SSTI Digest

Buoyed by a strong national economy, venture capital firms have invested at an all-time during the 2nd quarter of 1999, according to the latest quarterly survey by PricewaterhouseCoopers. At $7.61 billion for the quarter, venture capital investments were more than double the total reported only one year ago. The current survey reflects the investment activity of 684 venture capital firms. Three of the last four surveys have revealed record levels of investment. The previous high, set in the first quarter of 1999, was $4.31 billion -- 41 percent over the earlier record of $3.77 billion set during the third quarter of 1998. James Atwell, Managing Partner of the Venture Capital Practice of PricewaterhouseCoopers, predicts the current record will reign longer than previous highs. "All the stars were aligned in the second quarter: a solid economy, a favorable IPO market and a strong stock market. That combination resulted in a level of investment that is not likely to be eclipsed in the near future." Average funding per company rose 57 percent during the second quarter to $7.4 million versus $…

Last week, Indiana Governor Frank O'Bannon named the Board of Directors to oversee the design and administration of the new 21st Century Research & Technology Fund. By law, the Lieutenant Governor serves as chairman for the board. Earlier this summer, the Indiana General Assembly approved a budget for the initiative of $50 million for the next two years for the initiative. This level of funding, coupled with the existing programs of the Indiana Business Modernization Technology Corp. (BMT), moves Indiana into the top tier of states investing in technology-based economic development. The 21st Century Research and Technology Fund is to provide grants and loans that support economic development by addressing one or more of the following goals: to increase the capacity of Indiana institutions of higher education, businesses, and nonprofit organizations to compete successfully for federal or private research and development funding; to stimulate the transfer of research and technology into marketable products;…

Small companies' interests in developing environmental technologies appear to growing. Between 1998 and 1999, the Environmental Protection Agency (EPA) saw a 64 percent increase in the number of SBIR Phase I proposals submitted. The number of awards made by the agency was unable to keep pace, growing by only 30 percent. As a result, EPA was able to fund less than 9 percent of the 535 SBIR Phase I proposals received in 1999. In 1998, more than 11 percent of the proposals were funded. The accompanying table presents the distribution of EPA awards and proposals by state. Abstracts of EPA awards for the 1999 SBIR Phase I solicitation have not been posted on their website currently but should be soon. The web address is: http://es.epa.gov/ncerqa/sbir/

Taratec Corporation of Columbus, Ohio has been awarded a $44,500 contract from the Department of Commerce's Office of Technology Policy (OTP) to prepare a report of science & technology indicators for all 50 states. The indicators are intended to assist Commerce in evaluating the impact and outcome of projects funded by the Experimental Program to Stimulate Competitive Technology (EPSCoT) as well as other OTP programmatic improvements. The solicitation, released in early July says the report will be completed for Commerce in 18 weeks (refer to the 7/2/99 SSTI Weekly Digest Addendum for more details). Commerce will be responsible for any further publication and distribution. For more information, contact Anita Balachandra with the EPSCoT program at 202/482-8004 or by email at Anita_Balachandra@ta.doc.gov

The September 3, 1999 issue of the SSTI Weekly Digest contained some errors in the SBIR tables. The correct information is below. Revised tables are available for review on our website at:  http://www.ssti.org/Digest/Tables/090399t.htm In the Department of Education's SBIR Phase II awards, the totals for Michigan and Minnesota were inadvertently switched. There were no Phase II proposals received nor awards made to Michigan firms this year. Minnesota firms submitted two proposals, both of which were selected for Phase II funding. The Department of Education awarded one award out of three proposals received from firms located in Wisconsin. In the table, we accidently relocated these businesses to Wyoming. No Education Phase I SBIR proposals were received from Wyoming firms this year. In the table presenting NASA SBIR Phase II awards, the correct statistics for Michigan are 0 awards from four proposals. The correct figures for Mississippi are two awards to two different firms from three proposals submitted.

U.S. Department of Commerce Secretary William Daley has labeled as Amisleading@ a press release issued by the House Science Committee regarding the proposal review and selection criteria of the Advanced Technology Program (ATP). [See August 27, 1999 issue of SSTI Weekly Digest.] In the release, Rep. Sensenbrenner, the Chairman of the Committee, questioned the program's commitment to ensuring federal grants were not displacing private capital. The Department of Commerce disputes that criticism. "With respect to ensuring that project applicants adequately demonstrate the need for Federal funding, the ATP requires applicants to provide convincing assurances at several stages in the review process,@ said Daley in a letter to Rep. Sensenbrenner. AATP rejects proposals that fail to make a convincing argument that the work could not be entirely funded by industry." In 1998, ATP added Section 16 to the proposal cover sheet, instructing applicants to describe their prior efforts "to secure private capital to support this project wholly."  For the 1999 solicitation, ATP additionally requested…

