SSTI Digest

Price Waterhouse, in conjunction with the National Venture Capital Association, recently published the results of the 1996 National Venture Capital Survey. Venture capitalists reported investing $9.5 billion in 1996, a 25% increase over 1995. Approximately 2,000 companies received venture backing with funds going to companies in all stages of growth, from start-up to turnaround. More than one-quarter of all companies received early stage financing: either initial/seed or first round. Follow-on investments accounted for 15% of companies and 10% of funds. Price Waterhouse, which reports its information by region rather than by state, reported Silicon Valley remained the leader of venture capital with 552 companies attracting $2.29 billion. New England retained the number two position with 330 companies garnering $1.27 billion. The Southeast received $1.08 billion, followed by the Midwest with $895.8 million, Texas with $668.8 million, and the New York Metro area with $662.5 million. The industry sectors receiving the most venture capital in 1996, according to Price Waterhouse were…

In its annual Money Tree Survey of venture firms, Coopers & Lybrand, which also tracks venture capital activity, reported greater growth in 1996 than Price Waterhouse did. According to this survey, venture capital investment reached $10.1 billion in 1996. Surveyed venture firms participated in 2,163 deals during 1996. The average size of each financing rose in 1996 to $4.7 million, up from the $4.3 million average investment reported in 1995. Coopers & Lybrand, which reported information only for the top 12 states, ranked the states in the following order: State (millions of $) California 3,211.3 Massachusetts 1,067.4 Texas 595.3 Colorado 392.7 Florida 375.9 Illinois 343.9 Connecticut 314.7 Pennsylvania 307.0 Washington 294.7 Virginia 275.7 New Jersey 264.3 Tennessee 261.5 …

The Rhode Island Economic Policy Council has concluded a year-long examination of the state's economy with a call for nine recommendations to be implemented. The Council found,"Our economy has performed poorly in this decade. We have lost population every year because large numbers of people have moved out of state in search of economic opportunity. Five years into a nationwide economic recovery, key economic indicators in Rhode Island...are all still below their peak from the late 1980s." To strengthen the state's economy, the Council suggests that several steps be taken, including: Creating the Samuel Slater Technology Corporation to help existing firms move forward technologically and new firms commercialize technology Establishing a privately-operated early stage equity capital fund Increasing the R&D tax credit to 22.5% Expanding and merging multiple technical assistance organizations into an effective, coherent industrial modernization service The Economic Policy Council is a non-profit corporation equally funded…

Nominations are being accepted through April 4 for the annual Entrepreneur Of The Year awards. Nominees must be owners/managers primarily responsible for the recent performance of a company that is at least two years old. Founders of public companies are also eligible provided the founder is still active in upper management. Regional award recipients will be selected in several award categories by independent judging panels and presentations will be made at 46 regional award banquets in June. A national judging panel will choose finalists and award recipients for five National awards and The Entrepreneur Of The Year award. All regional award recipients are eligible, including those from previous years. The awards are sponsored nationally by the Entrepreneur Of The Year Institute, Ernst & Young LLP, the Center for Entrepreneurial Leadership Inc. at the Ewing Marion Kauffman Foundation, USA TODAY, and the Nasdaq Stock Market. For more information, call 1-800-755-AWARD (2927).

The U.S. Environmental Protection Agency (EPA) is soliciting grant proposals to establish a national network of pollution prevention information centers. Currently there are limited mechanisms to coordinate the development, review, and dissemination of pollution prevention information among those promoting source reduction technologies, according to the EPA. Access to pollution prevention information and assistance varies across the country. In addition, not all programs providing assistance to small businesses have access to pollution prevention information. As a result, EPA is supporting a program to: create new centers for the collection and dissemination of pollution prevention information for states not currently served by a pollution prevention regional center (although the solicitation is not clear as to exactly which states those are), support existing regional pollution prevention information centers, and coordinate work among centers. "The development of a pollution prevention information network of centers would allow state pollution prevention information…

The "Baldrige Index" for 1996 outperformed the Standard & Poor's 500 for the third year in a row, according to a study prepared by the National Institute of Standards and Technology (NIST). The fictitious index is made up of winners of the Malcolm Baldrige National Quality Award. NIST "invested" a hypothetical $1,000 in each of the five publicly traded, whole company winners of the Baldrige Quality Award and a percentage of $1,000 in the parent companies of nine subsidiary winners. The percentage represented the number of employees the subsidiary has as a percentage of the whole company's employee base. An equal amount was hypothetically invested in the S&P 500 at the same time. NIST found that the group of five whole company winners outperformed the S&P 500 by 3.5 to 1, achieving a 380 percent return on investment compared to a 110 percent return for the S&P 500. Meanwhile, the group of all publicly traded winners (which includes the five whole company winners and the parent companies of winning subsidiaries) outperformed the S&P 500 by about 3 to 1, a 325…

