State TBED Investments Pay Benefits, According to Program
Assessments
In a period of tightening budgets, it is important for stakeholders
to know that the investments they are making in tech-based
economic development are yielding positive economic results –
and returning revenue to the state. Recent impact assessments to
examine comprehensive TBED programs in three states show how smart
these investments have been. More telling, different evaluation
models were used in all three states and they each reached similar
conclusions: strategic TBED investments can stimulate economic
growth.
Pennsylvania
A review of the initiatives of Pennsylvania's Ben Franklin
Technology Partners (BFTP) program from the period of 2002 to 2006
concluded the state's investment of $140 million, dispersed to more
than 500 companies and institutions, has yielded $517 million in
state tax receipts – roughly a return 3.5 times greater than
the amount spent from state coffers. The values in the
assessment by the Pennsylvania Economic League are based on an
economic model that includes direct spending by BFTP client firms,
indirect spending as a result of BFTP, and induced spending of
goods and services by affected employees.
Along with using data directly reported by the participating companies, the study compares the performance of companies receiving BFTP funding to a control group of Pennsylvania companies similar in size and industry type. With this method, the review finds funding by BFTP increased the state’s GDP by an additional $9.3 billion and 32,800 “job-years” over the five-year period. Additionally, employees at BFTP-funded firms have, on average, a salary 33 percent higher than the average salary in Pennsylvania.
Oklahoma
Benchmarking employees’ salaries at companies that have
received state TBED assistance is a tactic also utilized by the
annual impact report of the Oklahoma Center for the Advancement of
Science and Technology (OCAST). In this study as well, employees at
participating companies experienced 33 percent higher salary than
the average in Oklahoma. For each of OCAST’s initiatives, the
amount leveraged in FY 2008 is provided, as well as the cumulative
leveraging over the lifetime of the initiative. In this case,
leveraged funds are a combination of downstream private funds,
funding from federal sources, and business financials. For all of
OSCAT’s initiatives, some spanning 21 years, the ratio of
leveraged funds to state funds is 18 to 1. Within the most recent
fiscal year, OCAST awarded $15.3 million.
Maine
An assessment of Maine’s performance on
the TBED front takes a more holistic approach, examining not only
the impact of the state’s programs, but other S&T
indicators including research performed, degrees attained, and
patents received. For many of these metrics, Maine is compared over
time not only to the New England states, but to the U.S. as a whole
and the other EPSCoR states. In the five years from 2004 to 2008,
Maine also invested $9.7 million in grants to
172 companies, resulting in 79 direct jobs and 233 indirect jobs.
In terms of revenues produced, the state found a return on
its investments of approximately 8 to 1.
According to the report, Maine experienced a marked rise in its R&D capacity and smaller increases in other metrics over this period. The study recognizes that varied investment strategies produce results in different ways, but points to a need to have a balanced portfolio of investments to yield the greatest impact.
For instance, for many years Maine has focused a significant majority of its resources on increasing the amount and quality of research conducted in the state. The report’s findings encourage the state to blend in policies that both improve the pace of commercialization and the economic impact value of the research. With this in mind, the report recommends the following policies for Maine, among others:
A Continuing Record of Achievement: The Economic Impact of Ben Franklin Technology Partners 2002-2006 is available at: http://www.benfranklin.org/our_impact/economic_impact.asp.
The 2009 OCAST Impact Report is available at: http://www.ok.gov/ocast/documents/final.pdf.
The Maine Comprehensive Research and Development Evaluation 2008 is available at: http://www.maineinnovation.com/r&e/pdfs/Maine_R&D_Evaluation_08_FINAL.pdf.
return to the top of the pageThe Digest Celebrates Its 600th Issue
Today's Digest marks SSTI's 600th issue. The
Digest’s growth in circulation and coverage over the past 13
years parallels the explosive expansion of activities to strengthen
regional economies through technology-based economic development. From its humble beginnings as a two-page fax sent out to 50 people
on Friday March 1, 1996, to its current world-crossing circulation
now in the thousands, the Digest remains committed to delivering
timely information that will help state, local and university TBED
practitioners succeed. For the history buffs among our readership,
nearly every past issue of the Digest is archived on our website:
http://www.ssti.org/Digest/digest.htm.
