Census of State Government Initiatives for High-Technology ... · nology initiatives to be a natural and even unavoid-able extension of their different economic develop-ment strategies

Census of State Government Initiatives forHigh-Technology Industrial Development

May 1983

NTIS order #PB84-104033

Technology, Innovation, and Regional Economic

Development

Background Pape.'

Census of State Government lnitiaUvt.."S lor High-Technology lndustrial Development

Library of Congress Catalog Card Number 83-600537

For sale by the Superintendent of Documents,U.S. Government Printing Office, Washington, D.C. 20402

Preface

This background paper contains preliminary information gathered by OTA during theearly stages of its assessment of Technology, Innovation, and Regional Economic Develop-ment. The information is being made available at the request of public officials and otherswith an interest in high-technology development programs that are being mounted at theState and local levels. OTA hopes that its timely publication will prove helpful to readerswho have an immediate need for more detailed information than will be available in theformal report of this assessment.

OTA Technology, Innovation, and RegionalEconomic Development Project Staff

John Andelin, Assistant Director, OTAScience, Information, and Natural Resources Division

William F. Mills, Program ManagerScience, Transportation, and Innovation Program

Paul B. Phelps, Project Director

Barry J. Holt, Analyst

Caroline S. Wagner, Research Assistant

Charla M. Rath, Research Assistant

Jay M. Berman, Intern (Fall 1982)

Mary Ann Wall, Intern (Spring 1983)

Marsha Fenn, Administrative Assistant

R. Bryan Harrison, Word Processing Specialist

OTA Publishing Staff

John C. Holmes, Publishing Officer

John Bergling Kathie S. Boss Debra M. Datcher Joe Henson

Doreen Foster Linda Leahy Donna Young

/v

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Contents

—Chapter1. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ● ● ● “ “ ● ● ● “

Z. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . .Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Preliminary Taxonomy. . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Analysis of Census Results. . +.. . . . . . . . . . . . .Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Creation of State High-Technology Programs . . . . . . . .

General Industrial Development Programs . . . . . . . . .High-Technology Task Forces . . . . . . . . . . . . . . . . . . . .

High-Technology Development Programs and ServicesUnsuccessful High-Technology Programs . . . . . . . . . . . .High Technology in Overall State Strategies . . . . . . . . .

Strategies Focused on Research and Development . .

. . . . . . ...*.** ● ✎☛✎☛

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

. . . . . . . . . . . . . ● ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎

Strategies Focused on Commercialization and Firm Creation . . . . . . . . . . . . . . .Strategies Focused on Expanding Production and Mature Industries . . . . . . . . .Other Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....””..

Appendix—Directory of State High-Technology Strategies and Programs

Tables

Table No.1.2.3.

High-Technology Development Programs and Services . . . . . . . . . . . . . . . . . . . . . . .State High-Technology Programs by Type.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Establishment of State High-Technology Programs by Year. . . . . . . . . . . . . . . . . . .

Page1

33344

778999

101111111112

13

Page578

CHAPTER I

Summary

Over the past 20 years, several regions of theUnited States have developed strong local economiesbased on fast-growing, technology-based industries.Encouraged by the success of “high-technology” in-dustries in California’s Silicon Valley, Massachu-setts’ Route 128, and North Carolina’s Research Tri-angle, many other States have launched governmentinitiatives to promote similar high-technology indus-trial development of their own.

OTA’s census, carried out as part of the ongoingassessment of Technology, lnnovation, and RegionalEconomic Development, has identified 150 Stategovernment programs with at least some featuresdirected toward high-technology development. Onlya few of these initiatives, however, are dedicatedassistance programs focused on the needs and prob-lems of high-technology businesses. Using the nar-rower definition of a “dedicated” high-technologydevelopment program—chartered and at least par-tially funded by the State, and specifically targetedon the creation, attraction, or retention of high-tech-nology firms-OTA identified a total of 38 programsin 22 States. Most of these initiatives have beenlaunched within the last 3 years.

OTA also found that the States define “high-tech-nology development “ in many different ways. Inmost cases, State officials consider their high-tech-nology initiatives to be a natural and even unavoid-able extension of their different economic develop-ment strategies. As a result, their high-technologyinitiatives show a great deal of variety in form, pur-pose, and level of funding. In general, however, thededicated programs provide services that addressfour central needs of high-technology firms, particu-larly those of entrepreneurial businesses engaged in

the development and commercialization of innova-tive

●

●

●

●

products and services:

technical assistance, including access to techni-cal facilities and equipment as well as the con-sulting services of experienced personnel to con-duct feasibility studies or patent searches;manpower assistance, including access to scien-tific and technical personnel as well as highlyskilled labor;business assistance, including access to consult-ants who can help the entrepreneur put to-gether a business plan or management team,as well as assistance with licensing and permit-ting or through subsidies for sites and facilities;andfinancial assistance, particularly access to riskcapital (whether through brokerage services, ordirect State equity investment, grants, or loansand loan guarantees), but also including fiscalassistance such as research and development taxcredits, technical training credits, and other taxincentives and concessions.

OTA has not yet completed its evaluation of theeffectiveness of these State efforts and their impactson related Federal policies and programs for high-technology industry. It should be noted, however,that only a few of the high-technology developmentprograms have been in place long enough to showmeasurable results or impacts. Further, the Statesthat have launched these initiatives often had con-siderable high-technology development prior to theState government’s intervention, making it difficultto assess the specific impact of the dedicated pro-grams on further development.

CHAPTER II

Int roduct ion

Overview

Over the past two decades, several regions of theUnited States have developed strong local econ-omies based on high-growth, technology-based firmsthat are engaged in the systematic development andcommercialization of new products, processes, andservices. These firms, and the industries they com-pose, are a major source of new jobs in the manufac-turing sector and an important factor in U.S. inter-national competitiveness and balance of trade. Theyare also a key source of the innovations that areessential to increased productivity in more matureindustries. As a result, several Federal policies areaimed at encouraging their growth. In addition,these high-technology industries are also becomingthe targets of the economic development strategiesof many State and local governments, as well as theefforts of corporations, universities, and other pri-vate sector groups.

This background paper presents the preliminaryresults of a census of existing State government pro-

grams to stimulate, attract, or retain high-technol-ogy industrial development. As such, it representsan update of similar studies conducted by the Stateof California for the National Governors’ Associa-tion (NGA) (State Activities to Encourage Techno-logical Innovation, October 1981, revised February1982) and by Venture Economics, Inc. (SourceGuide of Government Technology and FinancialAssistance, Capital Publishing Co., October 1982).Much of the impetus for such studies comes froman increasing awareness of the impact of State andlocal initiatives on the creation of new businesses.In addition, recent changes in Federal policy haveput increasing emphasis on the role and responsibil-ity of the States in controlling thepublic funds and in promoting theirdevelopment and well-being.

ScopeLater components of OTA’s assessment of Tech-

nology, Innovation, and Regional Economic Devel-opment will address the factors that influence thebirth and location of high-technology firms and therole of high-technology industries in the growth andrevitalization of the U.S. economy. We have givenpriority to the identification of State initiatives forhigh-technology development, however, in responseto both the desires of the Committees of Congressthat requested this study and the recommendationsof the OTA Planning Workshop held in July 1982.

distribution ofown economic

The purpose of this census was to identify thefullest range and variety of State initiatives for theencouragement of high-technology industrial devel-opment. As a consequence, it cast a wide net—both“high-technology programs” and “high-technologyindustries” were defined broadly (see below) in orderto catch as many potential initiatives as possible,as well as the similarities and differences betweenthese initiatives.

3

4 ● Technology, Innovation, and Regional Economic Development: Background Paper—Census of State Government Initiatives.——.— - .——— . . . . —.—- . .-———.—.-————.——— — — — — — — — — —

Methodology

Based on the NGA and Venture Economics stud-ies cited above and additional literature search, proj-ect staff developed a list of known high-technologyinitiatives and names of contacts. In States whereno initiative was known, a call was placed to theWashington Office of the Governor; if this turnedup no contact, a call was made to the Office of theGovernor in the State capital. In each State con-tacted, an effort was made to identify not only themanager of individual programs, but also the oneperson in the State government most knowledgeableabout its high-technology industrial developmentinitiatives. In many cases these proved to be thesame person.

Project staff called the managers of known pro-grams in order to determine the current status ofeach program and to verify available information

about its purpose and funding level and the servicesit provides. Where no dedicated program had previ-ously been identified, the contacts were asked if theirState had any high-technology incentive programand, if yes, to describe the mission of that programand the services it provides. In addition, they wereasked for information about other programs, suchas vocational and technical training programsfunded by the State, as they relate to a high-tech-nology development strategy. In States with no dedi-cated high-technology program, the contact wasquestioned about the extent to which general indus-trial development programs might also promotehigh-technology development. In addition, ques-tions were asked about overall State strategy in gen-eral economic development, and the place of high-technology industries in this development.

Preliminary Taxonomy

The census data gathered by OTA have beencoded and stored according to a preliminary taxon-omy of program types and services. This taxonomy,based on earlier studies and literature searches, in-cludes 5 descriptive codes for “universal categories”or program types, in addition to about 40 functionalcodes for specific services that are (or could be) pro-vided to high-technology firms by one or anotherof these program types. Although formatting con-straints did not allow for extensive comments, codeswere added over time to capture the unique features

and qualities of different State efforts. This resultsin some overlap—individual initiatives may be classi-fied in two different program categories, and someprograms may be listed as offering up to 10 differentservices—but it also indicates the range and diver-sity of the tactics that have been employed by Stategovernments to encourage high-technology develop-ment. The program and service codes are listed intable 1 for ease of reference and comparison in ‘ .discussion that follows.

— .

Ch. 11—introduction ● 5—

Table 1 .—High-Technology DevelopmentPrograms and Services———. -. ——. .— -..—.—. — . - — — - —. — .

Program typesHigh-technology developmentHigh-technology educationCapital assistanceLabor/technical assistanceGeneral industrial development

Functional codes (Program services)Enterprise zonesIndustrial revenue bondsInformation disseminationInvestment capital

investment in survivalGrants

researchstartupdevelopmenttraining

Laborgrant for jobs createdtraining voucherstraining technical staff

SOURCE Office of Technology Assessment

training by State State resources promotiontechnical support by Task forces and

State commissionslink with university Tax incentives

Legislation reduction in corporateLicensing assistance taxLoans abatement of property

debt taxequity freeze on assessed valuesubordinated exemption from salesstock or royalty rights taxguarantees Venture capitallong-term low-interest direct (startup)

Market development direct (productassistance development)

Office or equipment bond issue to raiseprovision funds

Physical plant assistance royalty or stock rightsPatent searches assistance in findingProduct development

assistance— — — — — — — — — —

CHAPTER Ill

Analysis of Census Results

Overview

OTA’s census identified over 200 State and locallevel economic development initiatives with at leastsome features directed toward high-technology de-velopment. The appendix contains detailed descrip-tions of 150 of these initiatives that were launchedby State governments; table 2 shows the distribu-tion of these programs by type and State. Using thenarrower definition of a “dedicated” high-technol-ogy development (HTD) program—chartered andat least partially funded by the State government,and specifically targeted on the creation, attraction,or retention of high-technology firms—OTA iden-tified a total of 38 programs in 22 States.

Most of these HTD initiatives have been launchedwithin the last 3 years (see table 3). Few of themhave been in existence long enough to producemeasurable results, and in most cases there has beenno systematic evaluation of their effectiveness. Infact, their effectiveness will be difficult to measure–many of these States had experienced a considerableamount of high-technology development prior toany intervention by the State government, and theimpact of the dedicated program on further develop-ment has yet to be demonstrated. In other cases,furthermore, relatively mature State programs havebeen very slow to produce any appreciable results,

Table 2.—State High-Technology Programs by Typea

State HTD TF HTE LTA CPA GID State HTD TF HTE LTA CPA GID-—..—.Alabama. . . . . . . . . . . . — — — — — 1Alaska . . . . . . . . . . . . . — — — — 2 —Arizona. . . . . . . . . . . . . — — 1 1 1 1Arkansas . . . . . . . . . . . — — — 2 1 —California. . . . . . . . . . . 1 — 1 1 — —

Colorado . . . . . . . . . . . 1 1 — 1 — 1Connecticut. . . . . . . . . 3 — — 1 1 1Delaware . . . . . . . . . . . — — — — — 1Florida . . . . . . . . . . . . . 3 — 1 — — 3Georgia . . . . . . . . . . . . 1 — 2 — — —

Hawaii ... , . . . . . . . . . 1 — — — — —Idaho . . . . . . . . . . . . . . — — — 2 — 1Illinois . . . . . . . . . . . . . 2 1 — 2 1 —Indiana . . . . . . . . . . . . . 1 — 1 — — —lowa . . . . . . . . . . . . . . . — — — — —

Kansas . . . . . . . . . . . . . — — — — 1Kentucky . . . . . . . . . . . — — — 1 1 1Louisiana. . . . . . . . . . . — 1 — — 1 —Maine . . . . . . . . . . . . . . — — — — 2 2Maryland . . . . . . . . . . . — 1 — 2 3 —Massachusetts . . . . . . 1 — 1 1 1 1Michigan . . . . . . . . . . . 8 — — 1 1 —Minnesota . . . . . . . . . . — — 1 — — 1Mississippi . . . . . . . . . 1 — — 1 1 1Missouri . . . . . . . . . . . . 1 — 2 2 2 2

Montana. . . . . . . . . . . . — — — — — 1Nebraska . . . . . . . . . . . — — — 1 — 1

Nevada. . . . . . . . . . . . . — — — — — 1New Hampshire . . . . . — — — — — 1New Jersey . . . . . . . . . — 1 — — — —

New Mexico . . . . . . . . 2 — 1 — — —New York. . . . . . . . . . . 2 — — 1 2 —North Carolina . . . . . . 1 — 2 — — 1North Dakota . . . . . . . — — — — 1Ohio . . . . . . . . . . . . . . . 1 — – — ; 1

Oklahoma . . . . . . . . . . — — — — — 1Oregon . . . . . . . . . . . . . — — — — — 1Pennsylvania. . . . . . . . 2 — 1 1 - —Puerto Rico . . . . . . . . . — — — 2 1 —Rhode Island. . . . . . . . 1 — — 1 1 —

