In the January 30, 2008 Issue:

Copyright State Science & Technology Institute 2008. 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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 Georgia Research Alliance Seeks $40M Dedicated VC Fund
Georgia Gov. Sonny Perdue this month proposed a new $40 million Georgia Research Alliance (GRA) Venture Capital Fund to be fueled by $10 million from the state legislature and subsequently matched with $30 million from the private sector. Of the entire suite of GRA initiatives, this will be the first program not funded entirely by the state of Georgia.
 
The Venture Capital Fund will invest only in early-stage companies associated with GRA’s VentureLab program. The VentureLab program provides technology assessment, commercialization instruction and seed grants to marketable research developed at GRA’s partner universities. These partner universities are the University of Georgia, Medical College of Georgia, Emory University, Clark Atlanta University, Georgia Institute of Technology, and Georgia State University.
 
One of the Venture Capital Fund’s goals is to provide the funding that will allow new companies to stay in the state without moving outside of Georgia to access capital. The fund’s primary targets for investment will be concentrated on technology in the life sciences, especially vaccines and anti-viral therapies.
 
To see the press release of the announcement, visit:
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/01-17-2008/0004738529&EDATE

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Minnesota Governor Announces Clean Energy Initiatives
Minnesota Gov. Tim Pawlenty recently unveiled four energy initiatives to promote clean energy R&D and the use of renewable energy technologies in the state. Through a combination of executive orders and legislative proposals, the programs are intended to push Minnesota towards its goals of having 25 percent of the state’s energy come from renewable sources by 2025 and reducing the state’s greenhouse emissions 80 percent by 2050. These new initiatives are:

Gov. Pawlenty also is promoting energy research, efficiency and technology as the current Chair of the National Governors Association and the Co-Chair of the Midwestern Governors Association’s Energy Security and Climate Stewardship Initiative.
 
More information on these initiatives can be found at the governor’s website:
http://www.governor.state.mn.us/mediacenter/pressreleases/PROD008626.html

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Tennessee Governor Requests $29.3M for Jobs Package, Research
Referring to his fiscal year 2008-09 budget recommendation as “back to basics,” Gov. Phil Bredesen proposed significant investments in research and workforce initiatives while vowing not to tap into reserves or raise taxes.
 
Earlier this week during his State of the State Address, Gov. Bredesen unveiled his ambitious budget proposal, which includes a total investment of $30.5 million in workforce initiatives. The Department of Economic and Community Development is slated to receive $29.3 million for the governor’s Next Steps Jobs strategy – $25.3 million for the FastTrack Infrastructure Development Program and Job Training Assistance and $4 million for business development. Additionally, $1.2 million – the same level as last year – is recommended for the Rural Opportunity Fund, a public-private partnership implementing a small business loan program targeted to small, minority and women-owned businesses in rural parts of the state.
 
To provide training grants to employers in order to create and retain high-skill, high-wage jobs in emerging fields, the governor recommends $9.3 million from the Special Revenue Fund for the Tennessee Job Skills Program.
 
Continuing a push to position the state as a leader in alternative fuels, Gov. Bredesen is asking lawmakers to approve $5.6 million for operational funds for the second year of the University of Tennessee (UT) Biofuels Center, which the governor’s office touts as capable of producing five million gallons of biomass-based fuel per year. Last year, lawmakers allocated $41 million for a pilot switchgrass ethanol plant – the centerpiece of the state’s alternative fuels strategy (see the June 20, 2007 issue of the Digest). Additional UT research initiatives slated for funding include:

Funding for the Tennessee Technology Centers would significantly decrease under the governor’s recommendation – from $71.7 million in FY 2007-08 to $54.4 million in FY 2008-09. Each of the 27 centers across the state are associated with a two-year institution and provide occupational training tailored to the specific needs of businesses and industries within the geographic region they serve.
 
