SSTI Digest

Florida is one of many states without an incumbent governor participating in the 2010 gubernatorial election, as Gov. Charlie Crist, who served just one-term in office, will seek an open Florida U.S. Senate seat this fall in a race against former Florida House Speaker Marco Rubio and Democratic U.S. Rep. Kendrick Meek. Crist is running as in Independent. Policy aimed at job creation is the topic of much debate in Florida, where unemployment is around 12 percent. Gubernatorial candidates Rick Scott (R) and Alex Sink (D) recently provided detailed jobs plans and outlined proposals to achieve energy independence, which are highlighted in the second installment of SSTI's special election series.

Rick Scott (R)

Companies that engage in R&D activities — either through performing R&D or funding others to perform R&D — are far more likely to innovate than companies that do not, according to new data from the National Science Foundation's (NSF) 2008 Business R&D and Innovation Survey (BRDIS). NSF researchers found that companies with R&D "exhibit far higher rates of innovation than do non-R&D companies. However, only 47,000 (3%) U.S. companies engaged in R&D activities from 2006 to 2008. Among those R&D active companies, 66% reported at least one product innovation and 51% reported at least one new process innovation. In contrast, of the almost 1.5 million non-R&D companies, only 7% reported new product innovations and 8% reported new process innovations. The BRDIS data also indicates that there is a clear positive relationship between R&D spending and increased instances of product or process innovations.

The European Commission has released the first comprehensive innovation strategy for the European Union. The strategy has over thirty action points including the development of European Innovation Partnerships, improving access to finance, creating a major research program on the public sector & social innovation and modernizing Europe's intellectual property rights regime. European Innovation Partnerships would step up R&D, coordinate investments, speed up standards and mobilize stakeholders in areas that tackle major challenges faced by the EU to become a world leader in innovation. Proposed projects include public health, energy, "smart" cities and mobility, water efficiency, non-energy raw materials and sustainable & productive agriculture. Under this strategy, the EU wants to achieve investments in R&D totaling 3% of the EU's GDP by 2020. If this goal is achieved, the European Commission projects 3.7 million jobs would be created and annual GDP would increase by €795 billion ($1.1 trillion) by 2025.

Regional innovation clusters can be a useful framework in understanding the high-tech economy, but only if local leaders recognize the limits of cluster-based strategies, according to a recent study by the Brookings Institution. Authors Mark Muro and Bruce Katz suggest that research has confirmed the positive impact clusters can have for local workers, firms and regions, but that effective policy interventions must focus on targeted initiatives to foster existing clusters. Clusters cannot be created out of nothing, and regional efforts should instead help to develop clusters where there is evidence of under-performance. Read "How Regional Innovation Clusters Can Foster the Next Economy" at: http://www.brookings.edu/papers/2010/0921_clusters_muro_katz.aspx.

A recent report from the National Science Foundation's (NSF) National Science Board calls for a new NSF research agenda to identify and develop the next generation of STEM innovators. The board developed a STEM agenda built on findings from a two-year study on math, science and engineering education in the U.S. The report, entitled "Preparing the Next Generation of STEM Innovators," provides recommendations that are intended to help set funding priorities at NSF for STEM education in the coming years. Overall, the board's report encourages policymakers to view STEM and innovation issues as integral to the national discussion on education. Read the report ...

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/.