In the September 30, 2009 Issue:

• Economic Recovery Remakes U.S. Venture Capital Map
• Free NIST TIP-MEP Regional Meeting at SSTI Annual Conference on Oct. 21
• Specialized Training for Innovative Entrepreneurs Needed in Higher Ed, Study Finds
• Early Registration Period Extended Until Tuesday Oct. 6!
• New Efforts Aim to Improve Manufacturing Competitiveness
• Nashville Launches Site to Help Build Innovation Community
• Useful Stats: Federal R&D Obligations to Academia Per Capita, FY 2003-2007
• TBED People and Organizations
• SSTI Job Corner

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Economic Recovery Remakes U.S. Venture Capital Map
While the U.S. venture capital (VC) industry struggles to recover from the last year’s sudden collapse in fundraising and investment, several regions are successfully rebuilding their venture environment. Venture investment remained far below 2008 levels in the second quarter of 2009, with venture centers such as Silicon Valley, Los Angeles, New York City and Texas falling farther from their lackluster numbers in the first quarter. Other key regions however, such as Philadelphia, and states in the Southwest and Southeast performed at, or near, the level of investment they experienced at the same time last year. Though the industry remains highly volatile, these changes have the potential to narrow the venture funding gap between Silicon Valley and the rest of the country.

Silicon Valley has dominated the venture capital industry for decades. Prior to the 2008 financial crisis, California’s share of U.S. venture capital investment, driven by activity in Silicon Valley, surpassed 50 percent. The crisis, however, had a stifling effect on Silicon Valley investment. Last quarter, California’s share of venture investment fell to 41 percent, the state's lowest share since 2001 according to data from the PricewaterhouseCoopers/National Venture Capital Association Moneytree Survey. The decline in share could simply indicate that VC firms are waiting for a more favorable climate to make new investments, but, at the same time, other regions are making strong gains.

At the same time, a few of the regions tracked by the Moneytree Survey are showing signs of recovery. The Philadelphia metropolitan area experienced a five-fold increase in venture investment dollars over the first quarter. The region was home to $161.9 million in venture investment and 22 deals, up from $31.2 million in 13 deals in Q1 2009. Though the average deal size jumped from $2.4 million to $3.36 million in the second quarter, the rise in investment was not simply due to a few larger investments since deal volume increased by 70 percent. In Colorado, investment dollars rose by 158 percent although the number of deals was slightly down. Venture dollars rose from $81.8 million in the first quarter to $211.1 million, even surpassing the pre-crisis investment level of Q2 2008. Colorado’s number of deals, however, fell from 18 to 16. For both Philadelphia and Colorado, the increase represents an increase in their share of total national venture investment.

Evidence suggests that the recovery is in effect in the Southeast and Southwest. The Moneytree survey groups Alabama, Florida, Georgia, Mississippi, Tennessee, South Carolina and North Carolina together as the Southeast and Utah, Arizona, New Mexico and Nevada as the Southwest. The Southeast experienced a significant rebound in dollars and a small increase in deals. Venture dollars more than doubled to $282.3 million from $113.6 million last quarter and deals increased from 30 to 34. The Southwest also performed well with venture investment dollars growing from $41.6 million to $157.9 million and deals increasing from 15 to 18. Along with Colorado, the Southwest was the only tracked region to surpass its investment level during the same quarter last year.

The other regions included in the survey experienced additional losses or modest gains. Texas, which received 4.5 percent of all U.S. venture investment last year, received only 2 percent last quarter. The Los Angeles/Orange County region received 6.8 percent of venture investment in 2008, but only 4.3 percent in the second quarter.

Read more about the venture industry’s second quarter performance at: https://www.pwcmoneytree.com/MTPublic/ns/index.jsp.

Is this the end of the Flyover Argument? Where do Public Equity Programs Go from Here?
One of the major arguments for public equity programs and policies to encourage equity capital investment is its disproportionate availability. Is this that much of a problem anymore?  Or is the remaking of the VC map, as suggested above a sign that public equity efforts are working? The future of TBED initiatives to increase access to capital is a major theme of SSTI's upcoming 13th Annual Conference. We're dedicating three sessions to the issue, starting with a bang:

• The Future of Public Equity and Entrepreneurship Programs
  Harvard professor Josh Lerner will join us to discuss his upcoming, provocatively titled book, Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed-and What to Do About It. Lerner asked: when has governmental sponsorship succeeded in boosting growth, and when has it fallen terribly short? In his presentation he will provide valuable insights into why some public initiatives work while others are hobbled by pitfalls and offer suggestions for how public ventures should be implemented in the future. A discussion of the implications and opportunities presented will follow.