Two initiatives aimed at fostering science, technology, engineering and mathematics would receive $900,000 under the governor’s recommendation. The Tennessee Board of Regents would receive $500,000 to provide non-recurring funds for support of the teacher quality initiative that addresses the shortage of highly qualified K-12 teachers, particularly in math and science. Within the Education budget, $400,000 is requested for the Governor’s Institute for Math and Science to increase the number of students attending the residential high school from 24 to 48.
 
Proposing to change the GPA requirement for the HOPE scholarship from 3.0 to 2.75, Gov. Bredesen said that nearly 80 percent of the scholarship winners lose their scholarship money during their college career because of an inability to maintain the 3.0 GPA. The governor is recommending an appropriation increase of $5.3 million from recurring lottery for education revenues to allow an estimated 3,000 students with a cumulative GPA of 2.75 to retain their scholarships. Currently, students can have a 2.75 GPA their first year, but they are required to maintain a 3.0 GPA in subsequent years.
 
Gov. Bredesen’s FY 2008-09 budget recommendation is available at: http://www.tennesseeanytime.org/govfiles/FY08-09-Budget-Document.pdf

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Tech Talkin’ Govs, Part IV
The fourth installment of the Tech Talkin’ Govs series includes excerpts from governors’ speeches delivered in Georgia, Kentucky, Massachusetts, Michigan, Tennessee, and Wisconsin.
 
Georgia – see article in this issue of the Digest.
 
Kentucky
Gov. Steve Beshear, State Budget Address, Jan. 29, 2008
“I recommend a $60 million bond authorization for a new round of ‘Bucks for Brains.’ … This program has attracted and retained some of the brightest faculty and research teams in the nation. In times like these, we simply must invest in the future. …
 
“… It is time to revitalize our economic development efforts, and as chair of the Economic Development Partnership Board, I will work with the Secretary of that cabinet to review and revise our strategy, giving it a new focus on the entire state and on twenty-first century jobs.”
 
Massachusetts
Gov. Deval Patrick, State of the Commonwealth Address, Jan. 24, 2008
“On the jobs front, let’s both advance human healing and add another 250,000 jobs over the next decade by passing the Life Sciences Bill next month.
 
“Let’s start promoting efficiency, renewables, cheaper electricity, and new jobs in a hot new growth sector by passing the Energy Bill.
 
“Let’s connect the whole state to the world of ideas and commerce, and jumpstart the economies in western and central Massachusetts, by passing the Broadband Bill.”
 
Michigan
Gov. Jennifer Granholm, State of the State Address, Jan. 29, 2008
“And tonight, I'm announcing two major initiatives to grow new jobs in Michigan. ... First: the Michigan Job Creation Tax Credit - a one time offer for businesses in the 50 fastest-growing industries in the country. Whether your business is in Michigan today or you'll come here tomorrow, if you grow jobs in Michigan, we'll cut or altogether eliminate your taxes. Along with new Michigan Business Tax, this is the first time in Michigan history where businesses will be broadly rewarded for hiring people.
 
“Second: I will create the Michigan Invests! Fund - a fund that will put Michigan money to work building Michigan's economic future. Young companies that want to grow in Michigan are instead being uprooted by their investors who live in California or New York. Invest Michigan! will give high-growth companies the investment capital they need if they grow right here.
 
“The Michigan pension fund and other major Michigan funds will combine to amass a pool of at least $300 million to create this win-win: pensioners and investors will get a good return on these sound investments. Michigan gets cutting-edge businesses and jobs. Michigan will now be in the top three states in the nation for making investment capital available to successful entrepreneurs who create jobs here. …
 
“… But let me talk for a moment about one sector that has blockbuster potential for Michigan: alternative energy. … Because of the need to reduce global warming and end our dependence on expensive foreign oil, the renewable energy and energy efficiency industries will create millions of good paying jobs.

“There's no question that these jobs are coming to our nation. The only question is, where?
 
