In the February 26, 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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Editor's Note
Special Digest Edition as Part of Entrepreneurship Week
It is the nation’s first Entrepreneurship Week, with many events, workshops and contests taking place across the country to encourage more people to consider becoming entrepreneurs. A complete list of activities is available at www.entrepreneurshipweekusa.com. With this issue, SSTI honors America’s tech entrepreneurs – and the state and local TBED efforts designed to ensure more of these firms succeed!

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Council on Competitiveness Reviews Status of U.S. Entrepreneurship
America’s laurels for its record of innovation and entrepreneurship are great but there is no time to rest on those past accomplishments given the changing global economy, a recent paper by the Council on Competitiveness concludes. Where America Stands: Entrepreneurship draws from dozens of other research papers, studies and articles to provide an overview of the current entrepreneurial climate in the U.S.
 
In addition to pointing out some of the challenges presented by globalization, the paper cites others’ findings of many missed opportunities for even greater returns:

Regional inequality of successful entrepreneurship is singled out in Where America States as a great challenge and opportunity to increase the nation’s economic output. The paper calls attention to three approaches adopted by successful regions to encourage entrepreneurial growth: 1) creating angel investment networks; 2) leveraging knowledge assets; and, 3) catalyzing connectivity.
 
The paper closes with a strong sense of urgency for America to do more, stating, “[The nation's] early lead and risk-friendly climate created a comfortable, but probably unsustainable, margin of leadership for the United States. ... Running in place is not an option for us.”
 
Where America Stands: Entrepreneurship is available at: http://www.compete.org/pdf/ew_deeper_dive.pdf
 
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Entrepreneurs Need Access to Capital: U.S. Slips to Fifth in New Milken Index
In the global competition to create the best markets for entrepreneurs, Hong Kong moved up from second place in 2005 to reclaim the top spot, according to the Milken Institute's 2006 Capital Access Index. Hong Kong was first in the 2004 edition of the index. 
 
In 2006, Singapore rose from third to second place. The United Kingdom, ranking first in 2005, slipped back to third for the 2006 rankings, while the U.S. dropped from fourth to fifth because of an increase in the lending rate.
 
The big story is Canada, which rose from 10th place in 2005 to fourth on the latest index and shows the most improvement in scores for alternative sources of capital (moving from 30th place to 15th) and access to international capital (from 40th place to 18th).
 
First developed in 1998, the Milken Institute Capital Access Index ranks countries around the world in terms of the financial infrastructures that support entrepreneurial activity by providing access to capital. Factors in the ranking include macroeconomic environments, financial and banking institutions, the development of the equity and bond markets, and alternative capital sources, such as hedge funds.
 
The 2006 Capital Access Index is available at http://www.milkeninstitute.org.
 
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New ATP Solicitation Forthcoming
The National Institute of Standards and Technology (NIST) recently announced the Advanced Technology Program (ATP) will conduct a new competition in fiscal year 2007 for cost-shared awards to support high-risk industrial R&D.

The ATP provides partial support to single companies or to industry-led joint ventures to accelerate the development of innovative technologies for broad national benefit through partnership with the private sector. ATP projects are selected in a competitive, peer-reviewed process.

Further details will be available when the competition is formally announced in the Federal Register this spring. Proposals will not be accepted before that time. Notices containing specific information, such as anticipated funding, eligibility criteria and proposal deadlines, also will be posted to www.atp.nist.gov and www.grants.gov.

Additionally, all of those on the ATP mailing list will receive a competition announcement and the ATP Proposal Preparation Kit. Those interested in registering for the ATP mailing list may do so at www.atp.nist.gov/atp/atpform.htm.

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Places, Please:
Local Entrepreneurship Facilities Take Center Stage for Most TBED Strategies
Whether you call it an incubator, accelerator, technology center or innovation zone, most communities actively engaged in promoting tech entrepreneurship can point to a building or group of buildings that houses some of those efforts. These facilities increase the success of budding tech firms by providing some combination of low-cost space, shared resources, business assistance, intellectual property assistance, and access to capital. 
 
