In the November 12, 2008 Issue:
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States Explore
Policy Options in Promoting Clean and Efficient Energy
Oregon
Oregon Governor Ted Kulongoski has unveiled a suite of policies to
address global climate change and support the state’s renewable energy
and clean technology industries. His proposals include instituting a
cap and trade system for carbon emissions, improving the energy
efficiency of commercial and residential construction, and tax credits
for energy-conscious investments. The governor hopes to see the climate
plan passed by the legislature in the coming year.
The governor’s recommendations include:
- Participating
in a regional cap and trade program that would go into effect in 2012;
- Giving
local governments bonding authority for energy efficiency projects;
- Expanding
the Business Energy Tax Credit (BETC) and creating a BETC Energy Fund
to support renewable energy projects; and
- Creating
an incentive pilot program for solar energy that would pay for the
electricity produced by solar projects, instead of a traditional
program offering capital investments.
Governor
Kulongoski says the plan will cost an estimated $10 million, and will
be possible despite the current economic crisis. The governor maintains
that by investing in new energy technologies and energy efficiency, the
state can play a vital role in reinventing the national and regional
economy.
Read Governor Kulongoski’s climate change agenda at: http://governor.oregon.gov/Gov/pdf/climate_change_agenda_1008_final.pdf
New Jersey
Governor Jon Corzine October 16 addressed a rare joint session of the
state legislature to unveil a multi-faceted plan to provide immediate
assistance for residents and statewide long-term economic growth
options to coax the state out of the current national economic
recession. Among the governor’s proposals to promote a green
economy is the creation of a Clean Energy Manufacturing Fund financed
with $60 million through 2012 that the Economic Development Authority
will soon implement to address the need to assist the advancement of
renewable energy and energy-efficiency technologies; and an Edison
Renewable Energy Technologies Fund that will provide grants through the
Commission on Science and Technology to New Jersey companies of
$100,000 to $500,000 for proof-of-concept research and development and
ancillary activities necessary to commercialize identified renewable
energy technologies and innovative technologies that significantly
increase energy efficiency.
The governor’s complete economic recovery plan is available at: http://www.state.nj.us/governor/home/plan.html.
California
A new report finds that California energy efficiency policies over the
last 35 years have been responsible for the creation of 1.5 million
jobs and $45 billion in salaries and wages. The report, authored by
University of California, Berkeley professor David Roland-Holst,
examines the costs and benefits of energy efficiency policies on the
state economy. Though these policies have somewhat slowed growth in
traditional energy industries like oil, gas and electric power, they
have added more than 50 new jobs for each job deferred in those sectors,
according to the report.
Roland-Holst, the director of Berkeley’s Center for Energy, Resources
and Economic Sustainability, argues that the state should continue to
pursue aggressive energy efficiency policies and standards for the good
of the state’s economy. Of particular concern is the Global Warming
Solutions Act, a measure passed by the state’s legislature two years
ago. The original law began the planning process for an initiative that
would require the state to reduce greenhouse-gas emissions to
1990 levels by 2020. California’s Energy Commission and
Public Utilities Commission recently approved a blueprint for the act.
The report recommends redoubling the state’s efforts through that
initiative, which it claims could create 403,000 new jobs and $76
billion in additional gross state product by 2020.
Read the Next 10 report “Energy Efficiency, Innovation, and Job
Creation in California” at: http://www.next10.org/research_eeijc.html
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Venture
Funding Remains Strong in Third Quarter Despite Ominous Signs
Venture capitalists invested $7.1 billion in
companies during the third quarter of 2008, according to the latest
Moneytree survey from PricewaterhouseCoopers and the National Venture
Capital Association (NVCA). Though this figure represents a nine
percent decline from the same period last year, investment levels still
show little evidence of the current drought in venture-backed exits.
Many expect investment to decline in the fourth quarter and next year,
particularly for seed and early stage companies, as investors become
more cautious and begin shifting their focus to the later-stage
companies in their portfolio.
