SSTI Digest

A new $15 million pilot program at the University of Michigan (UM) hopes to make a big impact in the research world by letting professors follow their instincts and allow breakthroughs to happen more naturally. Under the MCubed initiative, three researchers from different disciplines agree to work together or "cube" on a high-risk, high-reward idea. They also receive funding to hire students or a postdoctoral researcher. The university expects to fund research in the exploratory phase that could eventually lead to larger traditional grants.

As many states near the mid-point of their 2012 legislative sessions, we thought it would be a good time to take a look at some of the bills advancing in statehouses that could impact states' efforts to improve economic conditions. Several states are seeking to advance access to capital initiatives as they continue to struggle with declining revenue and tight credit restrictions. The following overview provides a sampling of TBED bills supporting access to capital, R&D enhancements and higher education standards.

Providing Access to Capital

The Arizona Senate approved last month a bill to empower the state to facilitate $250 million in loans to manufacturers and other businesses by allowing third parties to sell income and insurance premium tax credits to venture capital firms, banks and other lenders, reports The Arizona Capitol Times. Supporters say the program, which has been employed at the federal level over the last decade under the New Markets structure, has been adopted successfully by nine other states. The measure awaits action in the House.

The Michigan Economic Development Corporation announced the Tech Transfer Talent Network — a new $2.6 million initiative to increase the supply of seasoned entrepreneurs and innovators who can lend their expertise to member universities' tech transfer offices. The University of Michigan's (U-M) tech transfer office will lead the seven-university network and share its tech transfer resources with member institutions. In addition to U-M, the members are: Wayne State University, Michigan State University, Michigan Technological University, Western Michigan University, Grand Valley State University and Oakland University. The Tech Transfer Talent Network's primary purpose is to increase the supply of seasoned entrepreneurs and innovators who can lend their expertise to university tech transfer offices. The state hopes these connections will serve as important bridges to launch technology-based startups or license university inventions to established companies.

With a greater focus on jobs training and arts and cultural programs, Michigan's budget for economic development would increase by more than 10 percent in FY13 under Gov. Rick Snyder's proposal. Universities and community colleges would receive a 3 percent boost under a new performance formula based on degree completion — particularly in critical skills areas such as science, technology, engineering, mathematics, and health care. The Michigan Economic Development Corp (MEDC) is slated to receive $195 million in FY13, up from $175 approved for the current year. This includes $100 million for business attraction and economic gardening. Another $25 million would support innovation and entrepreneurship programs established last year (see the June 1, 2011 issue of the Digest). To address economic development in distressed cities, the governor recommends an additional $15 million in general fund support for the Talent Fund for Job Training and Skills Development. The budget also increases funding by $3.6 million for arts and cultural grants programs ($5 million total).

The Michigan Strategic Fund (MSF) and the Michigan Economic Development Corporation (MEDC) announced public hearings for the Pure Michigan Venture Match Fund — a new program that will match early stage investments from eligible venture funds in Michigan-based technology businesses. MSF and MEDC intend for the program to attract venture funds, within and outside of Michigan, to consider investments in early stage and pre-revenue technology companies and to mitigate some risk for venture fund investments through the matching MSF funds. The minimum venture investment of $700,000 is required and the maximum eligible investment is $3 million. MSF will match between $350,000 and $500,000 with similar investment terms as the venture investment. To be eligible for funding, a company must have secured a qualified venture investment and face a peer review of its business plan. Eligible investors must fulfill all the requirements of the 21st Century Jobs Fund legislation. After consideration of the comments and information received at the public hearing, the final MVM Fund program guidelines will be presented to the MSF Board for approval and implementation.

Jeffrey Brancato has recently joined NorTech as vice president. Prior to joining NorTech, Brancato was the associate vice president for Economic Development at the University of Massachusetts.

