In the February 27, 2008 Issue:

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 Canadian Government Provides $163M for New Centres of Excellence
Earlier this month, the Canadian Minister of Industry announced the establishment of 11 new Centres of Excellence for Commercialization and Research (CECRs) to pursue multidisciplinary work in the areas of environmental science, natural resources and energy, health and life sciences, and information and communication technologies. This $163 million investment joins a $105 million investment last year that created seven other CECRs across Canada.
 
The CECR initiative is a component of Canada’s Science and Technology Strategy (see the May 21, 2007 issue of the Digest) and is administered by the Networks of Centres of Excellence (NCE) program. Organizations that are eligible for CECR funding are nonprofit corporations formed by universities, research organizations, private firms or other nongovernmental parties. The average grant size for each CECR was around $15 million, to be distributed over 3-5 years.
 
Four of the 11 new centers are based in Vancouver: Other 2008 awardees include:

More information about the CECRs is available at: http://www.nce.gc.ca/comp/CECR/cecr_e.htm
 
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Hawaii, DOE Partner toward Ambitious Clean Energy Goals
With the goals of reducing crude oil consumption by a whopping 72 percent and identifying clean energy sources to cover 70 percent of the state’s energy needs by 2030, Hawaii has signed a memorandum of understanding (MOU) with the U.S. Department of Energy (DOE) to figure out exactly how to get the job done under the Hawaii Clean Energy Initiative.
 
To call the plan merely ambitious seems like an understatement. Hawaii currently depends on imported fossil fuels to meet 90 percent of its energy needs, the MOU begins. Despite that, Hawaii already generates more of its energy from biomass than any other state.
 
Both the state and DOE believe the goal is reasonable, however, given the abundance of clean energy resources the islands naturally enjoy – sunshine, wind and geothermal sources. In addition, the cost of importing fossil fuels across the Pacific continues to make traditional energy sources less attractive economically. The MOU states “every 10 percent increase in world oil prices results in a 0.5 percent reduction in the state’s GDP.”
 
DOE’s role is to begin immediately, according to the agency. DOE promises to engage experts in clean energy technology development to help Hawaii launch several projects with public and private sector partners that target early opportunities and critical needs for the state’s transition to a clean energy economy, including:

The MOU calls for the initiative to follow an open-source model, allowing other states and nations to borrow best practices and technologies developed through the process.
 
The MOU is available for review at: http://www.eere.energy.gov/pdfs/hawaii_mou.pdf

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EU Creates Entrepreneurship Assistance Network of 600 Organizations, Offices
Transforming as many small and medium-sized enterprises (SMEs) as possible into globally competitive firms is a challenge, as most TBED practitioners know. The complexity of combining all of Europe into a single market makes the work even more daunting.
 
To simplify the process for SMEs in more than 40 countries, the European Commission recently launched a consolidated Enterprise Europe Network. The network consolidates the older Euro Info Centres and the Innovation Relay Centres.
 
According to promotional materials, assistance services offered by the network include a business partner search within technology and business cooperation databases and access to information on funding opportunities. Network experts will provide “individual on-site visits to companies to assess their needs and a broad range of promotion and information material. Representatives of the network can also help businesses understand EU law, how it applies to their business and how to make the most the internal market and EU programs.”
 
In addition, the network is intended to help with some of the most pressing needs for innovation and technology-related SMES, such as commercialization, marketing, intellectual property and technology transfer.
 
Network activities will be conducted by a pool of 4,000-plus experts housed at 600 local contact points. “Most partners in the network are operated by consortia of qualified regional organisations such as chambers of commerce, regional development agencies and university technology centres," the network’s website explains.
 
More information is available at: http://www.enterprise-europe-network.ec.europa.eu

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Illinois Governor Proposes Own Economic Stimulus Plan, Yet Cuts Funding for TBED Programs
Gov. Rod Blagojevich unveiled a $25 billion capital plan supporting, in small part, several energy and technology projects, while at the same time eliminating funding in his fiscal year 2009 operating budget for several TBED-related programs within the Department of Commerce and Economic Opportunity (DCEO).
 
