SSTI Digest

Maine Gov. Paul LePage has nominated George Gervais, the acting commissioner of the Maine Department of Economic and Community Development as commissioner. His nomination must be reviewed by the Joint Standing Committee on Labor, Commerce, Research and Economic Development and confirmed by the Senate.

Ned Staebler, former vice president of entrepreneurial services of the Michigan Economic Development Corporation, has taken the position of vice president of economic development at Wayne State.

Much of the recent economic recovery plans coming from governors across the country have focused on growing and nurturing existing businesses through a regional approach to economic development. The idea is that by identifying and defining the unique needs of a region, policymakers and practitioners can then provide the necessary tools and resources to grow industries likely to succeed within a given region, thus improving the overall economic landscape of the state. This approach is happening both in states and at the local level.

Michigan state agencies in collaboration with the Michigan Economic Development Corporation and several private industries and organizations will offer economic development incentives, startup capital, and support services valued around $3 billion to help grow Michigan-based small businesses in emerging industry sectors. The Pure Michigan Business Connect initiative matches people with resources and strengthens relationships to fuel economic growth, according to a press release. Incentives offered by some of the participating organizations include $2 billion in lending over four years from Huntington National Bank and $100 million for second stage funding for Michigan businesses with innovative technologies to accelerate large-scale commercialization. Consumers Energy and DTE Energy also pledged to dedicate an additional $250 million each over five years to purchase goods and services from Michigan-based suppliers. The initiative builds on Gov. Rick Snyder's economic development plans centered on regionalism and economic gardening outlined during his State of the State address.

The Michigan Economic Development Corporation (MEDC) will be armed with $100 million for efforts to attract new businesses and help existing businesses grow in the coming year — an additional $50 million above Gov. Rick Snyder's request. Another $25 million was approved for a new innovation and entrepreneurship program.

Funding for the job creation initiatives comes partly from redirecting funds previously dedicated to the 21st Century Jobs Fund, which received $75 million last year. Lawmakers agreed with the governor's proposal to replace business tax credits with a new incentive program aimed at dedicating resources to helping existing Michigan businesses grow, known as economic gardening. MEDC also is slated to receive $25 million for tourism promotion and $25 million for a film incentive program.

An initiative aimed at stemming Michigan's brain drain was left out of the final budget. The governor had proposed $5 million to develop programs encouraging immigrants with advanced degrees to move to the state.

Gov. Rick Snyder signed into law a measure expanding the scope of the state's 21st Century Jobs Fund allowing more industries involved in research and advanced technology to compete for funds through the program. Although many tech-focused industries such as life sciences and alternative energy companies can already apply for funding under the program, the new legislation expands eligibility to include an even wider range of companies — information technology and agricultural processing. Additionally, the legislation gives the Michigan Strategic Fund Board flexibility to consider awarding grants and loans to any company that demonstrates significant advancement in any innovative technology, according to the governor's office. The 21st Century Jobs Fund is administered by the Michigan Economic Development Corporation to invest in high-tech industries and university research. In his budget proposal earlier this year, Gov. Snyder recommended level funding of $75 million for the program each year in FY12 and FY13.

Tom Thornton, president and CEO of the Kansas Bioscience Authority, submitted his letter of resignation to the board effective immediately. David Vranicar, president of the authority's Heartland BioVentures division, was named interim president and CEO.

Spencer Eccles, executive director of the Utah Governor's Office of Economic Development has named Sophia DiCaro as his new deputy director. Prior to this appointment, DiCaro served as the GOED Finance director.

Ann Arbor SPARK has selected Paul Krutko, a Silicon Valley economic development executive, as its next CEO. Krutko, who currently serves as secretary/treasurer of the International Economic Development Council, most recently led the economic development initiatives of the city of San Jose as chief development officer. Krutko succeeds, Michael Finney, who resigned to become CEO of the Michigan Economic Development Corp.

Recent announcements of new and emerging technology incubators range from Google's selection of Cape Town, South Africa to launch a pilot incubator supporting technology entrepreneurs that it hopes to replicate globally to Alabama Gov. Robert Bentley's plan to create a statewide business incubator focusing on workforce training. Select announcements from across the globe are highlighted below.

Google will set up a new technology incubator called Umbono in Cape Town, South Africa, reports Memeburn. Startup companies selected for inclusion will receive six months of free office space and bandwidth, in addition to $25,000 to $50,000 in funding from a panel of angel investors and Google. The goal is to replicate the model in other parts of the globe. The name means "vision," "sight" or "idea" in Zulu, the article states.

With no significant boost in funding for Michigan's economic development efforts proposed in the executive budget, Gov. Rick Snyder outlined steps to reform the way businesses are incentivized and modify the state's approach to job creation by better supporting local and regional initiatives as a means to transform the state's economy.

The governor's budget includes $199.3 million in FY12 and $199.8 million in FY13 in total funds for the Michigan Strategic Fund within the Department of Treasury. Of that amount, $75 million (the same as last year) is slated each year for the 21st Century Jobs Fund, administered by the Michigan Economic Development Corporation (MEDC) to invest in high-tech industries and university research. Most of the funding ($50 million) would be used for business attraction, economic gardening, innovation and entrepreneurship. The remaining $25 million would support Michigan tourism programs. Budget documents note that business attraction and retention efforts would be augmented with an additional $25 million in general funds.

SSTI recently reported on two important bills passed by lawmakers in Michigan late last year and in New Jersey earlier this year that would provide incentives for taxpayers who invest in emerging technology companies. As an update to the Dec. 8, 2010 and Jan. 12, 2011 stories, both former Michigan Gov. Jennifer Granholm and New Jersey Gov. Chris Christie have taken action on the bills with opposing outcomes. Gov. Granholm signed HB 5921 into law on December 14, enacting a measure to provide a 25 percent personal tax credit for individuals who invest at least $20,000 in qualified seed and early stage companies. Gov. Chris Christie on Friday vetoed S.2454, the New Jersey Angel Investor Tax Credit Act, along with 13 other bills approved by lawmakers in January as part of a jobs package.

Gov. Andrew Cuomo announced plans to direct $200 million in existing funds to establish 10 regional economic development councils to allocate funds and provide business assistance programs across the state. At the same time, the governor would consolidate programs supporting high-tech companies currently administered by the New York State Foundation for Science, Technology and Innovation (NYSTAR) with the Empire State Development Corporation (ESDC) — a move he says will eliminate duplicative functions and save the state $1.9 million in the coming year.

A majority of the funds slated for the councils ($130.6 million) would come from reprioritizing and redirecting existing economic development funds for competitively determined project grants, according to budget documents. The councils, made up of state government, business, community, and academic leaders, would compete for the funds based on economic development plans. Another $70 million would be provided in tax credits through the enhanced Excelsior Jobs Program.

The fourth installment of SSTI's Tech Talkin' Govs series includes excerpts from speeches delivered in Alaska, Delaware, Hawaii, Michigan, Missouri, Nevada, and Vermont. The first three installments are available in the Jan. 5, Jan. 12 and Jan. 19 issues of the Digest.

Ann Arbor SPARK is seeking qualified applicants to become their next CEO. The CEO will be responsible for continuing the momentum and positioning SPARK as a key leader in economic development. The ideal candidate has demonstrated P&L experience, preferably as a CEO; can build and manage a high performance team; has outstanding communication skills; has a strong financial and fundraising skillset and experience base; is able to quickly and effectively develop strong partnerships and relationships.