In This Week's Issue
SSTI News and Analysis
SBA Official to Address SSTI Conference
Regular readers of the Digest know that
over the last year, SBA has launched a set of new programs and
initiatives, including support for cluster development, changes to
the SBIC application process, the revival of the FAST program, and
a request for information on mentoring and entrepreneurship
education for high-growth companies. At SSTI's
14th Annual Conference in Pittsburgh, Sean Greene,
SBA's Associate Administrator for
Investment and Special Advisor for Innovation, will provide an
update on what he and his colleagues at SBA have been working on
and are planning for the future. With SBA pursuing a larger role in
issues involving tech-based economic development, this session will
provide an excellent chance to understand what lies ahead for SBA
— and the opportunities presented for regional
innovation strategies.
Join us Wednesday, September 15, 10:45 A.M. -
12:00 P.M. to learn more about the federal
government's plan for small business assistance.
Register today ...
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MS Special Session Produces Incentives for Biofuels
Development
Lawmakers called into special session on Friday approved a $75
million incentive package for a Texas-based energy company to build
five biofuel facilities in the state expected to generate 1,000 new
jobs through a total $500 million investment. The package approved
by lawmakers also includes $4 million for a workforce training fund
through the state's institutions of higher
education and up to $2 million for biomass research at Alcorn State
University and Mississippi State University.
The state assistance package totals $81 million, which includes
$51 million in new bonds and $30 million available from a previous
state-level authorization.
Texas-based KiOR, Inc. will receive $75 million to build five
commercial-scale renewable crude oil production facilities in the
state, three of which will be built over the next five years.
Another $4 million is allocated to the Mississippi Development
Authority Workforce Training Fund and $2 million is available for
research on biomass usage in the production of renewable crude oil
at the previously mentioned universities.
The company plans to utilize Mississippi's
abundant supply of woody biomass to produce commercial volumes of
Re-Crude, a high-quality crude oil that can be refined into
conventional fuel products such as gasoline and diesel, according
to a press release.
The measure,
HB 8, awaits the anticipated signature of Gov. Haley
Barbour.
Learn More About Building Support from Legislators for
Tech-based Economic Development at SSTI Conference
Pressure on state budgets is at a historic high, and ultimately,
it's going to be state legislators that will make the decisions on
how limited resources are allocated. Whether you are part of a
state program, funded by local government, or are at a university,
state funding is going to have an impact on your program's
operations. This session will provide the opportunity to get candid
assessment from two legislators on what is needed to build support
for tech-based economic development in this tough environment and
what they see as the road ahead. Learn
more about the session.
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When it Comes to Energy Policy the Challenge is
"Striking the Right Balance," Shows
Report
By 2035, nearly 40% of all new energy capacity will come from
renewable energies according to a report from the National Conference of
State Legislatures (NCSL). However, one resource or technology will
not meet the energy needs of the future. It is necessary to develop
a comprehensive plan that includes a combination of many
technologies and resources. This plan may include energy
efficiency, natural gas, cleaner coal technologies, nuclear energy,
smart grid technologies and renewable energy. Local, state and
federal governments will play an important role in shaping the
future sources of energy, electricity transmission & delivery
systems and electricity production & supply system.
The NCSL report provides an analysis of current energy sources
(i.e., coal, natural gas, nuclear, renewable energies) and energy
infrastructure. It also provides a state-by-state breakdown of
energy costs. Currently, the energy sector faces many systematic
issues that arise from a growing population and an increase in demand
for electronic goods. Policymakers are tasked with the
responsibility of creating policy that will address effectively
price, energy security, environmental concerns and transmission
constraints. The report, however, warns that policymakers must
remember the energy policy decisions made today will have long-term
effects on the economic and environmental goals of the state or
region.
NCSL also provides a glimpse into the future of energy sources
and energy delivery infrastructure. Examining several
energy studies, the report provides a meta-analysis of the future
composition of domestic energy generation. The authors also discuss the
challenges and opportunities that will arise in the coming years
from energy efficiency, natural gas coal, nuclear, and renewable
energies. Renewable energies, the report states, should drastically
decline in cost due to federal and state investments.
