In the May 8, 2006 Issue:

Copyright State Science & Technology Institute 2006. 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.

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 also may be completed at http://www.ssti.org/Digest/digform_unsubscribe.htm.

Legislative Actions & Tech Talkin' Govs 2006, Part II
The second installment to Walkin' the Tech Talkin' Gov Walk (see the April 17 issue of the Digest) covers the outcomes of the 2006 legislative sessions within four states, Connecticut, Florida, Hawaii and Kentucky. Following is a synopsis of bills passed and budget appropriations relevant to tech-based economic development and the priorities outlined in respective gubernatorial addresses at the beginning of 2006.

Connecticut
Gov. Jodi Rell signed into law SB 702, An Act Concerning Jobs for the 21st Century, a major component of her economic development strategy (see the Feb. 20 issue of the Digest). The core legislation exempts all manufacturing machinery and equipment from local property tax after a five-year phase out of the tax. Other provisions include:

The original bill, SB 1, proposed funding for the initiatives. However, the final bill dropped all language for funding mechanisms and instead relies on carryover funding from fiscal year 2006. Additionally, the final bill dropped the governor's proposed reorganization of the state's economic development office.

The FY 2006-07 Midterm Budget, HB 5845, includes $6 million over FY 2007-08 for the governor's proposed Job Creation Tax Credit, which establishes a credit for companies that relocate to the state and create new jobs. Also approved is $4.5 million per year beginning in FY 07 for the Displaced Worker Tax Credit, which provides a $1,500 per worker business tax credit to companies that hire workers who were let go by a previous employer as a direct result of business restructuring.

Florida
Nearly all the components of Gov. Jeb Bush's Innovation Agenda were approved by the legislature, although funding to finance the plan was cut almost in half. The governor's FY 2006-07 budget proposal included $630 million for research-focused initiatives, business recruitment funds, and other economic development related programs (see the Feb. 6 issue of the Digest). Following are the initiatives and funding levels approved by the legislature:

The Capital Formation Act, HB 1467, died in the Senate. The measure would have provided tax credits for the new Florida Capital Formation Program to create early-stage venture capital for start-up companies.

Hawaii
The legislature approved Gov. Linda Lingle's initiatives for energy self-sufficiency outlined in her State-of-the-State Address (see the Jan. 30 issue of the Digest). HB 2175 increases renewable energy tax credits for photovoltaic systems and removes the credit's 2008 sunset date. It also authorizes bond issuances to install photovoltaic systems at public schools statewide and enables state facilities to meet greenhouse gas and energy consumption goals. The bill requires incorporation of Leadership in Energy and Environmental Design silver standards for certain state-funded facilities and establishes a pilot project to help finance residential solar hot water systems.

A bill that establishes the Innovation Special Fund, SB 2546, to support life sciences, advanced technology, and renewable energy industries was unexpectedly tabled at the session's end last week, the Honolulu Advertiser reports. The measure would have provided $100 million in general fund revenue over the next four years.

Kentucky
The legislature approved several of Gov. Ernie Fletcher's budget recommendations, including $40 million for New Economy Initiatives. The governor announced new investments to spur the growth of companies in niche areas identified by the Life and Biosciences Task Force during his State-of-the-Commonwealth Address (see the Jan. 16 issue of the Digest). Approved funding for New Economy Initiatives includes $20 million for seven new initiatives ($8 million in FY 2006-07 and $12 million in FY 2007-08) and $20 million in bonds for Kentucky's two high-tech investment pools. Newly funded initiatives within the Department of Commercialization include:

In addition, the legislature approved funding for the governor's educational technology proposals. This includes $4.2 million of the Kentucky High Tech Investment Pool funds to be used for a grant to administer the ConnectKentucky Program; $16.1 million in bond funds for a high-speed education telecommunications network; and $15 million for a web-based online testing program for teachers.

return to the top of the page

Recent Research
Getting Growth Wrong: U.S. Ranks 28th in Global Environmental Index
The annual Earth Day celebrations provide an opportunity for the least environmentally friendly corporations and politicians in America to appear green by sponsoring litter pick-ups or standing in front of hydrogen fueled cars. More often, however, the U.S. policy debate sees a "jobs versus environment" battle, or most recently, cheaper gas versus environmental integrity. A recent index prepared by Yale University and Columbia University for the World Economic Forum reveals, however, most of the world's top innovative countries are also among the highest performers on 16 environmental indicators, ahead of the U.S. More telling, is that the areas the U.S. is weakest -- renewable energy, water resources, and greenhouse gas emissions -- also provide some of the greatest opportunities or obstacles for economic growth as the 21st century unfolds.

