In the March 5, 2008 Issue:

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 Global Innovation Race Tightening, EU Finds
The innovation gap between Europe and the U.S. is shrinking by several measures, according to the latest benchmarking study from the European Union (EU). The size of the gap remains significant, however, due in part to factors such as an increasing public R&D intensity in the U.S. and a decreasing public R&D intensity in the EU.
 
The European Innovation Scoreboard 2007 examines the 27 EU member states, in addition to Croatia, Turkey, Iceland, Norway, Switzerland, Japan, the U.S., Australia, Canada and Israel. Prepared by the United Nations University - Maastricht Economic and Social Research and Training Centre on Innovation and Technology (UNU-MERIT), Scoreboard 2007 compares these countries using 25 different measurements where comparative data is available.
 
In order to evaluate if an innovation gap exists between the EU and the U.S., the study creates a composite index aggregating 15 of the selected indicators. The size of the innovation gap has experienced a reduction every year from Scoreboard 2003 to Scoreboard 2007. The EU maintains a lead in four of the metrics: S&E graduates per capita, share of medium and high-tech manufacturing employment, trademarks per capita and registered designs per capita. In the 11 other measurements, the U.S. has the lead.
 
The U.S.’s advantage over the EU is lessening over the last several years in terms of broadband penetration rate, early-stage venture capital per gross domestic product (GDP), ICT expenditures per GDP, and triad patents per capita. On the flip side, the gap between the two is gradually widening in terms of public R&D expenditures per GDP and the share of exports considered as being high technology products.
 
The 2007 Scoreboard also assigns each of the 37 selected countries into four groupings based upon the value of their overall innovation performance. The top-ranked nations overall are Sweden, Switzerland, Finland, Israel, Denmark, Japan, Germany, the U.K., and finally the U.S. The second tier is composed of Luxembourg, Iceland, Ireland, Austria, the Netherlands, France, Belgium, and Canada.
 
Looking at the prospect for future growth, the report estimates these countries will remain set in these two leading groups, with only Luxembourg reaching the top tier in the immediate future. The rest of the countries fill in the bottom two groupings. But other countries in the lower tiers are on the move as well, as the study predicts the Czech Republic, Estonia, and Lithuania are on track to reach the EU member state average within the next 10 years.
 
This is the seventh edition of the Scoreboard since the first pilot study calculating a comparative innovation index was attempted in 2000. Since the pilot study, the number of indicators has risen from 16 to 25, and the number of included countries has increased from 17 (the EU15, the U.S. and Japan) to 37. The study allows the EU to compare its member states to its international competitors, which will be interesting to track as the EU attempts to reach its goal of having 3 percent of GDP dedicated to R&D by 2010.
 
The webpage for the European Innovation Scoreboard 2007 contains a clickable map that enables one to see the metrics for each of the selected countries and is available at: http://www.proinno-europe.eu/extranet/eis2007

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Chinese Venture Capital Investment Grows in 2007, But Not in High-Tech Industries
Venture capitalists invested almost $2.5 billion in China in 2007, according to a new report from Dow Jones VentureSource. That figure is a 5 percent increase over the 2006, and the highest since 2001, despite a decrease in the number of deals. Though investment is not growing quite as quickly as it is in the U.S., where venture investment rose by 8 percent last year, China is becoming a key global market for venture investment.
 
The decrease in the number of deals appears to be a sign of a maturing venture capital industry, according to the VentureSource report. Though seed and first-round investments still constitute 61 percent of the country's venture deals, more investors are looking at companies in their second round of financing or later. Fifty percent of total investment went to these later-stage companies. Second-round investment dollars increased by 15 percent over the previous year. Deal size may be decreasing as firms devote more money to investment in relatively mature companies.
 
The Chinese business, consumer and retail sector experienced the greatest gains in investment, up 83 percent over 2006. The most popular industry segment within that sector was consumer/business services, which accounted for 61 percent of total Chinese venture investment. Several high-tech sectors, such as energy and information technology, suffered modest decreases. Investment in information technology, the second largest sector, decreased by 9 percent.
 