The Kentucky Science and Technology Corp. (KSTC) has released Kentucky's Science and Technology Strategy, a plan outlining ten specific recommendations in four strategic areas to guide the Commonwealth's future R&D investments. If implemented, the recommendations are expected to have significant impact in just a few years. The four key strategic areas include enterprise development, manufacturing modernization, technological infrastructure, and people. The recommendations and their estimated annual costs are listed below. Most will require passage of new legislation by the Kentucky General Assembly in their next session. The recommendations are: Authorize use of two percent of state pension funds for business investments (up to $432 million) Increase compensation for K-12 math & science teachers who hold math & science degrees ($35 million estimated) Increase state investments in dedicated S&T higher education trust funds ($3 million) Create a Kentucky Science & Engineering Foundation to expand and replace KY EPSCOR ($2.5 million new money plus existing state…

NASA has announced the selection of 103 R&D projects to share approximately $62 million as Phase II recipients under the agency's Small Business Innovation Research (SBIR) Program. The 103 awards were chosen from 319 proposals submitted by promising NASA 1998 SBIR Phase I recipients. Ninety firms in 27 states won the 103 Phase II awards. Each project may receive up to $600,000 over two years to support their Phase II efforts. The accompanying table presents the distribution by state of awards to proposals, the conversion percentage, and the number of firms selected. More detailed information on NASA's selections may be found on the NASA SBIR website: http://sbir.hq.nasa.gov/.

The U.S. Department of Education's Small Business Innovation Research (SBIR) Program has announced approximately $3.2 million has been awarded through the 1999 SBIR solicitation. The agency funded 40 Phase I projects, totaling nearly $2 million, from 208 proposals received from companies across 40 states. An additional $1.2 million was awarded to ten Phase II projects selected from a pool of 34 proposals. The accompanying table presents the distribution of proposals and awards by state. No proposals were received from firms in those ten states omitted from the table. More information on Education's 1999 SBIR awards, including research topics and specific information for each awardee, may be found at http://www.ed.gov/offices/OERI/SBIR/

Before Congress left for its August break, the House voted 217-210 to pass the Commerce-State-Justice Appropriation Bill. Among other items, the Bill (H.R. 2670) eliminates all funding for the Advanced Technology Program (ATP). With this zeroing-out of funding for ATP, NIST’s total appropriation would be $436.7 million, $300.3 million below the request of $735.0 million, and $210.5 million below FY1999 funding of $647.2 million. The House Appropriations Committee report submitted with the bill says that after many years in existence, ATP has not produced a body of evidence to overcome fundamental questions about whether the program should exist in the first place. Given the tremendous financial constraints under which the Committee is operating, the Committee concludes that funding would be better spent on other higher priority programs and recommends that the ATP program be terminated. This decision coincides with House Science Committee Chairman James Sensenbrenner, Jr.’s (R-WI) announcement that the General Accounting Office (GAO) has released a draft report showing that ATP reforms designed…

This year’s second attempt to pass legislation establishing a state-funded seed capital program in Missouri was successful during the waning hours of the 1999 session of the Missouri General Assembly. SB 518, the Missouri New Enterprise Creation Act, authorizes the creation of up to four seed capital funds at the state’s innovation centers to support new technology-based companies in the state. Funding for the program will be generated through $20 million in tax credits, with a maximum limit of $5 million in credits each year. The legislation calls for a state seed capital and commercialization strategy to be developed and approved by a yet-to-be-established Missouri Seed Capital Investment Board prior to the creation of the seed capital funds. One fund is exempted from this provision and will be started immediately to assist any of the up to 7,000 Missourians to be laid off by the Boeing Corporation over the next two years. “These employees are highly skilled and trained in the latest technology,” Governor Mel Carnahan said of the Boeing layoffs while signing SB 518. “Based on historical…

NASA has named 20 companies from 13 states as recipients of the agency’s 1999 Small Business Technology Transfer (STTR) Program Phase I solicitation. NASA received 82 proposals from 59 companies in this year’s competition. Each selected project will receive a fixed-price, one-year contract with NASA for up to $100,000. Successful Phase I recipients may compete for two-year Phase II contracts of up to $500,000 next year. All STTR awards involve partnerships between the selected companies and research institutions. While the small business is the recipient of the award, a minimum of 30 percent of the research must be completed at the research institution, and the small business must perform at least 40 percent. The accompanying table presents the state-by-state awards-to-proposals statistics and a breakdown of home state for each of the selected companies and their research partners. Eight of the NASA awards involve small businesses and research institutions from different states. More information on the NASA…