SSTI Digest

While the Presidential election takes center stage on November 4, voters in several states also will cast their votes on statewide ballot issues affecting the TBED community. In addition to the 11 gubernatorial races and more than 5,800 state legislative seats up for grabs, voters across the nation will consider measures to provide funding for public education, expand investment in alternative and renewable energy, lift restrictions on stem-cell research, and eliminate income tax and state spending caps. Following is a summary of selected ballot issues from across the nation. Funding Public Education Florida Florida voters will be asked to amend the state constitution to require that the legislature authorize counties to levy a local option sales tax to supplement funding for public community colleges. Ballot question 8 requires voter approval to levy the tax. Maryland A proposal in Maryland asks voters to approve an amendment to the state constitution authorizing video lottery terminal gaming to provide funds for public education. Question 2 legalizes up to 15,000 machines at sites in four counties and the city of Baltimore. HB 4 requires…

Technology-focused incubators are an important component to fostering entrepreneurial development in a region by nurturing businesses in the earliest stages of development and helping them grow into larger companies that employ high-wage workers and bring new technologies to the market. The following select announcements provide an overview of new incubators from across the nation, illustrating the vital role of entrepreneurial development in growing high-tech regional economies. Ann Arbor Spark announced last month a new location for its proposed business incubator in downtown Ypsilanti, reports the Ann Arbor News. The 8,500-square-foot incubator, which is expected to open in December, will provide space for 10 start-up technology companies for two years, the article states. Battle Creek Unlimited announced in August they are developing a virtual incubator as a Web 2.0 network to match high-tech start-up companies with universities and public entities. With partial funding from the Michigan Economic Development Corporation, the virtual incubator will offer services including quick access to resources, business progress monitoring, and the ability…

Even in the venture capital-rich state of California during a boom period for clean energy investment, some clean energy entrepreneurs still have a hard time finding the capital resources they desire. As a result, one non-profit venture capital group, with a unique history of its own, is launching a new effort to support early-stage businesses. The California Clean Energy Fund (CalCEF) is currently helping to raise a $20 million angel fund to bridge a perceived gap in seed and start-up stage capital availability. Despite the rapid growth of clean energy investment in the past two years, CalCEF believes that early-stage investment is not yet sufficient to ensure a steady stream of high-quality investments at later stage of development. CalCEF was created in 2004 as a consequence of Pacific Gas & Electric Co.’s bankruptcy settlement negotiated with the California Public Utilities Commission. As a part of that settlement, the company agreed to contribute $30 million to support emerging clean technology energy companies. CalCEF is a non-profit entity that makes for-profit investments in clean energy companies and reinvests its profits in additional companies. The fund…

According to National Science Foundation (NSF) data released two weeks ago, companies spent in aggregate $247.7 billion on R&D expenditures performed in the U.S. in 2006. Leading the nation was California, with $58.4 billion in industrial R&D, followed by Michigan ($16.5 billion), Massachusetts ($15.6 billion), New Jersey ($14.6 billion), and Texas ($13.3 billion).   SSTI has prepared a table presenting the state rankings for industrial R&D performed in 2006, the per-state gross state product in 2006, and each state's industrial R&D intensity. The industrial R&D intensity is the ratio of industry-based R&D to the gross state product.   Using these calculations, Massachusetts experienced the largest industrial R&D intensity in 2006, at 4.64 percent. This was followed by Michigan (4.38 percent), Connecticut (4.04 percent), Washington (3.89 percent), and California (3.35 percent). The industrial R&D intensity for the U.S. as a whole was calculated to be 1.89 percent.   The table may be accessed by visiting: http://www.ssti.org/Digest/Tables/082708t.htm   The NSF has released an…

California California Gov. Arnold Schwarzenegger has signed a bill authorizing community service districts to provide high-speed Internet services in areas in which no private company has done so. The districts, which provide basic infrastructure such as water, sewer and police services, will help extend broadband access into rural areas of the state that remain underserved. The bill reflects the recommendations of the California Broadband Task Force, which was created in 2006 by Gov. Schwarzenegger and presented its findings in January (see the Dec. 4, 2006 issue of the Digest). This action comes on the heels of a new report from the Public Policy Institute of California and the California Emerging Technology Fund, which finds that the digital divide in the state is growing between key demographics. Rural residents are marginally less likely to have access to a high-speed connection than urban dwellers, but some groups in both urban and rural areas are less likely to have access. Less than half of Hispanics in the state have home computers and only about a third have access to a broadband connection. About two-thirds of white, black and Asian residents have at-…

The U.S. Department of Commerce's Economic Development Administration (EDA) recently announced Ben Franklin Technology Partners (BFTP) as the winner of the "Excellence in Technology-led Economic Development" award, as part of EDA's Excellence in Economic Development Awards 2008. BFTP, created in 1983, has regional offices in Lehigh Valley, Philadelphia, Pittsburgh and State College. Janet Harrah was named the director of a new center being started at Northern Kentucky University that is similar to Wichita State University's Center for Economic Development and Business Research, where Harrah will remain director until July 25. Peter Hermann resigned as president of the North Carolina Technology Association. Robert McGrath, currently senior vice president for research at Ohio State University, will help lead global laboratory operations at Battelle, starting in August 2008. No official title has been developed for McGrath's new position, which will emphasize development in energy policy and sources of renewable energy. J.D. Stack was selected to replace Oleg Kaganovich as chief executive of the Sacramento Area Regional Technology…