South Carolina . . . . . . — 1 — 1 — —South Dakota . . . . . . . — — — — — 1Tennessee . . . . . . . . . . 2 — 1 — — —Texas . . . . . . . . . . . . . . 1 — — 1 — 2Utah . . . . . . . . . . . . . . . — — — — — 1Vermont . . . . . . . . . . . . — — — — 1 —Virginia. . . . . . . . . . . . . 1 1 — — — 1Washington . . . . . . . . . 1 — 1 — — —West Virginia . . . . . . . — — — 1 — 1Wisconsin . . . . . . . . . . — — — — — 3Wyoming ., . . . . . . . . . — — — — — 1— . —

Totals , . . . . . . . . . . . 38 9 15 27 27 37

aHTD - High-technology development. LTA = Labor/technical assistance.TF = Task force. CPA = Capital provision assistanceHTE - High-technology education. GID = General Industrial development

SOURCE: Off Ice of Technology Assessment

7

8 . Technology, Innovation, and Regional Economic Development: Background Paper—Census Of State Government Initiatives.--— — . — — . — — —

Table 3.—Establlshment of State High-TechnologyPrograms by Year

19591984198819751978

1979

19801981

1982

1983

North Carolina Research Triangle ParkMississippi Research and Development CenterNew York Science and Technology FoundationConnecticut Product Development Corp.Florida Research and Development CommissionMassachusetts Technology Development Corp.Hawaii Venture Development FundNorth Carolina Board of Science and TechnologyGeorgia Advanced Technology Development CenterCalifornia Innovation Development Loan ProgramFlorida Technical Entrepreneurship ProgramIndiana Corp. for Science & TechnologyMissouri Office of Science and TechnologyNew York Corp. for Innovation DevelopmentPennsylvania Industrial Development AuthorityTennessee Department of High-Technology,

Finance, and Service SalesWashington Research FoundationConnecticut Innovation Development Loan FundConnecticut Science ParkIllinois Biomedical Research ParksIllinois Research Assistance to the StateMichigan High-Technology Development Corp.Michigan High-Technology Resource CenterMichigan Industrial Technology Institute

“ Michigan Innovation CenterMichigan Molecular Biology InstituteRhode Island Strategic Development Corp.Tennessee Technology Corridor FoundationTexas Institute for Ventures in New TechnologyVirginia Science, Engineering, and Technology

Advisory ServiceFlorida Interagency High-Technology CommitteeMichigan High-Technology Equity LoansNew Mexico Economic Development DivisionOhio Industrial Technology and Enterprise BoardPennsylvania Ben Franklin Partnership Fund

SOURCE: Office of Technology Assessment,

while more recent programs in other States are al-ready considered successful. Admittedly, some pro-grams are designed to achieve long-range objectives,while others are intended to show short-term results;but there has yet to be any systematic comparison

of the effectiveness and benefits of different programtypes. Finally, some States report that, even withouta dedicated effort, they have nevertheless experi-enced a great deal of high-technology industrialdevelopment.

It was also found, however, that different Statesdefine “high-technology development” in differentways, and that in most cases their high-technologyinitiatives are an extension of their overall economicdevelopment strategies. States with HTD initiatives,for example, tend to be those that had a sophisti-cated research base and considerable high-technol-ogy industry even before these programs were estab-lished; their objective is in part to strengthen andretain what was already there. In States where theeconomic base consists primarily of “sunset” indus-tries, on the other hand, the “high-technology” strat-egy tends to emphasize economic diversification andthe application of new production technologies totraditional manufacturing processes. Still otherStates, notably those that are not yet highly indus-trialized, base their strategies on the aggressive pur-suit of the production facilities of expandinghigh-technology firms as part of a broader effort tobolster their industrial base and build the founda-tion for future development.

These patterns suggest that, for most States, at-tention to high--technology industrial developmentis not distinct from economic development in gen-eral. They also suggest, however, that in launchingtheir initiatives, the States have given attention bothto the special needs of technology-based enterprisesand to their own comparative advantage vis-a-visthe basic stages of technological innovation andcommercialization. This attention, in turn, resultsin part from the ways in which these programs havebeen created.

Creation of State High-Technology Programs

Initiatives to promote high-technology industrial grams that are based on the needs of technology-development usually come about in one of two ways: based enterprises, whether perceived or projected,1) as a natural, evolutionary outgrowth of the State’s and on strategies to mobilize the resources or pro-ongoing economic development efforts; or 2) as the vide the services that will encourage or attract theirresult of a special effort to identify and mobilize the growth within the State. In many cases the programsappropriate State resources. Both routes lead to pro- are based on models elsewhere: several States cited

Ch. 111—Analysis of Census Results 9— — . — — . — . — —.— — - — — . —

the National Research Development Corp. (createdby the British Government in 1949 to commercializenew products), and many other strategies are de-scribed in terms of “making Silicon Valley happenhere.”

General Industrial DevelopmentPrograms

In the first instance, the dedicated high-technol-ogy program results from a need perceived by theState’s department of economic development. Thisoffice already provides a wide range of assistance toindustry in general, such as locating plant sites oridentifying an appropriate labor pool. Many but notall these services are also helpful to technology-basedbusinesses. As more and more special requests arereceived from high-technology firms, or as this sec-tor becomes more important to the State’s industrialbase, individuals or offices within the existing Stateagency are designated to concentrate on meeting thisincreasing demand.

OTA found that almost all States have “generalindustrial development” programs that can also as-sist or influence the creation and growth of high-technology businesses. The same can be said for pro-grams in the “capital assistance” and “labor andtechnical assistance” categories. These programsrarely exclude any specific type of business that needstheir services, and the services they offer to new,expanding, or relocating high-technology industryare often not much different from services offeredto more traditional industry.

For this reason many States that do not have ded-icated HTD programs can and do encourage thiskind of development through the services offeredby their general, capital, and technical assistanceprograms. In the States where dedicated programs

do exist, they usually work closely with these generalprograms to help their high-technology clients. Inaddition, in several States, an existing State agencyor representative assumed the job of encouraginghigh. technology industrial growth in the State.

As a result, however, it was difficult in mostStates—even those with dedicated programs—to de-termine precisely where to make the cutoff between“high-technology” programs, on the one hand, andthose whose mission is more general but who never-theless provide the special services demanded by agrowing high-technology sector.

High-Technology Task Forces

The second method of creating a high-technologyprogram is more of a “supply-side” tactic. The Gov-ernor or legislature appoints an ad hoc task forceto examine the State’s resources and recommendsinitiatives that will encourage the development ofhigh-technology industries. These task forces usuallyrepresent all sectors of the State’s economy, and theyaddress such issues as the proper definition of “hightechnology, ” the special needs of high-technologyfirms, and the question of loyalty to traditional in-dustry versus the appeal of emerging technologies.

OTA’s census identified nine existing task forces,and similar task forces in a number of other Stateshave already disbanded after reporting to the Gover-nor or legislature. In many cases the task forces, afterpresenting their recommendations, are succeeded bypermanent advisory committees that coordinate sub-sequent efforts, In other cases they are transformedinto nonprofit, semiprivate corporations or foun-dations that administer or provide funding for themechanisms created to implement task force recom-mendations. These organizations often provide thebasis

High-Technology Development

for the State’s HTD programs. -

Programs and ServicesOTA’s census identified only 38 State initiatives plants of expanding firms elsewhere or by encourag-

that met the criteria for the “high-technology devel- ing the creation and retention of indigenous high-opment” category—that is, a dedicated State govern- technolog y businesses. In addition, OTA identifiedment program or agency whose specific mission is 15 “high-technology education” programs—initia-the promotion of high-technology industrial devel- tives undertaken by States in conjunction with theiropment in the State, whether by attracting branch universities, and dedicated to equipping inventors

10. Technology lnnovation, and Regional Economic Development: Background Paper-Census Of State Government Initiatives— . . — — — —————.—--—..— .—. .— — —————_-——.— —_..

or entrepreneurs with the skills needed to create for high-technology firms. Almost half of the pro-firms that will develop or commercialize emerging grams also offer some form of financial assistance—technologies. In many cases, however, it is difficult nine programs assist entrepreneurs in locating ven-to draw the line between these two categories, par- ture capital, another nine deal with industrial rev-icularly where the school involved was a State uni- enue bonds, eight provide grants for research andversity and thus funded by the State. (In addition, development, and four provide loans to high-tech-the 15 education programs included here are only nology firms. Other services commonly offered in-a fraction of the HTD programs that have been elude: market development assistance (seven pro-launched by colleges and universities, both public grams); product development assistance (four pro-and private, throughout the Nation.) grams); and incentives or assistance in training tech-

The services most frequently offered by these 53 nical personnel (five programs). More unique serv-

programs involve information dissemination–ii’ices include helping inventors to acquire patents;

programs link industry and university resources, and providing laboratory or office space for new and

8 others involve promotional activities aimed atgrowing businesses; and investing public pensionfunds in high-technology business.

advertising the State’s resources and opportunities

Unsuccessful High-Technology Programs

In the course of its census, OTA also identifiedseveral high-technology industrial development pro-grams that have not succeeded. It is unclear whetherthe reasons for failure are unique to each programor State, or the result of program design flaws thatother States should avoid. Several examples follow:

●

●

The Maine Capital Corp. (MCC) was estab-lished by the legislature in 1978, with capitaliza-tion encouraged through a 50-percent creditagainst State income tax for investments inMCC. Since that time, MCC has funded onlyone project—a manufacturer of electronic parts—and that project was unsuccessful. AlthoughMCC has advertised its services, the fact thatit could invest only in Maine corporations, andthe fact that it is so close to Boston (a centerof competing private venture capital activity),may have rendered the program ineffective.The Michigan Business Development Corp.(MBDC) was authorized by the legislature in1979 to promote the growth of small high-tech-nology businesses in Michigan by channelingprivate venture capital to existing firms. How-ever, the legislature did not reach final agree-ment with the financial community about stock

and royalty rights before the legislation waspassed. As a result, the private sector was un-willing or unable to provide funding to busi-nesses through this program, and MBDC nevergot off the ground. It was replaced in 1981 bythe Michigan Economic Development Author-ity, which has established several programs forfinancial assistance to high-technology industry.

The New Jersey Office for Promoting TechnicalInnovation (OPTI) was set up in 1979 to en-courage economic development through tech-nical, business, and financial assistance to tech-nology-based enterprises. OPTI had a broadmandate but little flexibility or funding. It at-tempted to encourage everything from “base-ment inventors” to sophisticated licensing ar-rangements, but its greatest success may havebeen in involving the private sector in screen-ing and financing promising projects. The pro-gram lost its funding on September 31, 1982,but a source close to the program characterizedit as a useful experiment whose errors weretaken at a low cost. A proposal to create a sim-ilar mechanism, with these errors corrected, hasbeen introduced in the New Jersey Legislature.

Ch. III—Analysis of Census Results ● 11————. - .— ——- —-————-—.— — — — . — — — — — -

High Technology in Overall State Strategies

Most States report that “high-technology develop-ment” is part of their overall strategies to increaseeconomic growth, create new jobs, and enhance thestandard of living of their people. (These strategiesare described in the appendix.) As part of this ef-fort, most States seem to be assessing their strengthsand capitalizing on them in order to develop, at-tract, or retain high-technology industry. Theresulting programs therefore appear to target dif-ferent phases in the development and commercializa-tion of new technologies, according to each State’scomparative advantage. These phases correspondroughly to basic stages of industrial innovation: 1)initial research and product/process development;2) commercialization and firm creation; and 3) ex-panding production or application by establishedfirms. These patterns are illustrated below with ex-amples identified by the OTA census.

Strategies Focused on Researchand Development

States whose high-technology strategies em-phasize basic and applied research in emergingtechnologies tend to focus on the resources andfacilities of their university systems, and on the im-portance of cooperation between industry anduniversity activities. Several States are working toimprove or expand the university faculty, cur-riculum, and research in relevant disciplines. To en-courage these efforts they often provide R&D taxcredits, offer challenge grants for university research,seek out Federal R&D contracts, and even supportthe creation of independent centers of research anddevelopment.

●

●

Michigan has set up several research instituteswith State funding to conduct research anddevelopment in biotechnology and robotics.Illinois and Utah both have a biomedicalresearch park connected with the Stateuniversity.

Strategies Focused onCommercialization and Firm Creation

Some States encourage the development and com-mercialization of new technologies by providing their

inventors and entrepreneurs with the services theyneed to create new firms and bring new productsto market. These services include providing productand market development assistance, finding capitalassistance for new products and young companies,and in some cases establishing “incubator facilities”for high-technology business starts.

Georgia’s Advanced Technology DevelopmentCenter provides technical and business assist-ance, helps firms to find venture capital, andprovides incubator space for new businesses.The Massachusetts Technology DevelopmentCorp. provides venture capital for firms andproducts that would usually be overlooked bytraditional sources of capital, and it also pro-vides assistance with business plans, manage-ment, and marketing.l-he Hawaii Venture Development Fund hasa special “Inventor’s Fund” for the developmentof new product ideas.The Connecticut Product Development Corp.,which makes equity investments in existingfirms, has recently set up an Innovation Devel-opment Loan Fund to fund the developmentof innovative projects.

Strategies Focused on ExpandingProduction and Mature Industries

Instead of targeting the early stages of the innova-tion and firm creation processes, some States con-centrate on attracting the assembly facilities of ex-panding or relocating high-technology firms, or ontransferring and applying new production technol-ogies to help firms in mature industries.

Attracting Production Facil it ies.–SomeStates, aware of their limited R&D capability orskilled labor pool, are instead trying to attract theproduction of more standardized high-technologygoods in the State. These States pursue expandingand relocating high-technology firms in much thesame way that they recruit more mature industries,through promotional programs and through loca-tion assistance and tax incentives. Alabama’s Newand Expanding Industry Program is an example ofsuch an initiative; similar strategies to attract high-

12 . Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives.————-. ——. .——. -. ——.—-——...——.—.——-———-—-———. — — — — — — .

technology expansion and relocation are being usedin Delaware, Idaho, and Puerto Rico.

