May 4, 2001 -- SSTI Weekly Digest

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.

Subscription to the SSTI Weekly Digest is free. If you are reading a forwarded copy of this issue and would like to receive your own copy each week directly, please subscribe at: http://www.ssti.org/Digest/digform.htm Requests to unsubscribe should be sent to sstiwd@ssti.org

1st Quarter VC Figures Released; 4th Quarter 2000 State Stats Available
Venture capital (VC) investments for the first quarter of 2001 totaled $10.1 billion, a staggering 40 percent less than the previous quarter, according to the latest Moneytree™ survey prepared by PricewaterhouseCoopers in partnership with VentureOne. Although VC investment now has declined steadily in each of the four quarters since the peak in the first quarter of 2000, the latest results mark the greatest quarter-to-quarter decrease in absolute dollar terms since the survey started.

While the figures of a separate survey released this week by the National Venture Capital Association (NVCA) and Venture Economics reported higher totals for the two most recent quarters, the decline between quarters of 42 percent is consistent with the Moneytree™ results. NVCA reported first quarter 2001 venture capital activity totaled $11.7 billion compared to $20.5 billion for the final quarter of 2000.

According to the PricewaterhouseCooper’s website, seed and first round financings were hit hardest: both deal flow and the amount raised were at approximately half the level of fourth quarter 2000.

Seed and angel investments are areas most often targeted by public programs and investment tax incentives. The need for such public programs in regions less successful in attracting VC may be increasing as seed and first round investment represented only 24 percent of the venture capital dollars invested during the most recent quarter.

Virtually all industries experienced a decline in the Moneytree™ survey results, with sectors such as Consumer & Business Services, Electronics & Computer Hardware and Semiconductors falling 50 percent or more. Even the Communications and Biopharmaceuticals segments-which had maintained fairly steady levels of venture investment throughout the past year-were not immune to the quarter's malaise. They saw losses of 38 percent and 37 percent, respectively, in equity investment.

Statistics from the Moneytree™ survey for the fourth quarter of 2000 are now available on the PricewaterhouseCooper website. The quarter’s total of $16.7 billion includes a $600 million “correction” as PricewaterhouseCoopers and VentureOne consolidated their files.

As a service to Digest readers, SSTI has prepared the accompanying summary table presenting the information by state. No investments were reported in states omitted from the table. For ease of comparison and use, links to previous summary tables for 1997-2000 are also provided on the webpage containing the 2001 table: http://www.ssti.org/Digest/Tables/050301t.htm

Statistics from the survey of first quarter 2001 VC activity will be posted on the PricewaterhouseCooper’s website in early June. Once available, the SSTI Weekly Digest will produce a state-by-state table.

More information on the Moneytree™ survey can be found at: http://204.198.129.80/index.asp

Return to the top of this page

Bipartisan Efforts Deliver New Tech Programs, Acts for Arkansas
A wide range of research and tech-based economic development bills were approved by the Arkansas legislature, which ended its legislative session in mid-April. With proposals and support coming both from Republican Governor Huckabee and the heavily Democratic legislature, Arkansas is the latest state to demonstrate broad bipartisan support for investing in science and technology.

Bills addressed areas as varied as venture capital, life sciences research, creation of a chief information officer, and implementation of the state’s geographic information system. Highlights of the legislative session include:

The General Assembly also passed legislation for the state's tobacco settlement monies. The plan includes a research component for UAMS, the University of Arkansas at Fayetteville and Arkansas State University at Jonesboro. The money invested in research will attract additional grants from the National Institutes of Health, the National Science Foundation and other sources.

Another component is a state School of Public Health at the University of Arkansas for Medical Sciences in Little Rock. The school will serve as a catalyst for changing the health awareness culture of the state and as a continuing education center for health care professionals across Arkansas, including distance learning through interactive video and Internet-based courses, seminars and workshops on selected topics.