Although the U.S. broadband infrastructure has expanded rapidly over the past decade, 45 percent of rural areas still lack access to high-speed Internet services. A recent issue brief from the National Governors Association (NGA) Center for Best Practices provides a number of strategies that have proven effective in expanding broadband access, particularly in underserved rural areas.   The brief highlights a number of state efforts that have been successful in expanding and improving service in recent years. These include the California Broadband Initiative, ConnectKentucky, Maine's ConnectME Authority and the New York State Council for Universal Broadband. Together, these profiles offer an overview of how states are approaching the digital divide.   NGA also presents a number of specific strategies that can be implemented in states with high-speed Internet gaps to create a comprehensive broadband access initiative. For example, the report provides a guide to 14 state tax credit programs that have been used to increase demand for broadband services or to encourage the development of new broadband infrastructure.   Other…

SSTI’s VC Dashboard Value Enlarged with Addition of Per Capita Data The runaway success of California and a few other major venture capital centers in the U.S. has made it difficult to get a firm grasp on the venture capital scene in the rest of the country. In the April 16, 2008 issue of the SSTI Weekly Digest, SSTI looked at the impact of removing California from the data to get a clearer picture of how venture capital investment is distributed throughout the other 49 states. This approach, however, does not make it any easier to evaluate a state's venture activity relative to its actual capacity for investment. Such a study would require reliable metrics on the demand for investment, which we have yet to uncover.   In the absence of such metrics, it may help to examine each state's amount of investment and number of deals at the broadest and most general standardization level -- venture capital investment relative to the state’s total population. While total population is no substitute for data on investment capacity, it can provide a thumbnail sketch of how states are performing in light of their size. This approach could also help…

Publisher's Note: SSTI notes with much sadness the March 5 passing of Indiana State Sen. David Ford, following a battle with pancreatic cancer. David was a good friend not only of SSTI's, but also of the tech-based economic development community across the nation. In addition to being a tireless and cheerful advocate for investing in science and technology, he was also a gentleman in the true sense of the word, and we miss him greatly. David Abbott, executive director of the George Gund Foundation, was elected the new chairman of the Northeast Ohio-based Fund for Our Economic Future. Abbott replaces Robert Briggs of the GAR Foundation, who had served as chairman since the Fund was formed in 2004. Birgitte Ahring has joined Washington State University as the director of the Center for Bioproducts and Bioenergy and as the Battelle Distinguished Professor, based at WSU Tri-Cities. Eddie Ashworth, president of Research Park Corp., the managing entity of the Louisiana Technology Park, is resigning to become undersecretary of the state Department of Social Services. The Tucson-based BioIndustry Organization of Southern Arizona, known as Bio-SA, has…

Last week, three venture capital firms were chosen by the Department of Energy (DOE) to participate in its new Entrepreneurship in Residence (EIR) program, a pilot initiative designed to get advanced energy technologies out of the federal labs and into the marketplace. In the program’s design, an entrepreneur affiliated with each venture capital firm will work with the selected DOE laboratory staff in order to identify and evaluate marketable technologies.   The selected venture capital firms and their respective federal laboratories are: Kleiner, Perkins, Caufield & Byers (Menlo Park, CA) to work with the National Renewable Energy Laboratory; ARCH Venture Partners (Chicago) to work at Sandia National Laboratory; and, Foundation Capital (Menlo Park, CA) to investigate technologies at Oak Ridge National Laboratory. The DOE is providing $100,000 to each entrepreneur to defray salary and other expenses. The partnering venture capital fund is expected to match that amount, plus provide additional funds if needed.   The entrepreneur in residence and the venture capital fund will select a technology…

According to the latest index from JointVenture Silicon Valley, 2007 looks like a pretty good year compared to 2006 when you look at many standard measures of economic performance. There were 28,000 new jobs created, a 1.5 percent increase in population, and 21 percent growth in solar and wind energy installations. Water use also dropped 6 percent, venture capital investments were up 11 percent, median household income rose, and city revenues were up 37 percent.   A closer look at some of the socio-economic indicators in the Silicon Valley Index, first published in 1995, suggests all is not good for the sustainability of the Valley’s economy, however. Foreclosure rates were four times higher than the previous year, high school graduation rates dropped, and reading proficiencies dropped.   Receiving special attention in this year’s Index are the challenges facing middle-wage earners trying to keep or find employment opportunities with growing salaries or maintaining benefits. The number of these workers in the Valley - defined as earning $30,000 to $80,000 - dropped by 60,000 individuals during the 2002-2006 period. Lower-wage…

Although the national venture capital investment continues to expand, many parts of the country still lack access to reliable sources of business capital. Even in states that rank in the top tier for venture investment, there are often insufficient capital resources to support businesses at every stage of development. In order to support entrepreneurs and to attract more attention from the industry, an increasing number of cities, regional organizations, community and technical colleges, and other groups are creating their own capital programs. These programs frequently focus on providing funding at the pre-seed and start-up stages of business development when it is difficult to attract funding.   Northeast Ohio The Lorain County Community College (LCCC) Foundation recently announced that it would make its first three grants to support Northeast Ohio start-ups through its new Innovation Fund. These grants provide pre-seed and technology validation funding for businesses in the region that agree to provide internships for LCCC students and to participate in on-campus lectures on entrepreneurship. The program offers grants of up to $100,…