In This Week's Issue
SSTI News and Analysis
Tech Talkin' Govs, Part I
Entering its tenth year covering governors’ State of the State, Budget and Inaugural Addresses, SSTI’s Tech Talkin’ Govs series highlights new and expanded TBED proposals from across the nation. The first edition includes excerpts from speeches delivered in the following states:
Arizona
Gov. Janice Brewer, State
of the State Address, Jan. 11, 2010
“… I am taking the following specific actions to
make Arizona even more competitive in creating jobs.
First, I am announcing the formation of a Governor's Jobs
Cabinet. This team of key state agency directors will cut through
the red tape and the green tape to speed job creation.
“Second, I will be allocating a significant portion of
remaining federal stimulus funds directly to bring new jobs to
Arizona. Specifically, I am devoting $10 million in one-time
federal stimulus funds for job training. …
“… Third, under the leadership of Jerry Colangelo
and Commerce Director Don Cardon ... I have created the Governor's
Commerce Advisory Council. Working with other Arizona business
leaders, they will transform the Department of Commerce into an
engine for job creation.
“Finally, I will convene a summit of leading CEOs of
national and international companies in the near future to discuss
job creation opportunities in Arizona.”
California
Gov. Arnold Schwarzenegger, State of the State Address,
Jan. 6, 2010
“The first priority for the coming year, obviously, is to
get the economy and to get jobs back. …
“... (Y)ou will receive a $500 million jobs package that
we estimate could train up to 140,000 workers and help create
100,000 jobs. …
“… (S)ince we want California to be the dynamo of
green technology, I ask you to pass our proposal exempting the
purchase of green-tech manufacturing equipment from the sales tax.
…
“… Spending 45 percent more on prisons than
universities is no way to proceed into the future. So I will submit
to you a constitutional amendment so that never again do we spend a
greater percentage of our money on prisons than on higher
education.”
Idaho
Gov. Butch Otter,
State of the State and Budget Address, Jan. 11, 2010
“... (W)e soon will be submitting reports from my
Business and Innovation summits to germane committees of the
Legislature on what we’re hearing from Idaho businesses.
… you will see calls for continuing the work of our
Innovation Council toward making it easier to move great ideas at
our universities to great products and services in the
marketplace.”
Iowa
Gov. Chet Culver,
Condition of the State Address, Jan. 12, 2010
“Job creation and job retention are incredibly
important. So, I’m asking you to fully fund community
college job training, and to adequately fund the Department of
Workforce Development during these challenging times. And, to
create more ‘green collar jobs’ of the future, to fully
fund the Iowa Power Fund.
“In addition, to help create more jobs, invest further in
our infrastructure, stimulate our economy, and continue our flood
recovery efforts, I look forward to working with you to best
allocate the remaining $100 million dollars of our I-JOBS
initiative in FY11.”
Kansas
Gov. Mark Parkinson,
State of the State Address, Jan. 11, 2010
“The second initiative that I want to propose is that we
continue to move forward with energy policy in Kansas; 2008 was
about building wind farms in Kansas, 2009 was about bringing wind
manufacturing jobs and transmission to Kansas. Let’s make
2010 about making Kansas a national leader. We should lead the
country in renewable energy.
“Accordingly, I have asked Lieutenant Governor Findley to
lead a Cabinet team who will make sure that we take advantage of
every opportunity to continue to bring transmission, wind farms and
green jobs to Kansas. It is our destiny to provide clean energy to
the rest of the country and Lieutenant Governor Findley will lead
the way to make that happen.”
New York
Gov. David Paterson, State
of the State Address, Jan. 6, 2010
“Unfortunately, our Empire Zone program is no longer
working. So, as I said last year, we are going to put it where it
belongs – in the past. We are no longer going to provide tax
credits for businesses that do not provide the jobs that we were
promised. Instead, we will replace it with the Excelsior
Program.
“This will be a New Economy jobs program that will focus on
the clean energy and high-tech growth jobs of tomorrow. This
program will be sustainable. It will be one that we will all be
proud of because it will be open and it will be transparent.
…
“… We have come back with three aggressive initiatives
targeted for growth industries, such as clean energy, broadband,
information systems, and bio-technology.
“This, combined with our “45 by 15” energy plan
and a $25 million investment in a new technological fund for
entrepreneurs, will create the kind of encouragement for capital
investment, will spur innovation, and create tens of thousands of
jobs to go along with the 50,000 jobs that will be realized from
our great “45 by 15” energy plan, which converts
electric use to clean and renewable energy sources. …
“… So, the Excelsior Jobs Program will be the
centerpiece of the most aggressive jobs-creation agenda in our
State’s history. But it is only one piece. We are emerging in
New York and all around the globe toward an economy – one
based on knowledge, technology, and innovation. …
“… We will create and we will support the
environments of investment, which is why our Administration is
working on a plan to bring first-stage capital to first-stage
technological development.