Process Development and Application.–The “high-technology” strategy in many States em-phasizes technology transfer-the application of newproduction technologies to the manufacturing proc-esses in mature industries already located in theState. By increasing the efficiency and productivityof the existing industrial base, these programs maystrengthen and retain facilities and jobs that mightotherwise leave the State or the country. Maine’sNew Enterprise Institute, for instance, helped to in-troduce technologies like computer-assisted designand manufacturing to the shoe industry, and Mich-igan has established an Industrial Technology In-stitute to promote the development and applicationof robotics in the automotive and other mature in-dustries. Similar programs are underway at the Mis-sissippi Research and Development Center, theArkansas University-Industry Experimental Centerfor Small Manufacturers, and the Texas Engineer-ing Experimental Stations.

Other Approaches

Some State strategies have aimed at developingintegrated markets within the State, thereby provid-

ing the opportunity for new high-technology indus-try to produce for and obtain inputs from existingindustry. Examples of this approach are Michigan’semphasis on robotics, both as a new manufacturingsector and as an input to the automotive industry,and Arizona’s attempts to encourage the growth ofhigh-technology support industries.

A few States have placed their general industrialdevelopment emphasis on technology appropriateto unique State needs, and are not making a con-certed effort at this time to attractor develop high-technology industry. Alaska, for example, has a lim-ited manufacturing base and special applicationneeds in most technologies.

Finally, several States have attracted “spillover”high-technology industry without a concerted effortby their governments. These States include Colo-rado, Oregon, Arizona, Washington, and NewHampshire. Each of them maybe a desirable placeto live and do business, but in each case they alsohave-the advantage of proximity to a growing centerof high-technology development—apparently a greatadvantage in attracting branch plants.

APPENDIX

Directory of State High-TechnologyStrategies and Programs*

Alabama

Alabama’s overall strategy is based on developing theprimary industry and infrastructure needed to attracthigh-technology development. To do this, the State hasset up a new and expanding industry program, technicaland managerial training programs, and a pension fundwith bond issues for business. The State’s communitycollege system also provides programs for training andretraining technical workers. In addition, the State usesseveral Federal programs, such as Community Develop-ment Block Grants, to develop the infrastructure neededfor growth and development.

Alabama reports a good supply of engineers and techni-cians and a large number of high-technology support in-dustries. It also has a considerable base to build on inthe Huntsville area, which boasts some 200 high-tech-nology manufacturing firms and several advanced re-search programs at the University of Alabama at Hunts-ville. Other centers of high-technology research are Bir-mingham, Auburn, and Tuscaloosa.

ProgramsLabor/technical assistance

Alabama Industry Development Training Program

General industrial developmentAlabama New and Expanding Industry Program

Alabama Industry DevelopmentTraining Program

Mr. Michael McCainAssistant DirectorAlabama Development OfficeState CapitolMontgomery, AL 36130(205) 832-6980

Date of establishment: N/AAnnual State funding (millions): N/A

Program type:

Labor/technical assistance.

Program services:

Trains technical staff for business.Technical training provided by State.

*This directory i? based on lntbrmatmn provided hy the States, in conversa-

tion a n d wmung, betwcxn h“o~,ember f W a n d F e b r u a ry 1983,

Description:

This State-funded program includes training for bothtechnical and managerial personnel, and is free to newor expanding businesses. The program meets require-ments on a firm-by-firm basis and provides screening ofpersonnel, on-the-job training to business specification,upgrading or renewal of skills, and mobile classrooms andworkshops.

Alabama New and ExpandingIndustry Program

Mr. Michael McCainAssistant DirectorAlabama Development OfficeState CapitolMontgomery, AL 36130(205) 832-6980


Program type:General industrial development

Program services:

Abatement of local property tax.Freeze tax on improved property.Exemption from State sales tax.

Description:

The Alabama development office offers many servicesto new and expanding industry, some of which are alsopart of the general industrial development network. Thisprogram works with the Industrial Training Program toprovide training services to meet the needs of individualfirms. The State gives grants for industrial site develop-ment, has a one-stop permitting agency, and can pro-vide 100 percent Industrial Revenue Bond (IRB) financ-ing on land, buildings, and equipment. IRB projects andbusiness inventory may qualify for certain tax exemp-tions for up to 20 years.

Alaska

Alaska’s overall strategy involves the development oftechnological solutions for the unique problems faced bya “frontier” State. For example, the State is a leader inimplementing advanced telecommunications technology,

13

14 ● Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government initiatives

largely because of the vast distances between cities andthe subsequent isolation of its people. The State govern-ment is investing oil and gas revenues in renewable re-sources, such as agriculture and fisheries, that will diver-sify Alaska’s economy and minimize its dependence onthe boom/bust cycle characteristic of extraction in-dustries. In addition, Alaska has several programs de-signed to encourage the development of specific tech-nologies such as housing for permafrost areas, ice-strengthened research vessel, and avalanche forecasting,as well as the application of existing technologies toAlaskan problems.ProgramsCapital provision assistance

Alaska Council on Science and TechnologyAlaska Resources Corp.

Alaska Council on Science and Technology

Mr. Christopher NoahExecutive DirectorOffice of the GovernorPouch CVJuneau, AK 99811(907) 465-3510

Date of establishment: 1978Annual State funding (millions): $0.8

Program type:Capital provision assistance.

Program services:

Grants available.State resource promotion.

Description:This State program is designed to advise the Governor

and the legislature on technological and research mat-ters. In particular, the Council concentrates on energyprograms and on telecommunications policy.

The Council administers two research grant programsfor development of technology. One is the NorthernTechnologies Program, which provides grants for the de-velopment of technology appropriate to the region. Todate the program has funded 115 projects for up to $5,000each. Most are energy-related projects.

The second research grant program (using a NationalScience Foundation program as a model) provides fundsfor the development of technology suitable to northernclimes. This research grant program has also workedclosely with the Canadian Science Advisory Board ofthe Northwest Territories.

Alaska Resources Corp.

Mr. Wayne LittletonExecutive DirectorAlaska Resources Corp.Government Bldg.Anchorage, AK 99811(907) 561-2210Date of establishment: 1982Annual State funding (millions): $40Program type:

Capital provision assistance.Program services:

Direct investment in startup.Equity loans.Venture capital.

Description:

The Alaska Resources Corp. (ARC) (reconstituted in1982 from the Alaska Renewable Resources Corp.) pro-vides development capital for establishing and expandingsmall enterprises in resource industries, to diversify andstabilize the State’s economy. Targeted industries aretourism, fisheries, timber, and manufacturing enterprises.

This program uses a broad definition of “venture cap-ital” in order to serve the diverse needs of a frontier State.This program will help start any type of business, al-though most businesses served thus far are commercializ-ing or developing ideas for alternative energy sources.

Arizona

Arizona already has a well-established high-technologybase, consisting of some 200 establishments—many ofthem branches of firms elsewhere—that represent over40 percent of the State’s industrial base. This develop-ment has occurred with relatively little direct interven-tion by the State government programs or initiatives, butArizona has begun to explore possible mechanisms forretaining existing industry and encouraging the growthof indigenous firms. As part of this effort, the Staterecently issued a report on Opportunities in Arizona forSuppliers ofIfigh-Technology Manuficturers, which tar-gets desirable high-technology support industries anddiscusses the availability of skilled labor for microelec-tronics, computers, and other high-technology areas.

In addition, the State has placed emphasis on the de-velopment of a strong, technically based education sys-tem that can work closely with private industry. TheCenter of Excellence at Arizona State University

—-—-———

Append/x—Directory of State High-Technology Strategies and Programs ● 15

(Tempe), for example, works closely with business to im-prove science, mathematics, and engineering instruction.ProgramsHigh-technology education

Center of Excellence

Capital provision assistance

Arizona Development Services

Labor/technical assistance

Governor’s Manpower Program

General industrial development

ArizonaArizona

Economic DevelopmentDevelopment Services

Program

Arizona Development Services

Mr. John O. MoralesProgram ManagerOffice of Economic Planning and Development1700 W. Washington St., 4th FloorPhoenix, AZ 85007(602) 255-5705

Date of establishment: 1980Annual State funding (millions): N/A

Program type:

Capital provision assistance.General industrial development,

Program services:

Licensing assistance.Assists in finding venture capital.Loans.

Description:

This Arizona program works closely with the FederalSmall Business Administration 503 program. The pro-gram provides lists of licensing requirements for eachArizona community as a reference to new or relocatingbusiness. It also helps new or relocating business obtainlicenses and explains the local and State tax structure,sales taxes, and city ordinances.

In addition, the program will help businesses find ven-ture capital, and is trying to attract venture capital tothe State. Finally, the office plans a Center for Innova-tion, and intends to maintain an information clearing-house for small business information.

Arizona Economic Development ProgramMs. Judie ScaliseProgram Manager for Economic DevelopmentOffice of Economic Planning1700 W. Washington St., Suite 400Phoenix, AZ 85007(602) 255-5374


Program type;

General industrial development.

Program services:

State resources promotion.Assists in finding venture capital.Labor assistance.Physical plant provision.Information dissemination.Links industry with university.Market development assistance.

Description:

The high-technology industry base in Arizona has beencreated with few explicit State government incentives.Since nearly 40 percent of all manufacturing is in thehigh-technology sector, Arizona has begun to considersupport mechanisms for new and existing high-technol-ogy industry.

The State office also works closely with a number ofFederal Government programs such as the Small BusinessAdministration (SBA) 503.

There are no tax rebates or “holidays” offered to busi-ness, mainly because the State considers the existing taxclimate favorable for business. The existing tax structureincludes no inventory tax, no corporate franchise tax,and allows tax-exempt dividends for firms based inArizona.

A joint position statement between this office and thecommunity colleges in Arizona links education, train-ing and employment resources to the State in an effortto further high-technology development.

Center of Excellence

Dr. Charles E. BackusDirector, Center for ResearchCollege of Engineering and Applied ScienceArizona State UniversityTempe, AZ 85287(602) 965-1725

16 . .Technology, Innovation, and Regional Economic Development: Background Paper— Census of State Government Initiatives—.— — -_-— .——. -—.. .— — — —. _ —- -——-


Prograrn type:

High-technology education.Program services:

Links industry with university resources.Description:

The Center of Excellence has coordinated with a pro-posed State program for Academic Excellence recentlyinitiated by the State. Six proposals were given by theGovernor to the State Board of Regents and Board ofEducation to provide the following:

1.

2.

3.

4.5.

6.

higher admission requirements for math and sciencein the State universities,math and science centers at the universities for out-standing high school students,a student loan program to encourage more math andscience teachers,summer science and math institutes for teachers,computer literacy as a requirement for State teachercertification, and“team-teaching” efforts between educators and in-dustry specialists.

The Center of Excellence represents public/private in-vestment of $32 million, of which the State has donatedfunds for a new building and equipment for the engineer-ing school.

Governor’s Manpower Program

Mr. Alton J. WashingtonGovernor’s Manpower ProgramArizona Office of Economic Planning and

Development1700 W. Washington St., 4th FloorPhoenix, AZ 85007(602) 255-5434Date of establishment: 1977Annual State funding (millions): -O-Program type:


Program services:Training and employment resources.Grants for training.Information dissemination.

Description:The Office of Economic Planning and Development

supports a major job training effort called the ManpowerProgram. It has recently published the Arizona Train-ing Profiles, which supply Arizona employers and poten-tial employers with information in occupational educa-tion and training available to meet their employee re-

quirements. Two of the areas, “electronics” and “dataprocessing and computer science” are occupations indemand.

Arizona does not have any quick start money for train-ing, so the program was set up initially with Federal Com-prehensive Employment and Training Act (CETA) fund-ing. “Manpower” custom designs a training program ona firm-by-firm basis.

Manpower has undertaken several projects to investi-gate opportunities for high-technology managers and toresearch information processing training needs. Man”power links university resources with industry, and canprovide a list of high-technology firms with 25 or moreemployees.

In addition to the ongoing work of the Center of Ex-cellence, the State has provided funding for five short-term, competency-based, curriculum development andvalidation projects, designed to train workers in skills re-quired by high-technology industries. Utilizing CETAfunds, training will be in the following occupational areas:electronics, data entry/word processing, computer pro-graming, and automated accounting.

Arkansas

There is considerable support for high-technology de-velopment in Arkansas, but also for increased produc-tivity in traditional industries. Arkansas sources some-times point out that it is a newly industrialized State and,like many other Southern States, its industry has itsheadquarters and research facilities elsewhere, whileArkansas labor is used primarily in production and ship-ping of manufactured goods, As one State official putit, “High-technology? By the time it gets here it is likeany type of assembly industry. ” The State has thereforeadopted a policy of encouraging innovation in all typesof firms. It does this through a number of programs thatprovide firms with financial, technical, and training as-sistance. A recent task force of government officials andhigh-technology experts identified the State’s educationalinstitutions as a valuable asset, and encouraged a con-tinued emphasis on quality education.

ProgramsCapital provision assistance

Industrial Research Extension Center


A University-Industry Experimental Center forSmall Manufacturers

Industrial Development Corp.Industrial Research Extension Center


A University-Industry Experimental Center forSmall Manufacturers

—

Appendix—Directory of State High-Technology Strategies and Programs . 17— . — — — — — — — — . — — - — — —————. .—.—.— — —

Industrial Development Corp.Industrial Research Extension Center

A University-Industry ExperimentalCenter for Small Manufacturers

Mr. J. P. MooreDirector of Extension ActivitiesUniversity of Arkansas at Little Rock33d and University, Rm. 417Little Rock, AR 72204(501) 371-1971


Program type:General industrial development.Labor/technical assistance.

Program services:

Information dissemination.Trains technical staff for business.Market development assistance.Assists in finding venture capital.Physical plant provision.

Description:This program is jointly sponsored by the National

Science Foundation and the State of Arkansas. It is setup to introduce state-of-the-art technology into tradi-tional industrial processes in all industries in need of help,including new starts, expansions, and stabilizations. Theservices include production assessment, evaluation of lay-out and design efficiency, advice in technical manufac-turing, and assistance in finding capital for new devel-opments. The program does not provide any funding fornew ventures.

