In the April 9, 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.

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.

Arkansas Enacts $140M TBED Package
With all of the recent activity from its state legislature, Arkansas will soon possess one of the nation's most comprehensive portfolios of state-supported TBED initiatives. A number of TBED-related acts passed by the Arkansas General Assembly this session have all received Gov. Mike Beebe's signature. The result could be a public injection of up to $140 million for Arkansas's TBED community over the next biennium.

Most of the new TBED initiatives were outlined in the 2007 Legislative Agenda created by Accelerate Arkansas, an independent statewide coalition organized under the Arkansas Economic Acceleration Foundation. Accelerate Arkansas' goal is to raise the state's average wage to the national average by 2020, a goal to be advanced by investments in research, entrepreneurship, risk capital, and Arkansas' science and engineering workforce.

Every component of the legislative agenda proposed by Accelerate Arkansas was accepted by the legislature. The General Assembly also passed additional TBED legislation during the recent session, including authorization for research parks, broadband access, and R&D tax credits. The package rounds out the complement of the programs already underway in the state through the Arkansas Science & Technology Authority.

The new legislation authorizes maximum spending levels for a variety of specific TBED activities to be undertaken during the 2007-2009 biennial budget cycle. Gov. Beebe is given the discretion to spend less than the maximum levels, providing a flexibility to reallocate resources that is not often available to state executive branches.

Many of the new measures will be supported by an anticipated surplus in state revenues - projected to be around $917 million when the fiscal year ends on June 30. The legislature decided the funds will be distributed between public school facilities ($456 million), highway improvements ($80 million) and other legislature-initiated projects, resulting in about $196 million to be used for programs within the executive branch. Gov. Beebe has authorization to use approximately 70 percent of the $196 million for TBED initiatives, including:

The 2007 Legislative Agenda of Accelerate Arkansas can be found at:
http://www.asta.ar.gov/AA%20Brochure%2003-06-07.pdf

return to the top of the page

Canada Launches 5-year, $900M Aerospace and Defense Initiative
To promote excellence and accelerate innovation in the nation's aerospace, defence, security and space industries, Canada earlier this month launched the Strategic Aerospace and Defence Initiative (SADI) -- a repayable contribution program being administered by Industry Canada's Industrial Technologies Office (ITO).

Canadian aerospace, defence, security and space industries are knowledge-intensive and major contributors to Canada's economy. The aerospace sector, alone, had sales of $21.8 billion and exports of $18.5 billion and employed 75,000 highly skilled-and-paid Canadians in 2005. SADI is expected to invest nearly $900 million over the next five years, with funding to reach up to $225 million per year, in support of these industries.

SADI was developed with three objectives in mind: (1) to encourage strategic R&D that will result in innovation and excellence in new products and services; (2) to provide enhanced opportunities for Canadian A&D industries; and (3) to foster collaboration between research institutes, colleges, universities and the private sector. By investing in strategic R&D projects, ITO will concentrate its resources on projects that involve the development of technologies that focus on next generation products or services, build on Canadian strengths, enable Canadian companies to participate in major platforms, and assist in meeting Canada's international obligations. Each project proposal will be assessed according to its technology, social and economic benefits and the submitting company's ability to achieve the stated objectives.

SADI's repayment structure will be formula-based and standardized. Repayments on contributions will be based on gross business revenues of a recipient company, or its relevant division which lowers the risk to the government. The repayment will start regardless of the success of the technology developed. On average, repayment periods will be limited to 15 years, with repayments starting shortly after the completion of the R&D phase. All of these features will allow for more money being repaid earlier to the government.

More information about the Strategic Aerospace and Defence Initiative can be found on ITO's website at www.ito.gc.ca.

return to the top of the page

North Carolina Lays Out $25M Plan for Biofuels Industry
Several U.S. states have introduced plans in attempts to take the early lead in the country's emerging biofuels industry. For example, in 2006, the Washington legislature approved the initial components of the state's Bioenergy Program. Tennessee Gov. Phil Bredesen also has proposed a $73 million investment in biofuels research over the next five years though a new Biofuels Initiative at the University of Tennessee, and the Oklahoma legislature is mulling a $40 million Bioenergy Center to coordinate state research.
 
North Carolina is the latest state to enter the fray with an ambitious plan to fund biofuel research and infrastructure. Last week, the Environmental Review Commission of the state's General Assembly met to discuss "Fueling North Carolina's Future: North Carolina's Strategic Plan for Biofuels Leadership," a nine-point plan to boost the biofuels industry. The plan, commissioned by the state legislature in August 2006, was developed after leaders observed that the 5.6 billion gallons of petroleum-based liquid fuels sold in North Carolina each year were not contributing in any meaningful way to the state's economy.

By switching to locally grown and processed sources of fuel, the plan states, the state can leverage its consumption into economic growth. North Carolina should focus its biofuels research and industry support on cellulose-based fuel technologies, rather than corn and grain-based initiatives more common in the Midwest, it adds. Though the state's climate and soil conditions make for unfavorable growing conditions for corn-based ethanol, the plan's authors believe that with sufficient support North Carolina could become the "ethanol capital of the East Coast."
 
A new biofuels commission would oversee the state's progress in achieving the goals of the plan. Its chief goal is to ensure that, by 2017, 10 percent of all liquid fuels sold in North Carolina come from in-state agricultural sources and production facilities. The strategy requests $500,000 annually for the commission and another $500,000 to educate leaders and the public about the biofuels industry.
 
