In This Week's Issue
SSTI News and Analysis
Tech Talkin' Govs: Part III
The third installment of SSTI's Tech Talkin' Govs' series includes
excerpts from speeches delivered in Delaware, Hawaii,
Massachusetts, Mississippi, and Utah. The first and second
installments are available in the Jan.
11 and Jan.
18 editions of the Digest.
Delaware
Gov. Jack Markell,
State of the State Address, Jan. 19, 2012
"Following up on the recent
"Imagine Delaware' forum
sponsored by the News Journal, we are finding new ways to
support entrepreneurs. Over the last months, we studied best
practices at entrepreneurial support centers around the country...
Working with Representatives Lavelle and Bryon Short and groups
like First State Innovation, we will apply what we have learned to
further support emerging start-ups and growing companies in
Delaware."
Hawaii
Gov. Neil Abercrombie,
State of the State Address, Jan. 23, 2012
"Not only is it important to emphasize brick
and mortar, we must also build an infrastructure for technology to
meet the demands of the 21st century. This is the intellectual and
social infrastructure that we must have to provide opportunities
and experience for our people to become an advanced workforce that
can compete in the global marketplace.
"We will move forward on our Hawai'i Broadband
Initiative by requesting $2.9 million to enhance online services
for eHawaii.gov, advance research for transpacific fiber landing
stations statewide, and initiate a
'one-to-one' laptop program
for Hawai'i's public schools, to provide laptops
for every student."
Massachusetts
Gov. Deval Patrick,
State of the Commonwealth Address, Jan. 23, 2012
"... We need a unified community college
system in Massachusetts. In a unified system, students would find
courses specifically tailored to meet local workforce needs
alongside a core curriculum that emphasizes STEM subjects and with
credits that are easily transferable to another community college
or a four-year college. ...
"... To support this mission, I will propose
in my budget to streamline the funding and governance of community
colleges, and to increase overall funding by $10 million. I
challenge the business community to match that new funding with an
additional $10 million. I also propose to channel more state
workforce training dollars through the community colleges. With
this sharper focus, simpler structure, increased funding and
greater accountability, community colleges can help us better
prepare people for the middle skills jobs of today and
tomorrow."
Mississippi
Gov. Phil Bryant, State of the
State Address, Jan. 25, 2012
"Also, I am transmitting to the legislature
the Energy Sustainability and Development Act of 2012. This will
create incentives for manufacturing and industrial employers to
make energy efficiency upgrades that result in significant savings,
allowing them to be more competitive, retain or hire more workers,
and further invest in their operations. It will create the Biomass
Center for Excellence, which will be a partnership of the public,
private, and education sectors to coordinate and promote biomass
research, development, and manufacturing."
Utah
Gov. Gary Herbert, State
of the State Address, Jan. 25, 2012
"... [W]e must also innovate safer and cleaner ways to extract
natural resources and utilize energy. As Governor, I am calling on
the private sector and our major universities to lead out! Our goal
is to create an 'energy research triangle' that launches Utah into
a new era of energy technology innovation!"
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TBED Community Represented During State of the Union Address
A recent invitation from the White House to a high-tech entrepreneur who grew his company with help from TBED programs signifies the important role of high-growth companies for improving our nation's competitiveness. Hiroyuki "Hiro" Fujita, founder and CEO of Quality Electrodynamics, a medical device company founded in 2006, was invited to attend the State of the Union address as a guest of the First Lady upon recommendation from Cleveland Clinic Innovations, an SSTI member. At the request of the Office of Science and Technology Policy, SSTI surveyed members in five cities for suggestions of technology entrepreneurs to be invited to sit in the First Lady's box and the White House selected Mr. Fujita. Read more...
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Alabama Plan Calls for Legislative Agenda Focused on
Innovation
Alabama's new strategic plan defines three
economic development drivers to help diversify the
state's economic development efforts and
maximize opportunities for growth. Programs that focus on job
creation through innovation, entrepreneurship, R&D, and
commercialization are listed among the
"renewal" efforts of the three-part
plan. This includes establishing a statewide innovation council,
designating funds to expand commercialization programs, and
creating a mechanism to provide state grant matching for SBIR/STTR
awards.