The Digest is made possible solely by the financial support of our membership. We encourage our readers to thank them directly (a list is available here) and to join them in becoming an SSTI member to help sustain the oldest free newsletter dedicated to serving the nation’s entire TBED community.
return to the top of the pageEntrepreneurial Efforts Underway to Boost Economy
As companies across the nation continue to announce massive
layoffs during the economic recession, states, localities and
private foundations are encouraging entrepreneurial training and
providing support services to help create new jobs and assist
struggling businesses.
Last month, the Kauffman Foundation announced an intensive effort to quickly train entrepreneurs and bolster the nation’s economy. The $1 million FastTrac LaunchPad program is a combination of two existing initiatives – the FastTrac NewVenture and FastTrac GrowthVenture – offered in shorter lengths than the normal ten-week courses. The Kauffman Foundation points to U.S. Census Bureau Business Dynamic Statistics data, which indicates that while business startups decline slightly in most of the cyclical downturns, startups remain robust even in the most severe recession over the sample period (in the early 1980s).
The following is a sampling of recent announcements in support of entrepreneurship from across the country.
New York City
New York City, which has suffered major job losses throughout
the financial sector, was the first to sign on to Kauffman’s
FastTrac program. The city’s Department of
Small Business Services will offer a six-session
classroom-based course to help entrepreneurs determine the
viability of their business concepts and develop startup
strategies. An eight-week classroom training session will teach
existing businesses how to review and reshape their business models
in order to meet the current economic challenges.
Mayor Michael Bloomberg made the announcement last month in tandem with several other initiatives to promote entrepreneurship and grow the city’s venture capital sector, including low-cost incubators for startup companies, creating an angel seed fund, and establishing a central information clearinghouse and support network for entrepreneurs.
Rhode Island
Efforts to support new business creation are underway in Rhode
Island, where 10.3 percent of residents were unemployed in January.
The Rhode Island Economic Development Corporation (RIEDC) and Brown
University announced plans to open a Center for Innovation and
Entrepreneurship in the spring, leveraging the assets of the
state’s institutions of higher education, hospitals and the
private sector.
Creation of the center is one of three key recommendations for growing the state’s economy through strategic investments in R&D presented to Gov. Carcieri and the General Assembly by the Rhode Island Science and Technology Advisory Council (STAC). The initiative is a multi-institutional partnership that connects existing programs and helps to identify gaps where new programs and services are needed. It is envisioned as a springboard for commercializing research by enhancing technology transfer from higher education institutions and facilitating new startup formation, according to the STAC report.
Funding for the center is provided by an initial investment from Brown University and public investment by the RIEDC, STAC, and the Slater Technology Fund. RIEDC is contributing $100,000 to help build the center, and the Slater Technology Fund and STAC are each contributing $50,000. Other public and private institutions are expected to contribute to the effort.
Michigan
The new President and CEO of the Michigan Economic Development
Corporation, Greg Main, announced his intention to focus on
efforts that build an entrepreneurial culture in a state that leads
the nation in unemployment rates.
During an interview published in Crain’s Detroit Business, Main said, “… We need to do a much more intensive job of building what I call a culture of entrepreneurship in the state. I think that’s not been a strength in Michigan, and it needs to be if we’re going to have a technology-based economy. We need to find ways to encourage more entrepreneurship emphasis in our university systems and find ways to put in place stronger programs to support entrepreneurs, including pools of early stage capital.”
return to the top of the pageOnly 1 Day Left to Register for a Free Meeting For Latest
Updates on NIST Programs!
On March 12 from 1:00-5:00 p.m. in San Francisco, SSTI is
co-hosting a meeting with officials from the Technology Innovation
Program (TIP) and the Manufacturing Extension Partnership (MEP)
that we would encourage you or one of your colleagues to attend.
TIP and MEP are two of the most market-driven programs operated by
the federal government. Both programs have launched new investments
and innovative services in the last year.
