SSTI Digest

The venture capital industry appears to have rebounded from the post-tech bust slump, according to Ernst & Young’s latest Global Venture Insights Report. In the past year, venture investment has climbed to its highest point since 2001. Much of this growth has taken place in emerging markets like India, Russia and particularly China, where the venture industry is a relatively recent phenomenon. After three years of consecutive growth, China has outpaced the United Kingdom, Israel and Canada to assume the rank of second most active target market for venture investment. The report observes that this rapid growth has finally allowed China to make the leap from a promising new market to an important player in the industry.   Around the world, almost 20 percent of all venture deals took place across national boundaries. Ernst and Young notes that this is an increase of 250 percent over the preceding five-year period. They observe that this trend has been accelerated by the practice of “venture licensing," the replication of proven business models in new markets. Though the U.S., Europe and Israel remain key in the industry, practices like this are…

With the goal of improving the competitiveness of their workforces, many states and regions are searching for the best policies to encourage participation in educational opportunities beyond high school. Dual enrollment plans are one type of such policies that enable students to enroll in postsecondary level courses while still in high school.   According to a recently released study that examines Ohio’s dual enrollment plan, 47 states have enacted policies related to dual enrollment as of August 2006. A joint publication by the KnowledgeWorks Foundation and the Western Interstate Commission for Higher Education (WICHE), The Promise of Dual Enrollment: Assessing Ohio’s Early College Access Policy is the first report that collects and analyzes available data on the state’s program since its inception 18 years ago. The report provides insight into the participation rates, accessibility, levels of success, and costs of the policy to the state.   Initially, the Ohio Post Secondary Enrollment Options (PSEO) Policy was intended to allow high school juniors and seniors the opportunity to enroll in college courses and receive…

The Maryland Technology Development Corporation has awarded more than $500,000 to seven start-up technology companies. The program, TEDCO’s Maryland Technology Transfer Fund (MTTF), is designed to help businesses transfer technology from Maryland universities and federal laboratories into the marketplace. The grants range between $70,000 and $75,000.   TEDCO reports that MTTF has provided funding to 71 companies. With a total investment of $4,078,793, these companies have gone on to receive downstream funding from angel and venture investors, federal awards and other resources exceeding $152.4 million.   You can learn firsthand about this program and other TEDCO initiatives underway at SSTI’s 11th Annual Conference, Transforming Regional Economies, Oct. 18-19, 2007. Register and learn more about the conference at http://www.ssticonference.org/conference07.htm.

Like many states, Wisconsin has struggled to attract consistent attention from the national venture capital industry. Capital can be especially difficult to obtain in the state, since entrepreneurs with limited resources are often unable to participate in the expensive and complicated process of presenting their cases to venture capital firms based on the coasts. To address this market failure, Wisconsin has established several programs to encourage the formation of local venture and angel capital groups and incentives for in-state equity investment. A recent report from NorthStar Economics, in cooperation with the Wisconsin Technology Council and the Wisconsin Angel Network, suggests that these equity programs are working well. In 2006, early-stage risk capital activity reached $102.9 million, a 54 percent increase over the previous year. This early-stage activity includes investments by angel networks, individual angels, informal angel groups and early-stage fund investments. To put that in perspective, the Center for Venture Research at the University of New Hampshire reports that angel investing in the U.S. increased only 11 percent last year…

With the rapidly rising cost of health insurance, entrepreneurs frequently find themselves unable to pay their premium in the early stages of business ownership. Often, this means going without health insurance or abandoning plans to launch a new firm. The North Central Iowa Alliance (NCIA) has announced a new initiative to lower this barrier facing new business owners. The Helping Entrepreneurs Launch Program at North Central Iowa (HELP @ NCI) will make health insurance available to qualified entrepreneurs in the region during the first three years of their business' existence.   The program will be launched in partnership with the North Iowa Area Community College John Pappajohn Entrepreneurial Center, which will offer a regional feeder system for HELP @ NCI along with its other services for entrepreneurs. Though the program is offered at no cost to participants, business owners will be made aware of the expenses so that they can incorporate health insurance into the business planning.   HELP @ NCI will be funded through a $50,000 grant from the Iowa Department of Economic Development and through $15,000 in matching…

Innovation and technology, two key components of NGA Chair Arizona Gov. Janet Napolitano's Innovation America initiative, were the subject of much discussion during the National Governors Association's (NGA) recently concluded annual meeting. The two components are given even more attention in three new reports released by NGA during the meeting. With the reports' release, NGA has completed its series of publications - seven in all - that were produced as part of Innovation America, an initiative that places science, technology, engineering and mathematics education at its center. The first publication, A Compact for Postsecondary Education, focuses on how states can better align postsecondary education with their economic needs. Investing in Innovation, the second publication, provides a snapshot of state investment in R&D and offers guidance on how to design successful R&D investments. The final publication, titled Innovation America: A Final Report, summarizes lessons learned over the course of Gov. Napolitano's initiative, paying special attention to the role of governors in establishing best practices. Investing…