Coal, however, due to mounting environmental and sustainability
concerns will need to look towards coal gasification and carbon
capture and sequestration to remain a viable energy source.
A list of "state policy options"
also is included in the NCSL report. It provides a toolbox of
policy alternatives currently utilized by states to shape energy
policy. They include policy options in coal technologies, natural
gas, transmission, nuclear energy, energy efficiency, and renewable
energies (including specific policies for solar, wind biomass,
geothermal and small hydropower). However, NCSL strongly encourages
states and regions to develop their policies and energy plan based
upon financing options, environmental impacts, and sources that are
economically viable for citizens. Read the
Report ...
Want a better understanding of the green economy? You
should attend the SSTI Annual Conference's
pre-conference session: The Energy Imperative: Maximizing Green
TBED Opportunities in Pittsburgh, PA, on September 14. During
this session, you will have the opportunity to
hear from and
speak with experts regarding the
future of energy. These experts will provide you the knowledge
necessary to develop a strong energy plan that address all the
issues described in the NCSL report. You also will have the ability
to ask them questions that may address the concerns you have
regarding your region's energy future. In a time
when issues surrounding energy — its source,
efficiency, conservation, recovery — permeate
every aspect of our lives, how could you miss an opportunity to
position your region at the forefront of the green revolution? Learn more ...
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Get the Answers You Need at
SSTI's Power Roundtable
SSTI is proud to premier a new type of event at
our
14th Annual Conference. The
Power Roundtable is equal parts best tips of the trade,
informational interviews, and speed dating. We'll start with
nationally recognized experts in six critical areas for TBED
providing a rapid-fire roundtable of their top four insider tips
for success — so you are guaranteed to leave
with two dozen of the most important lessons for better TBED
practices.
Each of the experts will then move to private
tables, giving practitioners a chance to ask their own questions
directly to gain insider perspective. At points in the session,
you may find yourself in a small group, having an insightful
discussion with other TBED practitioners. At other points, you may
be one-on-one with the expert, asking candid questions in a setting
where you don't need to worry about others. Join us Tuesday,
September 14, 9:00 A.M - 12:00 P.M for this one-of-a-kind
event.
Register today ...
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Metro's face "New
Realities," According to Brookings Institute
Report
The "New Realities" will have a
dramatic effect on the future of metros and the metro's effect on U.S.
economic growth and prosperity, according to a recent Brookings
Institute study. Metropolitan areas have changed from their
traditional groupings (e.g., Sun Belt vs. Rust Belt and Southwest
vs. North East) into a new demographic seven-category typology of
metropolitan cities. Metros that have diversified successfully were
among the "demographic winners" of
the 2000s. However, metros still face similar issues regarding an
educated and skilled workforce. The report's authors argues that local, state
and federal governments will have to enact legislation that will
sustain long-term economic growth and prosperity.
The top 100 most populated metropolitan areas were classified
into one of seven categories. Economic growth and educational
achievement were among the variables that shaped these categories.
These categories include:
- Next Frontier Metro Areas were the demographic winners
of the 2000s due to their ability to retain and attract an educated
& skilled workforce that has made them.
- New Heartland Metro Areas have attracted and
retained an educated and skilled workforce, but their economies are
mostly service oriented. This includes the "New
South."
- Diverse Giant Metro Areas retained and attracted
skilled workers, but face large income disparities. However, these
cities still play a prominent role in U.S. growth.
- Border Growth Metro Areas saw rapid population
growth, but struggle to develop a diversified and sustainable
economy due to a lack of an educated workforce.
- Mid-Sized Magnet Metro Areas lack a skilled and
educated workforce that keeps them from developing a diversified
and sustainable economy.
- Skilled Anchors have higher than average educational
achievement and have transitioned from manufacturing and shipping-related industries to a more diversified economy. They are mostly
located in the North East.
