In the January 22, 2007 Issue:

Copyright State Science & Technology Institute 2007. 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.

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Hawai`i Governor Outlines Broad-based Innovation Strategy
With the opportunity presented by a $732 million budget surplus, Gov. Linda Lingle wants Hawai`i to shift its public investment philosophy away from land development and toward encouraging, nurturing and rewarding innovation, creativity, entrepreneurship and risk-taking. Most of Gov. Lingle's State of the State Address on Jan. 22 and her 56-page 2007 Initiatives booklet is dedicated to explaining how she wants the public sector to lead realignment of the state’s economy toward “one fueled by innovation and new ideas generated by our universities and a highly-trained workforce.”
 
Facing a legislature controlled by Democrats, the Republican governor’s plan embraces several proposals first advanced by legislative leadership last session, including a $100 million Hawai`i Innovation Fund. The privately managed technology-based equity fund would be capitalized from the State Employees Retirement System, under Gov. Lingle’s proposal. 

Other proposals include:

Gov. Lingle’s State of the State Address and 2007 Initiatives booklet, as well as links to a number of external supporting documents for the governor’s Innovation Initiative, are available at http://www.hawaii.gov/dbedt/innovation.

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Arizona Governor Unveils $75M TBED Initiatives in 2008 Budget
Earlier this month, Gov. Janet Napolitano presented Arizonans with a three-part plan to prepare for the 21st century economy in her annual State of the State Address. The One Arizona Plan would support state economic growth by investing in education, physical infrastructure and innovation. During her address, Gov. Napolitano emphasized the need to increase Arizona’s innovation capacity and to build a technologically-savvy workforce. The One Arizona Plan would approach these goals by increasing curriculum requirements for K-12 students, creating incentives to attract and retain high-quality educators, build new academic research facilities, and offer financial support for high-tech researchers and entrepreneurs.
 
The governor’s Executive Budget Proposal for fiscal year 2008 provides more details about the plan and its implications for state TBED. Under the governor’s plan, the state would dedicate over $75 million in new funding to science and technology initiatives, according to the Arizona Republic.
 
Science Foundation Arizona (SFAz), a nonprofit public-private partnership established last year by three Arizona CEO groups, would receive $35 million to invest in science-based research and innovation. SFAz administers several grant programs that support university research, new high-tech businesses and K-12 STEM education. The group released its strategic investment plan for fiscal year 2006-07 late last year, as described in the Nov. 27, 2006 issue of the SSTI Weekly Digest (http://www.ssti.org/Digest/2006/112706.htm#Arizona).
 
The One Arizona Plan would enable Arizona to increase its investment in K-12 education by $383 million and contribute $115 million to postsecondary institutions. The proposal would allocate $15.5 million of these funds to improve math and science education. Specific initiatives include:

An additional $50 million would be used to raise the minimum base salary for K-12 teachers to $33,000. Arizona’s three state universities would receive $30 million to attract and retain faculty.
 
The governor’s budget proposal also includes $25 million to expand the biomedical education and research programs of the Arizona university system. The funding would help establish the Phoenix Biomedical Campus, a cooperative effort between the universities. The campus would allow the state to produce more skilled medical professionals and facilitate cross-disciplinary biomedical research.
 
Read Gov. Napolitano’s 2008 Executive Budget Proposal at:
http://www.governor.state.az.us/dms/upload/2008-2009-Detail-Book.pdf
 
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VC Investment in Cleantech Drops for First Time in 2 Years
The Cleantech Venture Network (CVN) announced last week that U.S. venture investment in clean technologies fell 34 percent in the fourth quarter of 2006. Investment in cleantech, which includes products and services that reduce or eliminate environmental impacts, declined to $613 million last quarter -- down from a record-breaking peak of $933 million in the previous quarter. The drop brought to an end nine consecutive quarters of gains for cleantech, but still capped a record-breaking year for VC investment in the sector.
 
