SSTI Digest

This week, governor’s in eight states released their budget proposals. Balanced budgets and fiscal austerity were undoubtedly emphasized by the governors, yet funding for STEM education and workforce development initiatives were increasingly popular.

Nevada
Gov. Brian Sandoval’s education-heavy $7.3 billion biennial budget for FY 2016-17 includes considerable amounts of TBED funding, such as $10 million over the biennium for the Knowledge Fund. The Fund, which was created by AB 449 during the 2011 legislative session, provides grants that: establish technology outreach programs; recruit, hire, and retain researcher teams and faculty; construct research laboratories, facilities, and related equipment; and, provide matching funds for federal and private sector grants. Additional funding is also added to continue the Center of Excellence efforts to be a world leader in water technologies that focus on dealing with arid conditions.

This week, New York Gov. Andrew Cuomo released his proposed 2015-16 budget, including an extensive slate of economic development and innovation initiatives for the state. The governor unveiled his plans in a press conference outlining his 2015 Opportunity Agenda in lieu of this year’s State of the State address. Gov. Cuomo’s proposed economic strategy includes a $1.5 billion competition, based on the previous Buffalo Billion initiative, to help revitalize Upstate New York.

The Upstate New York Economic Revitalization Competition would offer awards of $500 million to three of seven Upstate regions. The competition would leverage the partnerships created through the Regional Economic Development Council (REDC) awards by calling on those groups to prepare regional investment plans that could qualify for the competition. The Western New York, Long Island and New York City REDCs would not be eligible. Submissions would be due in July and winners would be announced in the fall.

U.S. venture capital investment hit $48.3 billion in 2014, its highest level since 2000, according to data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PwC). Investments jumped 61 percent over the previous year in terms of dollars. Deals were up as well, but by a more modest 4 percent to 4,356 deals in 2014, indicating the growth of deal size and the presence of a number of “megadeals.” NVCA also noted that investments were dispersed throughout the country, with 160 U.S. metros receiving some venture capital.

A few trends drove the large bump in investment dollars last year. In 2009, the venture capital industry hit its lowest point since the 1990s following the Great Recession, according to NVCA/PwC. Since that year, the industry has grown, though investment activity seemed to reach equilibrium in 2011, hovering around $29 million in 4,000 deals through 2013. In 2014, the industry broke out of that equilibrium, with a sharp uptick in investment in the Software and Internet-specific industries. Both industries reached their highest point since the dot com boom in 2000.

SSTI's Tech Talkin' Govs series has returned as governors across the country formally convene the 2015 legislative sessions. The series highlights new and expanded TBED proposals from governors' State of the State, Budget and Inaugural addresses.

The third installment of this year’s series includes excerpts from speeches delivered in Delaware, Michigan, Mississippi, New Mexico and South Carolina. Read the first and second installments of this year’s series.

New York Gov. Cuomo unveiled a $1 billion public-private broadband program to ensure every New Yorker has access to high-speed Internet by 2019. Utilizing capital funds from bank settlements, the state will commit $500 million to the New NY Broadband Program with the intent of incentivizing the private sector to invest the additional $500 million to expand high-speed broadband access in underserved and unserved areas. To receive funding, the proposed plan must meet three qualifications:

The Department of Energy’s (DOE) Advanced Research Projects Agency-Energy (ARPA-E) announced that it will commit up to $125 million for its 2015 OPEN competition to Support R&D projects on potentially disruptive new energy technologies. Applications should be able to address how the proposed technology will be able to make a significant impact in one of the three mission areas of ARPA-E – to reduce imported energy, to reduce energy-related emissions, and to improve energy efficiency. Via the 2015 OPEN program, DOE intends to make up to 50 awards across the full spectrum of energy applications. Concept papers are due February 27, 2015, with the full application due date yet to be determined. Read the announcement…

As competition increases within the venture capital industry to fund the next Google or Uber, the most highly desirable startups often have multiple investment offers and must decide upon the best. There are several factors that can affect evaluation of potential equity investors. For many startups, the decision may focus solely on the terms of the deal. However, there may be many more factors – outside of financial considerations – that impact the startup’s evaluation process.

To date, most of the discussion in the academic literature and research conducted has focused on the decision-making process for the investors. However, over the last few years, researchers have started to refocus their research on the entrepreneur’s perspective to better understand what makes a deal more desirable for startups looking for financing. They want to know what drives the decision-making process and what factors make an equity investor more desirable to the startups with the most growth potential.

President Barack Obama recently announced a pair of initiatives to provide American students better access to two-year degrees and technical training programs. Under the first program, American’s College Promise, the federal government would cover three-quarters of the cost of an average community college education for students who attend at least half-time and maintain a 2.5 GPA. States would be required to contribute the rest of the tuition funds.

The second program, the American Technical Training Fund, would provide awards to 100 technical training centers to partner with employers and offer training in strategic fields. Additional grants would be provided for pilot programs and program expansion. Details are still being released, but a Los Angeles Times article indicates that the community college plan would require approval from Congress and participating states. Read the White House fact sheet…

SSTI's Tech Talkin' Govs series has returned as governors across the country formally convene the 2015 legislative sessions. The series highlights new and expanded TBED proposals from governors' State of the State, Budget and Inaugural addresses.

The second installment of this year’s series includes excerpts from speeches delivered in Arizona, Idaho, Indiana, South Dakota, Virginia, Washington, Wisconsin and West Virginia. Read last week’s installment featuring speeches in California, Kentucky and Vermont here.

Arizona
Gov. Doug Ducey, State of the State Address, Jan. 12, 2015
“… Last week, I signed an order placing a moratorium on new regulations in the executive branch. It was a good beginning, but only a beginning.

Pennsylvania’s largest universities by student population, Penn State and Temple University, both announced plans this week to make a concerted investment in their respective innovation ecosystems. Pennsylvania State University (PSU) President Eric Barron announced $30 million in new investments for economic development and student career students, while Temple University and Ben Franklin Partners of Southeastern Pennsylvania established a new startup accelerator to assist university ventures.

As governors around the country begin their newest terms, their proposed budgets are beginning to take shape. Although few governors specifically target technology based economic development, after the first wave of budgets a variety of initiatives related to workforce development and higher education have garnered support.

President Obama recently announced that the University of Tennessee was awarded the $259 million Institute for Advanced Composites Manufacturing Innovation (IACMI). The U.S. Department of Energy will commit $70 million to support the project with the remaining $189 million coming from IACMI partners including $15 million from the Tennessee Department of Economic and Community Development. The University of Tennessee will lead the 122-member consortium in its effort to connect the world's leading manufacturers with universities and national laboratories pioneering advanced composites technology development and research. IACMI will focus on advanced fiber-reinforced polymer composites that combine strong fibers with tough plastics. For more information, read the announcement about the IACMI, the White House’s IACMI fact sheet, or visit the IACMI website…