- Industrial Cores seem to be the most disadvantaged
areas having low educational achievement and have not been able to
transition from their industrial heritage to a diversified economy.
Metro areas that succeed in the 2000s created diversified
economies with an abundance of educated skilled laborers according to
the report. The researchers provide several recommendations that
the U.S. will need to take to make sure that metros continue to
drive the U.S. economy. They include:
- The federal government should focus on programs that improve
rates of education attainment versus just enrollment
- Border Growth and Mid-Sized Magnets should focus on programs
that attract and retain high achieving students and equip their
workforce with the skills necessary to keep them competitive in the
global economy.
- Diverse Giants and Next Frontiers need to develop
sustainability programs to maintain sustainable economic growth due
to increasing demand on metro infrastructure.
- New Heartland areas must develop programs that attract and
maintain highly-skilled workers in industry to develop a diversified
economy similar to the Next Frontiers.
- Skilled Anchors and Industrial Core areas will have to protect
against "brain drain." Even
though these two areas are at different stages of economic
development, they still face issues regarding their aging
population.
Educational achievement of young adults is another concern raised by
the study. Historically, generations have
"out-attained" the previous
generation's education achievement levels.
However, young adults' completion rates of higher education appear to be stalling, according to Brookings Institute
research. Large metros exemplify this growing disparity: 35-to-44
year-olds in large metro areas post higher degree attainment rates
than their 25-to-34 year-old counterparts. The flattening of higher
education completion rates will have direct effect on U.S. economic
growth. Due to the rapidly changing U.S. labor market increasing
demand for higher-levels of education and a more skilled workforce that
the future generation may not be able to supply, according to
researchers. The U.S. labor market's increasing demand for highly educated and skilled workers may not be satisfied if policymakers do not increase the educational achievement of young adults.
Read the Report ...
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Community Building Opportunities Galore at SSTI Annual
Conference
Where else other than an SSTI Annual Conference can
you awaken to an hour-long hatha yoga class, participate in a 5K
run or jog amid green spaces and local landmarks, calm your body
and mind through a 30 minute guided meditation session, and meet
new friends over dinner at some of the most popular restaurants in
town? SSTI's Annual Conferences are well known for incorporating activities to nurture
the soul of the community — our friends and
peers. With no additional cost associated with our
community-building activities, SSTI's conference
provides unmatched value for your dollar. Join your friends and
colleagues for Morning Hatha Yoga, Morning 5K
Run/Walk, Afternoon Meditation, and the Dine
A-Rounds.
Morning Hatha Yoga
6:30 A.M. Wednesday & Thursday
Now in its third year, SSTI's increasingly
popular yoga class again will be offered each morning. Yoga is a
fun activity that can produce powerful results and will wake up
your body, sharpen your mind, and clarify your spirit. Yoga
doesn't hurt, is only as difficult as you make
it, and allows you to proceed at an individual pace so
it's great for beginners as well as more
advanced practitioners. No sign up required. Just show up with a
mat or towel in the Sky Room.
Morning 5K Run/Walk
6:30 A.M. Wednesday & Thursday
New this year! There's no better way to get
the sense for a city's vibe and landmarks than
to immerse yourself in it. A brisk walk or jog with the
mid-September sunrise and a local host/guide and fellow
fitness-minded conference attendees is a great way to start the day
and maintain your exercise regimen while traveling. Route maps will
be provided if you'd prefer to travel at your
own pace. Meet in the hotel lobby.
Afternoon Meditation
5:00 P.M. Tuesday & Wednesday
Another new addition this year! Always crave a little quiet,
calming down time by yourself while attending bustling conferences?
Wondered what people actually do when they meditate or just curious
to try it? We will offer a soothing, guided, nonsectarian
meditation session immediately following the afternoon breakouts
— allowing you to join the National Innovation
Reception centered, refreshed and ready to fully re-engage with
your peers. No special attire or physical ability required and
chairs will be available for those who prefer. Beginners
encouraged. Meet in the Sky Room.
