SSTI Digest

A group of Massachusetts CEOs, venture capitalists (VC) and entrepreneurs recently launched a new initiative to create new, successful companies. The 12x12 Initiative will allow successful CEOs to collaborate with entrepreneurs to develop their ideas into new businesses. The resulting "team" also would include an experienced VC and would help the companies connect to mentoring services, capital and other opportunities.  Read the press release ...

Massachusetts ranks first in the country in patents per capita, SBIR awards and in R&D spending as a percent of gross domestic product (GDP), according to the latest version of the Index of the Massachusetts Innovation Economy. Though the report finds that the state's innovation economy is growing and, in many ways, suffered less than others during the economic crisis, it recommends taking action to increase student interest in STEM careers and to help launch new businesses. Published annually since 1997, the index evaluates Massachusetts' performance in innovative and growing industry compared to its peer states, including California, Connecticut, Illinois, Maryland, Minnesota, New Jersey, New York, Pennsylvania and Virginia. International comparisons are used throughout this year's edition to reflect the global nature of the state's innovation economy and peers. The 2009 report provides data on 11 key industries within the innovation economy using 25 economic indicators. Key industries include advanced materials, bio-pharma and medical, business services, computer and communications hardware, defense manufacturing and instrumentation, diversified industrial…

MIT's Department of Urban Studies and Planning is researching how economic development organizations are working with small businesses to address market opportunities or needs related to global climate change and the "green economy." The department currently is looking for economic development organizations to complete a brief, voluntary survey (10 minutes) relating to "green" programs and activities. Results will be shared with the economic development community and be made publicly available. To take the survey, go to http://www.surveymonkey.com/s/7Q7QRDT. Questions regarding this survey may be sent to Karl Seidman at seidman@mit.edu or (617) 253-3964 or Rebecca Economos at economos@mit.edu

Two bills aiming to consolidate state agencies and establish incentives for job creation were introduced last week by Gov. Deval Patrick and Senate President Therese Murray. Gov. Patrick's bill would merge the Massachusetts Technology Development Corporation with the Massachusetts Community Development Finance Corporation and the Economic Stabilization Trust to form a new Massachusetts Growth Capital Corporation funded by a $25 million capital bond authorization and $15 million from the Emerging Technology Fund. Under the Senate president's proposal, more than 30 state agencies, including the Massachusetts Department of Business Development, would be eliminated or merged under one economic development umbrella. Both the governor and Senate President say the goal is to streamline state programs and services and promote economic development. The impact most likely would be broader than that, however. The governor's bill, "An Act Providing for Job Creation by Small Businesses," consists of three main proposals. The proposed Massachusetts Growth Capital Corporation would provide financing and technical assistance to small businesses by capturing a…

Over the past few months, several states have enacted spending plans for the upcoming fiscal year and passed legislation to support renewable energy initiatives and tax credits for R&D. While some TBED programs will face dramatic cuts in FY10, others are slated for slight decreases or will receive level funding. The following synopsis provides an overview of the 2009 legislative sessions across the following states: Massachusetts Lawmakers rejected Gov. Deval Patrick's amendment to the state budget aimed at securing funding for the Massachusetts Life Sciences Center (MLSC) in the upcoming year. Although the enacted budget includes $10 million for grants, loans and investments through the MLSC, the appropriation is contingent on a consolidated net surplus for FY09, which currently reflects a zero balance, according to the state's projected financial statement released on June 29. Shortly after the budget was passed, Gov. Patrick asked the legislature to provide $20 million for MLSC outside of the surplus. The legislature rejected the Governor's proposal, and as a result, the original language in the budget was signed into law, meaning MLSC is unlikely to…

Three metropolitan areas dominate the U.S. venture capital landscape: San Francisco, Boston and New York. These cities are home to about half of all U.S. venture firms and about half of all U.S. venture-backed companies. Though venture firms have sprung up around the country over the past 25 years, the three cities have maintained, and even expanded, their share of national firms and investment. The continuing dominance of these cities may be frustrating to policymakers, industry leaders and entrepreneurs in other parts of the country, but a recent paper argues that there is a logic behind the clustering of firms in a few cities and that this distribution may be optimal for both the venture industry and the high-tech economy. Authors Henry Chen, Paul Gompers, Anna Kovner and Josh Lerner map the location of main and branch offices of U.S. venture firms, along with data on their investments and the location of the venture-backed firms between 1975 and 2005. This data is used to discern whether individual investments took place within the same combined statistical area (CSA) of the venture firm's main office, a branch office or outside of those CSAs. This data also was…

