In the May 17, 2004 Issue:

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$3.5B Round of New Markets Awards Announced
Sixty-two organizations in 44 states and the District of Columbia will receive a total of $3.5 billion in tax credit allocations through the second competitive round of the New Markets Tax Credit (NMTC) Program, the Treasury Department recently announced. Several of the selected organizations have a national market perspective.

Established by Congress in 2000, NMTC attracts private-sector capital investment into urban and rural low-income areas to help finance community development projects, stimulate economic opportunity and create jobs in the selected areas. The NMTC Program permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs).

Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments supporting certain business activities in low-income communities. The credit provided to the investor totals 39 percent of the initial value of the investment and is claimed over a seven-year credit allowance period.

All but six states - Kansas, New Mexico, North Dakota, Oklahoma, West Virginia and Wyoming - were associated with at least one 2004 national or statewide NMTC allocatee. A list of NMTC recipients by state is available at: http://www.cdfifund.gov/docs/nmtc/2003/states_served.pdf

The CDFI Fund anticipates that applications for the third round of the NMTC Program will be available during the summer of 2004. A complete list of 2004 New Markets recipients and additional information can
be found on the CDFI Fund's website: http://www.cdfifund.gov/

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SC Council Formed to Reshape the State's Economy
A new economic development council formed in South Carolina has been charged with two objectives: help reshape the state’s economy and raise its per-capita income. Members of the South Carolina Council on Competitiveness, a group of business, academia, government and economic development leaders, were announced earlier this month.

During an events session in Columbia, co-chairs Gov. Sanford and Ed Sellers, the chairman and chief executive officer of Blue Cross Blue Shield, met with the council members, asking them to advance the goals of a report that grew out of the South Carolina Competitiveness Initiative. The Initiative was a collaborative effort including individuals from the Palmetto Institute, the South Carolina Department of Commerce, the Palmetto Business Forum, the South Carolina Chamber of Commerce, the South Carolina Department of Parks and Recreation, and the University of South Carolina and managed by the Monitor Group.

The report, prepared by the Monitor Group, includes recommendations to raise income levels and make the state more economically competitive:

The Greenville News reports that South Carolina’s per capita income is about 82 percent of the national average. The state also lags in the area of patenting activity, with 3.6 patents per 10,000 workers in 2001, compared to the national average of 7.7.

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Report Focuses on Evaluating R&D
A new report from the Advanced Technology Program (ATP), A Toolkit for Evaluating Public R&D Investment, provides useful information to anyone interested in evaluating publicly-sponsored research and development (R&D) programs. While the report focuses on more than 40 evaluations that have been performed for ATP, it offers one of the most comprehensive and understandable overviews of evaluation methods and applying those approaches.

In one section, the authors provide a general framework for evaluation, discussing evaluation fundamentals, including the objectives and steps of evaluation, and choosing various methods of evaluation. The advantages and disadvantages of a variety of approaches, including surveys, case studies, bibliometrics, historical tracing and expert judgment, are described.

The bulk of the report is focused on how the evaluation methods have been applied to ATP, drawing on various studies commissioned by ATP between 1990-2000. Technology-based economic development practitioners will be able to use this section to consider how ATP's experience may be applied to their programs.

The final section centers around the results of ATP in five major themes: firm or industry effects, collaboration effects, spillover effects, interfaces and comparisons with other programs, and measures of overall performance. Prospective case studies show the benefits of the program far exceed the costs, the authors note. The National Research Council concludes that ATP is effectively meeting its legislative goals. According to the case studies, approximately 16 percent of completed ATP-funded projects showed strong progress toward creating and disseminating knowledge and commercializing projects and processes, and 26 percent showed substantial progress.

The report concludes with recommendations for future directions in evaluation.

