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Southern Growth hired Ted Abernathy, Jr., former Executive Vice President & COO of the Research Triangle Regional Partnership, to serve as its Executive Director, filling the vacancy created by Jim Clinton's resignation in September.

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.

As many stories in this issue of the Digest point out, academic institutions serve a critical role in performing R&D for the nation’s innovation pipeline. While most of the attention of national policymakers is directed toward the size of federal and industrial investments in R&D, the burden of financing the infrastructure to support much of that research activity falls on states and institutions of higher education. And that burden has a steep price tag.

Lori Broyles was appointed coordinator of the Women's Business Center in Oklahoma City.

Nearly four months into the current fiscal year, Wisconsin Gov. Jim Doyle signed into law the biennial 2007-09 budget last week, investing in renewable energy, university R&D and expanding tax credits to attract angel and venture capital investment.

 

The enacted budget includes $15 million in fiscal year 2008-09 for a renewable energy grant and loan program -- about half of the governor’s recommendation (see the Feb. 19, 2007 issue of the Digest). The program authorizes the Department of Commerce to award a grant or loan to a business or researcher to fund R&D, including demonstration projects into renewable energy technologies, development of renewable energy sources and infrastructure, the commercial application of renewable energy technology sources, and construction of one or more cellulosic ethanol production plants.

 

The Commerce budget also includes $775,000 in FY 2007-08 to increase funding for the Wisconsin Development Fund (WDF), bringing the total funding to $23.1 million for the biennium. It also includes an amendment to the technology commercialization grant and loan program that increases the maximum level of funding for the entrepreneurial and technology transfer center grants to $600,000 -- up from $500,000. 

 

The enacted budget restructures the WDF, the state’s major job creation tool, eliminating current grant and loan programs and establishing more general program criteria and procedures for distributing financial assistance. Under the restructured program, Commerce is authorized to make grants or loans to eligible recipients and the WDF board is expanded to include two legislative members. Commerce also is required to establish criteria for awarding the grants and loans, including the types of projects eligible for funding.

 

Gov. Doyle’s proposal to expand the angel and seed investment tax credits was ultimately approved in the enacted budget after being removed from the Senate version in July. The Assembly added the measure back into the budget, which expands by $5 million tax credits for angel investors and early- and seed-stage venture investors. Under the current law, Act 255, taxpayers can claim a total of $3 million per calendar year for angel investment credits and $3.5 million for early-stage seed investment credits. The new law increases the total tax credits to $5.5 million and $6 million, respectively.

 

Lawmakers approved funding for several initiatives within the University of Wisconsin System’s Growth Agenda, a plan to boost the state’s economic growth, increase college graduates, and grow knowledge-based jobs. The budget includes $8.4 million for UW-Milwaukee initiatives aimed at moving forward plans for a $149 million, 55-acre engineering campus and research park. Funding is allocated to expand an existing research initiative to compete for additional extramural research funds, hire 20 leading faculty in targeted clusters such as biomedical and health technologies, advanced manufacturing and other science and engineering areas, and enhance the level of graduate and undergraduate education and research. The appropriation is slightly less than the $10 million requested by the university.

 

The enacted budget also includes $2.1 million for a partnership between UW-Eau Clarie, UW-Stout and the Chippewa Valley Technical College championed by Gov. Doyle in his State-of-the-State Address earlier this year. The goal of the partnership is to educate more students in advanced science, technology, engineering and mathematics disciplines, including nanotechnology, biotechnology, polymer engineering and computer and electrical engineering. Funding also will be used to improve access to science and engineering facilities and to enhance the training of graduates in these fields to attract and retain high-end employers.

 

One-time funding of $2.5 million in FY08-09 is included for the comprehensive cancer center located in the UW School of Medicine and Public Health for lung cancer research. The funding must be matched by federal grants or private funding. The budget also includes $200,000 to establish a School of Public Health at UW-Milwaukee, pending approval from the Board of Regents.

 

The FY07-09 budget is available at: http://www.legis.state.wi.us/2007/data/acts/07Act20.pdf

Like many states, Wisconsin has struggled to attract consistent attention from the national venture capital industry. Capital can be especially difficult to obtain in the state, since entrepreneurs with limited resources are often unable to participate in the expensive and complicated process of presenting their cases to venture capital firms based on the coasts. To address this market failure, Wisconsin has established several programs to encourage the formation of local venture and angel capital groups and incentives for in-state equity investment.