“The five largest patent-holding companies that exist
right here in New York, average about $11 billion worldwide in
research and development. The Research and Development tax credits
will incenvitize them to put more resources into New York and have
a better relationship with our universities, both public and
private. …
“… We will also go back to the historic
manufacturing industry and make it whole again – with tax
credits and also with retrofits for small businesses; with a
reformed Power for Jobs Program; and a cutting-edge and
groundbreaking concept of buying up, retrofitting, and reselling
abandoned manufacturing sites. …
“… Now, we also have to address the decades in which
Upstate New York has suffered in recession – long before the
rest of New York and the country got there. We will do it by
extending the Erie Canal Research and Development
Corridor.”
Vermont
Gov. Jim Douglas,
State of the State Address, Jan. 7, 2010
“There are additional investments in economic development
that we can make now. I renew my call to use nearly $9 million from
the federal stimulus act for job creation. This money will help
train workers, provide access to capital for small businesses and
farms, promote tourism and enhance our telecommunications
infrastructure. …
“… The final stop for Vermont’s high-speed
network is in every home and workplace. … But for families
and businesses that want to get connected and are still not served
by high-speed internet, I propose a “Backroads
Broadband” program to spur local providers to build last mile
connections.”
Washington
Gov. Christine Gregoire,
State of the State Address, Jan. 12, 2010
“Washington has always been a state that attracts capital
— both financial and intellectual. We need to keep that
tradition going, and one way to do that is to stimulate capital
investment in biotechnology, software development, health care,
clean technology, renewable energy, aerospace and other industries
that will drive our future. The goal is to attract $2 billion in
capital investments to fuel job growth. …
“… I will create the Clean Energy Business Development
Program to position Washington to be a leader in the clean energy
economy and keep us competitive globally. …
“… Now is the time to be more practical in the way
we do business. Over the years, the Department of Commerce has
become a hodgepodge of programs. This session I am asking you to
move 25 programs out of the Department of Commerce so it can focus
on its critical core mission, and programs can be better aligned to
meet the needs of their customers.
“… I’m asking you to provide funding to our
community and technical colleges to retrain 2,500 of our workers
for the jobs of tomorrow. And I’m requesting you provide our
four-year institutions with competitive tuition flexibility so we
can continue to be ranked among the best in the nation in producing
the most innovative workers and employers.”
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Philadelphia to Encourage College Attendance
In an effort to improve the percentage of city residents with
college degrees, Philadelphia Mayor Michael Nutter announced his
administration will be opening an office within City Hall to help
potential students considering higher education. The
“PhillyGoes2College” office will direct residents to
assistance with filling out financial aid forms and applications,
preparing for standardized admission tests, and writing college
essays. In addition, the first-term mayor stated a goal of
attaining up to 1,000 fully funded college scholarships for city
students from the region’s universities by the end of 2012,
according to the Philadelphia Inquirer. More details on the
PhillyGoes2College initiative is available at: http://www.phila.gov/residents/education/fafsa.html.
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Baton Rouge Area Chamber: Statewide TBED Organization
Needed
The Baton Rouge Area Chamber (BRAC) has released the second and
final component of its strategy advocating the need to advance a
tech-based economy throughout Louisiana. The white paper focuses on
the topics of entrepreneurship, workforce development, risk
capital, and coordinating TBED efforts at the state level. For
example, BRAC calls for all returns from state funds invested in
venture capital firms to be reinvested, for regional angel networks
to be supported, and for the state’s angel investor tax
credit to be reinstated. The second part of The Innovation
Economy in Louisiana is available at:
http://www.brac.org/research.
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Los Angeles County Adopts New Strategy for Job
Creation
The Los Angeles County Economic Development
Corporation has approved what is being called the region's first consensus strategic
plan for economic development. The plan includes support for local
research and commercialization activities, sector-based worker
training and placement programs and provides assistance to
entrepreneurs. Read more at: http://www.lacountystrategicplan.com.
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Feds, Private Companies to Invest $250 Million in
STEM Teacher Training Programs
President Obama announced five new public-private
partnerships to train more than 10,000 new math and science
teachers over the next decade. The partnerships, part of the White
House's "Educate to Innovate", represent a $250 million investment
in STEM education. Read the announcement at: http://www.whitehouse.gov/the-press-office/president-obama-expands-educate-innovate-campaign-excellence-science-technology-eng.
