SSTI Digest

The Appalachian Regional Commission (ARC) announced its latest round of grants for Partnerships for Opportunity and Workforce and Economic Revitalization (POWER). The 35 grants totaling $26.5 million support workforce training and education in manufacturing, technology, healthcare, and other industry sectors; invest in infrastructure enhancements to continue developing the region's tourism, entrepreneurial, and agriculture sectors; and, increase access to community-based capital, including impact-investing funds, venture capital, and angel investment streams. The awards are projected to create or retain over 5,400 jobs and leverage more than $193 million in private investment into 59 Appalachian counties.

A few of the awards (with SSTI members in boldface) are highlighted here:

The ability of states to deliver the services promised to its residents relies on their fiscal soundness. With most states beginning their fiscal year in July, SSTI has reviewed the current fiscal standing for each state and here presents a snapshot of our findings.

Most states ended their fiscal year with a surplus and continue to recover from the Great Recession, with a growing economy and job gains. However, they face continuing demands on their budgets, with expanded Medicaid payments and the growing opioid crisis confronting nearly every state. Such decisions affect the state’s ability to fund innovation efforts, from the amount of support available for higher education and STEM programs, to funding for entrepreneurship, and forging public private partnerships to strengthen innovation programming that the private sector cannot fully support.

Our analysis found that some states that rely on the energy sector to fund their spending priorities continue to struggle, while others are already factoring in anticipated revenues as a result of new Supreme Court rulings involving gaming and online sales tax collections.

Alabama

Industry-led “innovation hubs,” additional funds for risk capital, and a proactive talent strategy are among the recommendations included in Ohio BOLD: A Blueprint for Accelerating the Innovation Economy, a new strategic plan conducted by Columbus-based TEConomy Partners on behalf of the Ohio Chamber of Commerce Research Foundation. Developed as a way to inform a new gubernatorial administration of the Chamber’s priorities, the plan identifies opportunities around four platforms: next-gen manufacturing, future health, smart infrastructure, and data analytics.

Columbus-based State Auto Labs, the innovation arm of the State Automobile Mutual Insurance Company, is collaborating with venture development organization Rev1 Ventures on a $25 million corporate venture fund to support innovation and entrepreneurship in the insurance industry. Through the partnership, Rev1 Ventures and State Auto Labs will help connect InsurTech and FinTech startups with resources such as capital, technologists, and industry experts. The fund, Rev1’s largest to date, will focus on four key investment areas: technology related to the internet of things; the role of machine learning and artificial intelligence in supporting data driven decision-making; distribution technologies; and, products and solutions that focus on the changing needs of insurance customers. 

In an effort designed to stimulate economic growth and workforce development in Ohio and New York communities, KeyBank Foundation announced a $24 million grant awarded to JumpStart, Inc. The grant represents the foundation’s single largest philanthropic commitment to date. Ray Leach, CEO of JumpStart said in a prepared statement that the grant “will dramatically increase the impact of entrepreneurs and small businesses on neighborhoods and communities." Leach went on to say that the grant will provide capital for more startup and scaling companies, and will increase the participation of minorities and women in the growth of those companies.

The "KeyBank Business Boost & Build Program, powered by JumpStart" is based on a five-pillar initiative that includes accelerating the growth of small businesses and micro-enterprises, the majority of which are to women or minority owned, as well as providing support for the tech economy through workforce training as well as technical assistance.

Breaking a two-year impasse, legislators in Illinois were able to pass a state budget that reinstitutes an R&D tax credit and implements workforce development programs. In California, the Governor’s Office of Business and Economic Development (Go-Biz) will see a 28 percent increase in funding, while other innovation initiative are receiving level funding. In other states whose budgets SSTI analyzed this week for TBED-related funding, we found that Innovate Mississippi was able to maintain state funding and new funding was appropriated for workforce development at the state’s community and junior colleges; a variety of programs were cut in North Carolina; and, Ohio will not get funding for a state office focused on commercializing research across key industries that the governor had proposed. More findings from California, Illinois, Mississippi, North Carolina and Ohio are detailed below.

The Ohio Third Frontier Commission (Third Frontier) has announced investments in entrepreneurial service providers (ESP’s) in the Dayton and Toledo regions. A new collaboration focused on health innovation will lead the initiative in Toledo, while an existing entrepreneurial center will lead programming in Dayton. Both regions had been among Ohio’s largest without a dedicated ESP. The state also awarded funds for its first joint-university program at Cleveland State University and Kent State University, and for commercialization activities at Cincinnati Children’s Hospital.

Ohio Gov. John Kasich is one of the last governors to deliver a state of the state address, which he did Tuesday evening. The former presidential contender assured the audience that he is “not running for anything,” but wanted to thank those who worked on managing the state budget. He used the address to focus on a variety of topics, including tech and innovation initiatives in the state, and educational efforts to support those industries. Kasich did not read a prepared speech and the following comments were taken from a transcript of his address:

Government offices focused on innovation have been around for several years, yet some states and even the federal government are seeking new ways to incorporate the concept into their offices. This week the White House announced a new Office of American Innovation, while earlier this month Rhode Island used its Office of Innovation to launch a new effort called the Government Innovation League, and in January Ohio’s governor proposed funding a new state office focused on innovation, emerging technologies and their job-creation potential.

SSTI continues to review state budget proposals as they are released, combing through them for TBED-related initiatives. This week, education and research and development programs are revealed as we examine the budget proposals from governors in Ohio, Tennessee and Texas.

A portfolio company of JumpStart Inc., an Ohio venture development organization, is to be purchased for $1.1 billion. The proposed acquisition of Ohio startup CoverMyMeds by McKesson Corp. marks Ohio’s first tech startup unicorn. JumpStart Evergreen, the non-profit fund that invested in CoverMyMeds, was funded in part by Ohio Third Frontier. CoverMyMeds was started in Ohio in 2008 and is now headquartered in Columbus. It provides electronic prior authorization solutions to pharmacies, providers, payers and pharmaceutical manufacturers. The deal is expected to close in the first half of FY 2018 and its workforce, in both Cleveland and Columbus offices, is expected to grow. Following the close of the transaction, CoverMyMeds will operate as an independent business unit under its existing leadership team. The deal was covered in a Columbus Business First story. Both Ohio Third Frontier and JumpStart Inc. are SSTI members.

The U.S. Department of Commerce’s Economic Development Administration (EDA) announced a number of grants last week to aid regional innovation and entrepreneurship efforts through infrastructure improvements, the creation of new spaces, and business improvements in regions across the country. The grants fund projects in AR, AZ, CA, ME, MI, and OH.

San Pedro, CA – A $3 million grant to AltaSea business hub will fund infrastructure improvements at City Dock No. 1 at the Port of Los Angeles, which will aid in the development of new ocean-related technologies. The hub will provide access to the deep-ocean and research space to study ocean-related problems. It is expected to create 220 jobs and attract $120 million in private investment over a six-year period.

Phoenix, AZ – A warehouse in Phoenix will get new life as a makerspace through a $3 million grant to the Maricopa County Community College District and Gateway Community. The space will be used by students and individuals to access the tools and equipment needed to generate ideas and develop products.