“I say we will win these jobs for Michigan and replace the lost manufacturing jobs with a whole new, growing sector. … Alternative energy companies have watched closely as 25 other states have set aggressive goals for their alternative energy use. We have to meet and beat other states' goals here in Michigan if we are going to attract those companies here. That's why I am asking the Legislature to set ambitious alternative energy goals for Michigan - produce 10 percent of our electrical energy from renewable sources by the year 2015 and a full 25 percent by the year 2025. …
 
“… Tonight, I'm announcing that our state's largest utilities are poised to make one of the world's largest investments in alternative energy and energy efficiency, creating upwards of 17,000 jobs in Michigan.
 
“As soon as this Legislature acts on a comprehensive energy package, Consumers Energy and DTE will begin to jointly invest up to $6 billion in Michigan - much of it to build wind turbines and wind farms to produce electricity and to help businesses and homeowners install energy saving technologies. Six billion. 17,000 jobs. …
 
“… A renewable energy goal is a powerful tool to attract alternative energy jobs, but there are other tools, too. We are going to create Centers of Excellence across the state to bring alternative energy companies and Michigan universities together to create new products and new jobs. I'm also asking you to pass tax incentives for anchor companies in the alternative energy sector that get their suppliers to also locate in Michigan.
 
“And to make sure that ethanol is made here and sold here and is competitive with gasoline, I'm asking you once again to eliminate the gas tax for fuel purchases of ethanol and biodiesel at gas stations.
 
“… In the past year, we created six early college high schools, which each partner with a major hospital in our state and a college or university. …We have six of these schools in Michigan today - with our 21st Century Schools Fund, we could create 100 more tomorrow. …
 
“… Unfortunately, far too many of our students enter college but don't graduate. The higher education budget I propose will take aim at that problem by rewarding colleges and universities when their students complete degrees. We'll also reward them when … they find ways to turn research ideas into businesses.
 
Tennessee – see article in this issue of the Digest.
 
Wisconsin
Gov. Jim Doyle, State of the State Address, Jan. 23, 2008
“Tonight I am proud to report that even during these uncertain times, the State of Wisconsin is primed to meet the challenges ahead. We are ready to Grow Wisconsin. … To get there, I present to you tonight the next step in my Grow Wisconsin strategy…
 
 “… We can create an economy built around innovation if we work … to encourage business to center their research and development operations in Wisconsin. When a business increases its research and development by 25 percent, let’s reward them dollar for dollar for what they invest beyond that. …
 
 “… Tonight we’ll launch an aggressive new strategy to reduce the pollution that causes global warming and grow Wisconsin’s economy – the Wisconsin Energy Independence Fund – a major new investment to make Wisconsin a world leader in renewable energy and homegrown power. Over the next 10 years Wisconsin will invest $150 million to help our businesses, our farmers, our foresters, and our manufacturers produce and promote renewable energy.
 
“Our strong manufacturing base and rich agricultural industries, along with the wealth of resources in our vast northern forests and world-leading research universities, position Wisconsin to become the Saudi Arabia of renewable energy. …
 
“Tonight we’ll launch a new campaign to increase the availability of renewable fuel by one billion gallons. First we’ll provide new tax credits for biodiesel fuel producers and add 400 new renewable fuel pumps to our roads. Second let’s pass a renewable fuel standard … to require oil companies to provide renewable fuel for our consumers. …
 
“… To make sure we have more kids ready to compete in the world, I urge you to pass legislation to make a third year of math and a third year of science mandatory for high school graduation.”
 
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Recent Research I
Global Trends in Business Creation and Entrepreneurship Policy
Ten to forty percent of entrepreneurs launching businesses in high-income countries expect that more than a quarter of their customers will come from outside of their country, according to a new study of trends in global entrepreneurship.
 
The Global Entrepreneurship Monitor (GEM), a report prepared annually by researchers from Babson College and London Business School, provides insight into international entrepreneurship trends and the factors that influence the rate of new business creation. This year’s edition dedicates particular attention to the national regulatory environments and other policy-based factors that encourage entrepreneurs. It also provides a glimpse into the increasingly global nature of entrepreneurship.
 
