SSTI Weekly Digest
A Publication of the State Science and Technology Institute
SSTI, 5015 Pine Creek Drive, Westerville, Ohio 43081
Phone: (614) 901-1690 http://www.ssti.org
Vol. 14, Issue 19

In the July 29, 2009 Issue:
ARCHIVED ISSUES (1996-present): Previous issues of the SSTI Weekly Digest are available and searchable on our website: http://www.ssti.org/Digest/digest.htm
An index of all state and local stories may be found at: http://www.ssti.org/Digest/Indices/indexstate.htm
TO SUBSCRIBE/UNSUBSCRIBE: Subscriptions to the SSTI Weekly Digest are free. To subscribe, please visit: http://www.ssti.org/Digest/subscribe.htm
To unsubscribe, please visit: http://www.ssti.org/Digest/digform_unsubscribe.htm

SBIR Drama to Drag Out Two More Months (at least)
Congress has approved a two-month extension for the Small Business Innovation Research (SBIR) Program, which was set to expire on Friday, July 31. S. 1513 extends the program in its current form until Sept 30, 2009, which coincides with the end of the federal fiscal year.

return to the top of the page

Moneytree Sees Some Positives in 2nd Quarter VC Investments
The U.S. venture capital industry showed signs of growth during the second quarter of 2009, according to the most recent update from the National Venture Capital Association and PricewaterhouseCoopers Moneytree Report. While the total number of deals remained flat, total dollars invested increased by 15 percent over the first quarter of the year. Much of the growth is the result of increased investment in seed and early-stage companies, which grew 67 percent over the previous quarter in an encouraging sign for entrepreneurs. Life science (including the biotechnology and medical device industries) investment also received a boost, receiving the highest percentage of U.S. venture capital dollars the sector has received in the history of the report.

Despite those encouraging signs, however, investment remains well below levels reached one year ago. Investment during the most recent quarter amounted to less than one-half of the dollars invested and 58 percent of the deals during the same quarter last year. The NVCA/PricewaterhouseCoopers announcement notes that, at the current rate of recovery, national investment totals for the year likely will resemble totals from 1996 and 1997. The lack of corresponding increases in venture fundraising and exit activity indicates that the current bump may not represent the start of a period of consistent growth, according to the release.

Silicon Valley, which received about 39 percent of U.S. venture dollars last year and 31 percent of all deals, did not benefit from the national bounce. Investment in the region fell by 8 percent in total dollars and by 6 percent in deals from the first quarter. Silicon Valley investment represented only 32 percent of national dollar investment in the second quarter. The Philadelphia metropolitan area posted the most impressive gains in the Moneytree regional data, doubling its number of deals and quadrupling its total dollars. Investment in the region, however, still lags behind last year's activity. Other regions experiencing strong growth include the Southwest (Arizona, Nevada, New Mexico and Utah), Colorado, the Southeast (Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee) and San Diego.

Though the life science sector overtook software as the leading target for investment, much of that increase was due to larger investments. Four of the top ten deals in the quarter were in the life sciences. The biotechnology industry alone dwarfed software investment on the strength of a few deals, though medical devices did experience a 32 percent increase in deal volume. Software investment saw only modest gains, as did networking and equipment, computers and peripherals and IT services. The clean tech sector, the internet-specific sector, semiconductors, media and entertainment and telecommunications all declined.

The bump in earlier-stage investment represents a renewed interest in young companies by investors. In the second quarter, seed- and early-stage investments represented 41 percent of venture dollars, the highest percentage since the late 1990s. This increase, however, was driven by several large deals as well, including the largest deal of the quarter. The number of seed- and early-stage deals remained flat. That earlier-stage and overall deal levels remained flat indicates that the uptick in venture activity is being driven by larger deals, and may signal that more time will be needed before any claims can be made that the industry is recovering.

Read the NVCA announcement at: http://www.nvca.org/index.php?option=com_docman&task=doc_download&gid=471&ItemId=93

return to the top of the page

New York City Gains $3 Million Tax Credit for Biotech Firms
The New York State legislature passed an act enabling New York City to move forward with a $3 million biotech tax credit that is expected to encourage biotechnology firms to bring their jobs, innovation, and emerging technologies to the city. The bill (S.4845-B/A.8131) is expected to be signed into law by Gov. David Paterson.