The bulk of the spending for the governor’s Illinois Works proposal would be spent on road and bridge construction ($14.4 billion), with $1.1 billion earmarked for both higher education and energy and technology projects. Gov. Blagojevich said during his Budget Address that the plan – which requires $11 billion in new state funds – would be funded primarily through a partial sale of the state lottery, which is expected to generate $10-12 billion. Of that amount, $7 billion would be used to fund the capital plan, and the state would issue bonds for another $3.8 billion, according to the governor’s office. The proposal invests in new and existing programs within DCEO, including:

The capital plan also includes funding for two projects at the University of Illinois Champaign-Urbana that won grant funding from the National Science Foundation (NSF). Gov. Blagojevich recommends $60 million for planning and construction of a new major research supercomputing facility, augmenting a $208 million commitment over the next four years from NSF. Pending an $18.5 million NSF award, the governor recommends $2 million for the University’s Information Trust Institute to provide state assistance in the procurement and development of the Center for Pervasive Health Technology. Additional proposed funding includes:

Lawmakers also will reconsider a proposal within the capital plan to create a $100 million Illinois Community Assets Fund, which they rejected last session. The venture fund would be used to issue small loans to businesses in distressed areas through financial institutions and community development organizations (see the March 12, 2007 issue of the Digest).
 
Gov. Blagojevich also announced a proposal to cut business taxes to encourage companies to sustain employment and hiring during the current economic downturn. Illinois businesses that pay the corporate income tax for 2007 and maintain their employment levels are eligible to receive a 20 percent tax cut under the plan. The proposal would be paid for by securitization of state revenues, such as tobacco settlement funds, according to the governor’s office.
 
The governor’s recommended funding level for DCEO in FY09 is $55.2 million in general funds, down from $79.5 million enacted in FY08. Gov. Blagojevich recommends the same funding level as last year for both the Entrepreneurship Centers ($5 million) and the Illinois Technology Enterprise Corporation Program ($435,800). However, no funding is included for several programs that the governor line-item vetoed last year, including the Illinois VENTURES initiative, the Innovation Challenge Grant Program and the Entrepreneur-in-Residence Program. Additionally, no funding is included for the Manufacturing Extension Centers, a decrease of $500,000 over last fiscal year.
 
Gov. Blagojevich’s FY 2009 budget recommendation and capital plan is available at: http://www.state.il.us/budget/

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Angel Groups Anticipate Rise in High-Quality Deals in 2008
This year's edition of the Angel Capital Association's (ACA) Angel Group Confidence Report reveals that angel investors are "cautiously optimistic" about their opportunities in 2008, despite recent predictions of a slowdown for the overall U.S. economy. In a survey of ACA members, nearly 55 percent predicted that the number of angel investments made by their group and the total dollars invested will increase this year. While most expect a decrease in the number of positive exits (through acquisitions or initial public offerings), 48 percent believe that both the quantity and quality of the deals they see in the coming year will be better than in 2007.
 
The report also includes a glimpse into the nature of angel capital groups’ activities in 2007. A vast majority of groups still focus on seed and early-stage investments, despite an increase in later-stage angel investment. Seed and start-up companies are targeted by 81.5 percent of groups, and 85.2 percent invest in early-stage firms. Expansion and later-stage companies are targeted by only 38.3 percent and 6.2 percent, respectively. Software continues to dominate the field, with 82.9 percent of groups preferring to invest in that industry. Medical devices and equipment closely follows with 75.6 percent, with IT services, business products and services, and industrial/energy not far behind.
 
ACA suggests one possible reason for optimism on the part of investors is the support provided by state governments to develop entrepreneurial talent and to increase the availability of early-stage capital. Many states, such as North Carolina, Pennsylvania, Washington and Wisconsin have created programs to build effective statewide angel groups and networks. The National Governors Association recently released an issue brief titled State Strategies to Promote Angel Investment for Economic Growth that addresses the options available to states attempting to create new capital opportunities.
 
The brief provides a number of models for state angel programs and several different approaches that governors may take to strengthen angel support. Six major approaches suggested in the report include:

NGA also provides information about how to implement these programs. For example, it explains the angel programs should avoid using competitive Requests for Proposals for angel grant programs. The amount of money and time required to complete these forms is substantial and the risk of publicly losing out on these opportunities can damage the group's reputation.
 