New business formation rates demonstrate a U-shaped pattern across countries of varying levels of average income. Early-stage activity tends to be high in countries with low per capita gross domestic product (GDP), and then declines in middle-income nations. The figure then rises again for high-income countries such as the U.S., which continues to have one of the highest entrepreneurship levels among richer countries. Iceland, Hong Kong and Ireland also rate among the top high-income entrepreneurial countries. Several low-income countries have very high rates of business creation, including Thailand, Peru, Colombia and Venezuela, and far outpace even the top high-income countries, though the report does not provide information on the nature of these new companies.
 
Though its overall rate remains high, early-stage entrepreneurial activity in the U.S. decreased in 2006/07, according to the GEM Survey. Meanwhile, Australia, which also boasts a high amount of activity, has substantially increased its entrepreneurship over the last few years. Other countries that have shown significant entrepreneurial growth since 2002 include Finland, Netherlands and Japan, which continues to languish near the bottom of industrialized countries but has shown some progress.

The report discusses the contribution of international organizations, such as the World Trade Organization and free trade agreements such as NAFTA, in increasing the global rate of entrepreneurship. By opening up new markets and sometimes by providing financial support for new businesses, international organizations can create new international business opportunities for entrepreneurs. Hong Kong, the United Arab Emirates and Singapore rate among the top of high-income countries with a strong international orientation.
 
Some other findings:

The authors also find the presence of burdensome bureaucratic requirements to start business significantly lowers a country’s rate of new business creation. GEM uses a “red tape” index, along with the World Bank’s “Doing Business” index, to evaluate the ease of launching an entrepreneurial venture. All else being equal, a high degree of red tape tends to dampen the desire to create and expand early-stage businesses. EU countries with lower rates of entrepreneurship frequently rank highly on the red tape scale.
 
Download the Global Entrepreneurship Monitor 2007 Executive Report at: http://www.gemconsortium.org/article.aspx?id=41

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Recent Research II
Reports Offer Suggestions for Small and Medium Manufacturers to Compete in Global Supply Chain
Considerable changes are affecting the structure of traditional manufacturing supply chains, and firms that do not adapt to these shifts will suffer economically, according to a recent report from the National Association of Manufacturers (NAM). Forging New Partnerships: How to Thrive in Today’s Global Value Chain provides information about specific programs and organizations, as well as suggestions and best practices, that may improve the difficulties small and medium manufacturers (SMMs) face as both their competitive markets and internal management needs are changing.
 
The report is the second release in NAM’s Small and Medium Manufacturers Series. The first report identified the challenges facing SMMs in the 21st century (see the March 6, 2006 issue of the Digest). Small manufacturers are considered to have less than 500 employees, and medium-sized manufacturers have between 500 and 2000 employees. Together, these two groups account for 99 percent of all manufacturers and 40 percent of U.S. production value.
 
Forging New Partnerships looks deeper into the evolving relationships between manufacturing suppliers, producers and consumers. In the past, the end consumer often dictated design, pricing and services, and components were primarily built to specification. But today, as globalization expands the locations of suppliers and producers, the end user is expecting more, requiring small and medium-sized manufacturers to incorporate innovation into their designs and offer enhanced services and support. In order to take advantage of this shift from supply chains to global value chains, SMMs need to both engage new overseas partners and position themselves as better, more valuable alternatives to foreign producers, NAM contends.
 
Noting only half of U.S. manufacturers presently have value chain strategies, Forging New Partnerships outlines strategies in four critical area: 

The report also provides a “Value-Chain Matrix” to assist SMMs with a self-assessment of their current relationships with suppliers and customers. To help with developing and implementing new strategies, the report identifies various resources and national organizations specializing in global sales and competition, workforce development, manufacturing and business development, lean manufacturing, federal government funding and sustainable practices.
 
