In This Week's Issue
SSTI News and Analysis
Virginia Gov's Amendments Would Restore
Funding for Research, Life Sciences
While touting broad support from lawmakers for his 2012
legislative agenda during the regular session, Gov. Bob McDonnell
also expressed concern about several economic development and
education initiatives left out of the 2012-14 biennial budget
passed by lawmakers during a special session that ended last month.
Just in time for the deadline, Gov. McDonnell submitted $43.9
million in budget amendments, which include restoring funds for
research, life sciences and teacher recruitment.
Within the Office of Commerce and Trade, the governor is asking
for $2.5 million each fiscal year ($5 million total) to partially
restore funding for a life sciences initiative that was included in
the proposed budget bill and later removed. The research consortium
would be comprised of higher education institutions that would
contract with private entities, foundations and other government
sources to capture and perform research in the biosciences. The
original proposal called for $10 million over two years to fund the
effort.
In order to provide the same level of funding each fiscal year
for the Growth Acceleration Program (GAP) and Commonwealth Research
and Commercialization Fund (CRCF), the governor is asking lawmakers
to add $3 million in the second year of the biennium. These funds,
administered by the Center for Innovative Technology, provide loans
and matching grants to advance science and technology-based R&D
and incentivize commercialization. The budget approved by lawmakers
allocates $3.2 million in FY13 and $2 million in FY14 for the GAP
fund and $4.8 million in FY13 and $3 million in FY14 for the CRCF
fund. As part of the governor's efforts to
support R&D and commercialization, lawmakers last year approved
$10 million for both funds (see the March
9, 2011 issue of the Digest).
To continue the state's efforts in attracting
new companies, the governor asked lawmakers to restore a portion of
funds for the Governor's Development Opportunity
Fund ($6 million) and the Workforce Retraining Fund ($1
million).
Lawmakers
supported many of the governor's K-12 education
proposals, including a teacher recruitment
initiative to attract the best
and brightest educators. The governor's
amendment to the budget adds $300,000 in FY13 and $400,000 in
FY14 for the pilot program, which he says will help prepare math
and science teachers and ensure students are equipped with
knowledge of science, technology, innovation and math necessary for
future job success. The budget passed by lawmakers also includes $230 million in new
state funds for higher education — about the
same amount proposed by the governor.
The General Assembly will reconvene May 14 to take up the
governor's amendments. The enrolled 2012-14
budget is available at: http://lis.virginia.gov/122/bud/budsum/HB1301e.pdf.
The governor's amendments are detailed in
http://lis.virginia.gov/cgi-bin/legp604.exe?122+amd+HB1300AG.
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SBA Invites Licensing Applications for New $1 Billion Early
Stage SBIC Initiative
The Small Business Administration (SBA) is now accepting the
first stage of the licensing process for the new five-year $1
billion Early Stage Small Business Companies (Early Stage SBICs)
initiative. In 2012, the SBA may commit up to $150 million to
support eligible investments funds focused on early/seed stage
investments. By licensing and guaranteeing leverage to these
investment funds, SBA intends to help early stage small business
overcome the valley of death, the period when it is difficult for
early stage businesses to access capital due to the lack of
necessary assets or cash flow for traditional bank funding.
Interested investments funds must complete the four-step
licensing process starting with a Management Assessment Questionnaire
(MAQ). Once licensed, Early Stage SBICs may receive SBA-guaranteed
debenture leverage of up to 100 percent of their regulatory
capital, maximum of $50 million per fund. Licensed Early Stage
SBICs are required to have a 1:1 match with private capital for all
investments in U.S. based small businesses and must pay SBA fees (1
percent commitment fee, 2 percent draw fee, examination fees and
licensing fee). To become a licensed Early Stage SBIC, an
investment fund must:
- Have a minimum of $20 million in regulatory capital when they
submit their licensing application in July 2012;
- Commit to invest at least 50% of their investment dollars in
early stage small businesses; and,
- Pass the MAQ.
Applicants must submit their Management Assessment Questionnaire
by June 19. Read more about the initiative...
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Proposals Requested for $45 Million Pilot
Institute for Additive Manufacturing
Three federal agencies (Departments of Commerce, Defense and
Energy) are accepting applications for the establishment of a $45
million pilot Institute for Additive Manufacturing. The federal
agencies intend for the Institute for Additive Manufacturing to
accelerate research, development and demonstration in additive
manufacturing and transition technology to manufacturing
enterprises within the United States. It will serve as a
proof-of-concept for the potential subsequent institutes in the
National Network for Manufacturing Innovation (NNMI)
— a network composed of up to fifteen institutes
for manufacturing innovation around the country, each serving as a
hub of manufacturing excellence in a specific research area.