Each of the acts can be viewed at: http://www.arkleg.state.ar.us/

Return to the top of this page

NVCA Looks at Venture Capital's Economic Impact
U.S. companies originally backed by venture capital created 4.3 million new jobs last year according to a new economic impact study released this week by the National Venture Capital Association (NVCA). Those companies generated $736 billion in revenues in the year 2000 and, according to the study, venture capital-backed businesses represented 3.3% of the nation's total jobs and 7.4% of Gross Domestic Product in 2000.

Regionally, the Southeast experienced the greatest job creation with 1 million jobs, followed by California. The consumer industry realized the largest number of jobs created as a result of venture-backed companies at more than 1.1 million in 2000, followed by the computer and medical/health industries. California saw the most venture capital-created revenues with $179 billion in 2000, followed by the Southeast and Southwest. The most significant revenue impact occurred in the computer industry with $204 billion in revenues generated in 2000, followed by the consumer and medical/health industries.

Regional statistics are provided below:

Region	Jobs Created	2000 Revenues (Billions $)
Southeast (AL, FL, GA, KT, MI, NC, SC, TN)	1,041,495	146.26
California	978,877	178.99
Midwest (IA, IL, IN, KS, MN, MI, MO, ND, NE, OH, SD, WI)	571,379	85.82
Southwest (AK, AZ, LA, NM, NV, OK, TX)	510,187	128.46
Northeast (CT, MA, ME, NH, NJ, RI, VT)	460,058	63.43
Mid-Atlantic (DC, DE, MD, PA, VA, WV)	231,128	32.29
New York	220,543	43.42
Northwest (AK, HI, OR, WA)	174,884	32.38
Rocky Mountains (CO, ID, MT, UT, WY)	94,581	24.88
TOTAL	4,283,132	735.93

The study, the first of its kind, was commissioned by the NVCA and released in New York City at its annual meeting. The companies in the analysis did not include those that were acquired and absorbed into other organizations, which would raise the totals by at least 30%, to 5.6 million jobs and $956.8 billion in revenue, NVCA estimates.

More information can be found at: http://www.nvca.com/

Return to the top of this page

Chicago Top Host for 'Inner City 100' Businesses
With ten firms, Chicago leaders win bragging rights for being called home by the greatest number of Inc. magazine's "Inner City 100," the fastest growing urban businesses. In fact, six of the top 50 companies were from the Windy City.

Five businesses from Buffalo won inclusion in the magazine's list, earning the New York city the unofficial title as the second most popular home. Pittsburgh, Cleveland, and Oakland, CA each had four companies on the list.

The "Inner City 100" is compiled by Inc. and the Initiative for a Competitive Inner City, a nonprofit organization founded by Harvard professor Michael Porter.

The list of 100 firms, selected based on five-year sales growth, was narrowed from more than 2,300 nominations. Profitability and number of employees are not considered in making the award, although to be eligible for consideration, a company must have had at least 10 employees and $1 million in sales in 1999.

To see the full list, visit: http://www.inc.com/incmagazine/inner100/

Return to the top of this page

Success Magazine Picks Best Business Schools for Entrepreneurs
Using survey responses and a weighted index for caliber of students, curriculum, faculty, support for students, and overall program, Success Magazine has identified what it believes are the best 50 business schools for entrepreneurial education. The top honors are not necessarily the business schools that immediately jump to mind for most people.

Babson College, situated outside Boston with an enrollment of 1,550 MBA students, won first place on the list because the students and curriculum are focused on starting businesses, the magazine reports.

UCLA, the University of Illinois at Chicago, DePaul University (also in Chicago), and the University of St. Thomas (Minneapolis) round out the top 5. Finishing the top ten list are: Rensselaer Polytechnic Institute (Troy, NY), Indiana University (Bloomington), Case Western Reserve University (Cleveland), University of Southern California (Los Angeles), and San Diego State University.

The article with the survey results, released in the February/March issue, launches a new, regular series for the magazine covering entrepreneurial activity in higher education, including profiles of innovative programs, faculty, and students involved in entrepreneurial education.