For the time being, seed and early stage investment is up slightly over
the previous quarter and the same period last year. These
deals now represent 39 percent of total deal volume, up 2 percentage points from
Q2 2008. The number of expansion stage deals, on the other hand, fell from 321 in
the previous quarter to 263. Expansion deals now account for only 29 percent
of deals, the lowest level since the Moneytree survey began in 1995.
Later-stage deals have been holding steady at about 32 percent of
overall venture investments.
Biotechnology has taken the lead over software as the leading industry
for investment, though software still leads in number of deals.
Investment in biotech jumped significantly in the third quarter, up
almost 21 percent over Q3 2007. Clean technology investment also got a
bump, and grew 14 percent over last quarter. Most industries however
were down, with the biggest declines in financial services, business
products and services and telecommunications.
SSTI has prepared a table with investment levels and number of deals by
state during the third quarter using the Moneytree data. Few states are
seeing more venture activity than this same period last year and a few
states, including Texas and Florida, have experienced fairly serious
declines. Michigan was one of only a handful of states to receive an
influx of activity. The state had $89 million invested in 11 deals in
the third quarter, up from $7 million in 3Q 2007 and $66 million in 2Q
2008. Access the full table of state-by-state data at: http://www.ssti.org/vc/3q.htm.
The NVCA previously reported that fundraising has finally begun to
slow, despite the continued relative strength of investments (see the October
20, 2008 issue of the Digest).
Mark Heesen, president of the NVCA, noted that if the exit drought
continues into 2009, investment will likely begin to decline for
companies seeking capital for the first time.
Read the Q3 2008 PricewaterhouseCoopers/National Venture Capital
Association Moneytree Report at: https://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202008%20MoneyTree%20Report_final.pdf
Annual data on state and national venture capital investment is
available on the SSTI Venture Capital Dashboard. The state profile
pages offer information on per capita investment and investment by
stage of business development. This data is provided by
PricewaterhouseCoopers and NVCA. Visit the SSTI Venture Capital
Dashboard at http://www.ssti.org/vc.
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USTAR
Investments Taking Shape at University of Utah
The University of Utah (U of U) announced last month two significant
investments in TBED supported by USTAR, the state-funded initiative to
grow Utah’s knowledge economy.
Following a recent $15 million donation from the Sorenson Legacy
Foundation, U of U officials said they would begin construction next
year on the 193,000-square-foot anchor facility for the new
Interdisciplinary Quadrangle, which encompasses 11 acres bridging the
upper and lower campuses. The Sorenson Molecular Biotechnology Building
will be the first of four multidisciplinary facilities and will house
advanced imaging and nanotechnology laboratories. USTAR is
investing $100 million in the facility, which is slated for completion
in 2012. The goal of the Interdisciplinary Quad is to bridge the
university’s health professions, engineering, science, business and law
sections of the campus.
Also announced last month was the establishment of the Nano Institute
of Utah located on the U of U campus. The institute will help attract
industry-sponsored research and other collaborative efforts with life
science businesses, said USTAR nanotechnology consultant Darwin Cheney
in a U of U press release. A central role of USTAR is providing funds
to recruit top scientists to lead cutting-edge research programs,
including the assemblage of the research team for the Nano Institute.
During the last legislative session, lawmakers appropriated additional
funds for the USTAR initiative, including a one-time expenditure for
research teams and funds to establish USTAR Centers, a program that
extends the school year for math and science teachers (see the March
12, 2008 issue of the Digest). Gov. Jon
Huntsman, Jr. is expected to unveil his budget recommendations for the
upcoming fiscal year to the legislature in mid-December.
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Universities Perform more
than One-Third of Canadian R&D, Thirteen Percent of U.S.
R&D
Universities
in Canada are a major component of the country’s science and technology
ecosystem, and as gauged by funding, they performed 36 percent of
Canada’s R&D activities in 2007. In the U.S. comparatively,
universities accounted for 13 percent of the
R&D performed in the country. A breakdown of both the
performing sectors and sources of R&D funding are included in
two recent publications: Momentum: The 2008 Report on
University Research and Knowledge Mobilization by the
Association of Universities and Colleges of Canada (AUCC) and an
August InfoBrief by the National Science Foundation.