The primary applicant must be an institution of higher education
or a nonprofit organization. However, applicants should collaborate
with industry partners and other key stakeholders in the
establishment of the institute. The federal agencies also strongly
desire a cost sharing (including in-kind such as equipment,
facilities and manpower) of 50% recipient and 50% government. State
and local funding (not originating from federal funds) will be
considered, as well as private sector investment. Interested
organizations should submit their proposals by June 14, 2012. Read
more about the
initiative...
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NIST Releases RFI on
NNMI
The National Institutes of Standards and Technology (NIST) has
released a request for information (RFI) on the National Network for
Manufacturing Innovation. Responders to this RFI should address one
or more of the 21 questions found in the document. NIST intends for
these comments to help shape the new program that will be funded in
2013. Comments are due October 25, 2012. Read the RFI...
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Michigan Program Puts Professors in Charge to Encourage Bold
Research
A new $15 million pilot program at the University of Michigan
(UM) hopes to make a big impact in the research world by letting
professors follow their instincts and allow breakthroughs to happen
more naturally. Under the MCubed initiative, three researchers from
different disciplines agree to work together or
"cube" on a high-risk, high-reward
idea. They also receive funding to hire students or a postdoctoral
researcher. The university expects to fund research in the
exploratory phase that could eventually lead to larger traditional
grants. Read
more...
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Iowa Governor Announces Statewide STEM Network
Iowa Governor Terry Branstad announced the first major
initiative of the Governor's STEM Advisory
Council, a public-private partnership of six regional STEM network
hubs to promote STEM education and economic development. Each of
the hubs will be housed at one of the state's
universities or community colleges, and will coordinate local
programs with businesses, nonprofits and other institutions in
their regions. The six winning hub applications are available
online and lay out the hubs' individual
approaches to elevating the quality of STEM education and matching
efforts with the needs of local employers. Read the announcement...
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Large Metros Dominate U.S. Manufacturing Landscape, Brookings Finds
A large majority of U.S. manufacturing jobs are located in large
metropolitan areas, according to a new paper from the Brookings
Institution Metropolitan Policy Program. In 2010, about 79.5
percent of manufacturing employment was centered in large metros
and in central metropolitan counties. Over the past two years,
however, there has been a slight shift in manufacturing activity
back towards non-metro areas, as U.S. manufacturing has experienced
a small resurgence. On the whole, the move towards metropolitan
areas since 1980 has been healthy for the national economy, since
it has allowed different cities to develop specialized industry
clusters, according to the report.
The country's top 100 largest metropolitan areas and central
metropolitan counties account for most U.S. manufacturing jobs, and
an even larger majority of high-tech manufacturing employment.
These regions encompass about 78.6 percent of moderately high-tech
manufacturing jobs, and about 95 percent of jobs in very high-tech
industries. Very high-tech industries include those in which
science and engineering occupations represent more than five times
the national average of total industry employment. These include
computer and electronic product manufacturing, pharmaceutical and
medicine manufacturing and aerospace product and parts
manufacturing. More than 30 percent of employment in each of these
industries exceed 30 percent.
High-tech manufacturing jobs appear to have flourished in metro
areas due to the advantages offered by the agglomeration of related
industries, research centers, pools of highly-skilled workers and
access to other specialized resources. This also has led to
specialization in the manufacturing industries of U.S. cities.
Urban industry clusters vary greatly between cities and offer
unique sets of benefits to businesses in different metros. The
reports lays out six different categories of metropolitan
manufacturing specialization groups, which demonstrate some general
trends about how these specializations have evolved.
The authors suggest that the advantages of strong urban clusters
and the potential environmental benefits of centralized
manufacturing should be encouraged, and that the movement of
manufacturers away from cities over the past two years is
undesirable. Federal, state, local and metropolitan leaders should
implement strategies, policies and programs that foster the
development of urban clusters that promote innovation and
collaboration. Policy leaders also should step in to discourage
smokestack chasing through tax abatements and right-to-work laws.
These sorts of policies merely promote the poaching of
manufacturers from other states and lead to the haphazard
agglomeration of unrelated businesses.
