SSTI Digest

While venture capital is harder to come by these days in most parts of the country due to the dot-com crash and stock market declines, investment capital may flow more easily in two southern states based on two initiatives.



Florida: $450 Million for CAPCOs Considered

The state legislature is currently considering CAPCO legislation to triple the maximum limit for tax breaks granted to insurance companies that invest in Florida companies through venture capital funds. Senate Bill 1130, passed unanimously in the Banking and Insurance committee this week, now moves to the Commerce and Economic Opportunities Committee for consideration. More information is available at: http://www.leg.state.fl.us/Welcome/index.cfm

During the first days of March, Michigan Governor John Engler announced the implementation of two programs through the Michigan Virtual University to integrate information technology into the state’s education system.



Laptops for Teachers

On March 6, the Governor ceremoniously distributed the first laptop computers in the Teacher Technology Initiative (TTI) announced last year. The program allocates up to $1,200 for each eligible educator to receive a computer complete with software, including a productivity package, Internet access, a warranty and web-based professional development. It is funded by a one-time $110 million appropriation made last year by the state legislature, providing 90,000 Michigan teachers with computers and Internet access.



TTI applications from some 211 school districts were processed during the months of December, January and February, representing 23,839 teachers and an investment of $28.6 million.



Because more than 60,000 teachers have completed the required online assessment, more school districts are expected to apply for the TTI program. For more information see the Teacher Training Initiative link under the Michigan Virtual High School at http://www.mivu.org/index.asp

Does patenting encourage or speed the transfer of technology from universities? Does the prospect of receiving royalties and licensing fees increase motivation among university researchers to work with businesses to commercialize technology? A recent paper suggests the answers to both questions is "no," but that more empirical and statistical research is needed to determine whether or not increased emphasis on intellectual property rights is achieving the desired results.



How Do University Inventions Get Into Practice?, prepared by a team of researchers from across the country, is the first report on a study that attempts to understand:

Research and development activity in the nonprofit sector share of total U.S. R&D held steady at 3 percent from 1973 to 1997, according to a February 15 Data Brief prepared by the National Science Foundation (NSF). The Data Brief reports on the first survey of nonprofit R&D activity since 1973.



The new study captured R&D funding and performance by nonprofit organizations for fiscal years 1996 and 1997. In 1997 nonprofit organization intramural R&D expenditures totalled $7.3 billion. The average annual current dollar increase from 1973 to 1997 was five percent when adjusted for inflation. Extramural R&D activity for nonprofits was estimated to be approximately $1.5 billion for the same year.



NSF has made early release tables for the report available on its website. Table A-12, which provides figures for intramural R&D performance at individual nonprofit organizations by state for fiscal year 1997 may be of particular interest to state and local tech-based economic development officals.



The Early Release Tables can be found at http://www.nsf.gov/sbe/srs/srs01411

The U.S. Department of Agriculture and the National Institutes of Health released information on 51 inventions that are available for license. Descriptions and contact information for each invention/patent are presented on the accompanying SSTI web page: http://www.ssti.org/Digest/Tables/031601t.htm

Growing and keeping an educated workforce, one ready to help build a technology-based economy, is one of the greatest challenges even the most high-tech areas. The problem can be quite severe. For example, a new statewide survey of Florida college students, conducted by Leadership Florida and Nova Southeastern University, revealed that only 48 percent of the students plan to remain in Florida after graduation. (For a copy of the Florida survey report see http://www.leadershipflorida.org/survey.asp) 



Who Will Stay and Who Will Leave?, a forthcoming report from the Southern Technology Council (STC), provides one of the first in-depth looks at what factors influence graduate migration behavior after college. With emphasis on recent science and engineering graduates, STC identified several individual, institutional, and state-level predictors of student retention using a series of regression analyses of 44 different variables. 



While a few of the results are somewhat predictable, the report is full of surprises that may help policy makers in thinking and rethinking efforts to clog the brain drain. 



For example, one might expect high school students that stay in-state to attend college also will seek jobs in-state after graduation. STC’s statistical analysis of behavior patterns of 7,000 students bears this out but to the remarkable degree that generally in-state students are 10 times as likely to remain in-state as are out-of-state students. The policy implications of this single finding, then would support the efforts of many areas to provide scholarships to entice the best high school students to stay in-state for their college education. But, statistics from the Georgia HOPE Scholarship program, on which many other states’ efforts are modeled, revealed that while the Georgia program was celebrating its 500,000 recipient last Fall, six out of ten scholarship recipients once in college failed to maintain the B average required to remain in the program. Georgia HOPE program officials are exploring alternatives to correct the problem. 