Registration and additional information is available at: http://www.ssti.org/tipreg/tipreg.htm.
return to the top of the pageFederal Agencies Set Up Recovery Websites
As instructed by the White House Office of Management and Budget
on Feb. 17, at least 25 of the federal agencies that received
funding through the Recovery Act have created recovery webpages
to allow easier access for potential grantees to the funding
opportunities available through the act. In addition, OMB believes
the sites will help keep the distribution process as transparent
and trackable as possible. OMB also is maintaining a master
recovery site, http://www.recovery.gov/ to monitor
overall progress of the stimulus bill.
Links to 25 agency recovery websites are available at: http://www.recovery.gov/?q=content/agencies.
return to the top of the pageNew SSTI Exclusive Podcast Available - Free, Educational and Only
Six Minutes
Through exclusive interviews with Excellence in TBED Award
recipients, find out first-hand how these award winning initiatives
successfully responded to a critical need by applying innovative
approaches to generate substantial economic gains for their region.
Recently released podcasts include:
Massachusetts, Maine Innovation Indices Assess States’
Readiness for the Economic Downturn
State governments are poised to play a vital role in the
economic recovery through their use of federally-appropriated funds
and through their internal policy responses to the global crisis.
Several states are focusing on innovation as a means of recovery.
Massachusetts and Maine both recently released the latest editions
of their annual innovation indices. These annual publications have
long helped to clarify trends in the innovation economy and
provided assessment of their performance relative to other states.
This year these indices take on new significance as state
governments search for potential paths out of the economic
crisis.
Massachusetts
In the seventh edition of the Index of the Massachusetts
Innovation Economy, Gov. Deval Patrick, MIT professor Richard
K. Lester and six other prominent industry and academic leaders
argue for the necessity of increased investments in research and
high-tech industry to propel the state through the difficult times
ahead. Lester suggests that the state should follow an innovation
strategy that focuses on “sustaining the flows of capital,
knowledge and people” that are vital to competitiveness but
can suffer during times of economic hardship.
This year’s data set does not yet reflect the effects of the crisis, but it does identify areas of strength for the state and negative trends that will have to be remedied to sustain growth. The report uses eleven indicators to benchmark the state’s innovation economy against nine other leading technology states, including California, Connecticut, Illinois, Minnesota, New Jersey, New York, North Carolina, Pennsylvania and Virginia. Massachusetts remains the top state in SBIR awards per capita, though its share of the national total is declining. The state also leads in per-capita patents, per-capita engineering degrees granted and educational attainment.
Areas of concern identified in the report include flat growth in real median household income and a significant erosion in real wages between 2003 and 2007. Massachusetts also has a lower number of two-year college graduates than the other states in the study, creating a labor shortage for new and expanding companies.
The 2008 Index of the Massachusetts Innovation Economy is available at: http://www.masstech.org/institute/index2008-21909.pdf.
Maine
Over the years the Maine Innovation Index has helped
state policymakers evaluate the effectiveness of their innovation
strategy and compare their performance to that of similar states.
This year, the Maine’s Office of Innovation begins a
year-long project to create a new Science and Technology Action
Plan to succeed the current plan, designed in 2005. The new plan
will guide Maine’s TBED initiatives in the coming years and
will rely on data compiled in the index.
To evaluate Maine’s competitiveness, the index uses 25 indicators grouped in five categories: R&D capacity, innovation capacity, employment & output capacity, education capacity and connectivity capacity. Over the past five years, the state has outperformed its EPSCoR peers in increasing its education capacity and its broadband infrastructure. Maine also continues to do well in attracting SBIR/STTR funding and in the performance of its nonprofit R&D labs.
Areas targeted for improvement in the index include total, industry and academic R&D performance, venture capital investment, patenting activity and entrepreneurial activity.