A CVN press release suggests that the lower figures can be attributed to inflated valuations earlier in the year, or common fluctuations in the market. Several large third-quarter deals also had an affect on the figures. In Q3, the top five cleantech deals accounted for 61 percent of total investment. Though the total number of deals grew from 47 to 74 in the fourth quarter, the average size of these deals dropped from $19.9 million to $8.3 million. Even with the drop in investment, the industry managed to post a 22 percent increase over the last quarter of the previous year.
 
Cleantech was not the only industry affected by the fourth quarter decline. Venture investment for all industries experienced a 14 percent drop from $6.6 billion in the third quarter to $5.7 billion, according to PricewaterhouseCooper’s MoneyTree Report. Several industries experienced investment decreases for the entire year, including Networking and Equipment; Computers and Peripherals; and Financial Services.

Overall, however, last year was an active one for venture investment. Venture capitalists invested $25.5 billion in 3,416 deals in 2006, according to the MoneyTree data. The MoneyTree year-end summary of VC activity reports a 10 percent increase in deal volume and a 12 percent increase in total investment dollars over 2005. Venture investment reached its highest level since the industry’s peak in 2001. The National Venture Capital Association’s (NVCA) annual survey of predictions for the venture industry revealed that investors are confident about the industry’s health in the coming year as well. Sixty-nine percent of investors believe that investment levels will reach between $20 billion and $29 billion in 2007.
 
Despite the fourth quarter setback, 2006 was a good year for the cleantech venture capital industry as well. CVN estimates that VC investment reached $2.9 billion last year in North America, a 78 percent increase over 2005. The majority of VC interest in clean technologies was directed toward energy-related ventures, which accounted for 74 percent of total investment. Other technology categories also posted significant gains, including Recycling and Waste ventures, and Transportation. Energy investment is expected to continue this growth in 2007. The NVCA survey reports that 91 percent of venture capitalists expect increases in the sector next year.
 
Read the Cleantech Venture Network press release at: http://cleantech.com/index.cfm?pageSRC=PressReleases
 
Read PricewaterhouseCoopers’s analysis of the 2006 venture capital industry at: http://www.pwcmoneytree.com/exhibits/06Q4MT_Press_Release.pdf
 
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U.S. Labor Dept. Selects WIRED II Recipients
On Jan. 17, the U.S. Department of Labor announced 13 regions across the country will share $65 million in the second round of Workforce Innovation in Regional Economic Development (WIRED) grants.
 
While the 13 original 2005 WIRED awardees split a pool of $195 million, each 2nd Generation WIRED region will receive an award of $500,000, with the ability to access a $4.5 million balance contingent upon completion of a regional implementation blueprint. Each of the second WIRED regions already received $100,000 after the 2005 competition to prepare talent development strategies.
 
The 2nd Generation WIRED regions are: Eastern & Central Puerto Rico; Southwestern Connecticut; Northern New Jersey; Delaware Valley Tri-State Area (Pennsylvania, New Jersey, and Delaware); Appalachian Ohio; Southeast Michigan; Northern Alabama and Southern Tennessee; Southwestern Indiana; Southeast Wisconsin; Arkansas Delta; Rio Grande Valley, Texas; Wasatch Range, Utah; and Northern California.
 
More information is available at http://www.doleta.gov/.
 
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OPPAGA Recommends Next Steps for Florida Biotech
A recent report by the Florida Legislature’s Office of Program Policy and Government Accountability (OPPAGA) recommends the state’s next steps to develop its biotechnology industry should include the creation of a privately managed early-stage capital fund for investing in start-up companies, to be financed by the Legislature. The report also contends that the state should consider the creation of an “early seed gap” fund to assist university researchers in the commercialization of their discoveries, and it should improve accountability for the performance of state-supported biotech initiatives.
 