• Addressing Capital Gaps: Lessons from the Field
  Capital programs are facing challenging times given the financial meltdown of the past two years. At the same time, TBED efforts to increase the availability of risk capital for young firms have taken on a new sense of urgency. What worked yesterday won't necessarily work in the new world of finance, however. This session will look at the continual evolution of state programs, highlighting the pros and cons of two recently adopted approaches in Tennessee and Pennsylvania to build robust local private equity markets.


• Where Do Equity Programs Go from Here? A Roundtable Discussion
  There will be a lot to process from our first two capital-related sessions, starting right from the top with Josh Lerner's provocative plenary address. Add financial markets that are continuing to sort themselves out, and heads could begin to spin. With Rebecca Bagley, one of the TBED community's top thinkers on equity policy, as our guide, we're dedicating this session to find meaning and direction: what does it all mean for programs and policies to increase local capital access? What should they look like going forward?

SSTI's Annual Conference, Seize the Moment: Tech-based Economic Development for the Next Economy, will be held Oct 21-23 in Overland Park, KS. More information is available at: http://ssticonference.org.

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Free NIST TIP-MEP Regional Meeting at SSTI Annual Conference on Oct. 21
"Tapping the Technology Innovation Program and the Manufacturing Extension Partnership"

On October 21, from 1:00 p.m. - 4:30 p.m, SSTI is co-hosting a regional meeting with officials from the Technology Innovation Program (TIP) and the Manufacturing Extension Partnership (MEP) that we 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. The meeting will give you a chance to learn about:

• New federal funding opportunities;
• New resources to support early-stage research;
• New products and services to expand manufacturing;
• New tools to help foster growth and innovation in companies you work with;
• New models to accelerate technology commercialization and translation; and,
• New ideas about ways to integrate state, local and federal investments.

Who should attend?

• Company officials responsible for new product development;
• Local and regional economic developers interested in innovation;
• University technology transfer officials;
• Managers from non-profits interested in commercialization of new technologies; and,
• State agency technology program managers.

The meeting will be held at:
Sheraton Overland Park Hotel
6100 College Boulevard
Overland Park, Kansas

A small room block is being held at the rate of $152/night. Rooms must be booked by October 6 to get the rate. Call the hotel at 913.234.2100 to book your room; ask for the State Science & Technology Institute meeting block or visit http://www.starwoodmeeting.com/StarGroupsWeb/booking/reservation?id=0904235450&key=A29E1.

To register for the meeting, please go to: http://www.ssti.org/tipreg/tipreg.htm. For more information about the SSTI conference, visit: www.ssticonference.org.

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Specialized Training for Innovative Entrepreneurs Needed in Higher Ed, Study Finds
Given the important contribution of innovative entrepreneurs, it is essential for colleges and universities to adopt effective programs to educate and train prospective business founders who will introduce new products and new production processes, find new markets, or innovate in other ways, finds a study released by the Small Business Administration Office of Advocacy.

Unlike traditional entrepreneurs who generally establish new firms of some conventional variety, innovative entrepreneurs are considered critical contributors to economic growth, bringing technological advances to market. The study notes that while business schools throughout the U.S. currently have well-designed, effective programs to train conventional entrepreneurs, there are few, if any schools with programs specializing in the education of innovative entrepreneurs.

To determine how prospective innovative entrepreneurs can be trained most effectively, the study is centered on a survey of undergraduate and MBA alumni at five universities conducted by a team of researchers from New York University. Participants were surveyed to identify the nature of the courses and their teaching approaches, and materials that were most useful, later on, in carrying out entrepreneurial activities. Major findings include:

• Graduates who have taken entrepreneurial courses are significantly more likely to select careers in entrepreneurship, which is defined as founding, running, or being employed in a startup or entrepreneurial team.
• Graduates who have taken entrepreneurial courses are more innovative, as quantified by the number of patented innovations, new production processes, and new services and products.
• Graduates who have taken entrepreneurial courses and those who have not taken such courses are equally likely to work for small businesses.
• There is no discernable relationship between overall educational achievement (as defined by GPA and SAT scores) and selection of a career in entrepreneurship.
• Students who have taken entrepreneurial courses are more likely to self-report stronger skills in areas related to entrepreneurship.

Approximately 62 percent of MBA alumni and 13 percent of undergraduate alumni reported having taken a course focused on entrepreneurship at some time during their educational careers. Additionally, results suggest a strong correlation between respondents having taken an entrepreneurial course and their self-reported skills in identifying new business-related opportunities, the study finds.

Another round of the survey is planned for 2010 and will involve additional universities in the U.S. as well as Europe, China, and the Middle East. As the study moves forward, the authors say the data will be focused on helping instructors to train prospective innovative entrepreneurs more effectively.

Toward Effective Education of Innovative Entrepreneurs in Small Business: Initial Results from a Survey of College Students and Graduates was funded through a challenge grant from the Ewing Marion Kauffman Foundation and is available at: http://www.sba.gov/advo/research/rs353tot.pdf.