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North Dakota Centers of Excellence: $16.56 Impact for Each
State Dollar spent So Far
Providing strong evidence for how
public investments in research and TBED pay off even on a short
time horizon, a recent impact analysis calculated the total impact
from the first $19.9 million North Dakota spent over the past
four years for the establishment of 20 Centers of Excellence across
the state. The analysts from North Dakota State University reported
a combined cumulative impact of $329.5 million for the 30 months
ending June 2009. The total includes both direct reported results
and estimates for indirect impacts. Already, the centers and their
client businesses reported direct employment growth of 921.5 jobs.
The centers also had captured $115.5 million in match and federal
research leverage from the state’s initial investment. The
analysis concluded because of the Centers, seven new spin-off
companies were created, five companies expanded within North
Dakota, and five companies expanded to the state. An additional
$42.4 million has been disbursed to the centers or awaits future
allocation by the state. The full report is available at: http://www.commerce.nd.gov/news/detail.asp?newsID=610.
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Brookings: Recovery Underway by 3Q 2009 but Uneven Among U.S. Metros
Since the start of the recession, the strongest performing
metropolitan areas are located in the southern midsection of the
U.S., especially in Texas, and around upstate New York and the
Missouri River Valley, according to the most recent edition of the
Brookings Institution’s MetroMonitor series. The brief
examines each of the largest 100 metropolitan areas in the U.S.
using 3Q 2009 data gauging changes in employment levels,
unemployment rates, gross metro products, and housing prices.
Brookings found only six metro areas, Albuquerque, Austin, McAllen,
San Antonio, Virginia Beach, and Washington D.C. had regained their
pre-recession peak of gross metro product by the end of the third
quarter. The latest version of Brookings’ MetroMonitor
is available at: http://www.brookings.edu/reports/2009/06_metro_monitor.aspx.
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Fourth Quarter Increases Cannot Salvage Slow Year for Venture
Capital Exits and Fundraising
U.S. venture capital fundraising and venture-backed
exits improved marginally in the fourth quarter of 2009, despite
having a very slow year overall, according to the National Venture
Capital Association (NVCA). Venture fundraising increased to $3.8
billion in the last quarter, an 82.6 percent increase over the
previous quarter but still far short of fundraising levels in
recent years. While investors expect activity to grow in 2010, most
predict that the industry will remain smaller than its scale in the
1990s and 2000s, with fewer firms and increasing focus on
late-stage deals.
Overall, 2009 was the weakest year for fundraising
since 2003. Investors committed only $15.2 billion to 120 funds
last year, down from $28.6 billion in 223 funds in 2008, which was
also a difficult year for fundraising activity. In 2007, investors
committed dollars to 250 funds. Last year fewer funds were raised
than any year since 1993. The NVCA report suggests that the
decrease in the number of funds points to an industry that is
rebuilding itself as a leaner, more efficient enterprise, with
fewer firms and more experienced investors.
Though there were some signs of improvement in
venture-backed exits last year, the last two years have been the
weakest consecutive years for initial public offerings (IPOs) since
the mid-seventies. Mergers and acquisitions (M&A) remained low
in 2009, though during the fourth quarter, the the total disclosed
value of M&As grew to its highest level since the end of 2007.
The number of IPOS more than doubled in 2009 over the previous
year, increasing from 6 to 13, but not approaching the 86 IPOs that
occurred in 2007.
Two recent surveys, however, indicate that venture
capitalists are optimistic about the industry's prospects in 2010.
A KPMG survey of 100 venture capitalists and entrepreneurs in the
U.S. found that most expect an industry revival in the coming year,
with increases in dealflow, total investment dollars, valuations,
fundraising and exits. Last year, 88 percent of the respondents
predicted that activity would remain flat or decrease. This year,
79 percent expect an increase in investment activity, though that
increase is predicated on the extremely low levels of activity in
2009.
Read the KPMG report at: http://www.prnewswire.com/news-releases/venture-capitalists-turn-positive-on-investment-levels-and-ipos-in-2010-kpmg-study-finds-80711702.html.
NVCA's annual survey of industry predictions from
venture capitalists also found that the community expects an
increase in investments, but revealed more diversity in
expectations of where the industry is headed. Sixty-three percent
of respondents predicted an increase or continuation of 2009 levels
of investment. Most of the sample also expect more or the same
number of companies will receive venture capital. Though this might
be good news for entrepreneurs seeking capital, respondents also
expect the venture industry as a whole to contract in the near
future. Ninety percent believe that the number of venture firms
will decrease over the next five years, and that an increasing
amount of U.S. venture capital investments will focus on
later-stage deals and opportunities overseas.