Action points from the plan include:

The state will also develop targeted incentives to produce and deliver biofuels to the consumer. Overall, the strategy calls for over $31 million in state investment. North Carolina also plans to work with other states in the South and the Mid-Atlantic to support the leadership of those regions in the national biofuel economy.
 
Find out more about the North Carolina Biofuels Leadership Plan at: http://www.ncbiotech.org/biotechnology_in_nc/strategic_plan/biofuel_plan.html

return to the top of the page

$50M Tech Fund Makes Cut for Maine Bond Package
A $295 million three-part bond referendum package passed by the Maine State Legislature last week includes a number of components central to the state’s TBED strategy, including funds to support continued development of the state’s research enterprise, expanded broadband access and increased rural/economic development financing.
 
The largest TBED item provides $50 million for the Maine Technology Fund to support research, development, and commercialization efforts of Maine-based public and private entities. The funds are limited to the state’s targeted fields of biotechnology, marine technology, composite materials, environmental technology, forestry and agriculture, information technology, and precision manufacturing.
 
Additionally, the package includes $48.5 million for improvements at the University of Maine and the state community college system and $2 million for revitalizing downtowns and expanding access to digital resources through the New Century Community Program.
 
Several revolving loan funds also will be replenished with a combined pool of $6.5 million, including the Maine Maritime Academy and School Revolving Loan Fund, the FAME Economic Development Revolving Loan and the Rural Development Fund, the Regional Development Loan Program, and the Agriculture Marketing Loan Fund.
 
The bond measures will be put to the voters as three separate items with the first $131.4 million offering focused primarily on transportation issues being considered in June. The $134 million November installment includes the TBED, education, cultural, and traditional economic development elements described above. The final measure will be on the June 2008 ballot and will address $29 million for more transportation projects.

return to the top of the page

Mississippi Rolls Out Five New Capital-attracting Funds
One of the most vexing problems facing states, outside of a few well known success stories, is a persistent lack of attention from the venture capital industry. In 2006, almost 60 percent of venture capital investment was concentrated in California and Massachusetts. The other 48 states have had to devise their own strategies to compete with Silicon Valley, Route 128 and each other to gain the attention of potential investors. Mississippi, for example, attracted only two venture investment deals and only $8 million in VC investment last year, according to PricewaterhouseCoopers’ annual MoneyTree Survey. The lack of access to capital was stifling the state’s economy, especially its high-tech industries, Momentum Mississippi concluded in a study last year.

To help remedy Mississippi's situation, the state legislature recently approved a package authorizing five new state funds to support early-stage high-tech companies and to build an in-state market for private equity investment. The funds will be administered by the Mississippi Technology Alliance (MTA), a nonprofit organization that works closely with the state to provide services to investors and entrepreneurs. Gov. Haley Barbour’s budget request for fiscal year 2008 proposes a $4 million initial allocation for the funds, which will be disbursed to MTA by the Mississippi Development Authority, as needed.
 
The state will dedicate almost half of the funding to one of the funds to assist start-up, seed and early-stage Mississippi-based businesses. To be eligible, the companies must have a business plan, reach a collaborative agreement with a state institution of higher education or community college, and secure a match from an accredited investor. The fund will provide loans for up to $100,000 per year in qualified expenses, for a total of $200,000. Interest on loans will be forgiven if the funds are repaid within three years.
 
The four remaining programs are similar in design but address specific situations or needs, such as: early-stage businesses without outside investment; university technology spinoffs; and early- and late-stage high-tech firms in rural areas.
 
In addition to providing capital to small businesses and an incentive for outside investment, Gov. Barbour says the new programs will stimulate collaborative research between the state’s research institutions and businesses, accelerate the rate of new business formation, and encourage promising high-tech industries.
 
House Bill 1724 is available at: http://billstatus.ls.state.ms.us/documents/2007/html/HB/1700-1799/HB1724SG.htm

return to the top of the page

Useful Stats
Per Capita Personal Income by State, FY 2003-2006
The U.S. as a whole showed an increase of 5.41 percent in per capita personal income from fiscal year 2005, according to second quarter 2006 estimates of state personal income data released by the U.S. Bureau of Economic Analysis (BEA).
 
Using BEA data, SSTI has compiled a table ranking all 50 states and the District of Columbia by per capita personal income and percent change between FY 2003-06. Twenty-four states showed an increase in per capita personal income over the four-year period greater than the national average of 15.51 percent. Among those states, Wyoming led the nation with a 22.1 percent increase, followed by Oklahoma (20.8 percent), the District of Columbia (19.7 percent), Louisiana (19.4 percent) and Hawaii (19.4 percent).
 
In per capita personal income, the District of Columbia led the nation from FY 2003-06 with an average of $56,307 per person in FY06. Connecticut, New Jersey, Massachusetts, Maryland and New York ranked 2-6, respectively, throughout the four-year period. Of the remaining top 10 states, Wyoming moved up eight places to seventh in FY06 (the largest jump in rank over the four-year period), New Hampshire moved down one rank to eighth, Delaware moved up 12 places to ninth, and Virginia remained 10th.
 
SSTI’s table is available at: http://www.ssti.org/Digest/Tables/040907t.htm

return to the top of the page

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

© 2007 State Science and Technology Institute. All rights reserved.