Similar to the economic gardening concept that has emerged in
many other states, the Alabama plan moves away from pure
recruitment efforts and focuses on creating and fostering a system
that enhances the growth potential of jobs through technology
developed within the state. Creating the Alabama Innovation Council
to serve as a statewide, coordinated initiative is imperative for
this effort to succeed, the report finds. Several tactics with
funding recommendations for achieving this type of growth are
outlined in the report, including:
Coordinating and Increasing Commercialization Efforts —
$2 million in state funds annually matched with $2 million in local
funds for:
- Integrating renewal allies including the
universities' Office for Technology Transfer,
Launchpad, angel investors, venture community and incubators;
- Developing pre-seed, seed, startup and early and late stage
support in conjunction with the venture community; and,
- Expanding Alabama Launchpad
Building R&D Capacity — $20 million annually from the
state and $20 million annually from other sources for:
- Selecting two or three targets of investment in research;
- Linking university and private research institutions around
targets and developing a plan to expand capacity;
- Creating a Commercialization Scholars program; and,
- Using the 501(c)(3) status of universities for tax credits for
contributions to support incubator initiatives.
Providing Financial Support for Innovation-based
Commercialization — unspecified state
general revenue and private-sector matching R&D dollars to:
- Increase financial commitment to Alabama Innovation Fund to a
minimum of $25 million;
- Create R&D tax credit;
- Create and fund Applied R&D Matching Grant program to
encourage private sector/university research partnerships;
and,
- Create Angel Investment and Tax Credit programs.
Developing a Legislative Agenda Focused on Innovation
- Drafting legislation and securing sponsors for a comprehensive
package to address creation of the Alabama Innovation Council;
creation of a Commercialization Scholars program; and, creation of
a mechanism for state support for grant matching for
SBIR/STTR.
Recruiting new business and industry and retaining programs that
focus on expansion of existing companies round out the
Accelerate Alabama plan, which is available at:
http://www.boyettestrategicadvisors.com/wp-content/uploads/2012/01/Accelerate-Alabama-Strategy-1-11-12-FINAL2.pdf.
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Maryland Gov's Agenda Seeks to Advance
Tech Commercialization
Building on the momentum of the InvestMaryland initiative
passed last session, Gov. Martin O'Malley
unveiled a joint venture between the state, federal research labs
and academic institutions to accelerate technology
commercialization. Under the Maryland Innovation Initiative,
participating universities would pay a fee of $250,000 each year
and, when leveraged with state funds and private donations, a pool
of money would be used to award grants to startup companies seeking
to advance research from Maryland labs. The program would be
administered by the Maryland Technology Development Corporation
(TEDCO). Legislation to establish the program was introduced as
SB
239.
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Invest Atlanta Intends to Focus on Jobs and
Competitiveness
Atlanta Mayor Kasim Reed unveiled Invest Atlanta
— the city's new economic
development authority that places a renewed effort on job creation
and competitiveness. Invest Atlanta will
work primarily to attract new investment, grow international trade, fuel
innovation and support entrepreneurship. Mayor Reed said,
"[Invest Atlanta] represents an effort to
modernize our approach to investment, attracting businesses,
foreign capital and trade."
Mayor Reed, who serves as chairperson of the nine-member
board of directors, also announced that the organization is
tasked with developing a new regional economic growth strategy.
Invest Atlanta intends to leverage the benefits of bond
financing, revolving loan funds, housing financing, tax increment
financing and tax credits to achieve their economic
development goals.
Invest Atlanta will be headed by President
and CEO Brian McGowan, former U.S. deputy assistant secretary of
commerce under President Obama. McGowan said, "Invest
Atlanta will continue to honor its traditional mission but
will place a renewed emphasis and focus on ensuring that
the city has the right atmosphere to help existing
companies grow and attract new companies. Our new name shows we
will work to get companies to invest in Atlanta creating
jobs and economic opportunity for all of our residents."
Visit Invest Atlanta's
website...