Arkansas Industrial Development Corp.(AIDC)

Mr. Windell AdamsDirectorArkansas Industrial Development Corp.One State Capital MallLittle Rock, AR 72201(501) 371-2301Date of establishment: 1955Annual State funding (millions): $3.5Program type:

General industrial development.Labor/technical assistance.

Program services:Information dissemination.State resources promotion (infrastructure).

Description:The AIDC program seeks to assist “home grown” busi-

nesses within the State, and to help firms relocate to theState. Arkansas does not provide any venture capital orbusiness loans, but the First Arkansas Development Fi-nance Corp. puts together State and commercial moneyfor fledgling organizations. The Board of Directors ofAIDC has both State and private sector representatives.

In addition to its day-to-day work, this State office hasconducted some seminars to bring together industry andeducation on an informal basis. Also, AIDC took partin the Legislative Council Task Force chaired by RayThorton of Arkansas State University, to “study educa-tional and research resources within the State whichwould be useful in providing highly technical and scien-tific instructional and research programs.” Conclusionsof this Task Force included the realization that high-tech-nology industrial development will only come about be-cause of the development of other basic industries andinfrastructures.

Arkansas Industrial ResearchExtension Center

Dr. Barton WesterlundDirector, Industrial Research Extension CenterUniversity of Arkansas at Little RockCollege of Business Administration33d and University, Rm. 417Little Rock, AR 72204(501) 569-3470

Date of establishment: 1955Annual State finding (millions): $1.2

Program type:Capital provision assistance.General industrial development.Labor/technical assistance.

Program services:

Labor assistance.Loans.Investment capital.Tax-favorable business climate.Venture capital assistance.Product development assistance.Information dissemination.Grants available.State resources promotion.Market development assistance.

Description:The Industrial Research Extension Center (TREC) is

set up to provide economic research and information tothe State development agencies, both public and private.

18. Technology, Innovation, and Regional Economic Developrnent: Background Paper-Census Of State Government Initiatives—.— . .——— ——.—. -—. — — — — — — — — — - . — — . — - - - — — —

This consists of educational programs and research, coun-seling of various types, projection studies, demographicstudies, income studies, feasibility studies, and marketstudies. For small businesses in the State, IREC providesproduction analysis, accounting assistance, and financialanalysis. IREC has field offices in five cities in the State,and is linked to nine institutions in the State. Set up bylegislative mandate, the program is located and integral-ly part of the State university system, although theymaintain a separate budget.

IREC handles all kinds of businesses, and are seeingmore and more advanced technology innovation in theState. The Director notes, however, that “by the timeit gets here, it is like any type of assembly industry, withsimilar types of low-skilled manufacturing jobs. We havespent some time with innovating firms who try to moveinto higher technology manufacturing processes, butwhat often starts out as ‘high tech’ quite quickly becomesstandard manufacturing procedure. ” Of his clients, Dr.Westerlund goes on to say, “We have fewer and fewerdealings with ‘Mere and Pop’ and more with minicom-puters to be installed in gas stations. Perhaps its thatMom and Pop are becoming more sophisticated.”

California

California is renowned as a center of high-technologydevelopment. It has a highly advanced industrial base,capital resources to fund new ventures, and the technical-ly skilled labor to meet the needs of quickly changingtechnologies. Under the previous administration, theState government set up several programs to encouragetechnological innovation and further development.These included the California Commission on IndustrialInnovation, a Pension Investment Unit that invested inhigh-technology ventures, and the California InnovationDevelopment Loan Program, which was designed to pro-mote product development. The Commission, however,ceased to exist after producing case studies of “winningtechnologies,” and both of the other programs have beendiscontinued under new State administration.

California’s public and private universities have workedclosely with industry to develop the technically skilledwork force needed for economic development. This trendis expected to continue. In addition, the State’s trainingprograms will continue to train technicians for industry.

ProgramsHigh-technology development

California Innovation Development Loan Program


California Innovation Development Loan Program


California Worksite Education and Training Act(CWETA)

Microelectronics Innovation and Computer ScienceResearch Program (MICRO)

California Innovation DevelopmentLoan Program

Ms. Christie CampbellDirectorInnovation Development1030 13th St., Suite 200Sacramento, CA 95814(916) 322-1394

Loan Program

Dare of establishment: 1981Annual State Funding (millions): $2.0

Program type:

Capital provision assistance.High-technology development.

Program set-vice:

Investment in product development.

Description:

This program provides financing for product develop-ment to promising technology-based firms. The recipi-ents of the loans are generally entrepreneurs and inven-tors who have had difficulty finding finding from othermore traditional sources.

California Worksite Educationand Training Act (CWETA)

Ms. Charlsey CartwrightDirectorCWETA800 Capita! Mall, MIC 38Sacramento, CA 95814(916) 323-3006


Program type:


Program services:

Links industry with university resources.Trains technical staff for business.

Description:

CWETA established a program in which potential em-ployers commit to hire CWETA-trained workers. Train-ing programs are devised in conjunction with local educa-

Appendix- Directory of State High-Techno/ogy Strategies and Programs ● 1 9-——. --.——.. ...- .———.— . .—. — .- ._ —.————.—..———

tion and training institutions, with much of the train-ing taking place on the job. Both entry level and upgradetraining are provided in fields which include electronics,machine trades, and health.

Microelectronics Innovation andComputer Science Research Program(MICRO)

Dr. James AlbertsonAssociate Vice President for Academic AffairsUniversity of California733 University Hall, 2200 University Ave.Berkeley, CA 94720(415) 642-9786


Program type:

High-technology education.

Program services:Links industry with university resources.Grants for research.Grants available.

Description:The 1981-82 University of California budget included

$980,000 for “innovative research in microelectronicstechnology, its application in computer information sci-ences, and its necessary antecedents in other physical sci-ence disciplines. ” The program is intended by the Stateto assist the California electronics and computer in-dustries in maintaining their competitive edge by expand-ing pertinent research and graduate student educationat the University. Under the research part of the pro-gram, faculty members on several campuses submit pro-prosals for research projects that will potentially form thep r pbasis of new industrial products several years in thefuture, Each faculty member is responsible for obtain-ing a prior commitment from an industrial firm to sup-port at least half the cost of the project.

Colorado

Colorado has a good base in high-technology industry,and in secondary industries supplying the inputs forhigh-technology manufacturing. This development hasbeen accomplished largely without the intervention ofthe State government. INC. Magazine, in its “ReportCard on the States,” identified Colorado as one of thefour or five most desirable States for high-technology in-dustry. Many Coloradans do not see such development

as an “economic panacea,” but the State has set up atask force m look at the issue of innovation in nationaland international markets and in the educational sec-tor. In addition, legislation is pending on the creationof” a Colorado Tec hnology Institute, although economicconstraints make passage uncertain in 1983.

Colorado also has the active participation of the privatesector in the development of high-technology industry.The Colorado Business Development Center, the HigherEducation Council of the Colorado Association of Com-merce and Industry, the Institute for ComputationalStudies, and Worker Outreach, all provide assistance intechnology-based economic development.


High-Technology Cabinet Council

High-technology educationColorado Electronics Institute

Labor/technical assistanceJobs for Coloradans


Colorado Division of Commerce and Development

Colorado Division of Commerceand Development

Mr. Steve SchmitzDirectorDepartment of Commerce and Development1313 Sherman St.Denver, CO 80203(303) 866-2205


Program type:


Program services;

Location assistance.Licensing assistance.Investment assistance.

Description:

The Division of Commerce and Development has along history of providing staff and financial assistanceto businesses seeking a new location. Many times, thisinvolves working with a new manufacturing process orproduct, helping to identify a labor base, the best loca-tion for specific resource needs, and assistance in com-pliance with local ordinances.

20 . Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government /initiatives——.——————..— .- — .-—-— - —— -. .——.—— --- . . . . . . —_ .-. .—- —.. -

Colorado Electronics InstituteSenator Al MeiklejohnState Capital Bldg., Rm. 127Denver, CO 80203(303) 8664866


Program type:Legislation.

Program services:Links industry with university resources.

Description:

A bill (S. 01) has been introduced in the 1983 Col-orado General Assembly for the establishment of a Col-orado Advanced Technology Institute to promote, de-velop, and coordinate education and research programsin fields of advanced technology. The Institute will seekto improve the quality and quantity of graduates fromColorado institutions of higher education in fields of ad-vanced technology, to further the research capabilitiesof Colorado institutions of higher education, to provideincentives to attract and retain superior faculty members,and to enhance the economic health of Colorado by en-couraging investment by both governmental and privatesources in educational programs which promote ad-vanced technology education and research and develop-ment.

Governor’s Science and TechnologyAdvisory Council

Mr. Leonard SloskyAssistant to the Governor for Science and

TechnologyState Capital Bldg., Rm. 127Denver, CO 80203(303) 866-2471

Date of establishment: 1975Annual State funding (millions): -O-

Program type:Legislation.

Program services:Task force.

Description:Technology development activity in Colorado has oc-

curred largely without active State government involve-ment. The Governor’s office established this task forceto explore ways to attract technology to the State, a topissue for the Governor in the coming year. The task forceis to address the issue of moving innovation to the mar-

ketplace by looking at educational and international eco-nomic issues.

High-Technology Cabinet Council

Mr. Leonard SloskyAssistant to the Governor for Science

and Technology

Governor’s OfficeState Capitol Bldg.Denver, CO 80203(303) 866-4579


Program type:

High-technolog y development.

Program services:

Task force.

Description:

This Council is set up to coordinate the activities ofthe Colorado government intended to promote high-technolog y development in the State. The Council willprepare a Colorado strategy to encourage high-technol-ogy industrial development in the State, including coor-dination of research and development efforts, educationand training, and private sector initiatives.

Jobs for Coloradans

Mr. Steve SchmitzDirectorDepartment of Commerce and Development1313 Sherman St., Rm. 500Denver, CO 80203(303) 866-2205


Program type:


Program services:

Technical training provided by the State.

Description:

This program is setup to meet the changing labor needsof industry, and train State people for jobs. A disloca-tion or training need is identified by State staff or throughnegotiations between local governments, area vocationalschools or community colleges. Upon identification ofspecific skill areas, employment and training agencies or-ganize and implement specific training programs. In ad-dition, this program works closely with the Worker Out-reach Program, a privately run program, which screensand places individuals for technical occupations.

Appendix—Directory of State High-Technology Strategies and Programs ● 21. —— . . . . .—

Connecticut

Connecticut has a major stake in high-technology in-dustrial development and has become a leader in the de-velopment of State government programs to encourageit, It ranks first in the percentage of manufacturing jobsin high-technology areas, and this percentage is grow-ing. State officials attribute Connecticut’s success in at-tracting and incubating high-technology industry to anumber of coincidental factors, including: a strong in-dustrial base; a large, well-educated labor pool; proximi-ty to a large export center; an above-average system ofhigher education; and access to venture capital.

To foster and retain this growth, the State governmenthas created over the past 20 years a number of programstargeted on the creation and success of high-technologyfirms. The major goals of these programs include: crea-tion of new jobs; expansion of existing industry; reten-tion of existing industry; creation of new ventures; anddiversification of the State’s economic base. The Gover-nor recently established a State High-Technology Coun--cil, which will focus its attention on the State’s educa-tional resources, and proposed a “high-technology strat-egy” for 1983 that includes funds for job training, in-creased funding for the Connecticut Product Develop-ment Corp., and funds for education programs in voca-tional and higher education.

The State government also has the organized participa-tion of the private sector through the Cambridge Re-search and Development Group (CRDG), founded in1965. The principal mission of CRDG is to identify andexploit patentable new products that represent outstand-ing business opportunities for Connecticut companies.

Programs

High-technology development

Connecticut Innovation Development Loan FundConnecticut Product Development Corp.Science Park


Connecticut Enterprise ZonesConnecticut Innovation Development Loan FundConnecticut Product Development Corp.Science Park


Connecticut Department of Economic DevelopmentConnecticut Enterprise Zones

————

Connecticut Department ofEconomic Development

Mr. John CarsonCommissionerDepartment of Economic Development210 Washington St.Hartford, CT 06106(203) 566-4094


Program type:


Program services:

Abatement of local property tax.Training vouchers for new jobs.Exemption from State sales tax.

Description:

The Connecticut Department of Economic Develop-ment is working on a project called “Take Care of YourOwn)’ to look after the needs of existing industry in theState. The Office reports that Connecticut has had thehigh-technology industry advantage all along, mainlybecause of its diversified economic climate. The Stateclaims 40 percent of Connecticut’s manufacturing workforce is in high-technology industry, and that the Stateleads the Nation in the number of patents granted andin the number of research and development laboratories.There is a broad mix of economic sectors, including awell-trained and educated work force.

Aside from being the home of many major manufac-turers, Connecticut offers Industrial Revenue Bonds, aworking capital loan program, industrial park networksfor land acquisition, no State income tax, and a generalprogram of recruitment.

Connecticut Enterprise Zones

Mr. Ken RobertsDirectorConnecticut Department of Economic Development210 Washington St.Hartford, CT 06106(203) $66-3308

Date of establishment: N/AAnnual State funding (millions): $1.0

22 ● Technology, Innovation, and Regional Economic Development: Background Paper—Census of State Government Initiatives

Program type:Capital provision assistance.General industrial development.

Program services:Enterprise zones.Long-term, low-interest loans.Industrial revenue bonds.Physical plant provision.

Description:Six enterprise zones, in underdeveloped parts of the

State in need of economic revitalization, have beennamed to date. The Enterprise Zone office has availablea $1 million revolving loan fund to help establish newor expanding businesses within the newly created zones.The emphasis is on high-technology business develop-ment.

Connecticut Innovation DevelopmentLoan Fund

Mr. Thomas MunsonDirectorInnovation Development Loan Fund93 Oak St.Hartford, CT 06106(203) 566-2920

Date of establishment: 1981Annual State funding (millions): $2

Program type:Capital provision assistance.High-technology development.

Program services:

Grants for development.Loans with stock or royalty rights.Market development assistance.

Description:This organization, recently funded by the Federal Eco-

nomic Development Agency, aims to speed the diffusionof innovation. It will work closely with the ConnecticutProduct Development Corp. (CPDC), taking over whereCPDC leaves off in the development of an innovativeproduct within an established company. In addition,CDPC and CIDP are considering providing venture cap-ital to new starts.