State manufacturing policymakers and TBED practitioners will find useful information in the report as well, based on results of survey data presenting the top three reasons SMMs do not participate in government-sponsored programs:

To address these problems, state and national programs could expand their outreach and visibility, and cultivate closer relationships and knowledge about manufacturers located in their service areas.
Forging New Partnerships: How to Thrive in Today’s Global Value Chain can be found at:
http://www.nam.org/s_nam/bin.asp?CID=216&DID=239787&DOC=FILE.PDF

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Useful Stats
State Business Churning Rankings, 2000-2006
Using data from the Small Business Administration's Office of Advocacy, SSTI has prepared a table showing how each state (and the District of Columbia) has ranked in business churning over the past seven years. Business churning is a measure of the creation of new companies and the death of existing companies as a share of total firms (small businesses with employees). Churning increases as the number of new start-ups and existing business failures per year increase. A high level of business churning can be a major driver of innovation and growth, since it can indicate the presence of entrepreneurial activity and the transition to new industries.
 
Over this period, Nevada, Utah and Washington have consistently occupied the top three spots, though they have traded places. Colorado and Arkansas have shown the most relative improvement, with Arkansas rising from 50th in 2000 to 16th in 2006. Maryland, Idaho and Tennessee were also consistent top performers.
 
South Dakota, Ohio, Connecticut and Wisconsin, on the other hand, continue to occupy the bottom tier. California fell from fifth place to 32nd over this same period.
 
Arizona's rank for 2006 is not reported in the table, due to data issues. The SBA data pointed to an unusually high number of business deaths that, according to the Office of Advocacy, may have been caused by reporting errors.
 
SSTI's table is available at: http://www.ssti.org/Digest/Tables/013008t.htm
 
Additional SSTI tables showing state business churning statistics are available for 1998-2001, 2002-2003 and 2004.

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SSTI Welcomes Newest Members
It is only through the involvement of the each and every one of our more than 185 members that SSTI is able to continue its mission -- to lead, support and strengthen efforts to improve state and regional economies through science, technology and innovation. Together, we’re growing a strong and vibrant tech-based economic development community. New members include:

State Sponsors
Kansas Bioscience Authority
Oklahoma Department of Commerce

Affiliates
California State University, Office of Tech Transfer & Commercialization
George Mason University, Office of Research Development
Institute for Triple Helix Innovation
Luther Forest Technology Campus
Murray State University, Regional Business and Innovation Center
New Jersey Institute of Technology, Enterprise Development Center
The Northeastern Pennsylvania Technology Institute
Ohio State University, Technology Licensing & Commercialization
Ohio Supercomputing Center
Rice University, Office of Research
South Dakota State University, President's Office
TECH Fort Worth
Technology Association of Georgia
University of South Alabama, Office of the Vice President for Research
WVHTC Foundation
 
Supporters
B&D Consulting
Growth Services
 
Membership allows access to the most comprehensive resource for collecting and maintaining information about tech-based activities across the nation. Our members tell us that one of the greatest benefits of membership is the ability to turn to SSTI when seeking answers to questions or advice on programs. Having answers to our member’s questions and finding the information they need is our top priority.
 
Join today or please contact Noelle Sheets, director of membership services, to learn more about SSTI.

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SSTI Job Corner
A complete description of this opportunities and others is available at http://www.ssti.org/posting.htm.

The Oak Ridge National Laboratory (ORNL) is seeking a director to lead the Industrial and Economic Development efforts for ORNL’s Partnerships Directorate. The incumbent will develop and execute a new Industrial Partnerships strategy, interface with the region’s economic development professionals to maximize ORNL’s contributions to regional economic growth, lead ORNL’s entrepreneurial efforts, and perform other responsibilities. A bachelor’s degree in general business, planning, marketing or a related field and at least 10 years of senior experience involving a combination of community, technology and economic development marketing and recruitment are required. A master’s degree is preferred.

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