently is COO for Sport Service, Inc. in Indianapolis. PRF holds more than 130 properties and 10,000 acres of Indiana farmland near Purdue University, including the Purdue Research Park. Matthew McClorey is the new president and COO for Kansas Innovation Corp., beginning June 3. McClorey currently serves as the vice president of business development and portfolio management for the Kansas Technology Enterprise Corp (KTEC). Marilyn Carlson Nelson, the chairman and chief executive officer of Carlson Cos. Inc., has been appointed by President Bush to chair the National Women's Business Council. The council serves as an independent source of advice and counsel to the president, Congress and the U.S. Small Business Administration.

Lewis Attardo is the first director of the new Sacramento Regional Technology Alliance. Attardo formerly was a Florida-based private business and economic development consultant.

Joseph Hornett has been selected to serve as senior vice president and treasurer of the nonprofit Purdue Research Foundation (PRF). Hornett currently is COO for Sport Service, Inc. in Indianapolis. PRF holds more than 130 properties and 10,000 acres of Indiana farmland near Purdue University, including the Purdue Research Park.

Matthew McClorey is the new president and COO for Kansas Innovation Corp., beginning June 3. McClorey currently serves as the vice president of business development and portfolio management for the Kansas Technology Enterprise Corp (KTEC).

Marilyn Carlson Nelson, the chairman and chief executive officer of Carlson Cos. Inc., has been appointed by President Bush to chair the National Women's Business Council. The council serves as an independent source of advice and counsel to the president, Congress and the U.S. Small Business Administration.

The University of Florida is seeking a creative and versatile individual to assist in partnership development and commercialization of technologies for UF and its sponsoring agencies. The primary responsibility for this position will be to serve as Deputy Director for the Environmental Systems Commercial Space Technology Center (ES CSTC), a NASA sponsored environmental research center. Additional responsibilities include assisting in new proposal development for UF, particularly those opportunities requiring cooperative multi-discipline research with commercial application. Applications are due before June 20, 2002. More information is available on SSTI's website at: http://www.ssti.org/posting.htm

After holding steady in late 2001, the amount of venture capital investment continued its two-year decline in the first quarter of 2002, according to the PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey. Total investments fell to $6.2 billion — a 24 percent decrease from the fourth quarter of 2001. A total of 787 companies received venture backing, or 207 fewer than the prior quarter. All leading industries experienced declines, the survey shows. The software, networking and biotechnology industries received the most capital, respectively capturing $1.1 billion, $899 million and $752 million in first quarter investments. The first quarter 2002 MoneyTree™ survey results are available on three websites: http://www.pwcmoneytree.com, http://www.nvca.org, and http://www.ventureeconomics.com. In addition, SSTI has prepared a table <http://www.ssti.org/Digest/Tables/051702t.htm> to present MoneyTree™ results by state, including data for the number of deals, total amount invested, and average deal size.

Ohio Proposes to Join Race With the growing need to identify cleaner sources of power, coupled with recent advances in alternative energy technologies, many states are targeting science and technology investments toward fuel cells. California, Connecticut, Massachusetts and New York all have made investments in fuel cell research demonstration or commercialization projects through energy related research funds. Michigan launched its fuel cell strategy in April (see the April 19, 2002 edition of the SSTI Weekly Digest). Examples of specific fuel cell activities within the states include: The National Fuel Cell Research Center at the University of California Irvine is managing a pilot demonstration project launched in April that will allow rail commuters to use a pool of 50 low-emission electric vehicles to complete their commutes. The cars are recharged using solar and fuel cell technologies. Automakers participating in the program can earn credits toward a state requirement that will require 10 percent of all California car sales to involve zero-emission vehicles. In addition…