Best Practices for Angel Organizations
Over the past few years, the Angel Capital Education Foundation has published a series of white papers on best practices in the angel investment process. The white papers address the entire investment process, including deal screening, due diligence, deal structure and negotiation, and post investment monitoring. Access these guides through a single reference point at: http://www.angelcapitaleducation.org/dir_resources-white_papers.aspx

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Programs Recruit, Train Workers and Youth for Critical ‘Middle Skill’ Jobs
Across the nation, policymakers, business leaders, private foundations and nonprofit groups are investing in science, technology, engineering, and mathematics (STEM) graduates to maintain a competitive U.S. workforce. From middle school math and science labs to engineering-centered summer camps and tuition reimbursement for undergraduates who pursue these fields, there is widespread support for STEM graduates.
 
The authors of a recent report from the national campaign Skills2Compete argue that while increasing the number of scientists and engineers is critical for the U.S. to remain a globally competitive force, researchers are underestimating middle skill job prospects and find that investments in these areas will likely generate important returns for the U.S. economy.
 
Refuting the notion that America’s labor force is increasingly comprised of very low and very high skilled jobs with a hollowing out in the middle, the report, America’s Forgotten Middle-Skill Jobs, calls for greater public investment to develop workforce education and training for jobs in the middle-skill range. Described as jobs requiring more than a high school diploma, but less than a four-year degree, middle-skill jobs make up 48 percent of the labor market and are projected to grow substantially over the next decade, according to data from the Bureau of Labor Statistics.
 
Many areas of the country have experienced the effects of not having a readily trained workforce, which plays a crucial role in recruiting large companies that often pay above-average wages to workers with specialized skill sets. In this issue of the Digest, we spotlight two programs in Virginia and Pennsylvania that are working directly with local companies to recruit and prepare their respective regions for the desired TBED-related jobs of the future.
 
Virginia
Faced with a projected shortage of more than 100,000 technically skilled manufacturing workers retiring over the coming decade, the Virginia Biotechnology Association and the Virginia Manufacturing Association co-led a statewide effort in early 2007 involving local employers to recruit, assess, train and certify manufacturing workers.
 
Focusing specifically on expanding the supply of qualified manufacturing technicians, the Virginia Council on Advanced Technology Skills (VCATS) discovered there was no ready-made material for training the manufacturing workers desired by local companies. VCATS partnered with the Virginia Community College System, which was already equipped to administer testing and assessments. Pulling from various sources, they created a statewide certification and assessment system based on individual competency for three technical skill levels and a training program for Level 1 Manufacturing Technicians based on input from employers. In some cases, VCATS has worked directly with the colleges to develop courses based specifically on the needs of individual companies.
 
Currently, a technical diploma that complements the VCATS certification is being developed through the K-12 system for high school graduates, and VCATS is working on a pilot program with two regions to offer dual enrollment in high schools so that students will be VCATS-certified by the time they graduate, allowing them to move directly into technically skilled manufacturing positions.
 
Initial funding for the project came from a $1.5 million national demonstration grant from the U.S. Department of Labor. However, VCATS Project Director Sheryl Bryan said sustainability through state buy-in is a major priority. VCATS is pursuing this through annual funding in the state’s budget.
 
Pennsylvania
In order to fill the pipeline for both current and future workforce needs, a program in southwestern Pennsylvania focuses on recruiting youth to manufacturing and information technology (IT) jobs by generating interest and providing hands-on learning.
 
Adventures in Technology (AIT), a collaborative project of Catalyst Connection and the Pittsburgh Technology Council, pairs high school students with manufacturing, biotech and IT companies for a 10-week project during which students design and build a product or re-engineer an existing product, process or system.
 
This year, about 30 schools are expected to participate in the program, which includes approximately 250 students. During the kickoff week, students tour the facility, learning about prospective jobs and what type of training and education is required. While there are opportunities for students to work for some of the companies directly out of high school with on-the-job training, many of the positions require additional training and two- or four-year degrees.
 
The AIT program also is being tied to the Cisco Networking Academy Program, enabling entire classrooms to be involved in a single project. Currently, one Pennsylvania school has 40 students working on a single project for a company, providing multiple strategy solutions. Catalyst Connection is hoping to expand this partnership to impact a greater number of students involved by adding a teacher professional development component. This would provide project management skills to teachers, enabling them to better lead a team of students on a project, said Scott Dietz, manager of workforce initiatives for Catalyst Connection.
 
Since its inception in 2002, funding for the program mostly has been provided through private foundations. Catalyst Connection is exploring options to diversify its funding source, making it more viable in the long-term. One option is to tie the program to the state’s Education Incentive Tax Credit, which allows companies who contribute to educational programs to receive a tax credit. Another option is to offer direct sponsorship opportunities from participating companies. Currently, there is no cost to the school or company.