Massachusetts Governor Deval Patrick recently announced plans to develop a $100 million high-performance computing center powered by clean and renewable energy in the small city of Holyoke. The center will be managed by a consortium of state agencies, universities and technology companies including the Massachusetts Institute of Technology, the University of Massachusetts, Cisco Systems and EMC Corp.. Universities and high-tech businesses will be able to access the center's resources, which local leaders hope could boost the local high-tech economy. Most publicly-owned U.S. supercomputers are housed at research institutions and large metropolitan areas. The TOP500 list, a compilation of the top 500 high-performance systems around the world ranked by computing power, is dominated by systems at federal and military research facilities, private companies, national labs or research universities. The Holyoke center however, will be located off-campus in the less-populated western half of the state. Holyoke itself is one of the most economically challenged cities in the state with nearly a third of its population living below the poverty line, according to an article…

Gov. Deval Patrick announced last week a venture funds competition providing seed money and mentoring to support new business development, adding to a growing number of states seeking to boost entrepreneurial efforts during the economic downturn (see the March 5, 2009 issue of the Digest). Supported through a $100,000 planning grant from the Massachusetts Technology Collaborative's John Adams Innovation Institute, the MassChallenge Venture Funds Competition will solicit startup plans from academics and professionals around the world and select winners to receive funding for immediate launch, according to a press release. Selected companies must be headquartered in the state, create at least five jobs, and secure matching investment funds. The founders of MassChallenge, a nonprofit entity, aim to raise $25 million to fund 25-30 startups per year in the areas of healthcare, life sciences, information technology, software, gaming, clean technology, energy, and social development. A Boston-area entrepreneur, Microsoft, and the Ewing Marion Kauffman Foundation also have contributed funding to launch the competition. In addition to a $50,000 cash prize, winners receive…

Despite the global growth of the industry over the past few decades, U.S. venture capital remains as concentrated as ever in the Silicon Valley region, and to a lesser extent, Massachusetts. Of the 87 venture capital firms included in the PricewaterhouseCoopers list of most active firms of 2008, 40 firms (46 percent) were located in Silicon Valley and San Francisco; only one California firm was located outside of that region (Santa Monica); another 18 of the most active firms were located in Massachusetts. The dominance of Silicon Valley and Massachusetts also are reflected in the number of deals and dollars invested in local companies (see the April 18, 2008 issue of the Digest). When companies in other regions are able to obtain venture capital, the source of that funding is often a VC firm in Silicon Valley, Massachusetts or one of the few other select venture hotspots. A new study, however, suggests that although it may be more difficult for companies outside of those regions to obtain VC, proximity to venture firms has little to do with the overall amount of capital a company obtains from an individual firm. In "Geography and the Structure of Venture…

One of the biggest challenges for green technologies and products is breaking into the market. Achieving the critical mass that allows production volume to drive down prices is difficult, particularly when the commodity being sold is, at least initially, more expensive to make because more of the actual cost of production is captured in the green company's business model. Successful state, university and local TBED strategies to grow green(er) companies help fund product demonstrations and early adoption strategies to help with market penetration.  In Toronto, a broad group of CEOs took matters into their own hands.  Greening Greater Toronto has announced the creation of a working group comprised of more than 25 senior executives who will encourage and lead other organizations to buy products and services that minimize environmental impact and create green jobs. The working group, called the Green Procurement Leadership Council, represents approximately $40 billion in annual buying power. In addition to creating the Green Procurement Leadership Council, Greening Greater Toronto plans to: Host the Green Procurements Marketplace event…

State governments are poised to play a vital role in the economic recovery through their use of federally-appropriated funds and through their internal policy responses to the global crisis. Several states are focusing on innovation as a means of recovery. Massachusetts and Maine both recently released the latest editions of their annual innovation indices. These annual publications have long helped to clarify trends in the innovation economy and provided assessment of their performance relative to other states. This year these indices take on new significance as state governments search for potential paths out of the economic crisis. Massachusetts In the seventh edition of the Index of the Massachusetts Innovation Economy, Gov. Deval Patrick, MIT professor Richard K. Lester and six other prominent industry and academic leaders argue for the necessity of increased investments in research and high-tech industry to propel the state through the difficult times ahead. Lester suggests that the state should follow an innovation strategy that focuses on "sustaining the flows of capital, knowledge and people" that are vital to competitiveness but can suffer…

Massachusetts Gov. Deval Patrick's secretary of Housing and Economic Development, Daniel O'Connell, resigned for personal reasons and was replaced by Greg Bialecki, an undersecretary who has been responsible for business development SRI International announced that Stephen Ciesinski has been appointed Vice President of Strategic Business Development. John Fremstad has left his post at the Metro Orlando Economic Development Commission to join the BE&K Building Group. Maryland Gov. Martin O'Malley announced the appointment of Christian Johansson, a Harvard University-educated entrepreneur who most recently ran a Baltimore-based business and government alliance, as the secretary of the Department of Business and Economic Development. Johansson, who must be confirmed by the Senate, would replace David Edgerley. The South Dakota Wind Energy Association, a group geared toward supporting the development of wind energy in South Dakota, has been established. Suzy Ticknor joined Oak Ridge National Laboratory as the director of the Industrial Partnership Program. Previously she was vice president of the Council on Competitiveness.