In contrast, in the U.S., investors flocked to deals in research and technology-intensive sectors. Last year brought record investments in biopharmaceuticals, medical device and energy-related companies in the U.S., while investment in the business, consumer and retail sector dropped nearly 20 percent. The largest gains occurred in the information services segment, which includes Web-based tools for businesses and consumers. Information services investment surged by 44 percent, unlike in China where investment in the sector shrunk by 1 percent.
 
China, however, is not alone in the growth of its business, consumer and retail sector. In Europe, investment in that sector jumped by 33 percent, though venture investment overall only grew by 2 percent. Like China, the most active segment of that sector was business and consumer services, which more than doubled.
 
More information is available at: https://www.venturesource.com/

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Three VC Firms Picked to Extract Green Tech from Federal Labs
Last week, three venture capital firms were chosen by the Department of Energy (DOE) to participate in its new Entrepreneurship in Residence (EIR) program, a pilot initiative designed to get advanced energy technologies out of the federal labs and into the marketplace. In the program’s design, an entrepreneur affiliated with each venture capital firm will work with the selected DOE laboratory staff in order to identify and evaluate marketable technologies.
 
The selected venture capital firms and their respective federal laboratories are:

The DOE is providing $100,000 to each entrepreneur to defray salary and other expenses. The partnering venture capital fund is expected to match that amount, plus provide additional funds if needed.
 
The entrepreneur in residence and the venture capital fund will select a technology developed within the federal laboratory, and subsequently negotiate a licensing agreement in order to create and finance a start-up company. The program will use a Standard License Agreement to hasten the commercialization process; the agreement contains a provision allowing the EIR to offer partial ownership in the start-up venture as payment for the license.
 
If successful, DOE's Office of Energy and Renewable Energy anticipates funding the program in yearly cycles, with the government accepting bids from interested venture capital firms. The next three firms will then be chosen to extract different green energy technologies from the federal laboratory system.
 
More information about the EIR program can be found at: http://www.energy.gov/news/5661.htm
 
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Funds to Improve Existing Industries Prominent in Louisiana Budget
Gov. Bobby Jindal unveiled his fiscal year 2008-09 budget to the legislature last week, focusing heavily on improving the existing workforce and creating a business climate that encourages entrepreneurship.
 
The governor’s recommendation for the Louisiana Department of Economic Development (DED) is $29.2 million in general funds, down $11.2 million from last year. The recommendation for total funds is $85.9 million, down from $201 million last year. The reduction is largely due to nonrecurring funding and interagency transfers and will not impact the department’s services in the coming fiscal year, according to budget documents. Workforce and economic development initiatives slated for funding include:

The governor is not recommending funding for the Louisiana Technology Park ($2.8 million decrease over last fiscal year). FY08 was the last fiscal year for which funding was required under the cooperative endeavor agreement between Louisiana Technology Park and DED, according to budget documents.
 
Gov. Jindal recommended increased funding for higher education initiatives to help achieve the goals in the Louisiana: Vision 20/20 strategic plan. Specifically, the governor is asking lawmakers to approve $10 million for workforce development and increased capacity in high-demand fields within the higher education system. Gov. Jindal also recommends $8 million in one-time funding for endowed chairs and professorships for Louisiana universities and $4 million for dual-enrollment programs for high school students.
 
Gov. Jindal’s fiscal year 2008-09 budget recommendation is available at: http://doa.louisiana.gov/opb/pub/FY09/FY09ExecBudget.htm

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Growth Capital for Targeted Industries at Center of Rhode Island Economic Plan
Using the state’s regional advantage, the Rhode Island Economic Development Corporation (RIEDC) wants to create high-wage jobs in targeted industry sectors and establish new equity and financing programs that provide growth capital to sustain the ventures, the agency announced last week.
 
RIEDC released an economic growth plan with the goal of increasing the percentage of jobs that pay above the national average from its current 40 percent to 60 percent over the next 10 years. The average private sector wage in Rhode Island is $38,700 -- $4,600 less than the national average and much lower than neighboring states Connecticut and Massachusetts.
 
