SSTI Digest

Nov 16-22 marks the second annual Global Entrepreneurship Week, a celebration of fostering innovation and ambition in people under 30 years of age and encouraging them to start new businesses. Founded by the U.S.-based Ewing Marion Kauffman Foundation and the UK-based Make Your Mark campaign, the Global Entrepreneur Week website maintains an interactive calendar of entrepreneur-focused events in 87 countries and all 50 states. According to the site, Tennessee leads the U.S. with 52 scheduled events, followed by California (41 events), Michigan (40 events), Florida (37 events), and New Jersey (31 events). More information regarding Global Entrepreneurship Week 2009 is available at: http://www.unleashingideas.org/

NorTech, the Northeast Ohio Technology Coalition, seeks applications for a Vice President of Strategic Outreach. Reporting to the president and CEO, and serving as an integral member of the senior management team, the VP of Strategic Outreach will be responsible for the development of NorTech’s overall communication strategy and building relationships with key stakeholders. The VP of Strategic Outreach will be responsible for the development, integration, and implementation of a broad range of marketing communications and public relations activities relative to the strategic direction and positioning of the organization and its leadership.

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Mayors from across the nation anticipate their cities will be in worse financial shape next year as sales tax revenue, revenue from service fees, and property tax revenues all are expected to decline. Findings from the U.S. Conference of Mayors survey indicate that while two out of three mayors expect budget shortfalls this year, four out of five are projecting shortfalls in their next fiscal year and those shortfalls are expected to be the same or larger than this year’s experiences.

More than half of the 158 mayors surveyed say that despite the funding provided through the American Recovery and Reinvestment Act, the current budget situation has affected their ability to engage in job-creating projects. Moreover, the U.S. Conference of Mayors and IHS Global Insight project job losses will continue into 2010 and will not regain their 2007 peak until late 2012. The most common actions being taken by cities to avoid budget shortfalls this year include postponing projects or initiatives (81 percent), eliminating city positions through attrition (75 percent), and reducing purchasing and procurement (73 percent).

Exactly six weeks into the federal government's fiscal year which commenced on Oct 1, five of the 12 appropriations bills for FY10 have been signed into law by President Obama. The remaining seven bills are at various places in the appropriations process, none of which have emerged from conference committee for a final vote by each chamber.

This means the final appropriations for departments such as Defense, Commerce, Labor, Education, HHS and the NIH, and agencies such as NSF and NASA still need to be resolved. However, the budget bills that have become law, including the Energy and Water bill, the Interior and Environment bill, and the Agriculture bill, contain specific line-items which can be reported for various research, development, and TBED content.

All eyes are on New Jersey and Virginia as newly elected governors soon will unveil action plans and proposals for their first year in office. During the recent gubernatorial campaigns, Governors-elect Chris Christie and Bob McDonnell both outlined plans to transform their respective states’ economies and create high-paying jobs through targeted investments in renewable energy. The following is an overview of the energy proposals outlined during the campaigns.

New Jersey Gov.-elect Chris Christie’s Energy as Industry plan focuses on re-branding New Jersey to promote the state’s resources to energy producers and providing incentives for renewable energy manufacturers to locate in the state and create high-paying jobs.

The fox pattern on his tie playfully conveyed Josh Lerner knew exactly where he stood as he looked out over the standing-room-only ballroom that served as the henhouse for SSTI’s annual conference two weeks ago. The audience, comprised mostly of practitioners from state, local, nonprofit and university-based TBED organizations, played its role as hens well – some nervous, some angry, all in fidgety anticipation of what the Harvard Professor was likely to say. SSTI fielded several questions before the conference as to why Lerner was invited as a plenary speaker based on apprehension from the title alone of his new book, Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed – and What to Do About It. As the book had just hit the streets the week before, we were all about to find out.

Texas leaders have fully embraced the importance that strongly supported top-tier research universities can serve for attracting and retaining high-wage technology companies and as drivers for future economic growth. With Tuesday’s passage of Proposition 4 by a solid 56.7 percent majority, it is evident the voting population of the Lone Star State gets it as well.

Angel investors are reducing the average size of their investments, according to the latest report from the University of New Hampshire Center for Venture Research. In the first half of this year, total angel investment dollars fell by 27 percent from the same period in 2008, but the number of angel deals increased by six percent. As a result, the average deal size has fallen by 31 percent since early 2008.

The report attributes the change to lower company valuations and to angel investors taking a more cautious approach to investing without decreasing their level of activity. Investors have also begun shifting their focus away from seed- and startup-stage firms in order to support their portfolio companies and reduce their risk.

The first third of the current fiscal year was over before Pennsylvania leaders could agree on a $27.8 billion FY10 budget that sharply reduces spending across many areas of community and economic development. It does boost funding for basic education to historic levels, however.

State spending in FY10 is $1.9 billion lower than in FY09 and $524 million less when federal stimulus dollars are taken into account, according to the governor’s press office. In addition to spending cuts across most agencies, the state will raise cigarette taxes by 25 cents per pack and institute a new tax on small cigars.

Gov. Jennifer Granholm signed the final FY10 budget bills last week, cutting nearly $1.9 billion in spending and warning state agencies of a possible 20 percent cut in state spending next year. To help fill the FY10 deficit, the enacted budget incorporates $1 billion in federal stimulus funds. With less than $600 million in federal funds available next year, the state could face a shortfall ranging from $800 million to $1 billion, reports The Detroit News.

The Michigan Strategic Fund, administered by the Michigan Economic Development Corporation, will receive $114.6 million in FY10, down from $152.6 million approved last year. This includes $28.5 million for the 21st Century Jobs Fund, a sharp decrease from last year’s appropriation of $65 million. The fund supports job creation in emerging fields such as renewable energy, life sciences, homeland security, and advanced manufacturing by investing in basic research at universities and providing access to capital. The business incubator program is funded at $1.3 million, a $50,000 boost over last year.

The Chinese government announced last Friday the launch of 20 venture capital funds, designed to target investments in high-tech sectors within their national economy. As outlined by China's National Development and Reform Commission (NDRC), these sectors include the medical and pharmaceutical industries, information technology, energy conservation and environmental protection, and energy production.

The initial capitalization of the 20 funds comes to $1.31 billion, with three-fourths of the total provided by private investment. The remaining one-fourth originates from a split between the Chinese central government and seven provincial governments (Beijing, Jilin, Shanghai, Anhui, Hunan, Chongqing, and Shenzhen). The funds will be managed by professional investment firms independent from the national or provincial governments, according to the NDRC.

Tuesday’s Republican victories in the gubernatorial races for New Jersey and Virginia mean a shift in political power for both states. With current fiscal conditions continuing to press state revenues lower and unemployment rolls higher, much of the new governors’ attentions could pass over tech-based economic development policies. Alternately, increased investments in TBED may be exactly what are needed right now to help create high-wage jobs in both states.

A look at the posted campaign platforms for the two successful gubernatorial candidates suggests changes are afoot in both states, if actions follow the campaign rhetoric when they take office in January. Highlights for both states follow (energy-related policies will be covered in next week’s Digest).

Virginia The website for the campaign of Bob McDonnell, a 55- year-old former state attorney general, states the governor-elect will focus heavily on traditional business recruitment/retention strategies, regionalization of job training and university research investments, and increasing higher education graduation rates.