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Recent Research
Quantifying Impact of Education and Other Factors on Economic Mobility
The best path to breaking the cycle of poverty from one generation to the next is a college degree, according to a new Brookings Institution report. Getting Ahead or Losing Ground: Economic Mobility in America reveals 41 percent of degree-holding people whose parents’ income placed their families in the bottom 20 percent of the population, or quintile, now have incomes placing them among the top 40 percent. Conversely, only 16 percent of college degree holders originally from the lowest income group remained in the bottom income quintile in adulthood. The balance, 47 percent of degree-holders from the lowest income population, move up either one or two income quintiles.
 
Further evidence of the importance a college education plays on breaking poverty is provided by those who do not obtain a degree. Only 14 percent of adults from a lowest economic group who do not attain a college degree make the ascent to the top 40 percent by income, the report states. Forty-five percent of non-degree people growing up in the lowest quintile remain there in adulthood.
 
Education may impact mobility at the highest rungs of the income ladder as well. For people whose parents originate from the highest income quintile, 54 percent remain at the top quintile in adulthood if they have attained a college degree. If they did not attain a college degree, only 23 percent remain in the top quintile, while 18 percent fall to the bottom income quintile.
 
The study also tracks how the income gap between degree-earners and non-degree-earners continues to widen. Adjusted for inflation, the gap between those whose highest attainment was a four-year college degree and those with a high school degree in 1964 was around $10,000. By 2005, this gap grew to more than $29,000. Since the early 1980s, income levels for both high school dropouts and those with only a high school education have remained constant. In this same period, both graduate degree-holders and four-year college degree-holders have experienced noticeable increases in income.
 
The education disparity extends into racial categories, the report indicates. In the 1970s, the share of whites who attained a college degree was twice the share of African Americans and Hispanics, data show. Since 1970, even though all racial groups have experienced small increases, the gaps between the races have become wider.
 
While the study shows the differing paths of those with and without a college degree, it also recognizes other factors that may play a role in the income attainment of individuals, such as family background, pre-school education and K-12 education.
 
The report’s purpose is to provide a comprehensive overview of economic mobility data and does not provide recommendations from a policy perspective. Besides information on how economic mobility relates to education, other chapters of the document consider the relationships of mobility to gender, race and wealth history, in addition to international comparisons.
 
Getting Ahead or Losing Ground: Economic Mobility in America can be accessed at:
http://www.economicmobility.org/reports_and_research/mobility_in_america
 
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People & TBED Organizations

BioConnect of Greater Charlotte, a new networking group for Charlotte, N.C.-area workers in life-science-related fields, held its inaugural meeting earlier this month.

The North Carolina Biotechnology Center has hired Yonnie Butler as business development director of its business and technology development unit.

Bob Calcaterra announced he is resigning as president of the Nidus Center for Scientific Enterprise, effective this spring, to help form a venture capital fund.

James Ellick is taking a leave of absence as director of the Idaho Department of Commerce for personal reasons.

Bo Fishback is the new vice president of entrepreneurship for the Kauffman Foundation.

A number of regional economic development organizations in Tennessee have formed a partnership called Innovation Valley Inc. Partners in Innovation Valley Inc. include the Blount County Chamber of Commerce, Knoxville Area Chamber Partnership, Loudon County Economic Development Agency, Oak Ridge Economic Partnership, The Roane Alliance and Tellico Reservoir Development Agency.

Dr. Cynthia McIntyre was named senior vice president of the Council on Competitiveness.

Egils Milbergs was appointed director of Washington's newly formed Economic Development Commission.

David Rooney will replace Tyler Fairbank as president of the Berkshire Economic Development Corp., effective next month. Rooney leaves the Empire State Development Corp. as its regional director.

Helene Schember became the first executive director of the Cornell Center for a Sustainable Future Dec. 3, joining the center as its first full-time staff member.

Peggy Tadej has left the National Association of Regional Councils to work in research at the Department of Transportation for the District of Columbia.

Kansas University has appointed Steve Warren as its first full-time vice provost for research and graduate studies.

The DC Technology Council and the Washington, DC Economic Partnership have joined to form a new association that will keep the name Washington, DC Economic Partnership.

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