Business incubators, known for the business support services they provide entrepreneurs, have shown themselves through the years to be a valuable resource in the process of starting and growing companies. Office and laboratory space provided at a reduced cost to tenants is just one of the benefits. Many incubators also offer access to university research, mentoring and seed and venture capital in order to encourage entrepreneurship and ensure the success of new high-technology start-up companies. According to a recent study by the National Business Incubation Association (NBIA), the business incubation industry has grown steadily in recent years, with the number of incubation programs in North America nearly doubling between 1998 and 2006. The study indicates 1,100 business incubation programs were operating in North America in early 2006 - up from 587 in 1998 and 950 in 2001 - and more than half (54 percent) of these programs were mixed-use incubators that accepted a variety of clients. Another 39 percent focused on assisting technology companies. Based on extrapolations from survey data, NBIA estimates that in 2005 alone, North American incubators…

For a country to attain a thriving information technology (IT) sector, an environment that promotes competitiveness, protects innovation, and invests in education and infrastructure must be supported. According to a report released this month by the Economist Intelligence Unit, which created an “IT Industry Competitiveness Index” to measure and compare this environment, the U.S. ranks first among 64 countries from around the world. Authored by Kim Thomas, The Means to Compete: Benchmarking IT Industry Competitiveness used a combination of 25 quantitative and qualitative indicators to produce a score and ranking for each county in the report.   Besides the U.S., the countries with overall index scores in the top 10 were Japan, South Korea, the United Kingdom, Australia, Taiwan, Sweden, Denmark, Canada and Switzerland. The assortment of indicators was organized into six distinct categories, each with a specific weighting for the composite index score. These categories included: Overall business environment (10 percent) IT infrastructure (20 percent) Human capital (20 percent) Legal environment (10 percent) R&D environment (…

Angel networks are often seen as an effective way to make sense of hodgepodge of individual investors, institutional funds and investment groups that make up the early-stage capital industry. Though many regions suffer from a lack of early-stage capital, this problem is often exacerbated by insufficient knowledge among entrepreneurs about local angel investors and groups and vice versa. Angel networks can fill this void by facilitating communication between local investors and entrepreneurs, thereby increasing the number of opportunities available to both. Several states provide financial support for angel networks, including Wisconsin (Wisconsin Angel Network), Pennsylvania (Pennsylvania Angel Network), Mississippi (Mississippi Angel Network) and Washington (WTC Angel Network). These organizations unite angel investment groups from around their respective states and provide a convenient starting point for new companies seeking early-stage capital.   A working paper from Veroniek Collewaert, Sophie Manigart, and Rudy Aernoudt, however, argues that the case for public support of angel networks may not be so cut and dry. In Europe, the popularity of…

As community leaders plan the physical development of their regions, some recent research may offer insight into the benefits of encouraging close proximity between firms. A group from Statistics Canada has published a paper exploring the various gains in productivity that manufacturing firms experience due to geographic concentration. In Urban Economies and Productivity, John Baldwin, Desmond Beckstead, W. Mark Brown and David Rigby use longitudinal data from a collection of approximately 20,000 manufacturing establishments across Canada.   Baldwin et al. incorporate theories that originated a century ago from the economist Alfred Marshall. According to Marshall, gains in productivity are due not only to the operational activities that occur within a firm, but also to a firm’s physical location. In his work, he identified three explanations how the geographic clustering of firms can increase their performance. First, collocating firms produce a larger pool of skilled labor with specialized skills. Second, information is transferred between firms in close proximity, resulting in knowledge spillovers. Third, clustering encourages the development of…

Together, we’re growing a strong and vibrant tech-based economic development community. State Sponsors Virginia Economic Development Partnership Washington Life Sciences Discovery Fund Affiliates Center for Advanced Engineering & Research City of Dublin, Ohio Defense Metals Technology Center Idaho National Laboratory Nashville Area Chamber of Commerce Wisconsin Security Research Consortium University of North Dakota, Center for Innovation Vermont EPSCoR Virginia Biotechnology Association Youngstown Business Incubator Supporters Edward Lowe Foundation GSP Consulting SSTI serves as our members go-to resource and strategic partner when dealing with TBED issues. SSTI’s unique ability to address the information needs of its members comes from the fact that SSTI’s staff and board have been in the trenches of technology-based economic development. SSTI’s…

As part of the budget deal agreed upon earlier this week between Gov. Ed Rendell and Pennsylvania lawmakers, two of the governor’s major TBED priorities - the Jonas Salk Legacy Fund and an alternative energy fund - will be voted on later this year.    Under the budget agreement, lawmakers committed to a roll call vote in November to decide on the Jonas Salk Legacy Fund, which proposes borrowing $500 million from the state’s tobacco settlement proceeds to invest in scientific research (see the Feb. 19, 2007 issue of the Digest). The initiative will be matched on a dollar-for-dollar basis, yielding $1 billion in new bioscience investments, according to the governor’s press office.   Gov. Rendell will call a special legislative session beginning Sept. 17 to consider alternative energy and conservation legislation. Lawmakers agreed to consider a $60 million annual commitment with the option of a bond authorization of up to $750 million. The governor’s Energy Independence Strategy calls for the creation of a fund to help bring energy products and technologies to the market.   The fiscal year 2007-08…