In the May 28, 1999 Issue:

Copyright State Science & Technology Institute 2002. Information in this issue of the SSTI Weekly Digest was prepared under a cooperative agreement with the U.S. Department of Commerce, Economic Development Administration. Redistribution to all others interested in tech-based economic development is strongly encouraged — please cite the State Science & Technology Institute whenever portions are reproduced or redirected. Any opinions expressed in the Digest do not necessarily reflect the official position of the U.S. Department of Commerce.

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Technology Leads VC Investments Past $4B Mark
As Wall Street waited for the Dow to top 10,000, venture capital investments were also reaching a new high, according to the latest PricewaterhouseCoopers Money Tree Survey. Venture-backed investments rose to a record $4.286 billion during the first quarter of 1999, a 41 percent increase over the first quarter of 1998. The survey's previous record of $3.77 billion was set during the third quarter of last year.

The survey results for the first quarter of 1999 reflect venture capital investors' growing concentration on technology-based companies. Technology firms -- defined as companies involved in biotechnology, communications, computers & peripherals, electronics, environment, medical devices, semiconductors, software and information -- and Internet-based firms captured 84 percent of the first quarter's total venture capital investments and rose 63 percent over the technology sector's results for the first quarter of last year. Investments in non-technology decreased by 18 percent compared to 12 months ago.

The $1.84 billion invested in Internet-related companies, which cut across all industrial sectors, was more than triple the first quarter 1998 total. The number of Internet firms receiving investments more than doubled to 236.

In all, 462 venture capitalists responded to the survey, funding 722 companies during the first quarter of 1999, up 7 percent from a year ago.

Silicon Valley's dominance of the nation's venture capital market grew as $1.73 billion poured into companies in that region. The New England region reported investments of $554 million. Only three other regions-- New York Metro, Los Angeles/Orange County, and the Pacific Northwest-- had investments totaling more than $250 million. Projects with Internet-based companies represented 75 percent of the total for the New York Metro region, two-thirds of the venture capital activity reported in Texas, and one-half of the investments for the Pacific Northwest.

The accompanying table reflects the survey results by state. Details of the Pricewaterhouse-Coopers Money Tree survey and the individual venture capital investments reported can be found on the company's website at http://204.198.129.80 

State No. of Deals Dollars Invested (millions)
California 280 2,173
Silicon Valley 212 1,727
Los Angeles/Orange Co. 43 283
San Diego 21 137
Sacramento/Northern CA 4 26
Massachusetts 88 477
New York 29 277
Washington (state) 33 225
Texas 37 174
Pennsylvania 20 116
Florida 17 101
New Jersey 17 100
Colorado 17 85
North Carolina 14 77
Virginia 17 60
New Hampshire 10 48
Illinois 11 42
Georgia 16 42
Minnesota 15 41
Connecticut 11 37
Oregon 4 33
Ohio 10 29
Utah 10 21
Maryland 9 19
Missouri 5 17
Tennessee 6 16
Arizona 5 11
Vermont 2 11
Kentucky 5 10
Washington, DC 2 10
Arkansas 2 7
South Carolina 1 6
Louisiana 2 5
Mississippi 1 3
Indiana 4 3
Michigan 7 2
Nebraska 1 2
Alabama 3 2
Delaware 2 2
Nevada 2 2
New Mexico 1 1
Hawaii 1 0.5
Wisconsin 3 0.5
Oklahoma 1 0.3
Montana 1 0.2
Total 722 4,286

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$4 Million Offered for Chemical R&D
The U.S. Department of Energy's Office of Industrial Technologies issued a solicitation this week calling for proposals to advance energy efficiency and technological innovation in the chemical industry. DOE anticipates awarding a total of $12 million for the solicitation with $4 million dispersed in fiscal year 2000.

