SSTI Digest

Several governors released their proposed budgets over the last two weeks, and while some states continue to deal with budget shortfalls that prevent many new initiatives from coming into fruition, governors in Pennsylvania and North Carolina included numerous proposals focused on innovation and economic development. Additionally, governors in Louisiana and Massachusetts highlighted new workforce development proposals.  Pennsylvania Pennsylvania Gov. Tom Wolf’s proposed $33.8 billion fiscal year 2015-16 budget prioritizes strengthening the commonwealth’s middle class, allocating funds to a variety of workforce, economic development, and education initiatives. To enhance Pennsylvania’s business friendliness, Gov. Wolf proposes lowering the Corporate Net Income Tax (CNIT) from 9.99 percent to 5.99 percent, improving the commonwealth’s ranking from second-highest to fourteenth-lowest. For technology-based economic development, Gov. Wolf proposes an increase of $100 million for the Ben Franklin Technology Development Authority Fund, meant to support entrepreneurs, established companies, and manufacturing innovation. This increase would be…

SSTI's Tech Talkin' Govs series has returned as governors across the country formally convene 2015 legislative sessions. The series highlights new and expanded TBED proposals from governors' State of the State, Budget and Inaugural addresses. The fifth installment of this year’s series includes excerpts from speeches delivered in Illinois, North Carolina, Oklahoma and Tennessee. Read the first, second, third and fourth installments of this year’s series. IllinoisGov. Bruce Rauner, State of the State Address, Feb. 4, 2015"... Too many people in our communities must overcome not only hurdles that state government has put in place, but also decades of hidden barriers that have caused their communities to suffer. Approximately 80% of individuals in Illinois apprenticeship programs are white even though Caucasians make up fewer than 63% of our population. ..." "... We should require unions that contract with the state to have their apprenticeship programs reflect the demographics of Illinois communities, and to have their membership on public construction projects reflect the diversity in the surrounding area.…

Last year, 108 unique institutional funders made a total of 260 investments in North Carolina companies, according to a report from the Council for Entrepreneurial Development. The 2013 Innovators Report details the $461 million in equity investments, grants and awards received by firms, including support from venture investors, angel networks, foundations, federal agencies, competitions, crowdfunding and other sources. Life sciences firms generated the most activity with $275 million in 134 deals, driven by the biopharmaceutical industry. Technology firms secured $117 million in 106 deals. The report identifies the location of the state’s funding institutions, with the largest number based in North Carolina (26), followed by the Northeast (24) and the Mid-Atlantic (14). Read the report…

Building on a bare bones structure for privatizing economic development established last session, Gov. Pat McCrory outlined a plan for transitioning the state’s Department of Commerce to a public-private partnership, effective July 1. The move, according to the governor, will allow for more flexibility to support businesses and achieve savings for the state. Several innovation-focused investments also were presented as part of the recommended state budget adjustments for FY15, including matching and incentive funds for early stage, high-tech companies and funding to assist campuses in commercializing technology.   During the short session, to last nearly two months, lawmakers will be asked to approve legislation that addresses transparency and funding issues for the public-private partnership left out of a bill enacted last session. That bill granted Commerce authority to reorganize the department toward a privatized model focused around seven regionally focused “prosperity zones,” and to contract with a nonprofit corporation for advisory, research and recruiting recommendations. A modified bill introduced this year requires the partnership…

Aligning industry needs with workforce training has gained renewed focus in states and emerged as a national priority. This week, President Obama announced two grant programs totaling $600 million in existing funds that challenge academic institutions and businesses to design job training for the globalized economy and set industry-recognized standards. The grant programs fall into two categories. The first challenge is part of the Trade Adjustment Assistance and Community College and Career Training competitive grant program that supports community colleges in preparing dislocated workers. Under the new initiative, the Department of Labor invites applications for training programs that respond to employer demand and create pathways from entry-level positions to more advanced positions. Funding for the $500 million competition is prioritized toward partnerships that include industry associations that help in designing the program and implementing industry-recognized credentials. The second competition provides $100 million in existing H-1B funds to expand apprenticeship opportunities across the country. The new program, to be launched this fall, will focus on…

John Sider has accepted a position with Pennsylvania State Senator Vincent Hughes and the PA Senate Democratic Caucus to work on economic development policy and projects, effective April 1. Currently, Sider is the managing director of statewide initiatives at Ben Franklin Technology Partners. Vic Nole has joined the Buffalo Niagara Medical Campus, Inc. as director of business development and entrepreneurial activity. Norris Tolson, who has been the president and CEO of the North Carolina Biotechnology Center since 2007, will retire from the organization on June 30.