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Early Registration Period Extended Until Tuesday Oct. 6!
These are hard times for many state and local governments and nonprofit organizations. That's why so much of this year's conference agenda is dedicated to securing new funding for your TBED efforts and exploring alternate approaches to meeting your TBED goals. To ensure more people are able to afford attending the most important professional development event of the year for the TBED community, SSTI is extending the early registration discount for one more week. Both the conference registration rate and the special $152 discount at the hotel are available until Tuesday, Oct. 6.

More information is available at: http://ssticonference.org.

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New Efforts Aim to Improve Manufacturing Competitiveness
Two recent efforts – a new program launched in Maryland and legislation introduced in Congress – aim to help manufacturers retool for the rapidly changing economy. Successful tech-based economies have an environment conducive to industry development of new, leading-edge products or services or processes that significantly enhance the competitiveness of existing operations. Programs and initiatives that provide industries with the essential tools and resources to effectively compete in the global marketplace are imperative to achieving this climate.

In Maryland, a new program that pulls together a network of resources from around the state recently was launched to provide expanded services to the state’s manufacturers. A partnership between the University of Maryland’s Technology Enterprise Institute and the Regional Manufacturing Initiative, the Maryland Manufacturing Partnerships program will deliver services to manufacturers focusing on four main areas:

• Continuous improvement, lean manufacturing and an increased emphasis on transformational projects, including supply-chain development;
• Sustainability and energy, incorporating green technology and sustainable practices in products and processes;
• Innovation and technology acceleration, developing and modifying programs so manufacturers can seamlessly adopt modern technologies; and,
• Strengthening the manufacturing workforce through education and training to meet 21st century demands.

Partners include University System of Maryland faculty, the National Institute of Standards and Technology’s national Manufacturing Extension Partnership network, and in-house consultants. More information is available at: http://www.mtech.umd.edu/news/press_releases/mmp.html.

On a national level, U.S. Sen. Sherrod Brown (D-OH) introduced legislation earlier this year to help manufacturers retool for the clean energy industry and help states attract new employers through specialized workforce development programs, according to a press release. The IMPACT Act of 2009 calls for a $30 billion manufacturing revolving loan program in which states would receive funding to assist small and medium-sized firms in retooling, expanding or establishing domestic clean energy manufacturing operations, and improving energy efficiency.

In addition, the bill would expand the focus of the Manufacturing Extension Partnership (MEP) to include support for manufacturers transitioning to the clean energy economy. Currently the nation’s 59 MEP centers receive slightly more than $100 million in federal funds each year with ither funds matching the federal contribution two-to-one, according to a press release. Under the bill, the federal share of MEP funding would increase to 50 percent, helping manufacturers diversify to clean energy markets and adopt innovative, energy efficient manufacturing technologies. Based on MEP’s current cost per consultation, the additional federal funding could enable MEP to reach an additional 10,000 manufacturers each year, according to a press release from Sen. Brown's office.

More information regarding S. 1617 is available at: http://www.loc.gov.

Attend SSTI's Annual Conference To Celebrate Excellence in Improving Competitiveness of Existing Industries and More!
On Oct. 22, SSTI will unveil the winners of the highly anticipated 2009 Excellence in TBED Awards. Conference attendees will have the opportunity to explore the award-winning programs in depth directly with program administrators during dedicated breakout sessions on Thursday afternoon and Friday morning. Awards are presented within six categories.

Past award winners in the Improving Competitiveness of Existing Industries category include Connecticut’s Center for Advanced Technology Manufacturing Supply Chain Integration (2008) and The Maryland Industrial Partnerships Program (2007). Download exclusive interviews with the award winners at: http://www.ssti.org/Awards/podcasts.htm.

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Nashville Launches Site to Help Build Innovation Community
The Nashville Area Chamber of Commerce unveiled a new website targeting the region’s entrepreneurial community. The Nashville Entrepreneurial Center provides insight and advice on starting a new company, local business and innovation news and several ways to connect to other entrepreneurs and investors. Though the site already offers a blog and social networking features, the group plans to expand their services to include additional resources for entrepreneurs seeking funding and other types of assistance.

The project is the result of two years of planning by the chamber and other regional groups. In 2007, Partnership 2010, an economic development outreach effort by the chamber, convened a task force to study the needs of the local entrepreneur community. The task force issued a list of short- and long-term recommendations to help the region leverage its relatively high-level of entrepreneurship into new jobs and greater regional wealth. The recommendations called for an online entrepreneur center that could serve as a focal point for outreach to this community. The new site is intend to help the region accomplish several goals including giving entrepreneurs a way to share their experiences and knowledge, providing a place to seek early-stage capital, improving city-wide coordination and encouraging students to pursue technology careers.