Produced by the Center for Environmental Law and Policy at Yale University and the Earth Institute at Columbia University, the Pilot 2006 Environmental Performance Index (EPI) identifies targets for environmental performance and measures how close each country comes to these goals. New Zealand ranks first in the Index, followed by Sweden and Finland. The U.S. ranks 28th, significantly below other highly developed nations such as the United Kingdom (5) and Canada (8), the study notes.

The Index ranks 133 countries on 16 indicators tracked in six established policy categories, including environmental health, air quality, water resources, biodiversity and habitat, productive natural resources, and sustainable energy. Incomplete data excluded 60 countries from the 2006 EPI. For each indicator, a relevant long-term public health or ecosystem sustainability goal is identified. The study outlines a number of policy conclusions:

The authors note that a number of existing environmental metrics have been criticized in the past for being overly broad and not focused enough on current results to be useful as a policy guide. However, the EPI tries to address this by focusing on current environmental performance within a context of sustainability, and more narrowly tracks actual results for a core set of issues that governments can be held accountable, according to the authors. The Pilot 2006 Environmental Performance Index is available at: http://www.yale.edu/epi/

Links to this paper and nearly 4,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at: http://www.tbedresourcecenter.org/.

return to the top of the page

Recent Research
Ernst & Young Report Sees VC Globalizing
A significant increase in venture-backed exits is signaling a new phase in the evolution of the global venture capital industry, according to a report released May 3 by Ernst & Young. Venture-backed company exits grew in value and number in 2005, as the U.S. and Israel saw increasing merger and acquisition (M&A) valuations, while Europe experienced an increase in Initial Public Offerings (IPOs) - a trend that is set to continue this year and into 2007, according to Transition, the fourth annual Ernst & Young Venture Capital Insight Report. The following summary is from the Ernst & Young press release accompanying the report:

"Global consumer markets, increased international competition, investment opportunities in emerging markets, the higher cost of building a company in the mature markets and advancements in technology are all continuing to drive the globalization of both venture funds and their portfolio companies. "Private, venture-backed companies must increasingly act like multinationals earlier in their life cycles, taking advantage of the new global ecosystem that matches the increased demand for innovation with an international supply of talent, technologies, business models and capital," said Gil Forer, Global Director of Ernst & Young's Venture Capital Advisory Group.

"Collaboration among funds is also increasing as global investors seek out local funds in the emerging innovation hotbeds for help in making the right investments and penetrating large developing consumer markets. As cross-sector innovation increases, so will collaboration among funds to complement each other with the right skills and expertise when investing in the cross-sector deals that will likely characterize the next wave of disruptive technology or business models.

"This fourth annual report on the state of the venture capital industry indicates that while in the near term in the US there will probably be continued reliance on both M&A and exploration of more innovative exit opportunities, improving market conditions and investor demand for venture-backed offerings are likely to result in increased venture-backed IPO activity in both the US and Europe through 2006. In the emerging markets, the increasing number of China-focused venture capital funds being raised and invested suggests that there is a robust population of venture-backed Chinese companies in the IPO pipeline.

"Venture-backed company exits grew in value and number in 2005, setting the stage for continued investment in 2006:

"Overall, the Limited Partner (LP) community is looking ahead to a stable investing environment and improved exit conditions. Key observations related to the LP outlook include:

Transitions is available at: http://www.ey.com/global/download.nsf/International/SGM_-_VC_-_Insight_-_May_2006/
$file/EY_SGM_VC_Insight_Report_May2006.pdf

Links to this paper and nearly 4,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at: http://www.tbedresourcecenter.org/.

return to the top of the page

Making Summer Travel Plans? Check Out SSTI's Calendar of TBED Events
It's probably the case that not all of your travel over the next few months will be for personal vacation. Conference excursions can stimulate new ideas, add to your professional growth, and establish or strengthen opportunities for collaboration. In addition to reserving Oct. 31-Nov. 2 for SSTI's 10th Annual Conference in Oklahoma City, we encourage you to check out our web calendar of events to scan more than 140 additional opportunities for professional development.