Dine
A-Round Pittsburgh
7:00 P.M. Wednesday
The Dine A-Round is a great time to take a break from learning
and network with old and new friends over dinner in some of
Pittsburgh's finest restaurants. With the conference in the heart
of downtown Pittsburgh, this year's Dine A-Round features nearby
restaurants for varied tastes and price points. Reservations have
been made for Wednesday, 7:00 PM immediately following the National
Innovation Reception for parties of eight .
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Recent Research
Who Creates More Jobs, Small or Young
Businesses?
It is often taken for granted that small
businesses are the primary vehicle of employment growth in the
private sector. While this is debated, academics have
struggled to demonstrate a strong inverse relationship between firm
size and job creation. A recent paper by John Haltiwanger of the
University of Maryland and Ron S. Jarmin and Javier Miranda of the
U.S. Census Bureau shows that once the data is adjusted to account
for firm age, there appears to be no systematic relationship
between firm size and growth. Instead, it is new businesses, of all
sizes, that play the most significant role in gross and net job
creation.
In Who Creates Jobs? Small vs. Large vs.
Young, Haltwanger, Jarmin and Miranda use data from the Census
Bureau's Longitudinal Business Database (LBD) to
sort out the interaction of firm age, size and growth. Using data
on non-farm business sector survival and growth from 1976 to 2005,
the authors find evidence that firm size is inversely related to
employment growth. Net growth rates tend to be higher for smaller
businesses than for larger companies. After adjusting for firm age,
however, this relationship disappears. Instead, age seems to be the
more important factor in growth. Startups account for only three
percent of employment, but almost 20 percent of gross job creation.
Youth appears to be more vital to this dynamic than size, according to the authors.
The authors suggest that previous studies that
linked business size and growth were hampered by the limitations of
their data sets. Other sources have been unable to accurately track
the relationships between firm size, age and growth, and often fail
to distinguish between net and gross growth rates. The authors
suggest that the LBD may be able to clear up other misperceptions
that have emerged without access to suitable data.
The key dynamic for startups is
"up or out", according to the
researchers. Young firms have a much higher likelihood of failure
relative to their older counterparts. When these firms fail,
however, they tend still to have few employees. If they survive,
young firms grow more rapidly than older firms, and, thus, make a
disproportionate contribution to net job growth. While the same
dynamic has been hypothesized for smaller companies, the empirical
data does not bear it out. The relatively high rate of failure
among new, small firms is offset by the lower failure rate of new,
larger firms and their growth. Small business startups contribute
more to new job creation than older, small businesses. In fact,
after adjusting for age, the authors found a slight positive
relationship between size and growth, indicating the larger
businesses may actually create more net and gross jobs.
The findings reveal how vital startups are in
job creation. New businesses have a remarkably high rate of gross
job creation and destruction. Over a five year period,
approximately 40 percent of all jobs created by startups will have
been eliminated due to the failure of these new firms. New firms
that survive, however, grow more rapidly than mature companies and
drive employment growth.
From this perspective, programs designed to
assist startups must accustom themselves to the idea that their
clients will frequently fail, but successful startups have a
disproportionate impact on state and regional employment.
Purchase Who Creates Jobs? Small vs. Large
vs. Young ($5) at:
http://papers.nber.org/papers/w16300#fromrss.
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TBED People and Job Opportunities
TBED People
Kevin Carr was named CEO of Kansas Technology Enterprise Corp.,
after serving as interim leader since June 2009. KTEC is a
public-private partnership charged with promoting tech-based
economic development throughout the state.
Jo Anne Goodnight will resign her position as director,
Division of Special Programs for the National Institutes of Health (NIH)
SBIR/STTR program effective Sept. 17 after 21 years at NIH. Ms.
Goodnight has accepted a program manager position in the private
sector.
Kerry Taylor was hired as first director of the
state-created aerospace
innovation hub in Dayton, OH. Kerry, who retired from the Air
Force in 2005, will focus on attracting more aerospace companies to
the Dayton area.
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