Patrick Gallagher has been named the 18th chancellor and chief executive officer of the University of Pittsburgh. Gallagher currently serves as acting deputy secretary of the U.S. Department of Commerce and director of the National Institute of Standards and Technology. Ben Walker has joined the Innovation Center of the Rockies team as the program manager working directly with CSU Ventures. Bryan Toney has been named The University of North Carolina at Greensboro’s associate vice chancellor for Economic Development. Boston Mayor Martin Walsh announced the appointment of John Barros as chief of his Economic Development Cabinet.

Crowdfunding was poised to make a major splash on startup financing in 2013, aided by the passage of the 2012 JOBS Act, a projected explosion in the number of crowdfunding portals and the adoption of state crowdfunding exemptions. However, the crowdfunding industry did not have the anticipated gamechanging impact on startup financing, mostly due to the Securities and Exchange Commission’s (SEC) cautious approach to the adoption of the crowdfunding rules mandated by the JOBS ACT. The SEC eased into the crowdfunding era by allowing for the general solicitation by businesses to raise equity from accredited investors via secure web-based portals. Finally, late in 2013 the SEC released proposed rules that would allow for equity crowdfunding from unaccredited investors sometime in 2014. States Push Ahead with Intrastate Crowdfunding ExemptionsWhile the SEC carefully developed its rules and regulations, states developed their own intrastate crowdfunding exemptions focused specifically on increasing the availability of  and retaining startup capital in their communities. On December 31, Michigan Gov. Rick Snyder signed into law Public Act 264 that will allow…

The first of three new manufacturing innovation institutes will be headquartered in Raleigh, NC, and led by a consortium of 18 companies, seven universities and labs, and the state of North Carolina. The announcement was made today by President Obama. Developing wide-bandgap semiconductor devices and industry-relevant processes is the goal of the Next Generation Power Electronics Institute. Such technologies are used to develop smaller, faster, cheaper and more efficient electronics for personal devices, electric vehicles and renewable power interconnection, according to a press release. Bringing back advanced manufacturing jobs and accelerating new technological breakthroughs are the intended outcomes of the Manufacturing Innovation Institutes. As explained in this 60-second video, the institutes serve as hubs that bring together private sector employers and universities for cooperative research and risk sharing that can lead to major advances in technology. Those advances are shared with small businesses and entrepreneurs creating the next generation manufacturing jobs. A pilot institute focused on additive manufacturing was launched in 2012 in Youngstown, OH.…

North Carolina is rich in resources to support a thriving innovation ecosystem. But despite its strengths, several factors are preventing the state from reaching its full potential to fuel and sustain strong economic growth. These and other findings are outlined in a recent report tracking the state's performance in 38 measures related to innovation assets, activities and trends. The fourth in a series of indexes produced over the past 13 years, the report benchmarks North Carolina with six key comparison states, the U.S. overall and leading countries. Findings indicate the state excels at academic R&D, but lags in business-led R&D. Additionally, the state's high-tech sectors have wages well above the U.S. average, but a large share of the state's industries and employment not high-tech in nature. Recommended actions to improve the state's standing are detailed in the report, Tracking Innovation: North Carolina Innovation Index.

Lawmakers continued to provide support for life sciences at a reduced level in the recently enacted budget; however, other technology areas did not fare as well. In some cases, funding was eliminated for tech-based initiatives, and lawmakers allowed a tax credit for early stage investors to expire. Meanwhile, the North Carolina Biotechnology Center plans to consolidate activities and redouble efforts to keep things moving in the wake of a 27 percent reduction to their budget. Established nearly 30 years ago, the NC Biotechnology Center serves as a statewide hub for life-science commercialization with activities including funding faculty recruitment and research with commercial potential. The 2013-15 biennial budget provides $12.6 million each fiscal year for the center, which is $4.6 million less per year than last biennium. Of this amount, $8.2 million each year is for science and commercialization activities. In a recent news article, Norris Tolson, President and CEO of the NC Biotechnology Center, said his group will work to consolidate activities around the new number. Funding for the Biofuels Center of North Carolina was eliminated ($4.3 million annually).…

As many state legislative sessions wind down, a clearer picture of the current direction of state innovation policies is emerging. This week’s SSTI Weekly Digest presents a few of the major trends in technology-based economic development initiatives approved by state legislatures during their most recent sessions. While this review is not meant to be comprehensive, it should illuminate the shifts states are making to refine their investments in the high-tech economy by providing smarter, more targeted support. Over the past few months, the Digest has reported on several major capital access initiatives, transparency efforts and agency reorganizations that have made headlines amid a slow economic recovery and renewed attention to accountability in economic development. While other stories in this issue will examine some of the trends in legislation that previously have gone unreported in the Digest, several major legislative efforts have appeared in earlier issues, but represent other intriguing developments in state innovation policy. States Launch Venture Capital Funds for High-Tech GrowthThis week in Wisconsin, Gov. Scott Walker signed…