For incubators alone, the National Business Incubation Association tallied more than 1,400 public and private facilities as of October, 2006.
 
And each month there are more announcements of construction of a new center or expansion of an existing effort. Here are just four recent examples of the cornerstone of many TBED strategies:

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Recent Research
Does Education Drive New Firm Survival?
When it comes to new firm survival in the service sector, do regions that have above-average high school dropout rates fare worse than regions with higher percentages of their adult populations earning college degrees? The answer, according to a recent discussion paper by Zoltan Acs, Catherine Armington, and Ting Zhang, is it depends.
 
In The Determinants of New-firm Survival across Regional Economies, the authors find, that regardless of whether the economy is in recession or growth, the higher a region’s high school dropout rates, the lower its new-firm survival rate in the service sector. [Note: High school dropouts are such a drain on state and regional economies, in fact, that many states are raising the legal age from 16 to 18 before a student can excuse himself from school permanently. For example, several governors used their State of the State Addresses this year to call for the change.]
 
But what about all of those college grads? The answer depends on the health of the overall economy, the authors say. During times of economic growth, the higher a region’s percentage of college graduates, the higher its new-firm survival rate. But during recessions, the opposite was true: the college graduate rate had a negative, although weak, impact on the new-firm survival rate.
 
In addition to exploring the relationship between human capital and new-firm survival at the regional level, the authors explore the impact of spillover effects from new firms, as they control for measures including population growth, income growth, unemployment rates, and establishment sizes within their model. The spillover effects were defined as the ratio of establishments per square mile to the population per square mile for various sectors within each Labor Market Areas, geographically defined by labor commuting patterns.
 
Regarding spillover, in both times of economic growth and recession, the ratio of service firms in a region had a negative effect on the new-firm survival rate but the ratio of all firms across diverse sectors had a positive effect on new-firm survival. According to the authors, additional research needs to be performed to show the effects of knowledge spillovers within industry specializations compared to those of a diverse economy.

The Determinants of New-firm Survival across Regional Economies, can be downloaded at: ftp://papers.mpiew-jena.mpg.de/egp/discussionpapers/2007-04.pdf

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Entrepreneurship Reports Available
This week's issue of the SSTI Weekly Digest exposes just the tip of the iceberg of information available on entrepreneurship. That's where the TBED Resource Center comes in handy. The TBED Resource Center, developed by SSTI in cooperation with the U.S. Department of Commerce's Office of Technology Policy, is an interactive website providing a wealth of information for practitioners, policymakers, university faculty, and researchers alike. With links to more than 4,500 reports, the website features information in a variety of TBED-critical topics in the U.S. and abroad.

More than 290 reports can be found on the TBED Resource Center when the topic entrepreneurship is selected.  

SSTI staff selections include:

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Useful Stats
SBIR Awards, Proposals by State, FY 2005
Nineteen states that applied for assistance under the Small Business Innovation Research (SBIR) Program in fiscal year 2005 saw an award-to-proposal conversion rate greater than the national average of 16.4 percent. Of those states, five experienced rates of greater than 20 percent ­- Nebraska (29%), Maine (27.3%), District of Columbia (25%), Montana (21.8%), and Washington (20%).

The top 10 states with the most awards in FY 2005 were California (816), Massachusetts (508), Virginia (242), Colorado (205), Maryland (204), Texas (198), Ohio (191), New York (186), Pennsylvania (176) and Michigan (111).
 