Among the first beneficiaries of the credit will be new tenants for the East River Science Park (ESRP), a $700 million bioscience complex being built along First Avenue between 28th and 30th Streets. Last week, ESRP announced its first signed tenant, biotechnology company ImClone Systems, which is owned by Eli Lilly. The city's new biotech tax credit, in tandem with state tax incentives and broad-based government investment in diversifying the local economy, will bring more such companies to ESRP and sites across the five boroughs.

The new tax credit, designed to work with New York State's Qualified Emerging Technologies Credit (QETC), will be capped at $3 million per year and will go into effect for three years beginning January 2010. The credit will help emerging firms equip labs, train technicians, and fund access to high-tech equipment. Funding will be focused mostly on growing firms, with the maximum amount of $250,000 per year given to eligible firms that increase their employment by at least 5 percent as compared to a base year. Growth below that threshold means firms would be eligible for half of the total credit amount. If credits in a given year exceed the cap, they will be allocated on a prorated basis by the New York City Department of Finance.

Proponents for the legislation point out the tax credit also will benefit the legal, accounting and marketing firms whose expertise is needed to bring a discovery out of the laboratory and into the marketplace.

return to the top of the page

Ohio Budget Cuts Funding for Higher Ed Initiatives
Funding for higher education initiatives fell victim to Ohio's budget woes as legislators worked to fill a projected $3.2 billion deficit. The enacted budget signed into law earlier this month by Gov. Ted Strickland cuts spending by $2.5 billion and leverages $5 billion in federal stimulus funds, according to the governor's office.

Earlier this year, Gov. Strickland asked lawmakers to continue for a third year the tuition freeze at all public universities. Funding for this request was not included in the final budget, and as a result, universities and colleges are allowed to raise tuition by 3.5 percent each of the next two years. Two schools, Ohio State University and Cuyahoga Community College, announced they would maintain level tuition for the upcoming year despite the cuts.

Also left out of the enacted budget was a new co-op and internship program that would have provided training for individuals seeking employment in biotechnology, bioscience, or other high-skill fields. The program was part of the state's stimulus plan passed by lawmakers in 2008 (see the Feb. 13, 2008 issue of the Digest). However, lawmakers left out of the final budget the first $100 million of the five-year, $250 million program, reports the Associated Press. Cutting the internship program and state aid to higher education gave lawmakers $270 million to put toward other programs, the article states.

Additionally, all financial assistance was eliminated for the Ohio College Opportunity Grant, according to a news release by the Ohio Association of Career Colleges and Schools. The grant provides income-based funding for students enrolled at career colleges.

The enacted budget does include funding to continue the Choose Ohio First Scholarship, a scholarship program created during the 2007 legislative session to increase the number of graduates in science, technology, engineering, mathematics and medicine (STEMM) field. The program is slated to receive $12.9 million FY10 and $15.8 million in FY11. The program requires a 1:1 match from higher education institutions. An additional $5 million is included each year for STEM initiatives at the Department of Education.

The total general revenue fund for the Ohio Department of Development (ODOD) is $76.75 million in FY10 and $92.2 million in FY11. ODOD appropriations include $15.8 million each year for the Thomas Edison Program, which supports a network of incubators and tech-centers to support startup technology companies.

The budget maintains funding for the state's Third Frontier Initiative, a tech-based economic development strategy that aims to expand Ohio's technological strengths and promote commercialization. For the Third Frontier R&D fund, $61 million is allocated each year, which includes $55 million each year for Third Frontier R&D projects and $6 million each year for R&D taxable bond projects.

Created in 2002, the Third Frontier Initiative is set to expire in 2012 unless renewed. Gov. Strickland announced last week his intention to call the legislature back into session to discuss putting the issue on the ballot this fall, which must be done before Aug. 5, reports the Columbus Dispatch. House Speaker Armond Budish, D-Beachwood, has said he is willing to reconvene the House for a vote if an agreement on the details can be reached. However, Senate President Bill Harris, R-Ashland, voiced concern that there is not enough time to prepare the issue for the ballot and effectively campaign to pass it, the article states.

The budget also includes an increase in the cap for the Technology Tax Credit to $45 million, up from $30 million, to enable investors to continue receiving a tax credit by investing in Ohio-based technology companies. The current cap was expected to be reached earlier this year.

The 2010-11 budget is available at: http://www.legislature.state.oh.us/BillText128/128_HB_1_EN_N.pdf.

return to the top of the page

Oregon Innovation Efforts to Continue with Reduced Funding
The legislature approved a budget agreement for the 2009-11 biennium last month, preserving partial funding for Oregon innovation efforts and passing legislation aimed at green job creation. A major component of Gov. Ted Kulongoski's climate change agenda did not survive the legislative session, however.