Read Locating American Manufacturing: Trends
in the Geography of Production at:
http://www.brookings.edu/reports/2012/0509_locating_american_manufacturing_wial.aspx
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Startups Continue Several Multi-Decade Declining
Trends, According to Kauffman Study
The pace of business startups in the U.S. has
exhibited a long-run decline that started in the early 1980s and has
continued through 2010, according to a new report
— Where Have All the Young Firms Gone?
— from the Kauffman Foundation. Using
data from the U.S. Census Bureau's Business
Dynamics Statistics (BDS), the report found several other long-run
declines in the business activity of U.S. startups and young firms
(defined here as firms aged five or less) between 1980 and 2010
including:
- A steady decline in the rate of job creation by
business startups (as a percentage of all firms) from almost 13
percent in 1980 to less than 8 percent in 2010;
- The share of young firms has declined from close
to 50 percent in 1980 to less than 35 percent in 2010;
- A steady decline share of job creation from young
firms has fallen from above 40 percent in 1980 to around 30 percent
in recent years; and,
- The share of employment accounted for by young
firms has fallen from more than 20 percent in 1980 to as low as 12
percent in 2010.
According to the data, these declining national
trends were accelerated by the great recession and have not
recovered.
Kauffman researchers also looked at state-level
data and found long-run (between 1980 and 2010) and short-run
trends (between 2006 and 2010) in the business activity of young
firms. Utilizing state-level BDS data, they found that long-run
declines in business activity by young firms have been present
across all states, but with varying magnitude. A common trend
emerged in states with the largest declines in business activities
by young firms — they are the states that had
some of the highest initial shares of business activity in the
1980s. In the short-run, states with the greatest net contractions in
the great recession also exhibited the largest decline in the share
of activity accounted for by young businesses.
Although no long-term regional patterns exist, there
were discernible regional patterns in the short-run. The largest
declines in business activities by young firms are concentrated in
the West, Southwest and South. Read the report...
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TBED Events
NIH Conference to Examine Changing Face of SBIR
Registration is now open for the National Institutes of
Health's (NIH) 14th Annual SBIR/STTR Conference
in Louisville, KY, May 30-June 1. This year's
event, titled "The Changing Face of
SBIR/STTR," will provide insight into NIH funding
opportunities and program changes. Learn more...
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Staff Picks
Drop in Unemployment Largely Due to Shrinking Labor
Force
Analyses by two economists show growing baby boomer retirements
are behind most of the decline. Some fear unemployment will rise
again when better job prospects draw back discouraged workers.
Read more...
Awareness Helping States Design Smarter Incentive Packages
While much has been said on the irresponsible deployment of
incentive packages by state and local governments, awareness of the
organic regional nature of job creation also is on the rise.
Read more...
NVCA 2012 Yearbook Analyzes Stats on U.S. VC Industry
The publication includes metrics on commitments made to venture
capital funds, venture capital investments into entrepreneurial
companies and venture-backed exits.
Read more...
Deaths Exceeding Births in one-third of U.S. Counties
This article from New Geography also finds the
world's population — with the
exception of Africa and a few others — will
stabilize mid-century and stop increasing. Several maps illustrate
population change over time.
Read more...
Renew Grid: Governments Can Play Big Role in Expansion of
Smart Grid
Some governments are approaching the smart grid as the next big
opportunity for their economy to become global leaders in the new
energy technology sector.
Read more...
EPA Roadmap to Guide Investments in Innovative
Technologies
As part of the effort, EPA is examining the most promising
opportunities to advance solutions to environmental problems.
Possible efforts include additional technology cluster initiatives
like last year's Water Technology Innovation Cluster in Cincinnati.
Read more...
Texas Venture Labs Gets $6M
Gift
The donation will expand the existing entrepreneurship and
incubator program for University of Texas (UT) graduate students
and help take the program to other UT campuses.
Read more...
PA Incubator Takes Home Incubator of Year Award
Ben Franklin TechVentures won two awards during NBIA's
conference, including the Incubator of the Year.
Read more...
Wisconsin Launches Seed Fund to Support Veteran-Owned
Businesses
The state will provide $100,000 to help grow about 15 startups.
Another $50,000 will help market the fund to potential
contributors.
Read more...
CanadaOne's Open Innovation Project Shares Companies'
Successes
Companies will share practical ideas that have helped improve
their business to help others explore ways to improve their own
processes.
Read more...
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