To see the magazine's picks for the top 50 business schools, visit http://www.successmagazine.com/

Return to the top of this page

Funding Opportunities

Department of Health and Human Services
The Centers for Disease Control have approximately $1.4 million available to fund up to two Health Promotion and Disease Prevention Research Centers. The centers will provide health promotion and disease prevention research that 1) focuses on the major causes of death and disability, 2) improved public health practices within communities, and 3) cultivates more effective state and local public health programs. Schools of public health, schools of medicine or osteopathy with accredited Preventive Medicine Residency with specified areas (see announcement for details) of expertise can apply. Letters of intent are due by May 24, 2001 and full applications, by June 15, 2001. Awards will be made as cooperative agreements. To view the announcement in its entirety, visit the CDC home page at http://www.cdc.gov click on “Funding” then “Grants and Cooperative Agreements.”

The National Institutes of Health Clinical Center (NIHCC) has two separate opportunities for at least one Cooperative Research and Development Agreement (CRADA) each under the following goals: 1) to develop and implement an applications specific artificial neural network based on intelligent computing system for on-line and off-line quality control of a medical process, especially test production in clinical laboratory automated analyzers, and 2) to develop and implement application specific computer-learned medical-outcome indexes. Each CRADA can be for as many as five years. For either opportunity, interested parties should notify NIHCC by June 1, 2001 of intent to file a formal proposal, which will be due no later than July 2, 2001. For the complete announcements, check the Federal Register under May 2, 2001. It may be accessed via SSTI’s web site at http://www.ssti.org under the S&T Resource Page, then click on the following: Information Resources, Federal Register, Browse, 2001, May 2, 2001.

Department of Labor
The Employment and Training Administration (ETA) has announced the availability of incentive funding for the Workforce Investment Act of 1998. The following six states are eligible to apply for $10.08 million in incentive grant funds because they are one full year ahead of the full implementation date: Florida, Indiana, Kentucky, Texas, Utah, and Vermont. The funds are available for a three year period to support innovative workforce system building activities which are eligible under title I or title II of WIA or the Perkins Act. Applications from these six states are due by June 18, 2001. For more information contact Mr. William Rabung at wrabung@doleta.gov or at (202) 693-3190. Information may also be found at http://usworkforce.org

National Science Foundation
NSF anticipates $12 million available and plans to make between five and ten awards of approximately $500,000 per year not to exceed five years, for Vertical Integration of Research and Education in the Mathematical Sciences. Grants will be made to departments in the mathematical sciences to carry out innovative educational programs in which research and education are integrated and in which undergraduates, graduate students, postdoctoral fellows, and faculty are mutually supportive. Proposals are due via fastlane July 30, 2001 from academic institutions in the U.S. and its territories on behalf of departments that grant the Ph.D. and have programs in the mathematical sciences at both the graduate and undergraduate levels. To download the solicitation go the http://www.nsf.gov click on “Grants and Awards, “ then “Funding opportunities”, “On-Line Document System,” then type in solicitation number NSF 01-104.

Sources Sought

Department of Defense
The Defense Advanced Research Projects Agency (DARPA), Advanced Technology Office is soliciting proposals for advanced research, modeling, design, development, and testing of microchemical oligonucleotide manufacturing, manipulation, and amplification technologies. The goal is to be able to manufacture significant quantities of approximately 10,000 base (b) oligonucleotides or arbitrarily specific sequence on time scales of less than 24 hours. This Broad Agency Announcement solicits topics in five topic areas:(1) Microchemical oligonucleotide manufacture, manipulation, and amplification process modeling and simulation; (2) Microchemical long-chain oligonucleotide manufacture; (3) Microchemical long-chain oligonucleotide amplification; (4) Oligonucleotide sequence error correction and control; and (5) Novel or unconventional methods for microchemical oligonucleotide manufacture, manipulation, and amplification. Amendment 2 reflects a narrow revision of the original BAA (issued 16 March 2001), and extends the due date from May 3, 2001, to May 24, 2001. See the May 3, 2001 issues of Commerce Business Daily Online at http://cbdnet.access.gpo.gov