Along with $2 billion in cuts, the approved budget relies on federal stimulus funds and taps into state reserve funds, reports the Portland Business Journal. To generate additional revenue for the state, Gov. Kulongoski signed legislation last week raising both personal income taxes for top earners and corporate income taxes. Although lawmakers typically meet every other year, the legislature likely will convene early next year to address any further budget gaps, the article states.

The Oregon Innovation Council (Oregon Inc.) will receive $16 million over the biennium to continue R&D and commercialization efforts in nanoscience and renewable energy through the state's signature research centers. This is scaled back from the governor's recommendation of $20.5 million and $12 million less than the 2007-09 biennial appropriation. Funding is distributed among the following initiatives:

The remaining funding will support the food processing and seafood industries. Lawmakers did not approve funding for a new forestry cluster initiative to increase technology development and commercialization efforts. Also left out of the budget is $1 million for an advanced manufacturing initiative at Portland State University.

Lawmakers passed a green jobs bill this session, directing state agencies to identify high-demand green industries and plan workforce development activities that promote the development of emerging green technologies and innovations. The legislation also calls for developing criteria for existing investments and new or expanded financial incentives and comprehensive strategies to recruit, retain and expand green economy industries and small businesses.

Legislators did not pass a bill at the center of the governor's climate package. Under SB 80, the state would have adopted a greenhouse gas cap-and-trade system to achieve greenhouse gas-emission reduction goals. The bill also would have established a Climate Improvement Fund and created a task force to develop recommendations for greenhouse gas-emission reduction. Lawmakers also rejected a measure allowing energy generated from existing biomass and municipal waste facilities to be included in the state's Renewable Portfolio Standard.

At the same time, a measure was passed by lawmakers cutting state tax incentives for wind farms from $10 million to $3.5 million. The bill also tightens requirements for receiving the tax credits. Companies are now required to stay in continuous operation for five years or risk losing the credits, reports The Oregonian.

In an effort to reorganize the state's economic development efforts, lawmakers passed a bill renaming the Oregon Economic and Community Development Department as the Oregon Business Development Department, or Business Oregon. The aim is to focus more intensely on job creation and retention, according to a press release. As part of the agency's realignment, the department's community development activities will be administered separately by a newly formed Infrastructure Finance Authority. Gov. Kulongoski proposed the reorganization last year.

The 2009-11 approved budget documents are available at: http://www.leg.state.or.us/budget/home.htm.

return to the top of the page

Illinois Stepping up TBED, Broadband Efforts with Flurry of New Legislation
Gov. Pat Quinn recently signed into law a six-year, $31 billion Jobs Now plan and smaller capital bill supporting science and technology research and commercialization and broadband deployment. The Illinois Department of Commerce and Economic Opportunity (DCEO) will administer several of the grants.

Funding for the Jobs Now plan is provided by a combination of state debt and federal and local matching funds. The bill allows the state to access more than $3.7 billion in federal American Recovery and Reinvestment Act funds. Taxpayers, however, will face several fee increases to pay for the 20-year bonds issued to provide funding for the state's $13 billion share of the six-year capital plan.

The bill allocates $50 million to DCEO to support broadband deployment in order to expand and strengthen existing broadband network infrastructure, health technology, telemedicine, distance learning, and public safety. Another $15 million is appropriated from the Build Illinois Bond Fund to provide grants, loans, and other investments to emerging technology enterprises to support and encourage commercialization of tech-based products and services, tech transfer projects involving the promotion of new or innovative technologies, and R&D projects.

Gov. Quinn also signed HB 312, referred to as the mini-capital bill, making appropriations for several projects that were included in his budget proposal (see the March 25, 2009 issue of the Digest). New appropriations include:

The governor signed several appropriation bills for FY10 operational costs, including SB 1216, which appropriates $8.2 million in general revenue funds for DCEO operations. Another $18.5 million is allocated for DCEO operational expenses, awards, grants, and permanent improvements. To help address the budget deficit, Gov. Quinn signed SB 1433, which authorizes the transfer of various funds to the general revenue fund. This includes $13.4 million from the Renewable Energy Resources Trust Fund, $2 million from the Workforce, Technology & Economic Development Fund, $2.2 million from DCEO Energy Projects Fund, and $1 million from DCEO Projects Fund.