As part of the DOE Industries of the Future initiative, the RFP seeks collaborative R&D projects that address priority needs identified in the industry-developed Technology Roadmap. Topics include: computational chemistry; materials of construction; separations; selected topics related to catalysis; alternative synthetic pathways; the application and use of alternative feedstocks; alternative reaction conditions; and supercritical/dense phase fluids as solvent replacements in production of chemicals and in other applications. Significant energy savings compared to currently used technologies must be incorporated into every project.

DOE will consider projects of 1 to 3 years in length. All projects must involve a teaming arrangement of at least two chemical companies. Academic institutions, national labs, and trade associations also may serve as team members.

However, industry partners must perform at least 50 percent of the proposed effort, and national labs may not serve as the prime contractor. Minimum cost-share requirements are 50 percent of the total project costs.

Proposals are due to the Chicago Operation Office before 3:00 pm on July 30, 1999. Selection of 12-15 cooperative agreement awards is antici-pated to be made by October 13.

Further information on the RFP (Solicitation #DE-SC02-99CH10989) can be obtained by contacting Jennifer Stricker at 630/252-5045 or by email at jennifer.stricker@ch.doe.gov . The RFP can be viewed on the web by following the link "Current Solicitations" at http://www.ch.doe.gov/business/ACQ.htm  

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New Washington Laws to Promote Rural High Tech
Washington's technology boom hasn't been enjoyed equally by most communities outside of the Seattle or Spokane urban areas. Two laws recently passed by the Washington legislature are intended to provide tax credits, infrastructure financing, and other incentives to spread the economic benefits of technology into the state's most rural counties.

House Bill 2260 grants 100 percent, seven-year Business & Occupation (B&O) tax credits to businesses in rural counties engaged in providing "help desk" technologies to other businesses. After the seventh year, the credit is reduced to 68 percent.

The bill also gives a $1,000 B&O credit for each new software manufacturing or software develop-ment job created by any business in rural counties. The credit may be applied each year for up to six years provided the job is maintained.

Final provisions of the bill provide a 50 percent utility tax credit for rural telecommunications and water facility projects, and allows rural counties to retain more of the state sales tax revenues collected to use for infrastructure projects, including telecommunications.

Senate Bill 5594 expands the use of state rural economic development funding to areas not eligible under former definitions of distressed areas, allowing rural communities to use state infrastructure loans and grants for telecommunications and other business expansion projects. The act also establishes a Rural Washington Loan Fund to distribute block grants for job-creating business projects in rural counties.

Rural counties, as defined by the two laws, are those with densities lower than 100 people per square mile. Thirty-two of the state's 39 counties fit the definition; 75 percent of Washington residents live in the remaining seven counties.

More information on the state' efforts to encourage rural high tech economic development can be found on the Web at http://access.wa.gov  

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DOE Selects STTR Winners
The Department of Energy has announced 16 awards under the 1999 solicitation for the Small Business Technology Transfer (STTR) Program. The following table presents states with companies and academic institutions or federal labs selected in the competition. Only five of the awards were made to projects in which the company and university are located in the same state. Award information is posted at http://sttr.er.doe.gov/sttr/ 

State Companies Institutions or Labs
AR 1 --
CA 4 1
CO -- 1
IL -- 1
IN 1 --
LA -- 1
MA 2 --
MN 1 --
MO -- 1
MT 1 --
NV -- 1
NM -- 3
NC -- 1
ND -- 1
OH 1 1
OR 1 --
PA 1 --
TN -- 1
VA 2 2
WY 1 1
Total 16 16

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Positions Available
Virginia's Center for Innovative Technology is seeking a new President and Chief Executive Officer. The CIT president's primary responsibility will be to assist the Secretary of Technology in implementing the Commonwealth's technology strategy by developing and directing CIT's key role in the strategy. Applications are due by June 22, 1999.

The Maine Science and Technology Foundation is seeking a Director of Policy Analysis to manage the development and implementation of the state's science and technology policy and the measurement of the impact of science and technology on the state's economy. Applications are due by June 15, 1999.

Full position descriptions for both can be found on the SSTI home page at www.ssti.org 

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