Ohio Injects Another $100M into Third Frontier Programs for FY05

Includes $24M for Biomedical Research, $50M for Wright Centers

Ohio has a biennial budget process so the fiscal year 2005 budget for technology-based economic development (TBED) activities could have been set in stone back in June 2003. With the passage of three bills this spring, however, the state legislature has committed an additional $103 million for its Third Frontier Project for the fiscal year beginning July 1, 2004. The new funds are a staple to the FY 2005 appropriations for other TBED programs such as Ohio's Thomas Edison Program, its SBIR efforts and coal research office.

The state's Third Frontier portfolio includes the Biomedical Research and Technology Transfer, the Wright Centers of Innovation, Wright Projects, and the Third Frontier Action Fund.

The Biomedical Research and Technology Transfer Trust Fund received $24.1 million for FY 2005 and an additional $23.9 million in FY 2006 from the state's share of the tobacco settlement funds. Since 2002, BRTT has distributed nearly $80 million to several multi-million-dollar collaborative biomedical and biotechnology research projects that could lead to commercialization.

The Wright Centers of Innovation support large-scale research and technology development platforms designed to accelerate the pace of Ohio commercialization. Wright Centers are to be collaborations among Ohio higher education institutions, nonprofit research organizations, and Ohio companies in the areas of advanced materials, bioscience, power and propulsion, information technology and instruments, controls and electronics. The state's financial commitment to the centers originally focused on fixed assets and capital expenditures; however, with Gov. Bob Taft signing HB 427 last week, $10 million will be available to provide operating grants to the existing non-bioscience related centers. For FY 2005, an additional $40 million from the state's capital budget will be available to support the new Wright Centers of Innovation.

The capital bill also included $13.6 million for new Wright Projects, which support specifically defined near-term commercialization projects requiring major capital acquisitions and improvements at Ohio higher education institutions and nonprofit research organizations. Projects must involve at least one Ohio company and be in selected technology areas.

A $13 million appropriation for the Third Frontier Action Fund will be distributed across several focused programs, including:

• $6 million in Validation/Seed Capital Funds to increase the availability of professionally managed capital and associated services to accelerate the growth of early-stage Ohio technology companies.
• $3.3 million for collaborative R&D grants through Ohio's Fuel Cell Initiative. Projects must addresses technical and cost barriers to commercialization, adapting fuel cell components produced in Ohio for use in fuel cell systems, and demonstration of fuel cells or fuel cell-related technology.
• $2 million to support the Product Development Pilot Program, which will provide grants to support delivery of product development assistance, including design, engineering, financing, marketing and management, to small and medium-sized Ohio manufacturers.
• $1.7 million for company recruitment and attraction.

The Ohio Department of Development, which administers the Third Frontier Project, will be releasing within the next two months several FY 2005 requests for proposals for the new funds. More information is available at: http://www.thirdfrontier.com/