Several other bills of interest to the tech-based economic development community have been approved by the legislature and are awaiting the governor's action. They include:

Currently pending in the legislature, SB 1522 would set aside $25 million in grants and tax credits to help biotech, pharmaceutical, and medical-device startups commercialize new technologies. The Emerging Technologies Industries Act would set aside $10 million in state funds annually for matching grants to Illinois startups that obtain SBIR grants and create a $15 million tax credit program for state registered and qualified investors in early-stage life science companies, reports BioRegion News.

return to the top of the page

Demographic Shifts or Brain Drain? The Changing Workforce of New Hampshire and the U.S.
Decreases in the number of young adults in the state are more a result of fewer children being born 25 to 35 years ago, and not because of a substantial brain drain or outmigration of talent from New Hampshire, according to a task force convened by New Hampshire Gov. John Lynch. However, attracting and retaining younger workers to the state is imperative because of the large share of baby-boomers in the workforce that will be retiring in the next decade. Coupling the state's skilled workforce needs with the demographic trend of a 23 percent reduction of 25 to 34 year-olds in New Hampshire from 1990 to 2000, the task force presented to the Governor recommendations for boosting the number of young adults in the state.

New Hampshire's concerns are similar to select states across the U.S., as many regions are witnessing an aging of their population and a lack of in-migration. While the proportion of the entire U.S. population 65 years and older will be 13 percent in 2010, it sharply will increase to 16.1 percent in 2020 and 19.3 percent in 2030 before leveling off at about 20 percent in 2050, according to the U.S. Census Bureau. However, these demographic shifts in age already are apparent in various states and communities.

To attract and retain younger workers in New Hampshire, the task force produced several recommendations, including:

While the aggregate trends in migration for states and regions merit further study, so do the relative levels and causes of migration.

The New Hampshire report includes a reference to IRS data showing 21,000 more people moved into the state between 2001 and 2005 than left the state. This net change is the result of 210,000 people moving into New Hampshire and 189,000 leaving New Hampshire during this time period. These churning numbers compare to a statewide population of 1.32 million.

For the nation as a whole, most adults (57 percent) have not lived outside of their home state, whereas 15 percent have lived in four or more states, according to a Dec 2008 report from the Pew Research Center on mobility in the U.S.. Texas leads the nation with 75.8 percent of its native-born adults still residing there, while only 28.2 percent of native-born adult Alaskans remain in the state.

Nevada leads the country with the highest percentage of its total population that was born in another state (86.4 percent), while New York has the lowest percentage of its population born in another state (18.8 percent).

The webpage of the Pew migration report "Who Moves? Who Stays Put? Where's Home?" containing maps and data that highlight the number of people moving in and moving out of each state is available at: http://pewsocialtrends.org/maps/migration/

The New Hampshire report, The Governor's Task Force for the Recruitment and Retention of a Younger Workforce for the State of New Hampshire, is available at:

http://www.usnh.edu/initiatives/documents/TaskForceFinal061809.pdf

return to the top of the page

TBED People and Organizations
Rebecca Bagley, who left her position as deputy secretary for the Technology Investment Office within the Pennsylvania Department of Community and Economic Development, was appointed president-elect of NorTech. Bagley will succeed Dorothy Baunach, the founding staff director of NorTech, as president and chief executive officer. Baunach will become president emeritus, serving as an adviser until December 2010. John Sider has been appointed to succeed Bagley. Prior to his appointment, Sider served as the director of venture investment for DCED.

Steve Crawford is leaving Brookings to take a new job as vice president for policy and research at CFED -- the Corporation for Enterprise Development in Washington, DC.

Ken Marcus has been appointed park director for the University of Arizona Science and Technology Park. Marcus succeeds Marshall Worden who retired.

Colorado Gov. Bill Ritter announced he has appointed state Rep. Don Marostica, a member of the legislature's Joint Budget Committee and a Loveland business owner, as the new director of the Colorado Office of Economic Development and International Trade.

Gov. Bill Ritter together with Christine Shapard, founding executive director, participated in the formal launch of the Colorado Cleantech Industry Association (CCIA). Founded six months ago, CCIA is a new statewide organization dedicated to promoting Colorado's clean tech industry.

Renee Winsky is stepping down as president and executive director of the Maryland Technology Development Corporation to become the executive director of the Tech Council of Maryland. TEDCO has named John Wasilisin to serve as acting director while the board finds a permanent successor.

return to the top of the page

<#UNSUBSCRIBE#> from all SSTI publications

State Science & Technology Institute
5015 Pine Creek Drive
Westerville, OH 43081
(614) 901-1690

Creative Commons License
SSTI Weekly Digest by SSTI is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License.
Approved for redistribution and derivative works. Attribution required. Not for commercial use.