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U.S. Government, Universities Must Partner to Address Shifts in International Competitiveness, Report Indicates
A new report
from the Center for American Progress contends that increasing
globalization, connectivity, access and acceleration of technology
has caused an urgent need for investment in innovation. To resolve
this issue, the authors believe that the U.S. government and
institutions of higher education must work in partnership
"not only to accelerate its investments in
research and innovation but also to continually reevaluate and
redesign the traditional mechanisms (e.g., funding and public
policy)." Five main
recommendations are provided to stoke innovation
through and around universities by:
- Increasing investments in early stage research
— specifically targeted investments related to
high-risk, large-scale, transformational projects;
- Bridging the gap between early stage research and the
marketplace — by developing new policies that
support technology transfer, programs that increase knowledge flow
between academia and industry and partnerships that support
translational research and proof-of-concept projects;
- Refocusing federal economic development funding
— to regional and local ecosystems that develop
talent and create links between researchers and the private sector;
- Develop new, more comprehensive methodologies
— that measures the linkages between investments
in innovation and the broader impacts in human capital, new
products and jobs to drive better policy decisions and incentives
for innovation; and,
- Develop radical policy experiments and incentives
— that enable universities to be at the
forefront of trends in innovation and competitiveness as the future
mechanisms of innovation change.
The report provides specific policy prescriptions within each of
the five main recommendations including the establishment of an
independent Office of Innovation Analysis within the U.S. Treasury
Department and the expansion of the National Science
Foundation's Partnerships for Innovation. Read
the report...
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Useful Stats
High-Tech Concentration of State Economies 2003-2008
The most recent edition of the National Science
Foundation's Science and Engineering
Indicators presents some mixed results on the significance of
high-tech companies and jobs in the U.S. economy. In 2003, 8.17
percent of all U.S. businesses were classified as high-tech, based
on NAICS codes. By 2008, that share had risen to 8.52 percent. The
increasing representation of high-tech companies in the economy was
driven by a rate of high-tech business formation that kept growing
year after year until 2008, when more high-tech businesses were
eliminated than created.
During the same period, employment at high-tech businesses
decreased as a share of total U.S. employment from 11.96 percent in
2003 to 11.47 percent in 2008. The discrepancy may indicate the
impact of outsourcing during that period, which could decrease
high-tech employment even as new businesses proliferated.
SSTI has assembled tables of the state data provided in the NSF
report including high-tech business formation, high-tech business
establishments and high-tech employment and the proportion they
represent in the state economy. These tables include the share of all companies and
jobs that fall under high-tech NAICS codes. This data is also
available on the NSF site, along with a tool for comparing various
indicators among the states. Together, these indicators provide a
way to compare the importance of high-tech economies in various
states.
High-Tech Business Formation
High-tech business formation in most states was adversely
affected by the recession that began in 2008. That year, the U.S. lost
2,768 companies that were classified as high-tech. Thirty-one
states lost more high-tech businesses than they created that year.
Even in the 19 states that created new companies, the rate of
company creation declined. Only Arkansas increased its growth rate
over 2007. Only Colorado maintained a consistently high rate of
high-tech company throughout the period from 2004 to 2008.
High-Tech Business Establishments
Washington, D.C., has a higher percentage of high-tech companies
than any other state. In 2008, 14.78 percent of
D.C.s companies had high-tech NAICS codes.
Delaware ranked second, followed by Colorado and Virginia.
California and Florida had the greatest growth in total number of
technology companies between 2003 and 2008.
High-Tech Employment
Virginia, Washington and New Jersey have the highest percentage
of jobs within high-tech industries. In Virginia, about 15.95
percent of all jobs fall under high-tech NAICS codes. Even there,
the number of high-tech jobs fell in 2008 and decreased as a share
of total employment. Texas, Virginia, Florida and Georgia posted
the largest net gains in high-tech employment between 2003 and
2008.
View an index of NSF's Science and
Engineering Indicators 2011 and the State Data Tool at:
http://www.nsf.gov/statistics/seind12.