Read the survey results at: http://www.nvca.org/index.php?option=com_docman&task=doc_download&gid=531&Itemid=93.
Find additional venture capital updates at: http://www.nvca.org/.
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Recent Research
Driving Innovation and Growth in 21st Century
City-Regions
Give a star academic researcher a full year to reflect on what
the world understands so far about regional innovation and
city-region dynamics and to offer suggestions to guide future
economic development initiatives to encourage growth and the
results are valuable for both his homeland of Canada and its
southern neighbor, the U.S. The Conference Board of Canada named
University of Toronto professor David A. Wolfe its 2009 CIBC
Scholar in Residence in May of 2008. His lecture and the resulting
report, 21st Century Cities in Canada: The Geography
of Innovation, is enlightening, insightful, and
frustrating – the final adjective because we should, but do
not, have the same well grounded and succinctly articulated
understanding of how American cities-regions function systemically
to encourage or thwart innovation and competitiveness.
It is increasingly clear, as Dr. Wolfe points out, well
functioning city-regions are the principle centers for innovation.
It isn’t particular companies or universities or federal
research institutions or even particular individuals. It is
all of them acting and interacting consciously and unconsciously
within particular geographic places and across them through the
Internet, World Wide Web, social media and more traditional means
of connection. Understanding the social dynamics of
innovation and creativity and the economic dynamics of city-regions
is critical to formulating public policy so city-regions
effectively nurture and sustain those dynamics.
Keys for Dr. Wolfe are:
- Facilitating the movement away from government to strategic
governance that blurs the boundaries between public and private
actors for designing, implementing and managing innovation and
economic development policy;
- Encouraging more civic engagement that integrates a broader
swath of community stakeholders into the entire public policy arena
for the city-region; and
- Strengthening global embeddedness of the city-region to
positively affect knowledge flows contributing to innovation and
economic growth.
Reading the Monograph
If you are looking for an
impartial, concise summary of specialization/cluster and
diversity/creativity theories for regional innovation (without the
personalities, drama and bias we currently see between both camps
in the U.S.), spend some time in the first two chapters of Dr.
Wolfe’s monograph.
Size matters. If you want to understand the different roles
large, mid-sized and small city-regions play in supporting a
national economy, particularly as roles evolve along with global
economic transformation, pore over the third chapter.
If you want to better understand the theory, the academic
research and the actual practice of making the transformation of
government to strategic governance, delve into the fourth chapter.
The principles of collaboration and partnership and the real
practice of moving from government to governance are fundamental
for effective TBED.
The fifth chapter explores methods a variety of Canadian
city-regions have adopted to broaden civic engagement and
involvement. The lessons and obstacles faced when attempting
multi-jurisdictional collaborations should prove useful for most
U.S. city-regions, where the number of political jurisdictions
potentially involved is greatly expanded (large metro core cities,
older suburbs, new suburbs, hinterland communities, townships,
counties, regional authorities, states etc).
The final chapter lays out the challenges and choices for
Canada’s city-regions. As throughout the monograph, the
advice carries south of the border. Dr. Wolfe points out not all
cities can make the transformation smoothly or to meet unrealistic
aspirations of political leaders. This is particularly true as
globalization leads to further concentrations of control of
financial and informational sectors in fewer cities, truly world
cities. The hierarchy of city-regions will continue to evolve as
the national urban system is transformed by global economic
factors. Yet the same keys of strategic governance and broader
civic engagement are critical for smoothing the transition to their
new roles that still will require solid policies for supporting
innovation and creativity.
21st Century Cities in Canada: The Geography of
Innovation is available at: http://www.conferenceboard.ca/documents.aspx?DID=3311.
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Staff Picks
Administration Announces Stimulus Funding
The Administration announced recipients of several competitions funded through the stimulus package, including:
More Americans Setting Down Roots
The New York Times asked eight experts to consider the implications of Americans becoming less nomadic.
Read more...
Corporate Capital Becoming Scarce
Scott Shane explores why corporate venture capital has decreased over the last decade.
Read more...
... Except for Biotech Capital
Meanwhile, big pharma is upping the amount going to biotech start-ups with $37B flowing in 2009, according to Burrill & Co.
Read more...
IA Evaluates R&D Credits
Iowa study sees little return on its research tax credits. (We saw the link to the article in this week’s Lipper Current)
Read more...
MD Eyes Federal Cybersecurity Funding
Maryland is targeting the cybersecurity industry.
Read more...
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