The 2009 Maine Innovation Index is available at: http://www.maineinnovation.com/r&e/pdfs/MOI_2009_Full_report_for_WEB.pdf.
return to the top of the pageLooking for funding? The Recession got you down? SSTI Membership
Can Help
More than 50 research funding opportunities totaling more than
$100 million were sent to SSTI Members this week in SSTI’s
Funding Supplement. This members-only electronic publication
provides readers with application information, eligibility criteria
and submission deadlines for hundreds of research and economic
development funding opportunities offered by the federal government
and others. Additional information about SSTI Membership is
available at: http://www.ssti.org/benefits.htm
Oregon A.G. Reforms State’s University Technology Transfer
Process
By streamlining what has been perceived as a lengthy review
process for university technology licensing deals, Oregon Attorney
General John Kroger hopes to eliminate barriers between Oregon
universities and entrepreneurs, thereby accelerating private sector
job creation.
Unlike most other states, Oregon law mandates the state Department of Justice conduct a separate legal review for its larger technology transfer deals. Tony Green, spokesman for Attorney General John Kroger, said the perception that the process moves more slowly in Oregon was impeding the state’s ability to make deals. The attorney general’s office reviewed how other states handled their review process and met with representatives in the venture capital community and attorneys who represent private clients in technology transfer negotiations.
The reforms announced by the attorney general’s office last week to eliminate the mandatory review by the Department of Justice, considered “cumbersome and unwarranted” by special assistant attorneys general employed by the universities to conduct the review, was met with praise by university and business leaders. The universities, with assistance from their own legal offices and access to specialized attorneys, now will be ultimately responsible for the review process and protecting the interests of the state.
Inventions developed by Oregon State University (OSU) generated nearly $2.6 million for the university in FY08, according to the OSU Technology Transfer office.
A press release outlining the announcement is available at: http://www.doj.state.or.us/releases/2009/rel022609.shtml.
An executive summary outlining the reform of Oregon’s technology transfer systems and processes is available at: http://www.doj.state.or.us/releases/2009/rel022609a.shtml.
return to the top of the pageITIF Ranks U.S. Last in Progress on Innovation and
Competitiveness
A recent Information Technology and Innovation Foundation (ITIF)
report ranks the U.S. last among 40 countries in progress toward
creating an innovation-based economy over the past decade. The
findings contradict several other studies that continue to depict
the U.S. as the global leader in economic competitiveness.
E-government, broadband, trade balance and corporate R&D were
particularly weak areas for U.S. progress relative to other
countries. ITIF warns that the U.S. economy will continue its
decline in innovation unless federal policymakers recognize the
need for a national innovation strategy.
The Atlantic Century: Benchmarking EU & U.S. Innovation and Competitiveness offers a different perspective from recent reports from the World Economic Forum and The Economist, which paint a more optimistic picture of the U.S. economy. The report uses 16 weighted indicators to assess competitiveness, including indices related to human capital, innovation capacity, entrepreneurship, information technology infrastructure and economic performance.
While the U.S. ranks sixth in terms of overall score, it lags behind every other country on the list for progress made between 1999 and 2009. The U.S. posts its weakest showing for its lack of progress in indicators related to IT infrastructure, including e-government and broadband infrastructure. E-government resources in the U.S. still rank second in the world, after Sweden, but its competitiveness in the area dropped significantly in the 10 years of the study. The U.S. ranked 36th in progress on broadband infrastructure, though the report explains that this is at least partially due to the relatively large base of broadband penetration in the early years of the study. The U.S. also scored poorly in other categories such as GDP per adult and venture capital.
China tops the list for improvement during the 1999-2009 period, though it still ranks 33rd in overall score. China made particular strides in its number of researchers, scientific publications, GDP per adult and productivity. Singapore takes the number one spot in overall score and ranks second in progress made, with strong improvement in its level of entrepreneurship. The remaining top ten countries for improvement during the last decade include Estonia, Denmark, Luxembourg, Slovenia, Russia, Lithuania, Cyprus and Japan.
The ITIF report concludes that an increasingly globalized economy has altered the U.S.’s competitive position in the world. Federal policymakers should think of the U.S. as a large state, instead of an unchallenged economic superpower. Maintaining U.S. competitiveness will require proactive innovation policies to drive growth and to retain the benefits of that growth within the U.S. ITIF includes several recommendations for what an effective national innovation agenda should try to accomplish, including:
The Atlantic Century: Benchmarking EU & U.S. Innovation and Competitiveness is available at: http://www.itif.org/index.php?id=226.
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