SSTI Digest

“Minnesota faces a crisis of competitiveness.” It didn’t take Minnesota’s leaders long to recognize the state’s precipitous fall in the standings for many major indicators over the past two decades paralleled the state’s prolonged diinvestment from a proactive TBED strategy. The report from the Minnesota S&T Economic Development Project Committee, created by the state legislature just last fall and co-chaired by the commissioner of the Minnesota Department of Employment and Economic Development, holds little back in its condemnation of the state’s nearly 20-year abandonment of any significant investments or policies to promote science, technology and innovation. More available at: http://image.exct.net/lib/ff2c15797266/m/1/2010+Science+and+Technology+Initiative+Presentation.pdf.

Last year venture investment decreased to its lowest level since 1997, according to the latest Moneytree Report from PricewaterhouseCoopers and the National Venture Capital Association (NVCA).  A weak environment for exits and increasing caution on the part of investors contributed to a 37 percent decrease in investment dollars and a 30 percent decline in venture deals from 2008 levels. This marks the second consecutive year of declining venture dollars and deals. A report from Dow Jones VentureSource, however, notes that investment activity rebounded in the fourth quarter, and both outlets predict growth in 2010.

Venture firms invested a total of $17.7 billion in 2,795 deals last year, down from the post-tech boom peak of $30.5 billion in 4,027 deals in 2007. Activity increased during the fourth quarter, exceeding the amount of dollars and deals during the same quarter in 2008, but not enough to salvage the overall low numbers for the year.

Virginia Governor Bob McDonnell dropped his previous nomination, Robert Sledd, as his secretary for Commerce and Trade and instead nominated businessman James Cheng. Cheng, whose nomination needs to be confirmed by the Democratic-controlled Senate, was sworn in on January 17.

Pennsylvania Governor Ed Rendell said that the Department of Community and Economic Development (DCED) Secretary George Cornelius will step down on June 30 to become the president of Bridgewater College in Virginia.

Rick LeFaivre and Tom Clement are joining the UW Center for Commercialization as key deputies to vice provost Linden Rhoads. LeFaive will split his time evenly between the university and his other job as a managing director at OVP Venture Partners, while Clement is expected to work full-time for about 18 months.

The National Science Foundation is seeking a Senior Analyst in its Science & Engineering Indicators Program, Division of Science Resources Statistics’ (SRS) Directorate for Social and Behavioral Sciences, Arlington, VA. The appointment is under the Intergovernmental Personnel Act (IPA) for a two-year renewable period

The second installment of SSTI’s Tech Talkin’ Govs’ series includes excerpts from speeches delivered in Colorado, Virginia and West Virginia. Our first installment was in the Jan 13 Digest.

Colorado
Gov. Bill Ritter, State of the State Address, Jan. 14, 2010
“Colorado voters were the first in the country to pass a renewable energy standard. … So, this session let’s think bigger, creating even larger markets for solar, wind, biomass, hydro and geothermal. Let’s increase our standard to 30 percent.

“This will trigger the creation of tens of thousands of new jobs, draw new capital investments and new companies to our state, and keep Colorado at the epicenter of America’s energy revolution. …

The Economic Development Administration invites proposals to distribute $37 million through the Community Trade Adjustment Assistance Program. Funds are available for communities that have experienced, or are threatened by, job loss resulting from international trade impacts. Communities must be certified as eligible for trade adjusted assistance. Funding can be used for planning, technical or infrastructure projects that could involve innovation and entrepreneurship. Proposals are due April 20. Funds will be disbursed through EDA’s six regional offices. More information regarding Community Trade Adjustment Assistance is available at: http://www.eda.gov/xp/EDAPublic/PDF/CommunityTAAFFOFINAL2.pdf

Describing the nation’s innovation system as broken, U.S. Secretary of Commerce Gary Locke yesterday said the Department of Commerce will be “working hard to find solutions” that move more federally funded R&D into the commercial market.

“Even in areas where we are allocating enough funding for R&D, we’re not doing a good enough job getting these ideas into the marketplace, particularly through entrepreneurs.

“For much of the last century, the way we moved federal R&D out of our labs and into the marketplace worked well enough… It wasn't a terribly efficient system, but for a time, it didn't really matter, because the United States was the unquestioned leader in innovation…

“But those days are over – and today, too many of our research ideas never make it out of the lab, and if they do, they get lost in the “valley of death,” where a high-risk idea doesn't have the resources or the funding to make it to market.

Gov. Sonny Perdue last week outlined an $18.2 billion budget for FY11 that reduces spending across several state agencies, including a $9.6 million reduction for R&D activities through the Research Consortium. The governor’s budget also would eliminate two science, technology, engineering and mathematics (STEM) programs within the Department of Education.

The Research Consortium, which supports R&D and tech-based economic development activities at Georgia’s research universities, would receive $16.7 million in FY11, down from $26.3 million approved last year. Executive recommendations include eliminating funding for the Traditional Industries Program ($1.6 million) and the Bio-Refinery program ($200,000).

Gov. Mark Parkinson last week unveiled his FY11 budget proposal, which includes $5.9 million from the Economic Development Initiatives Fund (EDIF) for the Kansas Technology Enterprise Corporation (KTEC), down $1.8 million from the FY10 governor’s estimate of $7.75 million. Many of the governor’s budget recommendations, including funding for KTEC and university research initiatives, may hinge on a tax increase proposal, however.

Proposed KTEC reductions include $600,000 in funding that the agency allocated for the Product Development Financing program to make investments in early-stage companies through KTEC Holdings, Inc., a wholly-owned subsidy of KTEC and $143,000 from the Commercialization program used to support the Entrepreneurship Centers and PIPELINE Mentoring program.

Enterprise Florida released its latest five-year strategic plan for the state, calling for increased investment in STEM education, university research, commercialization assistance and early-stage capital access programs. Florida must diversify its economy and strengthen its high-tech industries in order to reduce the state’s reliance on population-based growth, according to the report. Enterprise Florida also endorses a cluster-based strategy to promote high-tech industries based on their relative levels of development in the state.

The strategic plan identifies three categories of industries that are vital to the state’s economic diversification.

Current trends presented in the 2010 edition of the National Science Board’s biennial Science & Engineering Indicators suggest as early as the 2012 edition, the U.S. will no longer leads the world for a key indicator: total R&D expenditures – unless corrective action is taken.

The bump in U.S. spending from the 2009 ARRA/Stimulus may delay the inevitable until 2014, however. Regardless, the overall tone of the report suggests the previous decade of flat spending and little coordinated national innovation policy has had the anticipated negative impacts relative to other countries.

"The data begin to tell a worrisome story," said Kei Koizumi, assistant director for federal R&D in the President's Office of Science and Technology Policy. “U.S. dominance has eroded significantly."

For instance:

Entering its tenth year covering governors’ State of the State, Budget and Inaugural Addresses, SSTI’s Tech Talkin’ Govs series highlights new and expanded TBED proposals from across the nation. The first edition includes excerpts from speeches delivered in the following states:

Arizona
Gov. Janice Brewer, State of the State Address, Jan. 11, 2010

“… I am taking the following specific actions to make Arizona even more competitive in creating jobs.

First, I am announcing the formation of a Governor's Jobs Cabinet. This team of key state agency directors will cut through the red tape and the green tape to speed job creation.

“Second, I will be allocating a significant portion of remaining federal stimulus funds directly to bring new jobs to Arizona. Specifically, I am devoting $10 million in one-time federal stimulus funds for job training. …