The steel industry has experienced painful changes over the past 10 to 15 years, but has now emerged in much better financial and operating condition, according to a new report by the U.S. Department of Commerce's Office of Technology Policy (OTP). Downsizing, a strong economy that's allowing the industry to operate near capacity, and substantial sums invested in modernization have made the U.S. steel industry competitive for the U.S. market, the study finds. The Basic Steel Industry is part of OTP's Meeting the Challenge: U.S. Industry Faces the 21st Century series of studies that assesses the competitive position of a number of major U.S. industries and the factors influencing their growth. Previous reports have focused on the automobile manufacturing and chemical industries. Copies of the report can be obtained by calling OTP at 202/482-3037 or sending an e-mail to OTPReports@doc.gov

The U.S. Senate's Committee on Commerce, Science, and Transportation has established a new subcommittee to focus on manufacturing and competitiveness issues. Spencer Abraham (R-MI) will chair the Manufacturing and Competitiveness Subcommittee. Joining Abraham on the subcommittee are: Olympia Snowe (R-ME), John Ashcroft (R-MO), Bill Frist (R-TN), Sam Brownback (R-KS), Richard Bryan (D-NV), Ernest Hollings (D-SC), Byron Dorgan (D-ND), and Jay Rockefeller (D-WV). The membership of the subcommittee has a large degree of overlap with the Science, Technology, and Space Subcommittee, which is chaired by Frist. Five of the nine members of the Science, Technology, and Space Subcommittee are on the Manufacturing and Competitiveness Subcommittee (Frist, Abraham, Rockefeller, Bryan, and Dorgan). The remaining four members are: Conrad Burns (R-MT), Kay Bailey Hutchison (R-TX), Ted Stevens (R-AK), and John Kerry (D-MA).

Only 13 percent of midsize manufacturers reported that the growth of the Internet has had "a great deal of" or "some" impact on their companies over the past two years, according to a survey conducted for Grant Thornton LLP. However, the manufacturers expect that to change in the next two years. The survey found that 50 percent of the manufacturers expected the growth of the Internet to have "a great deal of" or "some" impact on their companies. The percentage of manufacturers with sites on the World Wide Web has increased significantly in the past year. In October 1996, 25 percent reported that they had a site, while in November 1995, only 14 percent had a site. Most significantly, 59 percent indicated that they either would have or planned to have a site by the end of 1997. Yet, less than half of the manufacturers with Web sites expect the Internet to have much of an immediate impact on sales. Just 41 percent rated "providing customers with another way to purchase products" as an important reason for establishing a Web site, and only 17 percent cited starting or enhancing mail-…

Last Thursday, the Clinton Administration released its detailed budget proposal for FY98. The requested 2% rise in research and development funding reflects the constraints facing discretionary spending programs: the call to balance the budget while costs for entitlement programs and debt service are growing. The FY98 budget proposal, which totals $1.69 trillion, calls for increasing spending on R&D to roughly $75.5 billion, up $1.6 billion from FY97. The following is an overview of the Clinton Administration's proposed spending for programs of interest to the science and technology community. Department of Commerce National Institute of Standards and Technology (NIST). The FY98 budget proposal is for $692.5 million. Extramural programs would receive $399 million, including $275.6 million for the Advanced Technology Program (ATP) and $123.4 million for the Manufacturing Extension Partnership (MEP). Funding would support a new general ATP competition and increase the coverage of MEP centers. Additional NIST funding would go for research at NIST laboratories,…

An agreement between the White House and the National Governors' Association (NGA) to establish a new mechanism, the U.S. Innovation Partnership, for coordinating federal and state technology efforts was announced by Vice President Gore and NGA's Lead Governors on Technology John G. Rowland, (R-CT), and Parris N. Glendening, (D-MD), earlier this week. "Building on the work of the State-Federal Technology Partnership Task Force led by former Governors Richard Celeste and Richard Thornburgh, I am committed to working with our nation's governors to establish a U.S. Innovation Partnership. This partnership will coordinate federal and state efforts to stimulate the development and use of new technologies that can help us meet our common goals of generating economic growth, improving our schools and health care, better protecting the environment at lower cost, and reinventing our government at all levels," President Clinton said in a letter to Gov. Bob Miller (D-NV), chair of NGA. Four USIP task forces have held meetings in Connecticut, Nevada, and Missouri to help set priorities and to…

A State-Federal Technology Executive (SFTE) to serve in the White House Office of Science and Technology Policy (OSTP) is being sought. The SFTE, sponsored by the American Society of Mechanical Engineers (ASME), is a one year old initiative designed to encourage broad-scale science and technology cooperation between the states and the federal government. The SFTE will have responsibility for facilitating state-federal collaborative efforts via the newly formed United States Innovation Partnership (consisting of the National Governors' Association, OSTP and the Dept. of Commerce). With the announcement of a new partnership between the states and the White House on science and technology issues, the position could have significant impact in shaping the partnership. Anticipated activities for the SFTE include: coordination of federal and state science and technology initiatives; promotion of opportunities available at state and federal levels for science and technology efforts; and, serving as an information resource for state governments, industry, and universities. The SFTE should be a…