A new University of Georgia study <http://www.terry.uga.edu/hope/hope.enrollments.pdf> showed the HOPE

scholarship program has been influential in keeping the state's brightest high school students in-state for college – a significant goal based on the STC findings regarding the likelihood of students remaining in-state after school. Three-fourths of high school students scoring over 1500 on the SAT now remain in state for higher education; only 23 percent stayed in Georgia prior to the creation of the scholarship program. Additionally, results showed 96 percent of the in-state students at the University of Georgia received HOPE scholarship funds. 



However, the STC analysis reveals that paying for all of its brightest students to attend college in-state may not necessarily help a state stop the brain drain, particularly if the state is trying to increase the number of science and engineering graduates. STC found that graduates are less likely to be employed in-state if they: 

Partnerships for Innovation (PFI), a National Science Foundation (NSF) program started just last year, has released its Program Solicitation for FY 2001. The program will support 10-15 new government-university-industry partnerships that explore new approaches to support and sustain innovation. An academic institution must be the lead for the partnership 



The program was designed to: 

The Wyoming legislature wrapped up its 2001 General Session on March 1. Several laws and supplemental appropriations were made that affect local efforts to grow a stronger tech-based economy. 



Senate Enrolled Act (SEA) 10 permits the Wyoming Business Council to use state funds to provide bridge financing to businesses, not to exceed 35 percent of the total cost of any particular project. 



SEA 71 creates a ten-year University of Wyoming endowment challenge program through which the state treasurer will match 1:1 each substantial private donation made to the university’s endowment fund. The legislature appropriated $30 million for the program in this year’s budget. 



House Enrolled Act (HEA) 32 repeals the sunset provisions for the University of Wyoming technology transfer center program, which without the law, would have terminated July 1, 2001. 



The legislature also provided $250,000 for the preliminary assessment, analysis, design and cost estimates for the University of Wyoming to establish a Wyoming technology business center. 



SEA 52 creates the Wyoming Energy Commission to facilitate the development, production, transportation, marketing and use of Wyoming's coal, hydro, ethanol, natural gas, oil, uranium, solar and wind resources. A portion of the Commission’s activities and a $1 million appropriation is to be dedicated to recommending research, development and demonstration projects and programs necessary to evaluate the availability and cost effectiveness of conservation and renewable resources in Wyoming. 



To increase access to capital, HEA 87 permits the state treasurer to invest up to $100 million in industrial development bonds and up to $55 million in small businesses through the purchase portions of federal SBA loan, FHA business and industry loans, and EDA loans. Prior to the bill’s passage, the ceiling for both investment activities had been limited to $35 million. The Wyoming Business Council administers the investment programs. 



To increase telemedicine opportunities and practices in the state, HEA 117 authorizes the department of administration and information to provide telecommunications services to private health care providers through the Wyoming equality network infrastructure. 



All of the bills mentioned above can be found at: http://legisweb.state.wy.us/2001/billsInfo.htm 

The U.S. Department of Energy's National Renewable Energy Laboratory (NREL) has selected six more incubators to join the National Alliance of Clean Energy Business Incubators, formed by NREL in April 2000. Alliance member incubators will focus on accelerating the growth and development of U.S. technology-based start-up companies working on a broad range of clean energy technologies, including solar, wind, biomass, geothermal, microturbine, fuel cell, power quality, energy efficiency, alternative fuels and infrastructure, and information technologies. 



The Alliance teams NREL with the seven business incubators and a network of venture capitalists and energy industry leaders to provide business and financial services to clean energy entrepreneurs. Each selected incubator received a $1 million grant from NREL to support incubator operations. 



Participating incubators include: 

There is often a disconnect between government policies to encourage entrepreneurship and the actual practice of launching fast growing companies, according to the fourth major report from the National Commission on Entrepreneurship (NCOE). Five Myths about Entrepreneurs: Understanding How Businesses Start and Grow is being released to educate policymakers about the vitally different characteristics of entrepreneurs and traditional small business owners. The report also sets out key policy implications based on these different characteristics. 



NCOE argues many policies are based on misconceptions about entrepreneurship: 

The state-by-state results for the 2000 SBIR Phase I awards — as reported individually by the 10 participating federal agencies and compiled by SSTI --- are presented in the accompanying table. Totals may not reflect new awards or cancellations made by an agency after the initial selection announcements. Abstract information for funded SBIR projects may be obtained on each agency’s SBIR website. Easy links are available from the DOEd SBIR web side: http://www.ed.gov/offices/OERI/SBIR/links.html 

Editor’s Note: For the skeptical Digest reader that viewed our assertion in last week’s issue that there is an average of at least one incubator-related article published somewhere in the country each day. Since we have several clippings on hand, it is easy to provide more examples of the continuing explosion of communities and states using non-profit incubators as tools for developing and expanding tech-based economies. Due to space considerations, a list of 17 more local incubator stories published in the last nine days alone is provided on the accompanying web page.