These recommendations come when Florida has made substantial recent investments in the hopes of enhancing the state’s biotechnology industry. Some of the well publicized financial incentives provided by the state to influence laboratory recruitment include $310 million for the Scripps Florida Research Institute, $155 million for the Burnham Institute and $32 million for the Torrey Pines Institute for Molecular Studies. Additionally, Florida has created two biotechnology Centers of Excellence, one in biomedical and marine biotechnology at Florida Atlantic University and the other in regenerative health biotechnology at the University of Florida. Other pieces of the biotech strategy included the completion of business incubators with laboratory space at three universities, the establishment of tax credits for certain capital investments, and the creation of biotechnology curriculum programs at educational institutions. After establishing these and other programs, the Florida Legislature then asked OPPAGA to identify the challenges facing the state for future biotech development and to provide suggestions on how to confront these challenges.
 
The two main problems identified in the report were the lack of capital for start-up biotechnology companies and the challenge of maintaining a long-term commitment to developing a strong biotechnology industry. If state-sponsored investment funds were to be established, OPPAGA recommends that the task should be carried out by an entity that will establish performance measures and provide the legislature with performance reports. In addition, the entity should be occasionally reviewed by an independent third party.
 
Finally, in order to improve accountability, the report recommends that every agency, educational or research institution, or other organization that receives state funding for biotechnology research and commercialization should provide annual reports on its progress, using a variety of innovation metrics for self-evaluation. All of these reports should then be directed to a single source, specifically Enterprise Florida Inc., to assist with the preparation for its annual strategic plan and long-term goals for the state.
 
This report, which provides a detailed overview of all of the components of Florida’s biotech strategy and possible future initiatives, can be found at: http://www.oppaga.state.fl.us/reports/pdf/0671rpt.pd

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SSTI Website Provides Easy Access to Wealth of TBED Information
Looking for information on individual states or on key statistical indicators? If so, the SSTI Weekly Digest archives are a resource that should prove helpful in your search.

By visiting www.ssti.org/Digest/digest.htm, one can browse headlines or view Digest articles dating back to 1996 or use any of these tools:

Contact Noelle Sheets, director of membership services, at 614.901.1690, if you have any questions regarding these resources or would like to learn about SSTI’s membership benefits.

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SSTI Job Corner
Complete descriptions of the position openings described below are available at http://www.ssti.org/posting.htm.

The Life Sciences Discovery Fund (LSDF) Authority was created by the Washington State legislature to promote economic vitality in the State of Washington by fostering innovative scientific research designed to improve the health of the state’s citizens. In support of this mission, the LSDF is seeking a senior program officer to manage its grantmaking portfolios. He or she will be required to structure and maintain relationships with LSDF applicants, grantees and peer reviewers; establish and maintain effective, collegial relationships with applicant scientists and their institutions; travel within Washington State to familiarize applicants with LSDF granting programs and requests for proposals; and perform other responsibilities. The ideal candidate will have a master's degree in a life science or related area and at least eight years of life science research experience. A Ph.D. is highly desired.

The Maryland Technology Development Corporation (TEDCO) seeks an experienced technology transfer practitioner to direct the organization's technology transfer and commercialization activities. TEDCO is an independent entity, established by the Maryland General Assembly in 1998, to facilitate the creation of businesses and foster their growth in all regions of the state. The director is primarily responsible for all funding programs related to the transfer and commercialization of technology from public sector research laboratories to private sector technology businesses in Maryland. The position requires an advanced degree and at least five years of progressively responsible experience with university or federal laboratory technology transfer or corporate licensing.

MTECH Ventures, a division of the Maryland Technology Enterprise Institute within the A. James Clark School of Engineering at the University of Maryland (UM), seeks two dynamic leaders to direct (1) MTECH Ventures and (2) VentureAccelerator.

Purdue University's Information Technology at Purdue (ITaP) is seeking a research scientist to research, recommend, obtain funding for, and execute computational science projects. He or she will develop proposal opportunities through collaboration with campus and national research teams; provide leadership and technical project management for shared cyberinfrastructure initiatives; and evaluate current and future trends in areas of high-performance computing. A Ph.D. in engineering or a related field is required.

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