SSTI Digest

Growth is most noticeable in dogs, cats and humans when they are puppies, kittens and infants. A new analysis by the Kauffman Foundation looking at the Census Bureau's Business Dynamics Statistics reveals the same phenomenon in businesses: growth, as measured by net employment, is most significant for younger companies compared to their more mature counterparts.  Infant mortality of young firms is very high, though - nearly 20 percent of all jobs at very young startups are lost due to the businesses failing within the first year.

Nevertheless, net employment growth in the firms that survive their first birthday is 15 percent. The net employment growth gradually tapers off as firms mature, but so, too, does the risk of failure and closing.  The Kauffman Foundation terms this an "up or out" pattern.

In 2006, three Arizona CEO groups joined forces to create Science Foundation Arizona (SFAz), a nonprofit public-private partnership charged with making strategic investments to support university research, new high-tech businesses, K-12 STEM education and to leverage outside investment. The state provided public support for these efforts through the 21st Century Fund, which in its first year included $35 million for SFAz's grant programs.

Recently, however, Arizona has begun cutting back their TBED investments through SFAz. Originally, the state had planned to allocate $25 million a year to the 21st Century Fund through FY10, but reduced the allocation in its second year and eliminated funding for FY09 (see the February 4, 2009 issue). Legislators are now considering omitting SFAz funding from the FY10 budget.

Last week the South Carolina Higher Education Study Committee, formed by the General Assembly in 2007, released its action plan to improve postsecondary education and economic opportunity within the state. Leveraging Higher Education for a Stronger South Carolina outlines more than 100 recommendations distributed among the following four goals: making South Carolina one of the most educated states in the nation; increasing innovation and research; improving workforce training and educational services; and, realizing the state's potential.

The recommendations target workforce improvement for industry sectors expected to grow by 15 percent by 2016. The report identifies these sectors as information, health care, utilities, administrative support, waste management and remediation, educational services, real estate, and management of companies.

Karl Fooks, a past managing director for J.P. Morgan & Co. in Asia, is the new president of the Hawaii Strategic Development Corporation. Fooks replaces John Chock who retired last year.

The U.S. Senate confirmed by unanimous consent President Barack Obama's nomination of Karen Gordon Mills as the 23rd Administrator of the U.S. Small Business Administration.

Virginia lawmakers passed a bill last month supporting the state's bioscience industry and providing incentives to investors for bioscience and advanced technology commercialization. The legislation comprised all of the top recommendations from the 2008 Joint Legislative Subcommittee on the Biosciences.

The bill changes the existing Commonwealth Technology Research Fund to the Commonwealth Research Fund to better focus on key areas of R&D, emphasize the importance of commercialization of R&D through matching funds programs, and to provide a loan program for the construction of facilities used in commercializing research. The Innovative Technology Authority would continue to administer the fund and establish and maintain specific guidelines for awarding funds.

Specifically, the bill:

Vermont Governor James Douglas has released a plan to spend some of the state's share of funds from the federal American Recovery and Reinvestment Act on building a stronger base for technology-based growth. The $17.1 million SmartVermont suite of proposals includes funding for technology company loans, lending to small businesses, seed capital for entrepreneurs and support for regional economic development projects. Governor Douglas' office estimates that the investment would attract another $140 million in private capital to support the state's economic development goals.

The Vermont Economic Development Authority (VEDA) would house most of the new and expanded programs covered in the SmartVermont plan. A new Technology Loan program at VEDA would use a $1 million investment from the ARRA funds to secure up to $6 million in loans and attract an additional $4 million in private capital for high-tech companies. These loans would target strategic industries and expansion projects to further the state's economic development goals.

The Technology Innovation Program (TIP) in the National Institute of Standards and Technology is using its FY09 award competition to support high-risk, high-reward research in civil infrastructure and manufacturing. The program has $25 million available to support as many as 25 new awards. TIP is open to individual small-sized or medium-sized businesses or to joint ventures that also may include institutions of higher education, nonprofit research organizations and national laboratories. TIP awards are limited to no more than $3 million total over three years for a single company project and no more than $9 million total over five years for a joint venture.

On March 30, the National Institutes of Health announced a new funding opportunity to use up to $100 million of Recovery Act funds to enable academic institutions "to hire, provide appropriate start-up packages, and develop pilot research projects for newly independent investigators, with the goal of augmenting and expanding the institution's community of multidisciplinary researchers focusing on areas of biomedical research relevant to NIH." 

In support of Gov. Bill Richardson's proposal to develop a workforce trained for 21st century jobs, the New Mexico State Legislature passed two bills this session allocating funds and creating training programs for green jobs. Lawmakers also supported a technology transfer initiative and several measures aimed at growing the state's solar industry.

HB 622 creates a green jobs fund from which higher education institutes will create green job training programs. The fund was initially designed to receive money from bonds issued by the New Mexico Finance Authority; however, that provision was eliminated and now the fund will receive appropriations from federal green jobs programs and any other allocations, according to an article in The New Mexico Independent.

Make 2009 your organization's year to be recognized as a national leader in the TBED community!

Legislative leaders and key stakeholders need to know the valuable impact of TBED on local, state and regional economies. SSTI's Excellence in TBED Awards showcase these accomplishments and tell the story of how successful TBED initiatives have responded to a critical need by applying innovative approaches to generate substantial economic gains for their region.

As an award winner, you:

Though angel investments dropped considerably in 2008, the total number of deals held steady, according to a year-end analysis released by the University of New Hampshire's Center for Venture Research (CVR).  Total investments fell 26.2 percent from 2007 to $19.2 billion, while deals fell only 2.9 percent. Deal size, however, declined by 24 percent. CVR concludes that although the current economic climate has not reduced angel activity significantly, it has caused investors to scale back the size of their investments.

Angel investors continue to be the primary source of seed and startup capital for entrepreneurs. In 2008, 45 percent of angel deals invested in companies at the seed and startup phase, up from 39 percent in 2007. A majority of angel capital recipients, 63 percent, are in their first sequence of fundraising, a number that has held steady for several years. Angel investors are becoming less interested in expansion-stage deals, which received only 14 percent of total angel dollars.

With its most recent release of academic research and development expenditures, the NSF has provided insight into the portion of funding that originates from private companies. SSTI has prepared a table showing these industry-financed R&D expenditures to academic institutions within each state from FY03 to FY07, the percent change over this period and rank, the percentage of each state's total funding originating from industry and this percentage's relative rank.

In the U.S., private companies supplied $2.67 billion in R&D expenditures to the nation's universities and colleges in FY07. California led the country with $357 million from industry. This was followed by North Carolina at $256 million and Texas at $203 million. New York, Pennsylvania, Ohio, and Massachusetts are the only other states with more than $100 million in FY07 from industry.