Established in 1988, ATP is part of the National Institute of Standards and Technology and uses project selection and funding processes to bring together private, nonprofit and public sector organizations to advance the development and commercialization of new technologies. The full report is available at: http://www.atp.nist.gov/eao/gcr03-857/contents.htm

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Changing Role of Community Colleges Redefining the S&T Workforce
Community colleges can play an important part in shaping the workforce in the science and technology (S&T) sector. For example, with the growth in biotech, there is an increasing need for technicians in the biotech field and workers are finding that they can prepare for these jobs rather quickly in community colleges. Technicians in biotech manufacturing facilities generally have two-year specialized training or an associate degree from a technical or community college, according to the U.S. Department of Labor. With overall employment expected to increase, particularly in biotech, the field is attracting more displaced workers.

North Carolina community colleges are embracing this new role as they prepare for the development of six new biotech centers to be hosted within the state’s community colleges. Earlier this month, the North Carolina State Board of Community Colleges accepted recommendations to distribute $4.4 million in grant awards to the centers.

According to the North Carolina Community College System, all of the centers will help develop expertise, curricula and specialized training within their field of responsibility and share it statewide with the community college system, thereby creating a cost-effective, efficient way of developing workforce training. The decision from the State Board to distribute the grant awards to the biotech centers has been passed on to Golden LEAF, the foundation funding the initiative, for final approval on June 3.

States across the country are experiencing growth in community college enrollment, according to a recent report from the National Science Foundation (NSF), The Role of Community Colleges in the Education of Recent Science and Engineering Graduates. The report looks at the role of community colleges in the educational experiences of science and engineering (S&E) degree recipients and how that role differs among subgroups within the U.S. population. Full and part-time enrollment at community colleges nationwide has risen 13.5 percent between 1990-2000, the data show, and more than 40 percent of recent S&E graduates have attended community college at some point in their educational paths.

Categories including field and level of degree, race or ethnicity, age, marital status and family, parent’s education and high school geographic division are examined in the report. Results indicate that Hispanics and married women with children living in the household attend community college at a greater proportion than any other category.

The Role of Community Colleges in the Education of Recent Science and Engineering Graduates is available at: http://www.nsf.gov/sbe/srs/infbrief/nsf04315/start.htm

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Useful Stats: 2003 DoD Phase I SBIR Proposals and Awards
The Department of Defense (DoD) distributed $152.9 million in awards under its fiscal year 2003 Phase I Small Business Innovation Research (SBIR) Program competitions. A total of 1,882 awards were selected from a pool of more than 15,000 proposals across all states and the District of Columbia.

DoD's SBIR Program provides up to $850,000 in early-stage research and development (R&D) funding directly to small technology companies. Between SBIR and the department's Small Business Technology Transfer Program, which supports small companies working with researchers at universities and other research institutions, DoD funds more than $1 billion annually in early-stage R&D projects.

States were able to compete for DoD SBIR funding twice in 2003 through two competitive solicitations. California led all states with nearly $33 million and 403 awards. Massachusetts followed with $23.7 million and 290 awards, but converted on more of its proposals than the leader, at 16.5 percent.

South Carolina, winning 11 awards through 50 proposals, had the highest conversion percentage of all states, 22 percent. Arkansas won two awards that averaged almost $100,000 each, tops in the nation for average award size. Iowa, North Dakota and South Dakota, which collectively submitted 63 proposals, were the only states that did not receive FY 2003 DoD Phase I SBIR funding.

Among other highlights, the 21 EPSCoR states garnered a total of 167 awards. Combined, the states captured $13.5 million in SBIR funding, or 8.8 percent of the nation's total, and had a conversion rate (13.3 percent) slightly above that of the nation overall (12.5 percent).

Abstracts of those receiving DoD SBIR awards are available for FY 2003 and past years at: http://www.dodsbir.net/awardlist/awardlist.htm

In addition, SSTI has prepared a state-by-state table for FY 2003 DoD SBIR awards. The table presents each state's number of awards and proposals, award total, average award size, and conversion rate and is available at: http://www.ssti.org/Digest/Tables/051704t.htm

SSTI extends its gratitude to Chris Busch, Christine Villa of the BRTRC Technology Research Corporation, and the Idaho SBIR Competition News for their contribution to this story.

