SSTI Digest

Minority and women entrepreneurs continue to experience lower survival rates than their white (and Asian), male counterparts, according to a recent U.S. Census Bureau report by Ron Jarmin and C.J. Krizan of the Bureau's Center for Economic Studies. Jarmin and Krizan link several databases on business activity in 2005 in order to track how race, gender, education and experience of the entrepreneur relate to survival rates, profits, size, employment growth and exports. The results indicate that firms owned by African-American, female and other minority entrepreneurs are more likely to fail, but also suggest that minority-owners use business failures to gain experience for future endeavors.

Minority- and women-owned firms typically face higher business death rates than white- or male-owned businesses. The notable exception is firms owned by entrepreneurs of Asian decent, which have similar survival rates to white-owned businesses. The same pattern holds true for growth rates across race and sex demographics.

In last week's edition of the the Digest, we highlighted the three most pressing needs for state and local TBED organizations: Federal, Commercialization & Entrepreneurship and Universities. This special section of the Digest will focus on the Capital, "How To" and Strategy & Alliance Building tracks and how they can navigate your region towards prosperity. In our upcoming 14th Annual Conference, to be held Sept 14-16 in Pittsburgh, SSTI will have numerous opportunities to gain insight into the issues challenging regional innovation strategies during the past year.

Several components of Gov. Bev Perdue's JobsNOW small business package related to tech-based economic development efforts in North Carolina were approved in the FY11 budget signed into law on June 30. A program to provide matching funds for Small Business Innovation Research (SBIR) will see its budget more than double in the second year of the biennium and life science programs will receive more than $22 million in recurring appropriations. The enacted budget also extends to Jan. 1, 2013 the Qualified Business Investment Venture credit, which provides a capped incentive for angel investment in cutting-edge industry sectors. The governor had proposed raising the cap from $7.5 million to $10 million, a measure that was not included in the final budget.

Joining a growing number of states investing in clean energy to promote economic growth and remain competitive, Delaware Gov. Jack Markell signed into law four renewable energy bills that he says will create new jobs by fostering the expansion of renewable energy industries such as wind and solar. Expanding the state's Renewable Portfolio Standard (RPS) and updating the Green Energy Fund to address a backlog in recipients waiting for grant dollars are among the new laws in the Clean Energy Jobs Package detailed below.

• SS 1 for SB 119 extends and expands Delaware's RPS so that 25 percent of the state's electricity must come from renewable sources by 2025, up from the current target of 20 percent by 2019. The bill also includes solar energy targets and provides incentives for local labor and manufacture of solar energy targets.

The Department of Energy and the Department of Defense have agreed to cooperate on the acceleration of clean energy innovation and strengthening the nation's energy security. Under this Memorandum of Understand (MOU), the agencies will work cooperatively together in the several areas including energy efficiency, alternative fuels and renewable energy. An under-secretary level working group will coordinate R&D efforts between the agencies. This will allow the agencies to reduce "waste" by avoiding the duplication of energy innovation efforts. The agreement also calls for DOD installations to serve as test beds for research. Read the MOU.

Two recent reports from Wisconsin economic development organizations suggest different paths for the state's economic initiatives. A white paper from the Wisconsin Technology Council (WTC) lays out a plan to increase access to capital for Wisconsin entrepreneurs, create new workforce development strategies, improve the state's infrastructure and business climate, and implement technology development and transfer strategies. Another report calls for greater coordination and streamlining of Wisconsin's existing programs through the creation of two new entities with a statewide reach. Both papers include extensive recommendations for the state's efforts to make capital available to startup businesses.

In Looking to the Future: A Case for Bold Action, WTC proposes a policy agenda for the next year that could help augment current initiatives, such as the Act 255 investor tax credits (now called "Accelerate Wisconsin"). The report includes several options for state leaders to consider in the broad areas of capital access, workforce development, infrastructure and technology transfer.