Connecticut Product Development Corp.(CPDC)

Mr. Thomas MunsonDirectorConnecticut Product Development Corp.93 Oak St.Hartford, CT 06106(203) 566-2920


Program type:

Capital provision assistance.General industrial development.

Program services:

Grants for development.Loans with stock or royalty rights.Investment in firm survival.Product development assistance.Technical support provided by State.Assists in finding venture capital.

Description:

CPDC, although not strictly a high-technology devel-opment operation, provides financial investment todevelop new products with job creation and market po-tential. These products are often “high-technology” prod-ucts. The system is set up to receive royalty from suc-cessful products, which in 1982 provided CPDC with$3.3 million in royalty payments. At present there are50 active projects, with 22 products already on the mar-ket. CPDC takes part in all aspects of preparing a prod-uct for market, including assisting in management planpreparation, product development, market identificationand development, and examining the financial capabili-ty of a company. It does not take part in any new businessstarts.

While CPDC is not a government agency, theemployees are on the State payroll, and the State treasuryhandles payment to beneficiaries. The Governor appointsthe Board of Directors and advises it about State policy.CPDC works closely with the Connecticut InnovationDevelopment Program (CIDP), set up with U.S.Economic Development Agency (EDA) funds, particular-ly in high-technology initiatives. Since CIDP providesventure capital, CPDC will usually refer new starts toCIDP.

Appendix—Directory of State High-Technology Strategies and Programs . 23

Science Park

Mr. E. L. DeshongVice PresidentScience Park Development Corp.Yale UniversityNew Haven, CT 06106(203) 436-2300

Date of establishment: 1981Annual State funding (millions):

Program type:


Program services:

$2

Market development assistance.Links industry with university resources.Grants for development.Physical plant provision.

Description:

Science Park is now under construction. Located with-in a Connecticut Enterprise Zone, Science Park will de-velop a large tract of land in New Haven for a communityof companies engaged in the pursuit and developmentof new scientific and technological products, processesand related manufacturing. This project represents a jointeffort between Olin Corp., Yale University, and the Cityof New Haven. The State has contributed $2 million tohelp rehabilitate a vacant industrial building in NewHaven for Science Park. Olin and Yale have also inde-pendently entered into a cooperative research agreement.

Delaware

Delaware is the headquarters and research center formany of the Nation’s largest businesses. However, asidefrom a favorable tax structure that is available to allbusinesses, there has been little direct effort to attractor develop high-technology business to the State. Thismay be changing.

Legislation has been introduced that would requirethat all Delaware high school graduates be computer lit-erate. The State also sponsors community college train-ing programs geared to skill development in electronicsand science. These colleges also work with the FederalGovernment to help with technology transfer from col-leges to industry.

ProgramsGeneral industrial development

Delaware Tax Incentives for Business

Delaware Tax Incentives for Business

Mr. David V. BrandonAssistant Director for Business DevelopmentDelaware Development Office, Townshend Bldg.P.O. Box 1401Dover, DE 19901(302) 571-3156


Program type:


Program services:

Reduction in State corporate business tax.Abatement of local property tax.Freeze on assessed value of improved property.

Description:

Although there are no State programs geared specifical-ly to the development of high-technology industry, taxincentives have been created for industry in general. Inaddition, the State has initiated enterprise zone legisla-tion, allowing a city or municipality to develop an enter-prise zone and a related loan fund. At present, onlyWilmington has exercised the enterprise zone option. TheState runs a training program through its technical andcommunity colleges, including classes in electronics andthe sciences.

Florida has

Florida

developed a solid industrial base forhigh-technology development, particularly in the so-called “Golden Girdle” and “Silicon Coast” areas thatstretch from Tampa on the gulf coast to Daytona Beachon the Atlantic and south to Fort Lauderdale and Miami.This includes a considerable amount of space-related in-dustrial development around the Kennedy Space Centerat Cape Canaveral, as well as aerospace and electronicsmanufacturing generally. One-fourth of Florida’s man-ufacturing employment is in high-technology industries,according to State officials.

Florida began its focused high-technology effort in 1980with the formation of a Governor’s Task Force, whichrecommended special incentives targeted on industriessuch as defense contracting, communications, electronics,pharmaceuticals, and scientific instruments.

In the near future, the legislature is expected to con-sider a bill creating an umbrella program for State ef-forts in high-technology industrial development. Floridais constitutionally prohibited from making loans or pro-

24 Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives

vialing capital of any kind to private firms, but the Stategovernment is helping to start a private venture capitalassociation. In addition, legislation was recently passedto exempt certain types of new job creation from taxesand to protect intellectual property developed under uni-versity-industry contracts.

Florida places considerable emphasis on these univer-sity-industry partnerships and has set up several govern-ment programs in this area. The University system par-ticipates in an entrepreneurship program and in a State-funded Research and Development Parks program. In re-cent months Florida has also announced plain to developengineering and vocational-technical education programsand efforts to enhance in-State research and develop-ment.


Interagency High-Technology CommitteeResearch and Development CommissionTechnical Entrepreneurship Program

High-technology educationOffice of High-Technology and Industry

General industrial developmentBureau of Economic AnalysisIndustrial/Academic CouncilIndustry Services Training Program

Bureau of Economic Analysis

Mr. Maury HagermanEconomic Analysis SupervisorBureau of Economic Analysis406 Fletcher Bldg.Tallahassee, FL 32301(904) 487-1314Date of establishment: N/AAnnual State funding (millions): N/AProgram type:


Program services:

State resources promotion (infrastructure).Links industry with university resources.

Description:This office works to attract new businesses into Florida

and retain businesses already there. It emphasizes attract-ing new industry to the State rather than starting newbusiness within the State.

The Florida Legislature has passed three laws to createincentives for business to develop facilities in tradition-ally underdeveloped or low-income areas. Part of this ini-

tiative was the creation of enterpise zones, wherein new-ly created jobs bring tax credits for salaries, tax creditsfor contributions to community projects, and exemptionfrom the “school tax” portion of the development tax.This amounts to almost tax-free development over a cer-tain number of years. In addition, four research and de-velopment parks have been or are being formed in theState, modeled after the Research Triangle in NorthCarolina. In addition, the University of Florida is de-veloping an “innovation center. ”

Industrial/Academic Council

Mr. Hank HectorState University SystemFlorida Board of Regents107 West Gaines St.Tallahassee, FL 32301(904) 488-7702


Program type:General industrial development.

Program services:State resource promotion.Links industry with university resources.Patent searches.

Description:The Industrial/Academic Council, recently organized

by the Board of Regents, is designed to further coordinateengineering activities within the State university system.The membership consists of user business and industrialgroups, and coordinates the State Technology Applica-tions Center, the Florida Engineering Education DeliverySystem and the Engineering and Industrial ExperimentStation.

Industry Services Training Program

Mr. Jesse BurtDirectorFlorida Department of

Vocational Training107 West Gaines St.Tallahassee, FL 32301(904) 487-1040Date of establishment:Annual State funding (millions): N/A

Education, Division of

N/A


.——.———

. —

Appendix—Directory of State High-Technology Strategies and Programs ● 25. . —. ...—.—-. -——— . -.——— ——.—. ——-.—

Program services:

Technical support provided by the State.Trains technical staff for business.

Description:

This program provides customized training programsfor new and expanding industries funded entirely by theState. Training is implemented through local vocation-al-technical schools and community colleges, and isgeared toward the development of skills for Florida’s in-creasing community of hig}~-technology industries.

Interagency High-Technology Committee

Mr. Kern AlexanderDirectorGovernor’s Office of Planning and BudgetCarleton Bldg.Tallahassee, FL 32301(904) 487-1880


Program type:

High-technology development.

Program services:

Information dissemination.Task force.

Description:

Florida’s most recent State initiative relating to hightechnology is the establishment of the Governor’s Inter-agency High-Technology Committee, to plan and mon-itor high-technology industrial development initiativesin the State. Representatives are drawn from education,labor, and commerce agencies. This group will also coor-dinate the Divisions of Sponsored Research at the Stateuniversities, administering State research trends.

Office of High-Technology and Industry

Dr. Marm HarrisDepartment of EducationCollege Building107 West Gaines St.Tallahassee, FL 32301(904) 487-3134


Program type:


Program services:

Technical support provided by State.Links university with industry resources.

Description:

The Office of High-Technology and Industry was or-ganized by the Florida Department of Education withexisting resources to provide for increased State level em-phasis on high--technology vocational training programs,particularly at the community college level. The level ofState funding and specific responsibilities of the officewill be determined by the 1983 Florida Legislature.

Research and Development Commission

Mr. Tim GrayLegislative Assistant to the Secretary of CommerceCollege Bldg.107 West Gaines St.Tallahassee, FL 32301(904) 487-3104

Date of establishment: 1978Annual State funding (millions):

Program type:


Program services:

Links industry with university

Description:

N/A

resources <

The State government has set up this Commission toinitiate incentives for research and development parksin association with State universities. Four parks havebeen established: Tampa Bay Research Park at the Univer-sity of Southern Florida; Central Florida Research Parkat the University of Central Florida; Florida Researchand Technology Campus at the University of Florida;and Innovation Park at Florida State University and Flor-ida A&M University. Industrial revenue bonds may beused in financing development.

Plans are currently underway at the University of Flor-ida for the development of an incubator facility to sup-port new high-technology companies.

Technical Entrepreneurship Program

Mr. Maury HagermanEconomic Analysis SupervisorBureau of Economic Analysis406 Fletcher Bldg.Tallahassee, FL 32301(904) 487-1314


Program type:


26 Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government lnltiatives.—— —.——. ————— ——. —————.—.— —- ——. ..——.— .

Program services:Information dissemination.State resources promotion.

Description:

This program, established to promote indigenous in-dustry in Florida, mobilizes the components of the State’shigh-technology community. Its activities consist of:

1. organizing and leading public and private efforts toevolve State high-technology strategies,

2. supporting and acting as a catalyst to individual andjoint efforts of various elements of the high-technol-ogy community to move ahead with actions support-ive of State goals, and

3. continuing efforts to analyze economic growth.The program works closely with the Florida “Venture

Capital Association (a private group), and with theUniversity of Florida in developing a prototype incubatorfacility and innovation center. This program will also beworking closely with the Small Business High TechnologyCouncil (Washington, D. C.) to develop an entrepreneur-ship network.

Georgia

Georgia has a well-established State strategy to en-courage the creation and growth of high-technology in-dustry. This strategy is centered on the Advanced Tech-nology Development Center (ATDC), jointly run by theState and the Georgia Institute of Technology. Much ofthe impetus for the development of ATDC came fromGeorgia Tech graduates who wanted to create challeng-ing employment opportunities in the State. ATDC pro-vides technical, financial, and management assistance inthe creation of new firms, as well as information and con-sulting services for relocating firms. Similar centers arebeing developed at other universities.

The Department of Industry and Trade is workingclosely with the education sector and ATDC to developa training strategy for high-technology development, andthe ATDC program and the vocational training initia-tives are being integrated into the State’s general in-dustrial development program. State development agen-cies are stressing the importance of education to meetfuture needs.

In addition to the joint effort at ATDC, the State hasa vigorous industrial development program that is recruit-ing technology-based manufacturing operations such asavionics and microelectronic research and assemblyplants. The State reports that high-technology ventures

targeted in the future will probably involve computersoftware, communications, biotechnology, and solarenergy.


Advanced Technology Development Center

High-technology educationGeorgia Engineering Technology ProgramGovernor’s High-Technology Advisory Council

Labor/technical assistanceAdvanced Technology Development CenterGeorgia Engineering Technology Program

Advanced Technology DevelopmentCenter (ATDC)Mr. Jerry BirchfieldDirectorAdvanced Technology Development CenterGeorgia Institute of TechnologyAtlanta, GA 30332(404) 894-3575


Program type:High-technology development.Labor/technical assistance.

Program services:Product development assistance.Technical support provided by State.Assists in finding venture capital.Office or equipment provision.Physical plant provision or assistance.

Description:In 1980, the State of Georgia and the Georgia Institute

of Technology established the Advanced Technology De-velopment Center (ATDC) to provide services for de-veloping and expanding high-technology industries. Theoffice is independent of both the State government andthe university,, but maintains strong ties and shares per-sonnel with these offices. In addition, ATDC maintainsclose ties with the private venture capital community inAtlanta. Services are available to new businesses as wellas to existing businesses wishing to relocate. Future plansinclude providing office and laboratory space on theGeorgia Tech campus for the incubation of new, smallbusiness.

Appendix-Directory of State High-Technology Strategies and Programs . 27— . . — . . — — ——————-.———.— ——————————.———.—

Georgia Engineering Technology ProgramMr. Robert MabryDirector, Postsecondary Instructional ProgramsOffice of Vocational Education17th Floor Twin Towers EastAtlanta, GA 30334(404) 656-2547


Program type:High-technology education.Labor/technical assistance,

Program services:

Technical training provided by the State.

Description:This statewide education program offers an Associate

Degree in Applied Technology to answer the needs ofincoming industry for skilled technicians in several tech-nical areas. The program curriculum is developed on theState level, and administered at six community colleges.The program takes a multidisciplined systems approachto technical education given that many technologies in-clude components from different technical skill areas.Every faculty member has 2 years of industry work ex-perience plus academic degree.

Governor’s High-TechnologyAdvisory Council

Mr. Robert MabryStaff CoordinatorOffice of Vocational EducationTwin Towers EastAtlanta, GA 30334(404) 656-2547


Program type:High-technology education.

Program services:

Task force.

Description:This Council, established to advise the Governor, came

about largely through a recognition of the need for a pro-gram of excellent, high-technology education to attractand retain advanced technology industries, and to secureemployment for students in high-technology industries.As high-technology training programs help industry aswell as the State, 10 of the 12 members of the Commis-

sion are representatives of Georgia industry. The two re-maining spaces are filled by a representative of the Ad-vanced Technology Development Center, and the StateBoard of industry and Trade participation.

Hawaii

The Hawaii Institute of Electronics Research, charteredin 1979 to develop Hawaii's electronics research capa-bilities, works with the State Department of Planning and

Economic Development to obtain and administer re-search contracts involving both private business and thefaculty of the University of Hawaii. In addition, the Statehas targeted tropical applications of biotechnology andmicroelectronics as key areas of high-technology growth.