The advantage of being located in a “knowledge-rich corridor” that expands from Boston to New York City and encompasses 86 colleges and universities is the formation of a strong R&D and entrepreneurial base, the report states. Rhode Island can build upon this base by targeting industries that depend on knowledge resources and workers, according to RIEDC. The report recommends expansion and attraction efforts within six of these high-wage sectors, including Health and Life Sciences, Marine Trades and Defense Technology, Advanced Manufacturing and Industrial Products, Information Technology and Digital Media, Financial Services, and Consumer Products and Design.
 
Access to capital at all stages of development is a prominent action item within the strategic plan. The plan calls for establishing a $20 million Growth Capital Guarantee Program by restructuring the existing Rhode Island Industrial Recreational Building Authority (IRBA) program. A bill is expected to be introduced in the Rhode Island General Assembly this week that would reduce IRBA’s guarantee authority and establish a new Growth Capital Guarantee authority to assist companies in obtaining growth capital for non-conventional assets such as patents, proprietary processes, software, systems, trademarks, copyrights, brands, contracts and licenses. The current IRBA program, which was created in 1958, addresses company needs only in machinery, equipment and real estate.
 
To provide Rhode Island companies with capital to create these new jobs, the plan calls for establishing a partnership that makes available new debt and equity products through an existing $200 million growth capital products portfolio. The alliance between RIEDC, the Business Development Company of New England and the Business Development Company of Rhode Island is designed to complement existing RIEDC programs and provide up to $2 million in junior debt and up to $5 million in mezzanine equity capital. Additionally, the plan calls for the alliance to consider investments in Rhode Island companies from the $30 million mezzanine fund, MB Capital III.
 
The strategic plan outlines two specific actions to address workforce issues. First, the Community College of Rhode Island 21st Century Workforce Commission will propose recommendations in the coming months for preparing students for jobs of the future and retraining current workers in emerging fields. Second, the newly established 21st Century Workforce Development Subcommittee – a partnership for RIEDC, the Department of Labor and Training, and the Governor’s Workforce Board – is charged with providing recommendations for realigning the state’s current workforce development programs.
 
To increase research activity and new company creation, the Rhode Island Research Alliance will expand its activities to assess collaborative research opportunities and begin assisting with the preparation of collaborative proposals to major funding agencies, including the National Science Foundation and the National Institutes of Health. The plan also calls for expanding and relocating the Slater Technology Fund’s new life sciences incubator. Both of these actions are key recommendations from the Rhode Island Science and Technology Advisory Council’s (STAC) report of activities for the state to pursue in 2008, which was presented to Gov. Carcieri and legislative leaders in early 2007.
 
Although currently facing a projected budget deficit of more than $300 million, Gov. Carcieri’s fiscal year 2009 budget recommendation included level funding for RIEDC and economic development initiatives included in the FY08 budget. This includes $3 million for the Slater Technology Fund, $1.5 million for the Rhode Island Research Alliance and $100,000 for the STAC.
 
RIEDC’s Economic Growth Plan 2008 is available at: http://www.riedc.com/files/2008_economic_growth_plan.pdf
 
Gov. Carcieri’s FY 2009 budget recommendation is available at: http://www.budget.ri.gov/CurrentYear/GovernorsBudget.php

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Research Park RoundUp
The following overview is a synopsis of selected recent announcements from research parks across the nation, including new tenants, groundbreakings and tools for financing start-up companies.
                       
The chemical company BASF announced in January a $1 million contribution to the Brazosport College Foundation for construction of a new process technology center at the school’s planned Science Technology Corridor. The new facility will include analytical labs and classrooms for curriculum supporting the petrochemical, energy and nuclear energy. The BASF center groundbreaking is expected this summer as the first phase of the Science Technology Corridor, which will also include a health professions and science technology complex with laboratories, classrooms and department offices for health professions programs.
 
Tuesday marked the groundbreaking ceremony for the Bio-Research and Development Growth Park at the Donald Danforth Plant Science Center in Missouri, a $36.1 million, 118-square-foot multi-tenant research park that will house start-up life sciences companies. The buildings located within the research park will house wet laboratory and office space and will provide companies with direct access to the intellectual capital of Danforth Center scientists, according to a news release. The project is slated for completion in March 2009, according to an article in the St. Louis Business Journal.
 