A recent report from NorthStar Economics, in cooperation with the Wisconsin Technology Council and the Wisconsin Angel Network, suggests that these equity programs are working well. In 2006, early-stage risk capital activity reached $102.9 million, a 54 percent increase over the previous year. This early-stage activity includes investments by angel networks, individual angels, informal angel groups and early-stage fund investments. To put that in perspective, the Center for Venture Research at the University of New Hampshire reports that angel investing in the U.S. increased only 11 percent last year.



The life science/biotech industry posted the most gains for Wisconsin early-stage investments, growing from $23.9 million in 2005 to $35.7 million in 2006. The number of deals, however, fell from 17 to 13, meaning the average size of an early-stage biotech deal nearly doubled. Energy also experienced an early-stage investment boom, receiving $14.7 million and displacing information technology as the second most popular industry for investment in the state.



Tom Still, president of the Wisconsin Technology Council, told the Milwaukee Journal Sentinel that he credits much of the state's progress in attracting angel capital to measures introduced in the past few years that target early-stage investment. In 2004, Gov. Jim Doyle created a number of programs under the Grow Wisconsin Initiative (see the April 26, 2004 issue of the Digest). Current programs include early-stage angel investment and venture capital tax credits, technology assistance grants to help businesses pay for third party services used to acquire private investment, and technology venture fund loans to help businesses search for angel or seed investment. The angel tax credit, which provides $3 million annually in credits, has allowed Wisconsin to collect more detailed information about angel investment within the state.



Additionally, the Wisconsin Angel Network, created in January 2005, has provided investors and entrepreneurs with information and networking opportunities to increase the volume and quantity of investment over the past two years. The network is a public-private initiative operated by the Wisconsin Technology Council, which also offers a number of other programs to improve the state's venture market.



Though Wisconsin actually rose two spots in the national rankings, venture capital investment overall in the state was down $8 million in 2006. The state now ranks 33rd in the country, despite the setback. In the Sentinel article above, Still attributed the small decline to a fund-raising year for several of the states’ larger venture firms. Last year, however, also saw the formation of several new venture funds in the state, which Still feels bodes well for future growth in the industry. Healthy growth within the early-stage market also should provide more high-quality opportunities for later-stage investment down the line, Still concluded.



Read Risk Capital in Wisconsin: A Progress Report for 2006 at: http://www.wisconsinangelnetwork.com/uploads/ReportingMetrics/RiskCapital2006Report.pdf

John Gee was named president and CEO of the Information Technology Association of Wisconsin.

Last week, Wisconsin Gov. Jim Doyle announced his administration and the Wisconsin Alumni Research Foundation (WARF) had reached an agreement that would allow companies sponsoring stem cell research in Wisconsin to obtain a free, non-exclusive research license under the stem cell patents held by WARF. WARF, which manages more than 720 pending and 880 issued U.S. patents on University of Wisconsin at Madison technologies, will not charge Wisconsin research centers for licenses on its stem cell patents. The agreement is part of Gov. Doyle's plan to help the state capture 10 percent of the national stem cell market by 2015.



The WiCell Research Institute, a subsidiary of WARF and operator of the National Stem Cell Bank, offers technology licenses, stem cell lines, and training for university and private sectors researchers around the world. WiCell provides five of the 21 stem cell lines available for federal funding and maintains more than 460 academic and commercial licenses on human embryonic stem cells. Its licenses directly affect all U.S. companies and research in the field.



The agreement gives Wisconsin a competitive advantage in growing and attracting biotechnology companies over other states active in stem cell research, such as California. Wisconsin's biotech economy generates nearly $7 billion annually and employs 22,000 workers earning well above the average state income. In its announcement, the governor's administration cited predictions that the market for stem cell products could reach $10 billion, and create more than 100,000 jobs over the next 10 years. Gov. Doyle expects the measure to keep Wisconsin at the forefront of this growth.



The agreement is part of a package of incentives offered by the state of Wisconsin, which also includes:

Barbara Fleisner is the new vice president of economic development for the Green Bay Area Chamber of Commerce. She succeeds Paul Ehrfurth, who retired in June.

The six-month-old Information Technology Association of Wisconsin selected Jim Rice to serve as the organization's first president and CEO.

Wisconsin manufacturers must adapt to a fast-changing world in order to grow and succeed in the 21st century. That is the thrust of a recent study of the state’s industrial economy recently released by the Wisconsin Manufacturing Extension Partnership (WMEP).