Hawaii’s Governor has proposed creating a High-Tech-nology Development Corp. responsible for identifyingavailable land and financing to develop industrial parksdevoted entirely to high-technology firms. This researchand industrial effort targets alternative energy resourcedevelopment, in which Hawaii is a leader.


Hawaii Venture Development Fund

Hawaii Venture Development Fund

Dr. Hideto KonoDirectorDepartment of Planning and Economic DevelopmentP.O. Box 2359Honolulu, HI 96804(804) 548-8741


Program type:


Program services:

Loans–debt.Market development assistance.Product development assistance.Licensing assistance.Location assistance.

Description:This Department has three separate projects designed

to help high-technology development in the State:1. Inventor's Fund (Funding: $100,000) This project

provides seed loans for the development of newproducts. In addition to capital, the staff assists with

28 . Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives

patent and literature searches, and in finding ven-ture capital for business development.

2. High-technology promotional funds. (Funding:$l00,000)The Department has set aside funds to de-velop, attract, and retain high-technology industries.The staff will assist in location of new and expand-ing industry, provide information on tax regulations,licensing, permitting, labor, trade, and markets.

3. Capital Loan Program. (Funding: $1 million) Thisprogram has a high-technology focus: the staff helpsidentify new industries needing funds. The programprovides debt financing at below market rates (cur-rently 7.5 percent) up to $100,000. Additional fundsare requested for fiscal year 1984.

A fourth effort expected to be passed in the State legis-lature this term is the development of a High-TechnologyDevelopment Corp. set up to develop Science Parks forhigh-technology industries in the State. This program,like the Hawaii Institute of Electronics Research (HIER),will eventually be a private corporation, but will be ini-tially administered through this Department.

Idaho

There are no State programs geared to the develop-ment of high-technology industry in Idaho, although theState markets itself actively to expanding companies. Likemany Western States, Idaho has a lot of tax “incentives”built into its tax laws, including low property taxes andincentives for job creation and investment. In addition,the State claims the lowest energy prices in the North-west. The State government recently convened a TaskForce on capital development, and it has set up a pro-gram to use public pension funds for mortgage and busi-ness development.

Through the State Board of Education, an electronicstechnical training center is being established at Idahouniversities with private industry funding. Teachers andequipment will be supplied by area industries to trainstudents to meet their employment needs. Private sec-tor initiatives include a State Marketing club set upcooperatively by business and government to help drawindustry to the State. Such efforts have already attractedbranch plants of microelectronics firms to Idaho. TheState also works closely with the U.S. Small Business Ad-ministration, and uses CETA and block grant funds todevelop the work force and infrastructure needed tostrengthen its industrial base.

ProgramsGeneral industries development

Idaho State Tax Commission


Idaho Division of Economic and Community AffairsIndustry Training Program

Idaho Division of Economic andCommunity Affairs

Mr. Jay EngstromEconomic Development SpecialistDivision of Economic and Community Affairs108 State HouseBoise, ID 83720(208) 334-2470


Program type:


Program services:Tax—favorable business climate.State resources promotion.Links industry with university resources.Technical training provided by State.Physical plant provision.Industrial revenue bonds.Task force.

Description:Idaho has no State programs geared to the develop-

ment of high-technology industry, although the Gover-nor has actively marketed the State’s resources to expand-ing corporations. The State takes advantage of Federalfunding through CETA, CDBG, and other developmentmoney to improve the State infrastructure and make itmore attractive to incoming business. Cities and munici-palities have also been participating actively in this area.

The State recently convened a Task Force on CapitalDevelopment to discuss State resource promotion. A pri-vate sector “State Marketing Club” is being set up withmembers from business and government-to promote theresources of the State to businesses outside the State.

Idaho reports many tax “incentives” built into an al-ready low tax base and claims to be the lowest indebtedState in the Nation; the property tax is 1 percent andincentives have been created for job creation and invest-ment (see Tax Commission program).

-. —.

Appendix-Directory of State High-Technology Strategies and Programs ● 2 9—

Idaho State Tax Commission

Mr. Larry G. LooneyChairmanIdaho State Tax Commission700 West State St.Boise, ID 83720(208) 334-4624


Program type:

General industrial development,

Program services:Tax—favorable business climate.Training vouchers for new jobs.Labor assistance.Reduction in State corporate business tax.

Description:

The 1982 Idaho Legislature approved and GovernorJohn Evans signed into law a tax incentive package allow-ing an investment tax credit. The law provides a 3 per-cent tax credit for new investments made instate, notto exceed 50 percent of the tax liability for the taxableyear. A carry-over provision of up to 5 years is included.In addition, the Job Expansion Act of 1982 offers Idahobusinesses a tax credit for hiring new employees. Thiscredit is limited to $500 the first year, $300 the secondyear, and $100 the third year for each new employeehired. The law is retroactive to January 1, 1982.

Industry Training Program

Dr. Larry SellendState AdministratorDepartment of Vocational Education650 West St.Boise, ID 83720(208) 334-3210


Program type:Labor/technical assistance.

Program services:

Training provided by the State.

Description:

This program assists businesses in new and expandingindustries to train personnel for growing needs. The pro-gram provides “customized” training through the State’spostsecondary vocational-technical education system.

Training programs to meet new specific needs can be op-erational in a short time. The program is available forindustries new to Idaho and for expansion of businessand industries already in the State.

Illinois

The task force appointed by the Governor in 1981identified four high-technology industries central to I1-linois’ economic development: electronics, biotechnol-ogy, materials technology, and robotics. In addition, itrecommended that the State develop a network of high-technology facilities associated with university and in-dustrial centers. This task force has been replaced by apermanent Commission on Science and Technology withrepresentatives from banking, business, labor, education,and government. The Commission’s goal is the develop-ment of long-range economic goals and the implemen-tation of the task force’s recommendations.

Illinois’ strategy for economic development is to pub-licize the advantages of the State to attract high-tech-nology growth companies, but it will also encourage newand expanding firms within the State. Like other heav-ily industrialized Midwestern States, however, Illinois alsoneeds to retain and strengthen traditional industry whilediversifying into high-technology areas. The State reportsthat development is building on existing strengths: goodtransportation, a skilled work force, a network of univer-sities and scientific research facilities, and good educa-tional and vocational training systems.

Part of this effort includes retraining workers for newskill areas and setting up a biomedical research park inChicago. The State is also working closely with the Fed-eral Government to develop a High-Technology Train-ing Assistance Program, designed to provide technicaIskills for economically disadvantaged students. Educa-tion sector initiatives include a Microelectronics Centerat the University of Illinois, set up to conduct basic re-search in electron beam lithography.

ProgramsHigh-technology Development

Biomedical High-Technology Research ParkFaculty Research Assistance to the StateGovernor’s Commission on Science and Technology

High-technology educationBiomedical High-Technology Research Park

Capital provision assistanceIllinois Industrial Development Authority

30 . Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives—

Labor/technical assistanceFaculty Research Assistance to the StateHigh Impact Training ServicesIllinois Industrial Training Program

General industrial developmentIllinois Industrial Development Authority

Biomedical High-TechnologyResearch Park

Mr. Norm PetersonExecutive DirectorGovernor’s Commission on Science and Technology310 South Michigan Ave., Suite 1000Chicago, IL 60604(312) 793-3982


Program type:

High-technology development.High-technology education.

Program services:Links industry with university resources.Physical plant provision.

Description:The 46-acre high-technology Park is being established

to promote the development of high-technology industryin the Chicago metropolitan area and in Illinois, and tostrengthen the partnership between high-technologybusinesses and higher education.

Initial capital of $1 million was provided by the Stateof Illinois to enable the university to lease an incubatorfacility building. The State has agreed to provide the Uni-versity with $10 million to purchase the building. TheCity of Chicago has agreed to provide both planning andconstruction of the infrastructure in the Park.

Leases in the incubator building are mainly for fledg-ling firms. Land leases for firms desiring to build theirown facilities would be long-term. The Park has no spe-cific written criteria for occupants at this time. Park oc-cupants are expected to be businesses or organizationswhich will benefit from location in proximity to univer-sities and their human and physical resources.

The Chicago area universities anticipate a high degreeof faculty participation in the many facets of the Park’soperation, ranging from research consultation to the pro-vision of faculty expertise in other areas to assist Parkoccupants (e.g., architectural design, securing of venturecapital, etc.) A full range of services can be provided, fromlibrary and computer facilities to conference facilities andcatering.

Faculty Research Assistanceto the State (FRATS)

Mr. Richard A. ZollingerDirector, FRATS Institute of Government and

Public Affairs, University of Illinois1205 W. Oregon St.Urbana, IL 61801(217) 333-8770



Program services:Information dissemination.Links industry with university resources.

Description:The FRATS program provides an on-line computer-

ized information file of faculty research capabilities andscholarly interests. The data base is a resource accessi-ble to participating campuses and businesses in need ofobtaining information on research capabilities and per-sonnel. The FRATS program provides a method bywhich individuals/universities/businesses can receivebroad and rapid access to faculty research and teachingcapabilities in areas of interest, including science andtechnology, economic development, and employmenttraining. During 1983, 4,500 faculty profiles will be col-lected and entered on-line into the data base.

Governor’s Commission on Scienceand Technology

Mr. Norm PetersonExecutive Director310 S. Michigan Ave., Suite 1000Chicago, IL 60604(312) 793-3982


Program type:


Program services:

Task force.Information dissemination.State resources promotion.Investment capital.

Description:This 31-member Commission was appointed by the

Governor to carry out the recommendations of the State

——. —

Appendix—Directory of State High-Technology Strategies and Programs ● 31————— .——. ..—

Task Force (which presented recommendations to theGovernor on March 24, 1982) to develop the State’shigh-technology effort. The Task Force targeted four in-dustries as central to Illinois development: electronics,biotechnology, materials technology (coal processing),and robotics. The overall recommendation of the TaskForce was that the State should develop a network ofhigh-technology facilities associated with various univer-sities and other centers of technical excellence through-out Illinois. As a result, the State established Chicago’sbiomedical research park in September 1982, and plansto develop a $5.3 million Microelectronics Center at theUniversity of Illinois (Urbana/Champaign).

In addition, an Illinois Growth Investment Fund is be-ing established to provide seed capital to help financenew product development. The Fund will finance smalltechnologically innovative enterprises during their initialformation and early development stages.

Specific investment criteria for the Fund will be estab-lished. These will include, for example, financial supportfor companies that are located or agree to be located inIllinois, have products or services sufficiently innovativeto have a potential market advantage, have adequatemanagement and technical support, and offer the poten-tial for significant job creation and long-term growth.

High Impact Training Services

Mr. Jack WilliamsDirectorIllinois State Board of Education100 North First St.Springfield, IL 62777(217) 782-5098


Program type:


Program services:

Technical training provided by State.

Description:

The High Impact Training Services (HITS) programoffers “customized” training on a firm-by-firm basis. TheIllinois State Board of Education cooperates with the De-partment of Commerce and Community Affairs, IllinoisState Chamber of Commerce, Board of Education, andthe Illinois Community College Board in offering theseservices. HITS, funded from State and Federal vocationaldollars, is intended to bridgc the gap between long-term,in-school vocational training programs and the imme-diate short-term job training needs of business and in-dustry. It provides financial assistance for local educa-tional agencies to design and conduct job training pro-

grams. The program is available to any business or in-dustry that is expanding, permanently increasing person-nel levels through additional work shifts, and/or facilitiesin excess of normal growth or turnover.

Illinois Industrial Development Authority

Mr. Lee Roy BrandonGeneral ManagerIllinois Industrial Development AuthorityP.O. Box 397Marion, IL 62959(618) 997-6318

Date of establishment: 1968Annual State funding (millions): $Bond

Program type:


Program services:

Enterprise zones.Industrial revenue bonds.Loans.

Description:

The Authority helps create new jobs or retain existingjobs within labor surplus areas of the State. The Authori-ty concentrates its assistance on the projects designed tocreate the maximum number of new jobs.

The Authority’s two part effort consists of: 1) directloans for periods up to 25 years, ranging from $10,000to $150,000; and 2) issuing industrial revenue bonds onbehalf of qualified applicants. The Authority may nothave outstanding at any one time, bonds and notes inan aggregate principle amount exceeding $1 billion. Nomore than one-third of the total principle amount ofbonds and notes as authorized by the Illinois GeneralAssembly are issued for the development, construction,acquisition, or capital improvements of commercial fa-cilities. One hundred million dollars of the total author-ized bonding power is reserved for use in Enterprise Zonesas established by the Illinois Department of Commerceand Community Affairs.

Illinois Industrial Training Program

Mr. Chuck BakerDepartment of Commerce and Community Affairs320 W. Washington St., 5th FloorSpringfield, IL 62706(217) 785-3206


32 ● Technology Innovation, and Regional Economic Development: Background Paper—Census of State Government initiatives— ..—. — . — —.- — .- ——


Program services:Trains technical staff for business.Technical training provided by State.Links industry with university resources.Physical plant provision.

Description:

The Department of Commerce and Community Af-fairs administers the Illinois Industrial Training Program(ITP) to help Illinois industries expand and to assist in-dustries locating in Illinois. ITP pays firms a portion ofthe salaries of new workers while they are being trained.ITP can be used to improve the skills of currently em-ployed workers and to support on-the-job training in awide range of skill areas. ITP? activities can be coordinatedwith CETA programs. To qualify for ITP funds, a firmmust be planning an expansion or permanent increasein production that requires additional personnel. Suchexpansion can take the form of additional work shiftsand/or facilities in excess of growth.

Indiana

Indiana is setting up a program to answer the specifictechnology development needs of the State. The Stateeffort includes the Corp. for Innovation Development,a not-for-profit organization set up in 1982 with fundsprovided through a foundation. The 24-member boardof directors includes representatives from business, gov-ernment, and education. The Corporation provides cap-ital assistance to promising innovations, makes publicpolicy recommendations and designs programs to en-courage further development of science and technologyin educational institutions and the industries within theState.

The government plans to work closely with existingindustries to provide a favorable economic climate andto encourage the growth of new industry within theState. In addition, plans are in the works to developindustry-university cooperative resources in research anddevelopment.