The National Science Foundation (NSF) has begun reporting employment and R&D investment figures for companies that perform R&D based on the agency's new Business R&D and Innovation Survey. The inaugural data, based on 2008 results, shows that U.S. companies that perform R&D employed 27.1 million people worldwide 1.9 million of whom were directly involved in research. Domestic employment within these companies totaled 18.5 million, with 1.5 million R&D workers. In that same year, companies reported spending $346 billion on company-performed research, with $283 billion of that amount invested domestically.

Read the NSF release New Employment Statistics from the 2008 Business R&D and Innovation Survey at: http://www.nsf.gov/statistics/infbrief/nsf10326/.

Job Corner
i2E has three new career opportunities available in their Oklahoma City office. These positions are designed to work directly with entrepreneurs and grow the support infrastructure of early stage companies in the region.

The positions include:

• Executive Advisor - markets and manages the delivery of commercialization services to new, early stage advanced technology companies.
• Concept Investments Manager - to coordinate our pre-seed and proof-of-concept initiatives that provide critical funding to some of Oklahoma's most promising technology-based startups.
• SeedStep Angel Coordinator - to promote and maintain active Angel Group membership and positive investment activity.

Read more job postings

The Economic Development Administration (EDA) would have $15 million less available for grants next fiscal year in the budget bill approved by the Senate Appropriations Committee last week. For comparison, the relevant House Appropriations subcommittee in June approved a total budget of $317.85 million for EDA — that is $24.85 million more than the FY10 budget and a whopping $37.67 million more than the Senate.

The Senate Appropriations Committee, on the other hand, reduces EDA funding for grants from $255 million in FY10 to only $240 million in FY 11. The Senate report that accompanied the bill expresses the committee's support for investing in regional innovation clusters and incubators, also recognizing "an effective federal economic development program must transcend the conventional conceptions of urban and rural development," at the same time it was reducing the total money available for the grants.

Also taking a hit from the Senate is NIST's Technology Innovation Program, which would not receive any funding for new grants. NIST's Manufacturing Extension Partnership would receive $130 million in both bills.

VC Investment Up As Cleantech Sector Hits Record High
U.S. venture capital (VC) investment rose to its highest point since mid-2008 during the second quarter of 2010, according to the latest data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers. Firms invested $6.4 billion in 906 deals last quarter, a 34 percent increase in dollars and 22 percent increase in deals over this year's first quarter. Slow but encouraging growth in venture returns have helped spark new investments, according to the NVCA press release. Seed and early stage received a notable boost last quarter, as did the life science industry. Meanwhile, the clean technology sector set a quarterly record for investment.

Read the NVCA press release at: http://www.nvca.org/index.php?option=com_docman&task=doc_download&gid=628.

According to a survey of SSTI members, the three most pressing needs for state and local TBED organizations in this economy are: how do we capitalize on the federal government's renewed commitment to growth through innovation and research? How do we encourage faster commercialization and more entrepreneurship among our local businesses? How do we more fully engage our universities in building our economic recovery and innovation-based future?

In our upcoming 14th Annual Conference, to be held Sept 14-16 in Pittsburgh, SSTI has developed three tracks at focused exclusively on helping you answer those vital questions. With a blend of engaging plenary and intensive breakout sessions, the Federal, Commercialization & Entrepreneurship and Universities tracks will provide you with the knowledge and tools necessary to successfully navigate the road ahead. We'll highlight a few examples from each below, but encourage you to review the full conference brochure to see all of the options available in the three tracks: http://ssticonference.org.

A Brookings Institution's Metropolitan Policy Program study of U.S. exports between 2003 and 2008 found that export-based businesses accounted for 8.3 percent of U.S. employment and higher wages than domestic-oriented industries. During that period, the country's 100 largest metropolitan areas produced about 64 percent of U.S. exports, including about 75 percent of the nation's exported services. Since the Obama administration has made increasing U.S. exports a national goal, the report recommends working with metro regions to create strategies that help develop their export economies through collaboration with local organizations and leaders.