SSTI Digest

Now that many governors have signed spending bills and legislative sessions are drawing to a close, the SSTI Digest will check on the status of proposals related to the innovation economy, and examine the state of technology-based economic development funding in the states. This week, we review spending bills in Alaska, Connecticut, Louisiana, South Carolina and Vermont.

Alaska
On June 30, following a second special legislative session, Gov. Bill Walker signed a $9.8 billion (HB 2001) FY16 budget. The governor, however, vetoed $200 million in tax credits, which will delay payment to the state's oil and gas companies.

The budget allocates $5.2 million for Community and Regional Affairs and $1.6 million for Economic Development. The campuses of the University of Alaska are slated to receive $247.5 million, with $785,900 for its Small Business Development Center.

With place-based policies for free higher education in place at the local level for years, recent developments have begun to apply these programs on a grander scale. This month, Oregon became the second state to provide free community-college to its citizens, while a team of congressional Democrats introduced a proposal to move forward with President Obama’s plan for free community-college nationally. The intention and purpose of these policies vary by scope; however, recent research provides some evidence that free college programs are helping increase educational attainment. 

Over the past 40 years, the number of women across the globe filing patents has risen fastest within academia compared to all other sectors of the innovation economy, according to a new study from researchers at Indiana University (IU). The researchers found that the overall percentage of patents with women's names attached rose from an average of 2 percent to 3 percent across all areas in 1976 to 18 percent in 2013 for female academics. In comparison, the overall percentage of patents with women's names attached grew to 10 percent in industry and 12 percent for individuals. The study tracked female patent filers across 185 countries, all of whom filed their patents with the U.S. patent office.

The Ewing Marion Kauffman Foundation will award $2 million in grants to expand successful nonprofit programs to help entrepreneurs. The foundation is seeking scalable programs at nonprofit organizations to receive grants between $250,000 and $500,000, paid over two years. Awardees will be selected for their demonstrated record of supporting entrepreneurs, geographic diversity and scalability. Applications are due July 31, 2015. Read the announcement at: http://www.kauffman.org/newsroom/2015/07/wanted-scalable-programs-that-help-entrepreneurs-succeed

Last month, Minnesota Gov. Mark Dayton signed the MNVest bill – an intrastate securities exemption that allows Minnesota-based companies and entrepreneurs to raise money through equity crowdfunding. To qualify for the exemption, businesses must show evidence of several requirements including being organized under state laws and that its principal office is located in Minnesota. Companies can raise capital from both accredited and non-accredited investors from across the state. In any 12-month period, a company cannot raise more than:

• Up to $2 million if the business provides prospective purchasers with audited or reviewed financial statements; and,
• Up to $1 million if the financial statements are not audited or reviewed.

The exemption allows accredited investors to invest an unlimited amount (up to the maximum investment of $2 million) in companies using the state rules. However, non-accredited investors are capped at $10,000 per transaction.

In FY13, federal agencies obligated $29 billion to 995 academic institutions for science and engineering (S&E) activities, according to a recent National Science Foundation (NSF) InfoBrief. The FY13 federal obligation represented a 6 percent decrease in current dollars from the $31 billion that federal agencies obligated to 1,073 academic institutions in FY12 – the third year in a row of declining S&E funding to academic institutions. In FY13, research and development (R&D) obligation accounted for 89 percent of total academic S&E obligations annually from FY 2011-13. Other S&E categories supported by federal agencies include R&D plant; facilities and equipment for instruction in S&E; fellowships, traineeships, and training grants; general support for S&E; and, other S&E activities. Collectively, the Department of Health and Human Services (HHS), NSF, and the Department of Defense (DOD) provided 87% of all federally funded academic S&E obligations in FY13.

On Wednesday, the U.S. Department of Commerce announced the designation of 12 new communities as part of the Investing in Manufacturing Communities Partnership (IMCP) initiative. This second round of manufacturing communities was selected by an interagency panel to receive targeted support from 11 different federal agencies and programs. The IMCP initiative is intended to accelerate U.S. manufacturing by investing in partnerships and long-term economic development strategies in key regions. More than $1 billion in federal assistance will be available to the 12 designated communities.

SYNEVA Economics – a consulting firm focused on local and regional economic analysis – released a free-to-use, web-based tool that allows users to examine monthly change in employment for the United States’ largest metros from January 2008 to May 2015. Using U.S. Bureau of Labor Statistics data, the Metro Employment Index interactive dashboard includes a mapping function that allows users to examine monthly employment data for all 387 metros. The tool also allows users to view a single metro monthly employment data for the 77 months of available data. As of May 2015, the number of metros adding jobs dropped to 319 – approximately 82 percent of all U.S. metros. These finding marked the fifth consecutive month with fewer metros showing job growth. The 63 states that reported job loss was the highest since March 2014. Use the dashboard…

Biotech is in the midst of an investment boom, at least in Silicon Valley. In the first quarter of this year, biotech firms in the region raised $574 million, the third highest quarter on record, according to data from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA) and reporting by the San Jose Mercury News. This peak represents a 103 percent increase over the same quarter the previous year. Nationwide, the sector is poised to attract a record-setting $7 billion this year, according to Bloomberg Business. However, Silicon Valley's biotech boom is less apparent in other parts of the country.

In recent years, academic researchers have focused on trying to identify the characteristics that could make someone a potentially successful founder of a startup. However, there has been limited research on the characteristic of the individuals who join these founders as early employees to help them develop and commercialize innovative new products and services. These “joiners” are skilled laborers who want to work for tech startups, but don’t want to be founders – mostly because they are less interested in management and more interested in technical roles. Two studies have been released that look at the characteristics of joiners and the role they play in a startup’s success.

Last week, New Mexico Gov. Susana Martinez signed House Bill 2 into law, new tax incentive legislation that, according to the governor, expands the state’s economic development toolkit. The bill received bipartisan support, in the GOP-controlled House, where it passed 60-2, and the majority-Democrat Senate, where it was approved 31-11. According to the Martinez administration, the package is expected to cost between $6.5 million and $11.5 million per year. The bill expands six incentives already established, while two new tax breaks are created. Most notable for New Mexico’s TBED community are the New Mexico Angel Tax Credit and the Technology Jobs and Research and Development Tax Credit Act.

The Growth Dashboard, an annual report released by the Enterprise Research Centre, a policy advisory group with researchers from five United Kingdom business schools, and the government’s Business Growth Service, serves as a source of evidence to inform discussions on the country’s business support priorities. Presenting a set of growth metrics for startups and existing firms across a range of sub-national geographies in the UK, the metrics used in the annually updated dashboard are: