SSTI Digest

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. Akron, OH – A business incubator space will be created with the support of a $…

Venture development organizations are reaching into new territory for funding partners and finding success in innovative models. Two new funds, the San Diego Tech & Life Science Investor Syndicate and Rev1 Fund I in Columbus, OH, have recently opened with less traditional funding sources, testing the waters of crowdfunding and heavy corporate backing, respectively.  The San Diego fund, launched by CONNECT, allows anyone wanting to invest $1,000 the opportunity to participate alongside more experienced lead investors. Rev1 Fund I gathered significant backing from community corporate powerhouses located in Columbus, such as Nationwide, Cardinal Health, and Worthington Industries. It also has the backing of institutions like Ohio State University and the Columbus Foundation, as well as government backing from Ohio Third Frontier. The funding models present two ends of the spectrum of defining community involvement for venture development organizations. The San Diego Tech & Life Science Investor Syndicate expects to invest in about six deals a year, helping to fund early stage technology and life sciences startups in San Diego.  Crowdfunding has been…

Opportunities for successful workforce development partnerships exist across a variety of industries and geographies, according to a recently released report from the Community Development Department at the Cleveland Fed.  The report, Addressing Employment Needs through Sector Partnerships, includes five case studies from throughout the Federal Reserve’s Fourth District, which contains Western Pennsylvania, Eastern Kentucky, the panhandle of West Virginia and all of Ohio. Although sector-based initiatives have been around for quite some time, the Workforce Innovation and Opportunity Act, whose final regulations became publicly available in June 2016, places a strong emphasis on aligning education and job training with employer needs, according to the report’s authors Kyle Fee, Matt Klesta, and Lisa Nelson. Using numerous interviews to conduct their research, each case study highlights how initiatives are structured and operated so that they identify and meet the needs of both employers and jobseekers. The case studies are: Addressing the Needs of Health Care Employers: Tri-County Health Care Industry Partnership; Building a Pipeline of IT Talent in…

The big data technology and services market is expected to grow at a compound annual rate of 23.1 percent over the 2014-2019 forecast period, with annual spending projected to reach$48.6 billion in 2019, according to a 2015 study from IDC – a market research firm. Hoping to leverage this exponential growth into research and economic development opportunity, several universities are fund raising to establish new big data R&D Centers in the communities they serve. The results are mixed so far: while big data center projects at universities in Massachusetts, Nebraska, and Nevada are seeing significant progress, the University of Akron’s proposed Center for Data Science, Analytics and Information Technology will be shuttering its doors before it ever opened. On August 17, Gov. Charlie Baker announced Massachusetts will make a four-year, $5 million investment in the University of Massachusetts Amherst’s (UMass) Data Science/Cybersecurity Research and Education Collaborative – a public-private partnership designed to accelerate data science innovation in the Pioneer Valley region of Western Massachusetts. The state funding is intended to…

Last week, the U.S. Department of Transportation announced that Columbus, home to SSTI’s 2016 Annual Conference, has won a $40 million grant from the agency, beating out five other cities in the Smart City Challenge. As is often the case in Columbus, partnerships were vital to the city’s success; to complement the federal funds, businesses and other public entities in the region pledged $90 million to support the future transportation initiatives. In addition to the $40 million grant from the USDOT, Columbus is also expected to receive an additional $10 million from Microsoft co-founder Paul Allen’s Vulcan Inc. to help support electric-vehicle programs. Both of these amounts pale in comparison, however, to the $90 million raised in the community to support the endeavor, led by energy company AEP ($22.8 million), Columbus Partnership members ($22.5 million), Ohio State University ($15 million), and the city of Columbus ($10.5 million). Several other companies, through their partnerships with the USDOT, will also commit to Columbus as part of its Smart City designation, including Amazon Web Services, Mobileye, Autodesk, and NXP. The city is also…

Ohio Gov. John Kasich signed a bill (HB 233) last month that authorizes cities and villages to create Downtown Redevelopment Districts (DRDs) that can address innovation districts and/or historic rehabilitation. The DRDs permit tax abatements of up to 70 percent of increased assessments in conjunction with payments in lieu of taxes (PILOTs) or a redevelopment charge that functions as a special assessment tax. In the case of innovation districts, these charges may be used to fund loans or grants to technology businesses—specifically including R&D and technology transfer activities—or to incubators or accelerators in the district. To qualify as an innovation district, the area must include access to a high-speed broadband network capable of download speeds of at least 100 GB/S. Read the announcement...