Mann Research Center is planning to develop a six-building life sciences complex at the Florida Center for Innovation at Tradition in St. Lucie. Preliminary plans call for a mixture of medical office, R&D, corporate office, and support retail space, according to the South Florida Business Journal. The innovation center is a 120-acre research park set to open in 2009. 
 
Georgia Gov. Sonny Perdue announced that the state is pursuing the creation of a research park on a 115-acre parcel of the Fort McPherson property, which is being closed under the federal government’s Base Realignment and Closure Act. The science and technology research park would be located in close proximity to universities and research institutions. The state is currently awaiting approval from the Army.
 
A bill introduced in the Hawaii Legislature calls for the creation of a high technology park on the island of Oahu to be managed by the Hawaii High Tech Development Corporation. The purpose of the technology park is to support Hawaii’s technology and defense-related industries, which are expected to grow significantly in the coming years with an estimated 176,000 vacant jobs by 2012, 51,000 of which are expected to be newly created positions.
 
Technology start-ups in Louisiana could get a boost in working capital from the Louisiana Technology Park and the state’s economic development department. The research park’s executive committee recommended last month that the board of the Research Park Corporation, the nonprofit organization that operates the tech park, establish a business and industrial development corporation (BIDCO) to provide short term loans to technology companies, The Advocate reports. The BIDCO would use $1 million in research park funds matched with $1 million in state funds from the Louisiana Economic Development Corporation to finance the loans, with a return of 16-25 percent, according to the article.
 
Louisiana Tech University selected a designer last month to begin the planning phase for a $25 million research park. Half of the funding for the park, dubbed Research Campus, was approved during the 2007 legislative session within the supplemental appropriations bill, and the other half is a line of credit from the state bond commission. The park will target companies in cyberspace protection, nanotechnology, biomedical engineering, and micromanufacturing.
 
The University of Nebraska-Lincoln (UNL) unveiled a model of the proposed Nebraska Innovation Park, modeled after the Centennial Campus at the University of North Carolina. The university wants to build the research park on land currently occupied by the Nebraska State Fair. The proposed research model would link the UNL-City and UNL-East campuses and includes public and private technology development space to encourage entrepreneurs to work with UNL research faculty, according to a UNL press release.
 
Construction began last month on a 1.1 million-square-foot multi-tenant high tech research park located at Picatinny Arsenal in New Jersey. The park will feature laboratories and office space for high tech, defense and academic tenants.
 
Last month, EDS, a global technology services company, announced plans to locate a national software solution center within the Purdue Research Park. EDS will occupy 45,000 sq. ft. of a new 78,000-square-foot Innovation Center slated to open in 2009. The company plans to create 200 software engineer and business analyst positions by 2010. The Indiana Economic Development Corporation and the city of West Lafayette played a critical role in recruiting the company, offering $300,000 in training grants and another $1.5 million in additional incentives.
 
A new €300 million science park at Emersons Green in Bristol is in the final stages of planning. The SPark is a 70,000-square-foot innovation center that will act as a hub for developing and supporting young science-based companies, according to South West England Regional Development Agency. The 10-year project, which will provide dedicated space for science and technology companies in southwest England, is expected to create around 6,000 new jobs.
 
Using up to $60 million in funds from a federal omnibus bill, the University of Mississippi announced it will spend $7.3 million to begin construction on the Mississippi Biotechnology Research Park, reports The Clairon-Leger. The first building, which is slated for completion in three to four years, will house laboratory and office space for biotechnology companies. Mississippi State will receive another $7.3 million to expand its Thad Cochran Research, Technology and Development Park with a 30,000-square-foot building, according to the article.

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Timeline Announced for 2008 Excellence in TBED Awards
The 2008 Excellence in TBED Awards call for applications is right around the corner, and this year, your organization could be recognized as a national leader in the TBED community.
 
As an award winner, you:

For these reasons and so many more, mark your calendars now for the tentative schedule of the 2008 Excellence in TBED Awards:
 
Call for application – March 19
Deadline for application – May 16
Winners recognized – SSTI’s 12th Annual Conference, October 15-16, 2008
 
To learn more about the 2007 Excellence in TBED Award winners, visit: http://www.ssti.org/awards.htm

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