SSTI Digest

Venture capital invested during the past three decades created 7.6 million U.S. jobs and more than $1.3 trillion in revenue as of the end of 2000, according to an economic impact study released Monday by the National Venture Capital Association (NVCA).  The research shows that $273.3 billion of venture capital created companies were responsible for 5.9 percent of the nation's jobs and 13.1 percent of the U.S. Gross Domestic Product in 2000. Venture investment most frequently led to job and revenue creation in the computer, consumer, and medical health sectors, followed by the communications, industrial energy, electronics and biotech.  The new figures are substantially higher than preliminary numbers released this past Spring (see the May 4, 2001 issue of the Digest ) as they include not only independent venture-backed enterprises but also those venture-backed companies that have been acquired. 

A national conference since 1997, the RuralTeleCongress (RTC) has transformed into a national organization devoted to rural telecommunications. RTC, which held its inaugural session October 14-16 at the Aspen Institute in Colorado, has launched a redesigned website as part of its transformation.  RTC is expected to serve five functions: an educator, convener, facilitator, and discussion forum; a catalyst for rural-based research; a disseminator of information; a way to dispel rural stereotypes; and an instrument for sharing and leveraging limited resources.  The purpose of RTC is to be a convener of rural interests in rural telecommunications policy and its implications for rural consumers, with participants including citizens, small businesses, practitioners, industry representatives, federal and state and regulatory bodies, and representatives from other organizations. 

Jefferson County, Missouri  Its first economic growth strategy in more than a decade, the Jefferson County Economic Development Corp. has issued a plan aimed at attracting new businesses while supporting existing ones, an article in the St. Louis Post-Dispatch reported. The nonprofit's plan suggests acquiring land for industry and commercial development by working with farmland owners and getting municipal governments to delineate rural parcels. Among the programs detailed by the plan are a nonprofit business incubator which would offer low rent to start-up companies and a loan program for the companies. Much of the plan is geared to assist area small businesses, but it also would market the county's strengths, including its river and interstate access, to businesses across the U.S. The Economic Development Corporation presently is seeking grants to secure funding for the plan.  Los Angeles, California 

Public corporations headquartered in the U.S. almost doubled the growth rate of their investment in R&D in 2000, according to new data from the advance estimates of annual U.S. corporate R&D released this week by the Commerce Department’s Office of Technology Policy. According to the report, R&D investment in 2000 rose sharply by 9.3 percent in inflation-adjusted terms, increasing from $145.6 billion in 1999 to an estimated $162.7 billion in 2000. The increase reverses a five-year trend of slowing annual percentage increases in corporate R&D investment and approaches the high of a 10.2 percent annual increase set in 1995. Among the report’s highlights:

With the announcement of the first 30 grants under the Federal and State Technology Partnership (FAST) less than two weeks old (see the October 5 issue of the Digest), the new federal program supporting state efforts to encourage small business technology development and commercialization is in danger of being cancelled. The House version of the Commerce-Justice-State (CJS) appropriations bill covering the Small Business Administration FY 2002 budget (H.R. 2500) provides no funds to continue FAST or the Rural Outreach Program (ROP) that focuses on underperforming states in SBIR awards.

"If technology is at the core of the Innovation Economy, then investment in research and development is one of the principal drivers in the creation of that technology." The sentence, lifted from the new Massachusetts Technology Collaborative (MTC) report, Maintaining the Innovation Edge: The Case for Creating a Massachusetts Science and Technology Strategy, is valid for the entire country but rings especially true for the Commonwealth, a perennial leader in R&D investment and innovation. Past MTC research reveals innovation is at heart of nine key industry clusters in the Commonwealth. In fact, 25 percent of the state's total employment is tied directly to technological innovation. Written by MTC Director of Federal Programs Bob Kispert, Maintaining the Innovation Edge scrutinizes R&D funding in the state over the past decade and unveils some unsettling trends for the future growth and stability of the Massachusetts economy:

After nearly ten years as the head of America's space program, NASA's longest-serving Administrator, Daniel S. Goldin, has announced his resignation, effective November 17, 2001. He also announced he has accepted an interim position as a Senior Fellow for the Council on Competitiveness in Washington D.C., as he transitions into the private sector. Goldin was appointed NASA Administrator April 1, 1992, by President George H.W. Bush. While no replacement has been selected, Goldin says he will work with the Administration before he leaves office to identify an interim Acting Administrator. Return to the top of this page

If one were asked to identify localized examples of the economic spectacle that was the late 1990s, the metro region of Austin, Texas would be on most short lists. A recently completed economic development plan from the tech-soaked Austin suburb of Round Rock, however, reflects the fundamental upheaval or disruption that characterizes the economies of many regions of the country. Round Rock has grown quickly, doubling in population during the last decade to become the second largest city in the Austin-San Marcos metro area. It is experiencing for the first time, like many other cities emerging in a decade marked by rapid urban sprawl, the challenges of a recession.

Richard Bendis, president and chief executive officer of the Kansas Technology Enterprise Corporation (KTEC), has accepted an offer to lead the newly created Innovation Philadelphia Corporation. Mr. Bendis has been involved with KTEC since the organization was created in 1987. He was appointed to the KTEC board of directors by the Governor and served as the board’s first chairman. Mr. Bendis served as interim president in 1994 before being named president in 1995. The decision to leave was tough, Mr. Bendis said, but the Philadelphia job appeals to his entrepreneurial spirit. “I’ll be starting with a blank sheet of paper to build an entity that can help make the Philadelphia region a more vibrant participant in the New Economy.”

The Australian Government has enacted new rules to attract international private equity investment in the country’s venture capital community. The rules introduce tax concessions for international investors, including university endowment funds and venture capital fund-to-fund vehicles. The rules will treat these investors in the same way as pension funds, exempting them from capital gains tax on their Australian investments. The government’s impact analysis suggests the plan should attract $1 billion (Australian dollars) in foreign investment and add $350 million to the Australian annual gross domestic product. Venture capital proponents say the new rules levels the investment field with the U.S., the United Kingdom and other industrialized countries. More information is available from the Australian Venture Capital Association Limited by cllicking on News Releases at: http://www.avcal.com.au

The National Science Foundation has launched the new, online Industrial Research and Development Information System (IRIS) to provide easy access to information on industrial R&D performance across a broad range of years and criteria. The historical database (1953–1998) contains more than 2,500 statistical tables presenting R&D expenditures as a percentage of company sales, by industry, size of company, size of R&D program, type of cost (e.g., wages or materials), state, and source of funds. Data also is arranged to allow easy manipulation of trends analyses and state-by-state comparisons. A late-September Data Brief from the Foundation (NSF 01-338) describes the new system and provides examples of its value for the S&T community. For more information, see http://www.nsf.gov/sbe/srs/databrf/nsf01338/sdb01338.htm

Alabama Senate Bill 130, which would create $80 million in tech-based venture capital funding if passed, was introduced during the current special session of the Alabama state legislature. Using the certified capital company or CapCo model, the bill allows insurance companies to redirect tax payments into qualified investment firms. According to a recent Birmingham Business Journal article, backers of the bill concede the current fiscal environment and short session will probably lead to the bill’s reintroduction when the regular session begins in January. Atlanta, Georgia