Corporation for Science and Technology

Capital provision assistanceCorporation for Science and Technology

Labor/technical assistanceLaser and Electro-Optics Technology Training

Program

Corporation for Science and Technology

Mr. Robert CumminsActing DirectorIndiana Department of Commerce440 N. Meridian St.Indianapolis, IN 46204(317) 232-8810


Program type:


Program services:

Task force.State resource promotion.Information dissemination.

Description:

This Corporation is designed to stimulate the develop-ment of science and technology in Indiana, and is setup as a not-for-profit corporation. The Board of Direc-tors consists of representatives from the private sector,from education and from the State and local govern-ments. One of the primary missions of the corporationwill be to encourage public-private cooperatives programsin research and development.

Laser and Electro-Optics TechnologyTraining Program

Mr. Don GentryExecutive DirectorState Board of Vocational and Technical Education401 Illinois Bldg.Indianapolis, IN 46204(317) 232-1814


Program type:

High-technology education.Labor/technical assistance,

Program services:

Technical training provided by State.Links industry with university resources.

Description:

This training program has been set up within the De-partment of Vocational Education to address the needsof industry with advancing technologies. The programqualifies graduates as skilled technicians in design sup-port, developmental assistance, sales, field service, andmaintenance.

--

Appendix-Directory of State High-Technology Strategies and Programs ● 3 3.. ——————. . .- — —. — .— — ——. . . . . —— -- —— -.—.———-—— ——-— .—. ——.—.— .

Iowa

The former Governor’s High-Technology Task Forcewas appointed in 1982 to examine the status of high-technology industry in the State. The Task Force report,after taking into account existing State resources, iden-tified biotechnology, micrcelectronics, and energy tech-nologies as important to the overall economic develop-ment of Iowa. It also cited the need for a better technol-ogy-transfer mechanism, and recommended the creationof a permanent Commission to establish long-range goalsand oversee State high-technology issues.

The new Governor has introduced a legislative packagethat echoes many of these recommendations, including:the continuation of a permanent high-technology com-mission; a technology-transfer mechanism; challengegrants for basic and applied research in agriculture andindustrial; a high-technology research tax credit; expan-sion of the State industrial development bond law to in-clude high-technology research and development bonds;and revisions in Iowa securities laws to encourage theavailability of venture capital.

The Iowa Development Commission has also workedwith local communities that are experiencing labor prob-lems, trying to encourage local solutions to local problemsand to improve labor relations throughout the State byforming labor/industry councils. In addition, the Statewill be looking at policy alternatives in the longer termdevelopment issues of education and training.


Iowa High-Technology Task Force

Iowa High-Technology Task Force

Mr. David SwansonDirectorIowa Development Commission250 Jewett Bldg.Des Moines, IA 50309(515) 281-3251


Program type:High-technology development.

Program services:Task force.State resources promotion (infrastructure).Information dissemination.

Description:The high-technology Task Force reported on Novem-

ber 1, 1982 on its original mission to examine the statusof high-technology in Iowa. It recommended:

1.

2.3.4.

5.6.7.8.

.,targeting research and development efforts at bio-technology, microelectronics, productivity enhance-ment/process controls, and energy alternatives;expanding technology transfer opportunities;looking towards long-term development;forming a commission to oversee efforts (a bill isbefore the 1983 legislature to form this commission);considering legislative changes;developing human resources;encouraging venture capital; andexpanding in tax and regulations State promotionaround the country.

Kansas

“Strategy for the Eighties,” a staff study commissionedby the Governor, concluded that Kansas has, in its tech-nically skilled work force, the basic ingredients neededto compete in the arena of high-technology development.The Governor has appointed a task force to follow upon this study and develop specific policy recommenda-tions based on its findings.

The Governor has also called for a program underwhich the education system’s Board of Regents wouldinvest State money, with matching funds from the privatesector, to provide more support for high-technology re-search conducted at State schools. This includes a pro-posal to tax oil and gas revenues in order to avoid cut-ting other educational programs. Wichita State Univer-sity, in cooperation with the local chamber of commerce,has taken the lead in this area by establishing an innova-tion and entrepreneurship center to encourage new busi-ness development. The University of Kansas is also in-vestigating the feasibility of a science and research parkin Lawrence. The State has also developed an aggressiveenterprise zone program to be developed and run by in-dividual cities.

ProgramsHigh-technology Development

Governor’s Task Force on High-TechnologyDevelopment

General industrial developmentKansas Department of Economic Development

34 TechnOlOgy, Innovationr and Regional Economic Development: Background Paper—Census of State Government Initiatives— — . - — — — . — . — — .- -..— . . . -..———. .- ——-. -— ———..— --——. --- — .——.————— .———— —..- ————— — --.———. -.—

Governor’s Task Force on High-Technology Development

Mr. Charles SchwartzSecretaryDepartment of Economic Development503 Kansas Ave., 6th FloorTopeka, KS 66601(913) 296-3481



Program services.

Task force

Description:

In October 1982, Governor ]ohn Carlin establishedby Executive Order, the Governor’s Task Force on HighTechnology Development, The Task Force is chargedwith analyzing the conclusions and recommendations ofthe study on Strategy for the Eighties: High TechnologyIndustrial Development, as well as exploring high-technology development potential in Kansas. The Task Forcewill make its report to the Governor in July 1983.

Kansas Department ofEconomic Development

Mr. Charles Schwartz:SecretaryDepartment of Economic Development503 Kansas Ave., 6th Floor Topeka, KS 66603(913) 296-3480


Program type:


Program services:

Trains technical staff for business,Enterprise zones.Reduction in State corporate business tax.Training vouchers for new jobs.Task force.

Description:

This Department recently completed a study entitledStrategy for the Eighties: High Technology Industrial Development, in which State officials concluded that Kansashas the basic ingredients needed to compete in the arenaof high-technology development, hut must now createState level programs that show high-technology indus-

tries a concern or commitment on the part of Kansas.Recommendations for this action include: convening acommittee of business, education, and State leaders; con-sidering legislative changes such as tax and R&D incentives; coordinating training with educational instructions;and promoting the State resources to out-of-State busi-ness. At present, the State has an Industrial TrainingProgram, tax incentives for business and enterprise zonelegislation allowing cities to develop the zones in speciallydesignated areas.

Kentucky

The economic development strategy laid out by theGovernor includes the formation of a High-TechnologyCommittee to review all sectors of the State economyior possible high-technology industrial development. TheState already provides overall development assistance tobusiness, including a strong financing program and a recent emphasis on the importance of education for economic growth. Kentucky also has good vocational train-ing programs, including a program designed for displacedolder workersj and has an aggressive State- local cooper -ative enterprise nine program.

Development efforts by the education sector includethe Northern Kentucky University Foundation, estab-lished to develop a research/technology park adajacentto Northern Kentucky University. In addition, the Uni-versity of Kentucky Office of Continuing Education actsas information broker on Federal funds for small business.\development.

ProgramsCapital provision assistancc

Kentucky Development Finance Authority

Labor,/technical assistance

Industry Training Program


Kentucky Development Finance AuthorityKentucky Enterprise Zones

Kentucky Development Finance Authority

Mr. Roger PetermanExecutive Director, Industrial Development DivisionKentucky Commerce CabinetCapital Plaza TowerFrankfort, KY 40601(502) 564-4554

Date of establishment: 1%2Annual State funding (millions): N/A

Appendix—Directory of State High-Technology Strategies and Programs ● 35———— ..——.——.—. .— — . .————.— —..— ... .———.— ——.

puter training in manufacturing industries. This commit-tee will identify the skills needed in high-technology in-dustries, and then develop a training program aroundthese needs.

The Upgrade Training Program, another project in thisdepartment, is a program designed to retrain older work-ers who do not have the skills to use new manufactur-ing equipment.

Kentucky Enterprise Zones

Louisiana

The Governor’s Task Force on High-Technology,ap-pointed to look at possible economic diversification ina State that is dependent on the petrochemical industry ,includes representatives from business, education, government, and finance. Goals developed by the Task Forceinclude better capital markets, enhanced technologytransfer between university and business, and changesin the tax structure to encourage the development oftechnology-based industries. Other State developmentgoals include strengthening the State’s research and de-velopment base, both public and private. The State de-velopment strategy includes all forms of innovation andmanufacturing.

Louisiana is looking forward to hosting the NewOrleans World Fair, which will emphasize high-technol-

ogy industrial development. The city of New Orleans,too, is aggressively pursuing the development of high-technology industries. This includes plans for a researchpark, changes in city ordinances, and location assistancefor new and expanding industry.ProgramsHigh-technology development

Louisiana Task Force on High-TechnologyCapital provision assistance

National Business DivisionLabor/technical assistance

National Business DivisionGeneral industrial development

National Business Division

Louisiana Task Force on High-Technology

Mr. Kevin CouhigProject Coordinator-Task Force on

High-TechnologyOffice of Commerce and IndustryP.O. BOX 44185Baton Rouge, LA 70704(504) 342-5372



Program services:Task force.

Ascription:This Task Force is considering the future of Louisiana’s

economy, emphasizing the potential instability in con-tinued State income reliance on the petrochemical in-dustry. The concerns of the Task Force include accessto risk capital, and the role educational resources playin the development of high growth industry. It consistsof university presidents and chancellors, the Commis-sioner of Higher Education, State Legislators, and mem-

bers of the business community. The Task Force willmake recommendations to the Governor and the legis-lature in April 1983.

National Business Division

Mr. John FoltzDirectorNational Business Division of the Department

of CommerceP.O. BOX 44185Baton Rouge, LA 70804(504) 342-5370

Date of establishment: 1972Annual State finding (millions): N/A

Program type:Capital provision assistance.General industrial development.Labor/technical assistance.

Program services:Enterprise zones.Industrial revenue bonds.Technical training provided by State.Subordinated loans.Links industry with university resources.Abatement of local property tax.Assists in finding venture capital.Task force.State resources promotion.Information dissemination

Description:Louisiana has developed incentives for business devel-

opment including property and building tax exemptionsfor up to 10 years; an Industrial Revenue Bond (IRB) fi-nancing program; and a training program which custom-izes a program on a firm-by-firm basis. The State recent-ly began a new effort coordinating the efforts of the vo-cational-technical schools with the skill requirements ofindustry. In addition, the State is looking for ways topromote engineering and science skills.

A small business division of this department providesloans and guaranteed loans; and some venture capitalis available through this office. This office also ad-ministers the State enterprise zones-two of the first fourfirms in these zones were high-technology manufacturers.

—— ———- . —

Appendix—Directory of State High-Technology Strategies and Programs ● 37— . — —.—.—.—..——..——

Maine

Maine, whose economy is made up almost entirely ofsmall businesses, has recently struggled with a decliningdemand for its major product: shoes and leather goods.Its strategy for overall economic development includesthe creation of a loan guarantee program and a State-chartered corporation to provide capital for new or ex-panding industry. There has been limited support for thetechnical education that may be needed to attract high-technology industries, but the State enjoys the coopera-tion of the university and private sectors in automatingthe shoe industry and other traditional industries tomake production more efficient.

The New Enterprise Institute, a private nonprofit groupassociated with the University of Maine, has been in-strumental in developing computer--assisted design andmanufacturing in the shoe industry, working on a firm-by-firm basis to implement innovative production proc-esses. In addition, this group helps find research and de-velopment funds for further high-technology develop-ment.

Programs


Maine Capital Corp.


Business Assistance DivisionMaine Guarantee Authority

Business Assistance Division

Mr. Robert HirdDirector, Business Assistance DivisionState Development OfficeState HouseAugusta, ME 04333(207) 289-2656


Program type:


Program services:

Training vouchers for new jobs.Tax–favorable business climate.Industrial revenue bonds.

Description:

The Business Assistance Division of the State of Maineworks closely with industry in the State to encourageeconomic development. The office caters to the needsof small business which comprises a large proportion of

38 . Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives

brella Program which issues bonds to provide loans andinsurance, and 3) loans for building “shell” industrialbuildings. The program makes it possible for businessesto acquire loans that would otherwise be beyond theirreach.

Maryland

The Maryland High-Technology Roundtable, createdin 1982, advises the Governor and legislature on issuessuch as financial support, technical education, industrialretraining, and engineering programs at Maryland’s uni-versities. Maryland already has eight State financing pro-grams for different types of businesses, including a ven-ture capital program for new companies, and it aggressive-ly promotes the resources available to expanding indus-try. There are plans to expand the existing TechnologyExtension Service throughout the State to encourageproduct development and manufacturing innovation. Inaddition, several Maryland counties have launched suc-cessful high-technology programs of their own.

The University of Maryland plays a leading role in theState’s efforts to promote advanced research and high-technology development. Its University Research Foun-dation conducts technical research and assists businessesin product and market development; the Center for Pro-ductivity and Quality of Working Life provides training,technical assistance, and information to the public andprivate sector; and the Engineering Research Center as-sists small business with technology-related product de-velopment. In addition, the University has recently an-nounced plans to establish a research park, the MarylandScience and Technology Center, to exploit its strengthsin computer science, engineering, and biomedical re-search.


Maryland High-Technology Roundtable


Maryland Industrial Development FinancingAuthority

Maryland Small Business Development FinancingAuthority


Maryland Industrial Training ProgramTechnolog y Extension Service


Technology Extension Service

Maryland High-Technology Roundtable

Mr. James RobersonSecretaryDepartment of Economic and Community

Development2525 Riva Rd.Annapolis, MD 21401(301) 269-3176Date of establishment: 1982Annual State funding (millions): N/A

Program type:


Program services:

Task force.

Description:

The Maryland High-Technology Roundtable acts asan advisor and consultant to the Governor and Statelegislature on significant issues in Maryland’s high-tech-nology environment. The Roundtable is comprised of de-cisionmakers from high-technology businesses, financialinstitutions, professional organizations, public and privateuniversities, and State and local government. Issues onthe Roundtable’s agenda include: the development of ex-cellence in State university engineering programs; thedevelopment of realistic industrial retraining programs;the enhancement of technical education in primary andsecondary schools; promote capital formation; set upcommittees on specific issues.