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Venture Capital Dollars and Deals by State 1995-2011
U.S. venture capital activity continued to rebound in 2011, with
total investment dollars reaching levels similar to venture capital
activity before the late-2008 drop, according to the latest data
from the National Venture Capital Association (NVCA) and
PricewaterhouseCoopers (PWC) Moneytree survey. Venture capitalists
invested $28.4 billion last year in the U.S., up 30.3 percent over
2010. The NVCA/PWC announcement ranks 2011 the third highest year
for investment in the past decade. Venture deals, however, grew by
only 12.1 percent, stemming from higher valuations and continued
support for portfolio companies.
Early stage investment activity grew substantially last year,
while seed stage investment declined. VCs invested $8.3 billion in
1,414 early stage companies, an increase of 47 percent in terms of
dollars and a 16 percent increase in deals over the previous year.
Early stage investments represented about 29 percent of all venture
dollars and 38 percent of deals, a modest increase over 2010. Seed
stage investments, however, declined by 48 percent in terms of
dollars to $919 million. Seed stage deals remained steady at 396.
These numbers indicate that even though the overall trend in 2011
suggest a preference for larger deals, seed stage deals experienced
a decline in average size.
Read the NVCA/PWC announcement...
SSTI has prepared tables of venture capital dollars investment
by state and venture capital deals by state from 2006-2011.
Additional data on venture dollars and deals from 1995-2011 is
available in Excel (.xls) format.
Most states shared in the increase in venture activity last
year. Among 2010's top ten states for venture
dollars, only North Carolina and Washington had decreases in
activity in 2011. The decline caused North Carolina to drop out of
the top ten for the year, replaced by Virginia where venture
dollars increased by 61.8 percent to $607.6 million. California,
which was the recipient of 51 percent of all venture dollars last
year, experienced a 32.1 percent increase in investment.
In the coming weeks, SSTI will prepare additional tables on
state share of national VC investment and per capital venture
dollars and deals.
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SSTI Events
High-Growth Companies: Identifying and Learning from
Them
Less than 1 percent of companies in Pennsylvania are
creating 74 percent of the net new jobs, according to a new
report.
SSTI kicks off the new webinar series Thursday, February 16 at
3:00 PM EST. The session highlights one of the most exciting and
revolutionary pilot programs of 2011. Formulated from a
groundbreaking
study, the
High Growth Initiative targets specific companies based upon
unique characteristics across a spectrum of industries. Click here to register.
Team PA will provide an insider's look at their new high-growth
pilot program, a program intended to learn from the region's higros
and potentially incorporate their best practices into economic
development policy. Attendees will have the opportunity to learn
about the characteristics of higros and what separates them from
other businesses.
Presenters:
Gary Kunkle, Founder, Outlier, LLC
Matt Zieger, President & CEO, Team Pennsylvania
Foundation
Register today — space is limited!
Members can attend a minimum of one webinar for FREE.
Contact Noelle at sheets@ssti.org to receive your promo code or become a
member.
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TBED People and Job Opportunities
Job Corner
The Maine Technology Institute seeks candidates for a
Business Innovation
Specialist with experience working in technology intensive
companies and an entrepreneurial outlook.
This is an exciting opportunity for a talented individual who has
an interest in business development and finance and wants to help
grow startup and existing companies in Maine. The
position is a professional member of the MTI Business Innovation
team and reports to MTI's Business Innovation
program manager.
Read more job postings
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Staff Picks
GAO Report Finds Overlap in Federal STEM Programs
To avoid potential duplication, the GAO recommends government
STEM programs need to be guided by a robust strategic plan.
Read more ...
Survey Finds Youth Unlikely to Enter STEM Fields
At the same time as the reported government overlap, a recent
study finds 60 percent of young people surveyed named at least one
factor preventing them from pursing work in this field.
Read more ...
State Funding for Higher Ed Continues to Decline
Inside Higher Ed reports on the annual Grapevine study,
which finds state funding for higher education fell 7.6 percent in
2011-12. The report offers a good comparative chart for
states' spending on higher education.
Read more ...
Private Donation Establishes Tech Commercialization
Fund
A University at Buffalo faculty member has donated anonymously
$1 million to establish a fund that supports commercializing the
discoveries and inventions of his colleagues.
Read more ...
FedDev Ontario Investing $5M for Advanced
Manufacturing
The funding will expand a program already in place to provide
manufacturers with more advanced software and help in implementing
new processes or materials.
Read more ...
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