While most national technology-based economic development (TBED) organizations, unfortunately, limit announcements to their own events or those of members, SSTI attempts on its web calendar to include activities spanning most issues related to growing a knowledge economy. Examples of three upcoming events include:

June 4-6
The Southern Innovation Summit, to be held at the New Orleans Marriott, will focus on the creation, accumulation and application of knowledge for the South's businesses, universities, citizens and governments, and develop strategies for increasing innovation as part of the South's economic growth policies. The conference will feature the release of the 2006 Report on the Future of the South, with keynotes and panel discussions featuring Louisiana Governor and Southern Growth Chairman Kathleen Blanco; Georgia Governor and Southern Technology Chairman Sonny Perdue; Missouri Governor Matt Blunt; Tennessee Representative Zach Wamp, champion of the East Tennessee Technology Corridor; Ping Fu, Inc. Magazine's 2005 Entrepreneur of the Year and Geomagic chairman and CEO; Dr. Walter Massey, president of Morehouse College and former director of the National Science Foundation; and key researchers and strategists from universities and innovation centers from across the country. To register online, visit www.southern.org/conf.asp.

June 12-14
The Global Creative Economy Convergence Summit, organized by Innovation Philadelphia, will be held at the Park Hyatt Philadelphia. The event will provide regional, national and international creative, technology, and business professionals the opportunity to learn best practices for encouraging creativity around five major themes: Creativity 101; Creative Cityscapes; Funding Creative Ideas and Industries; Creative Technologies for Reaching New Audiences; and, Creative Human Capital. Featured keynote presentations include artists Christo and Jeanne-Claude, creators of The Gates, and Daniel Pink, author of the best-selling books, A Whole New Mind and Free Agent Nation. More information, including registration details, is available at www.ipphila.com/creativeeconomy/GCECS.

June 18-20
DRUID, the Danish Research Unit for Industrial Dynamics, will hold its summer conference in Copenhagen, presenting nearly 250 papers and poster sessions from most of world's leading and rising academic researchers on TBED and innovation issues. This year's theme is Knowledge, Innovation and Competitiveness: Dynamics of Firms, Networks, Regions and Institutions. Scanning the titles of the papers selected for presentation alone demonstrates the importance of this annual event for advancing TBED policy and understanding: www2.druid.dk/conferences/papers.php?first_letter=all&cf=8 More information is available at: www.druid.dk/conferences/summer2006/Welcome.htm

SSTI's calendar of events is available at: http://www.ssti.org/calendar.htm

return to the top of the page

SSTI Accepting Bids for 2007 Annual Conference
With preparations for SSTI's 10th Annual Conference in Oklahoma City on Oct. 31-Nov. 2 well underway, we have received many questions from local, regional and state organizations wanting to host the premier event for the tech-based economic development (TBED) profession in 2007. Because of the increased interest, SSTI has bumped up its schedule for selecting the 2007 site. We are accepting nominations of host organizations and locations for SSTI's 11th Annual Conference until July 30, 2006.

Held in October to early November each year, SSTI’s annual two-and-a-half day event attracts approximately 300-400 participants from more than 40 states and several countries. The conference is especially designed for those engaged in TBED on the local, regional, state or national level. Over the past 10 years, SSTI’s annual conference has grown to become the nation’s largest and most diverse gathering of the TBED community.

To be the host organization or location for SSTI's conference is to showcase nationally and internationally the success of your state, region or community TBED efforts. Specific benefits include:

Nominations may be from collaborations of several organizations, with a lead organization designated as host. The lead organization for the 2007 conference must be an SSTI Sponsor or Affiliate in good standing for all of 2007. (More information on sponsor or affiliate membership is available at http://www.ssti.org/sponsors.htm.) The host organization also must be willing to provide funding that helps SSTI keep conference costs affordable to all attendees. This funding can be obtained in part from collaborative partners in the bid. Recent hosts also have provided in-kind support such as on-site conference staffing assistance, audio and visual equipment, printing capability, storage and other services.

Interested parties are encouraged to contact Noelle Sheets <sheets @ ssti. org>, SSTI's director of member services, for a complete bid package.

return to the top of the page

State Science & Technology Institute
5015 Pine Creek Drive
Westerville, OH  43081
(614) 901-1690

© 2006 State Science and Technology Institute. All rights reserved.