SSTI has compiled a table that presents this FY 2005 Phase I SBIR data for all 50 states, Puerto Rico, and the District of Columbia. Statistics show awards, proposals and award-to-proposal conversion rates from 10 of the 12 participating agencies (the Department of Education and the Commerce Department's National Oceanic and Atmospheric Administration declined to provide proposal statistics). The table is available at: http://www.ssti.org/Digest/Tables/022607t.htm
 
SSTI’s FY01-05 SBIR statistics provide states with five years of data to evaluate award, proposal and conversion trends for most agencies and comparable states. Tables containing data for fiscal years 2001-2004 are available at:
 
FY 2004: http://www.ssti.org/Digest/Tables/042505t.htm
FY 2003: http://www.ssti.org/Digest/Tables/062705t.htm
FY 2002: http://www.ssti.org/Digest/Tables/090503t.htm
FY 2001: http://www.ssti.org/Digest/Tables/051002t.htm

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A Resource Guide for Technology-based Economic Development
Ideas for Fostering Entrepreneurship
With Entrepreneurship Week, you and your colleagues may be more inspired to take steps to encourage entrepreneurship. But where to begin? What approaches should you consider? Or perhaps you are having problems developing an entrepreneurial culture?

Wouldn't it be great if there was one guide that you could turn to that captures the wisdom and experience of more than 50 experienced practitioners? One publication that would describe more than 14 ways that are being used across the country to encourage entrepreneurship? One publication that offers these suggestions from one seasoned practitioner:

"First, start identifying who the entrepreneurial leaders are who can influence a paradigm shift or culture change within a region. They need to be added to boards of economic development organizations, angel groups, commercialization corporations, and so forth so the word can be spread. ...
"... Identify leaders who will be involved at the state level because education within the state legislature, with a governor, and with governors' administrations is extremely important. It's not that the efforts need to be government led, but the government can act as a catalyst and can be a major funding source. ...
"When it comes to changing the entrepreneurial culture, it can be influenced, but no one can dictate that it happens — much of the strategy is simply leading by example. For this reason, it is important to find a champion, a stakeholder within the region that people can get behind. Evaluate the needs, find the right people to address them, and if the right people are not there, import them into the region."

In fact, there is just one guide, and it's available either as a free, downloadable PDF or as a hard copy for purchase. A Resource Guide for Technology-based Economic Development, produced with support from the U.S. Department of Commerce's Economic Development Administration, can be obtained at http://www.ssti.org/Publications/Onlinepubs/resource_guide.pdf or as an inexpensive 90-page bound book (a format still more likely to be perused by most legislators or gubernatorial staff than a pile of printouts). Single print copies are $15 plus shipping. SSTI members receive a 10 percent discount on each order. Orders of 15 or more receive a discounted price of $10. Hard copies can be ordered by calling SSTI at 614.901.1690.

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Job Corner
GDEcD Seeks Director for Innovation and Technology Office
The Georgia Department of Economic Development (GDEcD) is seeking a director to run its Innovation and Technology Office. The director is responsible for implementing and expanding a statewide technology and innovation-based economic development program that encompasses a full range of sales, marketing, business recruitment, business development, community development and public relations activities. A bachelor's degree in the life sciences, engineering or a closely related field is required; a master's degree in these fields is preferred. A full description of this opportunity and others is available through the SSTI Job Corner at http://www.ssti.org/posting.htm.

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People

Sheri Stickley, vice president of SSTI, will be leaving SSTI on March 2 to accept a position with the Oklahoma Department of Commerce. Sheri was one of the primary authors of A Resource Guide for Technology-based Economic Development, and we wish her well in her new position. Oklahoma's gain is our loss, but we look forward to benefiting from her advice and wisdom as she enters a new chapter of her career.

Willem Bakker was named president of the Technology Entrepreneur Center and executive director of the Information Technology Coalition, both in St. Louis.

Jan Lesher was named director of the Arizona Department of Commerce, replacing outgoing Gilbert Jimenez.

Dick Munson is stepping down as executive director of the Northeast Midwest Institute to help start Recycled Energy Development, LLC.

Sherrie Preische resigned as executive director of the New Jersey Commission on Science and Technology to accept a position in the private sector.

Connecticut Innovations appointed Dr. David Reed to the position of executive in residence.

The Maryland Technology Development Corp. has appointed Renée Winsky as its new executive director.

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