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VC News

New Mexico Firms Would Receive $30M in Venture Funding
New Mexico might be close to closing on two venture deals worth a combined $30 million, the Albuquerque Journal recently reported. The New Mexico State Investment Council (SIC) gave preliminary approval of the $30 million to two Santa Fe-based firms early last month. Flywheel Ventures, one of the two companies in consideration for the money, was said to be raising its own $30 million for investment in seed and early-stage technology companies. Rio Grande Venture Partners, the other beneficiary, would indirectly contribute to tech firms through a $100 million fund it hopes to close this spring. The New Mexico investment program requires that both companies provide match funding and do business in the state, either whole or in part.

The state has committed roughly $168 million to about 20 venture capital funds over the last decade, with $70 million in commitments made since 2003, the Albuquerque Journal states. The $168 million comes from a pool of $200 million for venture capital investment, drawn from New Mexico's $3.5 billion severance tax permanent fund. With approval of the two new deals, something SIC will consider at its May 25 meeting, the state will have committed the entire balance of money available for 2004. Because of the ever-changing market value of the severance tax fund, however, the available pool of money would not be exhausted. In addition, some earlier investments may expire, resulting in millions of unused dollars.

For more information on SIC, visit http://www.state.nm.us/nmsic/.

Minority Business Roundtable Forms New Venture Fund
Small, minority- and women-owned businesses around the country can expect to benefit from the newly-created Minority Business Roundtable (MBRT) Venture Capital Fund, Inc. For these groups, the Fund means a source of early-stage venture capital that fully intends to generate returns on investment. The Fund already has taken equity in three companies and plans to invest in 15-20 new companies each year.

Business, financial and community leaders, invited as potential board members, convened last month to formally recognize the MBRT Venture Capital Fund. Founding partners of the Fund include Artemis Strategy Fund, Inc. and the Corporate Finance Institute, Inc.

"Historically, relatively little capital has been available for small and minority businesses, even in an entrepreneurial climate," said Rebel Holiday, president of the MBRT Venture Capital Fund and the Artemis Strategy Fund. "(The Fund) will seek small, minority- and women-owned businesses that have developed proprietary products, strong margins, and excess rate of return, exceptional management, near-term revenues, and strong potential for stock liquidity."

More information on the Fund is available at http://www.mbrtventurecapitalfund.com/.

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People

Debra Elston has been named the Federal Highway Administration's director for research, technology, and innovation deployment within the Office of Research, Development, and Technology.

Garza Fernandez, president of the Southern Arizona Industry and Aerospace Alliance, announced her resignation to devote more time to the Technology Development and Research Institute.

Arthur A. Garcia has been appointed director of the Community Development Financial Institutions Fund in the U.S. Department of the Treasury. Until his appointment, Garcia has been administrator for the U.S. Department of Agriculture's Rural Housing Service.

Elizabeth Gatewood has been named director of Wake Forest University's new Office of Entrepreneurship and Liberal Arts. At Indiana University, Gatewood was the Jack M. Chair of Entrepreneurship and the director of the Johnson Center for Entrepreneurship and Innovation.

Paul Hiller, formerly managing director of the economic development arm of the Irvine Chamber of Commerce, is the new president and chief executive officer for the Inland Empire Economic Partnership.

Linda Johnson, president and chief executive officer of the Center for Information Technology Enterprise, has announced she will be leaving the position this fall to return to her academic career at Western Kentucky University.

Bruce Mehlman and Alex Vogel have formed a new firm, Mehlman & Vogel, Inc. The company offers clients a full range of public affairs services including strategic planning, message development, coalition management, legislative and executive branch lobbying, corporate positioning, guidance for political activities and public relations.

Arundeep Pradhan is the new director of the Office of Technology and Research Collaborations at the Oregon Health and Science University. Pradhan was the head of technology transfer for the Colorado State University Research Foundation.

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