At 54 percent, private industry performed $15.8 billion (Canadian) of Canada’s
R&D in 2007. This was followed by universities performing $10.4
billion, or 36 percent. The Canadian federal government
performed 8 percent ($2.3 billion) and non-profit organizations
contributed to 1 percent ($324 million) of R&D efforts.
Private industry was also the highest sector in the U.S. in 2007,
performing 72 percent of the country’s R&D efforts, or $265.2
billion. Universities were responsible for $48.9 billion, or 13 percent
of the total, which was similar in size to R&D by the federal
government, at 11 percent, or $38.6 billion. Finally, non-profits
represented 4 percent, or $15.3 billion.
The sources of funding for R&D, also demonstrate significant differences between the two countries. In Canada the
private sector contributed $13.8 billion, or 48 percent, of the total
in 2007. The federal government was the second-highest source at 19
percent, or $5.4 billion. Universities accounted for 16 percent ($4.8
billion) and non-profit organizations 3 percent ($849 million).
Additionally, other sources such as provincial governments ($1.5
billion) and foreign entities ($2.6 billion), provided the remaining 14
percent of funding. In all $29 billion was directed to R&D in
Canada in 2007.
In the U.S., the private sector provided two-thirds of the
total funding, at $245 billion. The federal government was also the
second highest provider, with 27 percent, or $98.3 billion. Non-profit
institutions were the next highest sources at $11.6 billion (3.2
percent), followed by universities at $9.9 billion (2.7 percent). The
rest of the funding, $3.2 billion, comes from various non-federal
government sources, which represents 0.9 percent of the total. In all
$368 billion was directed to U.S. R&D in 2007.
While the exchange rates between Canada and the United States have
fluctuated back and forth in the last two years, on occasion reaching
near parity, the amounts reflected in the reports are for dollars in
their respective countries.
The funding details of the Canadian R&D system are just one
part of the Momentum: The 2008 Report on University Research
and Knowledge Mobilization. Also included are in-depth
explanations of funding, research and partnerships in the Canadian
academic system. More at:
http://www.aucc.ca/momentum/index_e.html
NSF’s most recent InfoBrief on federal trends in research and
development expenditures can be accessed at: http://www.nsf.gov/statistics/infbrief/nsf08317/nsf08317.pdf
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Useful Stats: R&D
Performed by Industry within U.S., Per State, 2002-2006
SSTI has
prepared a table displaying the amount of funding companies spent
on R&D in each state from 2002 to 2006, the state’s rank in
2006, the percent change over this five-year period, and the rank of
that percent change. For the U.S. as a whole, industry-funded
R&D was $193.8 billion in 2002 and rose to $247.7
billion in 2006 – a five-year jump of 27.8 percent. Note, the amounts
in the chart are not indexed to a single year, but reflect values of
when the data was released.
View the table at: http://www.ssti.org/Digest/Tables/111208t.htm.
California led the country with $58.4 billion in R&D funding
from industry in 2006. This was followed by Michigan ($16.5 billion),
Massachusetts ($15.6 billion), New Jersey ($14.6 billion), and Texas at
$13.3 billion. Washington, Illinois, Pennsylvania, New York, and
Connecticut rounded out the top ten states.
Alabama realized the largest percent increase from 2002 to 2006, rising
from $846 million in 2002 to $1.83 billion in 2006 – a gain of 117
percent. New Mexico was the only other state to witness more than a
doubling spent on R&D by industry. Rounding
out the top ten, the other states to see at least a 50 percent increase
were South Dakota, Missouri, Colorado, Virginia, Nevada, Montana, New
Hampshire, and Hawaii. Over this period, 27 states and the
District of Columbia experienced a larger percent increase than the
U.S. as a whole.
The data for this table comes from Table 5 of the National Science
Foundation's their annual briefs describing
industrial spending for R&D. They can be accessed at: http://www.nsf.gov/statistics/industry/.
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