In the last month, major new developments have occurred in TBED capital programs. Launch Tennessee and Pittsburgh-based Innovation Works both announced positive findings about the growth of their startup investment ecosystems with $1 billion being raised by Tennessee startups from 2012 to early 2016 and over $279 million invested in Pittsburgh startups in 2015. Meanwhile in Ohio, both Youngstown-based and Cincy-based startups will see an influx of capital, while a new $150 million fund focused on stem cell companies and regions has been launched. Tennessee Launch Tennessee (LaunchTN) announced that private investment in Tennessee-based, early stage companies surpassed $1 billion between 2012 and Q1 of 2016 – well ahead of its organizational goal of $1 billion invested by the end of 2017. LaunchTN attributes much of the local startup success to partnerships that have been cultivated with established organizations to offer mentorship at its accelerators. “Domain expertise from the music industry in Nashville and companies like FedEx in Memphis and Scripps in Knoxville gives our entrepreneurs real advantages in succeeding in those sectors,…

To support the growth of Northeast Ohio’s entrepreneurial ecosystem, The Greater Cleveland Partnership (GCP) announced a limited-partner investment in JumpStart's new for-profit $20M venture capital fund. Co-investing alongside other VCs and private-sector investors, the JumpStart NEXT Fund will invest in Ohio-based companies that need to raise $2 million to $8 million in private capital to continue their growth. GCP is a membership association of companies and organizations in Northeast Ohio, serving as the region’s chamber of commerce for the region. In 2001, GCP helped create Northeast Ohio’s regional economic development system, which includes JumpStart, a venture development organization tasked with supporting entrepreneurs and growing companies. Currently, JumpStart operates a nonprofit Evergreen Fund that invests seed capital in high potential Northeast Ohio companies and matches them with an experienced Entrepreneur-in-Residence. Earlier this month, the city of Cleveland and three private developers announced their plans to invest in JumpStart’s Evergreen Fund. According to Crain’s, the Cleveland Foundation would invest $…

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 California, Iowa, Ohio and New Jersey. CaliforniaOn June 24, Gov. Jerry Brown signed a FY16 budget package that includes $115.4 billion in general fund spending. The final budget includes $49.4 billion in general funds for K-12 education, $14.2 for higher education and $214 million for labor and workforce development. Within the higher education allocation, there is $29.1 million in new funding for community college apprenticeship programs, including $14.1 million to expand current programs and $15 million for apprenticeship-demonstration projects in emerging industries. IowaIn early July, Gov. Terry Branstad approved $7.2 billion in general fund spending, but vetoed more than $55.7 million in K-12 education spending and $6.4 million for community colleges and state universities. The economic development budget (SF 499) includes $15.5 million…

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 final installment of this year’s series includes excerpts from speeches delivered in Alabama, Florida, Ohio, Pennsylvania and Texas. Read the first, second, third, fourth and fifth installments of this year’s series. AlabamaGov. Robert Bentley, 2015 State of the State Address, March 3, 2015"This Session we will introduce the Made in Alabama Accelerate Alabama Jobs Incentive Package. Our current incentives are 15 years old, out of date and 100 – percent dependent on borrowing money. "This new incentives package will no longer be based solely on debt. "It will increase incentives for new projects that locate in rural areas, like Vernon, Alabama. "It will offer incentives for those who invest in Small Businesses and Start-Ups. "It will provide research and development credits for work done with Alabama-based research centers. And…

This week, governors in Michigan, Ohio, Oklahoma, Tennessee, and Wisconsin unveiled their budget proposals. Included in the governors’ recommendations are several cases of agency restructuring and funds for workforce development, innovation tax credits, and other TBED-relevant issues. Michigan Gov. Rick Snyder took an unconventional approach to issuing his $54 billion proposed FY2016 budget, releasing overviews on the popular blog-publishing platform Medium.  More than three-fourths of the governor’s proposed total spending is dedicated to education and health and human services. Under the budget recommendation, universities would receive an operations increase of $28 million (2 percent) and would be required to hold any tuition increases to less than 2.8 percent in order to receive new funding.  For workforce development, Gov. Snyder proposes $17.8 million to better prepare students for colleges and careers by expanding career and technical education programs throughout the state. To encourage more residents to master a skilled trade, Gov. Snyder also proposes a $10 million increase for skilled-trade training programs, bringing total…

In a new report, the Ohio Board of Regents highlights promising policies to build more competitive innovation economies by tapping into the skills, knowledge and entrepreneurship of women, African-Americans, rural residents and other underrepresented populations. The review includes models pioneered by community organizations, academic institutions, entrepreneurship support organizations, philanthropies and tech-based economic development groups that draw traditionally underrepresented residents into innovation networks and ensure that benefits of the high-tech economy reach people of all backgrounds. The board’s Subcommittee on Inclusive Competitiveness provides specific recommendations for the state’s university system, including support for the Believe in Ohio Youth STEM Commercialization and Entrepreneurship program and the Choose Ohio First Scholarship. Download the report…