Randal Charlton has announced his retirement as executive director of TechTown, the Wayne State University research and technology park. Leslie Smith, the general manager of TechTown has been appointed to fill the position beginning Nov. 1.

Martin Briley has been named CEO and president of the Virginia Economic Development Partnership. Since 1997, Briley has been executive director of the Prince William County Department of Economic Development.

Richard Baier, Nebraska's Department of Economic Development director plans to step down at the end of Oct. to take an executive-level position with the Nebraska Chamber of Commerce.

Michigan State University, Rutgers University and the University of Michigan all have announced new initiatives that are intended to fuel innovation and grow regional economies. Michigan State established the University Center for Regional Economic Innovation — a university-based, economic development research center focused on generating businesses and jobs statewide. Rutgers University created a Disruptive Innovation Fund to provide up to $1 million to support the commercialization of innovative products. The University of Michigan's Michigan Investment in New Technology Startups initiative will invest directly into U-M startup businesses.

The Michigan Economic Development Corporation (MEDC) recently announced the recipients of $25 million in awards from Michigan's 21st Century Jobs Fund. Each of the eight organizations receiving the awards will use the funding to support Michigan entrepreneurs and technology commercialization. The largest single allotment, $10.8 million, will benefit Ann Arbor SPARK, which plans to replenish its Michigan Pre-Seed Capital Fund with the award. Other recipient organizations will be offering capital and business assistance around the state.

The 21st Century Jobs Fund is a program of the Michigan Strategic Fund, which is administered by MEDC. Since its creation in 2005, the fund has promoted the commercialization of new technologies and provided capital for startup companies. The current round of awards will support programs at the eight recipient organizations for the next two to three years.

The Kiva City program will extend small business access to microloans in U.S. cities facing the greatest small business stress. Kiva, a nonprofit organization, offers personal microlending services. Building upon Kiva's Internet-based lending model, the goal of the Kiva City program is to spur job growth and economic recovery through microfinance by building connections between Kiva's global network of 592,000 individual lenders and small business owners across the country. Kiva also intends to reach out to credit unions or other financial institutions partners at a local level to facilitate the loans and community groups and civic leaders to build awareness among small business owners and refer them to the program. Kiva.org, in partnership with Visa Inc., will administer the program. Read the press release...

Michigan's InvestMichigan! Mezzanine Fund is slated to become the Small Business Administration's (SBA) first licensed Impact Investment Fund through the agency's new Impact Investment Initiative. The SBA initiative, which is part of the White House's Startup America initiative, uses the existing infrastructure of the Small Business Investment Company (SBIC) program to encourage small business growth. Participating funds must make place-based investments in small businesses in underserved areas, or investments in the clean energy and education sectors. SBA will provide $80 million to the Michigan fund, along with another $15 million from Dow Chemical Company and $35 million from Michigan Growth Capital Partners. Read the announcement...

Pamela Goldberg has been appointed as the executive director of the Massachusetts Technology Collaborative. Currently, Goldberg serves as director of entrepreneurial leadership at Tufts University.

Alabama Gov. Robert Bentley announced the appointment of Greg Canfield as the new director of the Alabama Development Office. Current ADO director Seth Hammett is returning to his position with PowerSouth Energy. Canfield is expected to begin his duties on or before Aug. 1.

Ohio Gov. John Kasich announced that Jim Leftwich is resigning as director of the Development Department. Leftwich, former CEO of the Dayton Development Coalition, stepped in as former director Mark Kvamme moved to a different position within the administration.

James Weyhenmeyer has been named the vice president for Research and Economic Development at Georgia State University. Previously, Weyhenmeyer was the senior vice provost for Research and Economic Development in the Office of the Provost of the State University of New York system. He succeeds Robin Morris, who has assumed the position of associate provost for Strategic Initiatives and innovation.

Robert McMahan Jr. has been named president of Kettering University. McMahan joins Kettering from Western Carolina University, where he was the founding dean and professor of The Kimmel School.