Currently, the site offers video and educational resources for entrepreneurs, including an Ask-An-Entrepreneur for personalized advice. The site also makes use of integration with social networking applications such as Twitter, Facebook and LinkedIn.

The site is envisioned as the first step in a region-wide effort to help create successful new businesses, with a focus on technology, healthcare, digital media and biomedical applications. Eventually, the Nashville Entrepreneur Center will reside in a physical location, offering space for new companies and hand-on assistance by entrepreneurs-in-residence.

Visit the Nashville Entrepreneur Center at: http://www.entrepreneurcenter.com/.

Effective Use of the Web to Advance TBED
Web 2.0 provides critical tools for building powerful virtual and real communities to encourage innovation and tech-based economic development – if done properly. See and hear about some of the most effective approaches to web-based TBED during a highly interactive breakout session at SSTI’s upcoming Annual Conference, Seize the Moment. The session will draw on the expertise of two successful web practitioners, Maria Meyers of US Sourcelink and Tim Haynes, Vice President of Marketing and Member Services with TechColumbus. More information is available at: http://ssticonference.org/schedule.html.

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Useful Stats
Federal R&D Obligations to Academia Per Capita, FY 2003-2007
On a per capita basis, federal R&D obligations to U.S. universities and colleges increased by 7 percent from FY 2003 to 2007, rising to $83.80 per person in FY07, according to the National Science Foundation. Total U.S. federal R&D obligations to academia increased by 11.1 percent over the same five years to $25.3 billion in FY07.

SSTI has prepared a table listing the academic obligations per capita from FY 2003 to 2007, the percent change of these obligations per capita over this period, and the relative rank of this change.

The range in per capita figures among the states is large. Washington D.C. led the country with $360.10 in federal R&D obligations to academia per capita in FY07. This was followed by Maryland ($279.30), Massachusetts ($230.70), Connecticut ($142.10), and Hawaii ($135.60). Maine, Arkansas, Idaho, Nevada, and Oklahoma were the states with the lowest per capita values. Overall, the U.S. average of $83.80 per capita bested 28 states.

New Mexico had the largest percentage increase in federal obligations to academia per capita from FY03 to 07, rising 38.5 percent to $92.80 per person. The other states with the largest five-year increases were West Virginia, North Dakota, Massachusetts, and Ohio.

NSF defines obligations as “the amounts for orders placed, contracts awarded, services received, and similar transactions during a given period, regardless of when the funds were appropriated and when future payment of money is required. Obligations differ from expenditures in that funds allocated by federal agencies during one fiscal year may be spent by the recipient institution either partially or entirely during one or more subsequent years.“

SSTI's table is available at: http://www.ssti.org/Digest/Tables/093009t.htm

The data for the table came from the Census Bureau and the NSF’s Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions, FY 2007. The later is available at: http://www.nsf.gov/statistics/nsf09315/.

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TBED People and Organizations
Kathy Collins has been appointed as the Wisconsin Entrepreneurs’ Network (WEN) regional director in Madison. Previously, Collins worked as the technology and financial development manager in the Commerce Division of Business Development.

Ron Cox has been appointed as the assistant dean for economic development in the engineering college at Iowa State University. He retains his current position as director of CIRAS, the Center for Industrial Research and Service.

Frank DiBello, a veteran aerospace consultant who’s been Space Florida’s interim president since May, was named as the permanent leader of the aerospace development agency.

Utah Gov. Gary Herbert appointed businessman and philanthropist Spencer Eccles to lead the Governor’s Office of Economic Development. Eccles, son of the former First Security chairman and CEO Spencer Eccles, will be joined by Josh Romney, son of former Massachusetts governor Mitt Romney. The younger Romney will serve as the state’s national business recruitment policy advisor.

John Hardin has been named Executive Director-Office of Science and Technology, a Division of NC Commerce.

Mike Tramontina resigned as the director of the Iowa Department of Economic Development, effective immediately. The Department of Economic Development will report to Richard Oshlo, the interim director of the Department of Management, while new leadership at IDED is being considered.

President Barack Obama announced his intent to nominate the following individuals to key administration posts:

• Daniel Yohannes, Chief Executive Office, Millennium Challenge Corporation
• ArunMajumdar, Director of the Advanced Research Projects Agency – Energy, Department of Energy

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SSTI Job Corner
Complete descriptions of these opportunities and others are available at http://www.ssti.org/posting.htm.

Missouri Small Business Technology Development Center invites applications for an associate state specialist (counselor). This position serves as a statewide specialist to provide leadership, expertise, and training to University faculty and staff, and private sector clients with SBIR/STTR. A master’s degree in engineering, business, science, or a related area with appropriate coursework and five or more year’s relevant experience are required.

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