Maryland Industrial DevelopmentFinancing Authority

Mr. Oliver H. FultonExecutive DirectorMIDFAThe World Trade Center, Suite 2244Baltimore, MD 21202(301) 659-4262

Date of establishment: 1%5Annual State funding (millions): N/A

Program type:

Capital provision assistance.

Program services:

Industrial revenue bonds.Long-term, low-interest loans,State resource promotion.Loan guarantees.

Append/x-D/rectory of State High-Technology Strategies and Programs 39

Description:The Maryland Industrial Development Financing

Authority (MIDFA) approves issues, sells, and insurestax-exempt industrial revenue bonds through two majorprograms. Both programs assure low-interest, tax-exemptfinancing for loan recipients to finance land, buildings,and equipment. Because of the tax-exempt status, interestrates are lower than those available through conventionallending markets. The two programs are the MIDFA Um-brella Program for capital provision to small businesses,and the MIDFA Insurance Progam guaranteeing loansmade to business.

Maryland Industrial Training Program

Mr. Ray AdcockDirectorDepartment of Economic and Community

Development1748 Forest Dr.Annapolis, MD 21401(301) 269-2631Date of establishment: N/AAnnual State funding (millions): N/AProgram type


Program services:Technical training provided by State.

Description:The Maryland Industrial Training Program offers cus-

tomized training on a firm-by-firm basis with special em-phasis on new and expanding industries. The Programoffers skills training in high-technology areas such as com-puters, electro-optics, and robotics.

Maryland Small Business DevelopmentFinancing Authority

Mr. Stanley TuckerExecutive DirectorMSBDFAThe World Trade Center-401 E. Pratt St.Baltimore, MD 21202(301) 659-4270


Program type:Capital provision assistance.

Program services:Assists in finding venture capital.

Description:This program assists socially or economically disadvan-

taged businesspersons to obtain working capital neededto continue and complete a project under a Federal,State, or local government contract. Eligibility for loansup to $150,000 per project requires that the applicantbe unable to obtain adequate business financing throughnormal lending channels. A second program admin-istered by this office can guarantee up to 80 percent ofa loan, up to $500,000 made by a lender to a qualifiedapplicant.

Technology Extension Service

Mr. Frank ModerachiDirector, Technology Extension ServiceUniversity of Maryland College of EngineeringFrostburg State CollegeFrostburg, MD 21532(301) 689-2570Date of establishment: 1978Annual State funding (millions): $0.05Program type:

Labor/technical assistance.General industrial development.

Program services:Product development assistance.Patent searches.Links industry with university resources.Information dissemination.

Description:This program was funded as a pilot program by the

Appalachian Regional Commission in 1978, to help busi-nesses with product development and innovation. TheDirector reports the program has been quite successfulin helping firms to adopt new technologies, and in link-ing firms with university technical assistance. This pilotprogram, which was considered a success, has been ex-tended statewide and will be funded by the State of Mary-land.

Massachusetts

Massachusetts is often cited as an example of the ben-efits of high-technology development. It has been de-scribed as having no outstanding natural resources, butit does have a well-trained technical labor force, excellenteducational institutions, and a business community thathas consistently fostered investment in technological in-

40 ● Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives— —— --.—————

novation. Massachusetts boasts more venture capitalcompanies than any other State except California.

State government initiatives include an aggressivetraining program for high-technology workers, tax incen-tives for investments by insurance companies, and a tech-nology park that is currently in the planning stage.Another initiative, the Massachusetts Technology De-velopment Corp. (MTDC), was set up by the State toprovide venture capital to otherwise overlooked ventures.MTDC has been highly successful in this role, and hascome to be a model for similar initiatives in many otherStates.


Massachusetts Technology Development Corp.

High-technology educationBay State Skills Corp.

Capital provision assistanceMassachusetts Industrial Finance AgencyMassachusetts Technology Development Corp.

Labor/technical assistanceBay State Skills Corp.Massachusetts Technology Park Corp.

Bay State Skills Corp. (BSSC)

Ms. Susan K. MoultonExecutive Director, Bay State Skills Corp.McCormack Office Bldg.One Ashburton Place, Rm. 2110Boston, MA 02108(617) 727-5431


Program type:High-technology education.Labor/technical assistance.

Program services:Information dissemination.Links industry with university resources.Grants for training.

Description:BSSC encourages and facilitates cooperative relation-

ships between business, labor, government, and educa-tion aiming to develop and expand programs of skillstraining consistent with employment needs. It also pro-vides grants-in-aid to educational and training institu-tions making awards of over $5 million for conductingskills training programs and education in a variety of

growth occupations. In addition, the corporation plansto collect and disseminate information on employmentneeds, and to conduct conferences and seminars. BSSCwill identify occupations that are in high demand, seekout strong education and training organizations, andfund creative skill training programs by using Statedollars to leverage financial assistance from the privatesector. All of BSSC programs require active involvementof the private sector.

Massachusetts IndustrialFinance Agency (MIFA)

Mr. Robert E. PattersonExecutive DirectorMassachusetts Industrial Finance Agency125 Pearl St.Boston, MA 02110(617) 451-2477


Program type:


Program services:

Industrial revenue bonds.Physical plant provision.

Description:

This agency was established to create jobs by stimulat-ing private investment. Since its inception, the agencyhas helped 769 industrial and urban revitalization proj-ects to go forward, creating an estimated 40,000 new jobs.The program provides low-cost capital for expansionthrough the Industrial Review Bond (IRB) program.MIFA uses the IRBs for three types of development proj-ects—industrial companies , commercial projects, andpollution control facilities.

Massachusetts TechnologyDevelopment Corp. (MTDC)

Mr. William F. AikmanPresident .Massachusetts Technology Development Corp.84 State St., Suite 500Boston, MA 02109(617) 723-4920



— —

Appendix—Directory of State High-Technology Strategies and Programs ● 41— —. . . . . -. — — . — -. —. — ———

Program services:

Assists in finding venture capital.Direct investment in startup.Investment in product development.Venture capital–royalty or stock rights.Loan–debt.Equity loans.Market development assistance.

Description:

This Corporation—often the model for programs inother States—provides venture capital to new or smallhigh-technology-based companies. MTDC also providesinformation on labor and market development, productdevelopment assistance, and export promotion informa-tion. It will coinvest with private funds. MTDC helpsnew businesses or inventors achieve commercial successby providing debt, equity or royalty agreement capital,and assistance in finding venture capital from othersources.

Massachusetts Technology Park Corp.

Mr. Philip F. HolahanAssistant Secretary and General CounselExecutive Office of Economic AffairsOne Ashburton Place, Rm. 2101Boston, MA 02108(617) 727-8380Date of establishment: 1982Annual State finding (millions): $20Program type:

Labor/technical assistance.Program services:

Links industry with university resources.Trains technical staff for business.Technical training provided by State.Physical plant provision.

Description:

This public corporation encourages industry to locate,develop, and expand within the Commonwealth by in-creasing the capacity of postsecondary institutions to pro-vide state-of-the-art training in certain emerging areas ofscience and technology. At present, the Corporation isdesigning a microelectronics center.

Michigan

Michigan is undertaking a comprehensive program tostimulate the growth of new industries and bolster itstraditional industries. This strategy includes loan andcapital programs, training programs, a research and de-velopment (R&D) fund, university-industry cooperativeprograms, university research centers, and changes inR&D tax laws. Legislation passed in 1982 made theState’s public pension funds eligible for equity in-vestments in Michigan businesses. The focus is on tech-nology-based, growth-oriented industries, with invest-ments generally taking the form of stock or convertibledebentures. Michigan banks have also set up Small Busi-ness Innovation Centers in several cities, and a Stateagency has a program to help with small business devel-opment.

The new Governor has called for a study of how theState’s education system is tied to overall economic de-velopment, and how improvements can be made to en-hance overall economic development in the State. Thiscomes in part from the recognition that Michigan’s un-employment problems, caused by permanent structuralchanges in automotive and related industries, can beeased only by developing new industries like robotics.

Government leaders also recognize that, if the Stateis planning to compete effectively for new jobs and eco-nomic growth, there must be more cooperation betweenthe private, public, and academic sectors. A new privatesector initiative in this area is the Economic Alliance forMichigan, a group of business and labor leaders that isinvestigating high-technology industry as a means ofbringing new jobs to the State and expanding employ-ment in existing industries.


High-Technology Equity LoansHigh-Technology Resource CenterIndustrial Technology InstituteInnovation CenterMetropolitan Center for High-TechnologyMichigan High-Technology Development Corp.Molecular Biology Institute

Capital provision assistanceHigh-Technology Equity LoansMichigan Economic Development AuthorityMichigan Job Development Authority

42 ● Technology, Innovation, and Regional Economic Development: Background Paper-Census Of State Governmenf Initiatives

Labor/technical assistanceComprehensive Employment ProgramHigh-Technology Resource Center


Michigan Economic Development Authority

Comprehensive Employment Program

Mr. Rob FraserOffice of Industrial TrainingMichigan Department of Labor309 N. Washington St.Lansing, MI 48909(517) 373-9180



Program services:Technical training provided by State.Links industry with university resources.Technical support provided by State.Loans.

Description:This program designs and administers training pro-

grams to meet the expressed labor needs of new and/orexpanding businesses.

High-Technology Equity Loans

Mr. Bill AmermanDirector of InvestmentsMichigan Department of TreasuryP.O. Box 15128Lansing, Ml 48901(517) 373-3140

Date of establishment: 1983Annual State funding (millions): $375 bond

Program type:

Capital provision assistance,High-technology development.

Program services:

Equity loans.

Description:

This program is not yet implemented, but will be a “set-aside” for high-technology business provided in conjunc-tion with the State Pension Fund. It is likely that theinitial investments for the pension fund as a venture cap-ital source will likely take place with other nongovern-

ment institutional venture capitalists into a company thatwould in turn make the direct equity purchases.

High-Technology Resource Center

Mr. Albert A. BogdanDirectorOffice of Economic Development, Michigan

Department of CommerceP.O. BOX 30225Lansing, MI 48909(517) 373-35.30



Program services:Grants for research.Grants for development.Assists in finding venture capital.Links industry with university resources.

Description:This Center administers the State Research Fund and

provides assistance to entrepreneurs in obtaining Federalresearch and development grants. Also assists technol-ogy-based firms obtain venture capital, prepare businessplans, and access technicaluniversities.

Industrial Technology

Dr. Arch NaylorDirector

assistance from Michigan

Institute (ITI)

Industrial Technology Institute2901 Baxter Rd.Ann Arbor, MI 48109(313) 763-9273



Program services:Market development assistance.Links industry with university resources.Technical training provided by State.

Description:ITI has been established to help the State capture an

increasing share of the growing computer-based automa-tion and flexible automated manufacturing industries.ITI will use Michigan’s higher education system, includ-

Appendix—Directory of State High-Technology Strategies and Programs ● 43— —

ing community colleges, and work with the private sec-tor to develop capabilities in advanced robotics research,applied research, and retraining programs necessary tointegrate robotics into the workplace. Funding is ex-pected to come from private foundations, private sectorindividuals, and the State government.

Innovation Center

Mr. Don SmithInstitute of Science and TechnologyUniversity of Michigan2200 Bonisteel Blvd.Ann Arbor, MI(313) 764-5260



Program services:Technical assistance.

Description:The main emphasis of this program is to help existing

Michigan firms expand their manufacturing capacity intonew products and markets, utilizing emerging technol-ogies. This demonstration project brings universityresources to the private sector.

Metropolitan Center for High-Technology

Dr. M. A. RahimiMetropolitan Center for High-TechnologyWayne State University2727 Second St.Detroit, MI 48201(313) 577-4722



Program services:Product development assistance.Technical training provided by State.

Description:Wayne State University, with over $20 million of con-

tract research a year, will play a pivotal role in Michigan’sand particularly southeast Michigan’s plans to encouragedevelopment of technology-based industries. The Metro-politan Center for High Technology will provide researchand development capabilities, special incubator environ-ments, teaching and service capabilities, industrial train-

ing, and retraining. Key program components includean Innovation Center, Incubation Center, and High-Technology Outreach Services.

Michigan Economic DevelopmentAuthority (MEDA)

Mr. William A. SchwartzExecutive DirectorMichigan Economic Development AuthorityBOX 30234Lansing, MI 48909(517) 373-6378



Program services:Loan-debt.Bond issue to raise capital.Long term, low-interest loans.Grants for research.Grants for development.

Description:The Authority’s primary responsibility is to retain and

create jobs in Michigan. In addition it is to develop self-sustaining enterprises and to promote diversification ofthe economy of the State.

MEDA provides necessary financial assistance to jobcreating or job retaining projects capable of becomingself-sustaining enterprises. It provides direct loans andloan insurance enabling projects to obtain funds on termsnot otherwise available.

A separate responsibility of MEDA is to administergrants to nonprofit research and development enterprisesthat perform research and development in present andemerging technologies and the application of such tech-nologies to business and industry.

Michigan High-TechnologyDevelopment Corp.

Mr. Robert C. LawDirector8623 N. Wayne Rd., Suite 200Westland, MI 48185(517) 373-3530


Program type:


44 ● Technology, Innovation, and Regional Economic Development: Background Paper—Census of State Government /initiatives

Program services:Task force.State resources promotion (infrastructure).

Description:This Corporation has the job of implementing the

Michigan High-Technology Task Force recommenda--tions. The Corporation is designed to devise, promote,and implement plans to increase development andgrowth of technology-based businesses in Michigan. TheCorporation will coordinate all State, local, and regionalhigh-technology efforts.

Michigan Job Development Authority

Mr. William I. CochranDirectorMichigan Department of CommerceP.O. Box 30227Lansing, MI 48909(517) 373-0349


Program type:


Program services:Investment capital.

Description:The Michigan Job Development Authority (JDA) of-

fers direct loans and loan participation for financing in-dustrial construction, but cannot finance startup busi-nesses or rescue failing businesses. Financing is availablefor construction, acquisition, expansion, or rehabilita-tion of industrial buildings, machinery, and equipment.The Authority requires, however, that successful appli-cant credit must be sufficient to attract revenue bondbuyers. In 1983, JDA will expand its services to commer-cial, agricultural, solid waste disposal, and forestryfacilities.

Molecular Biology Institute

Dr. Patrick OrielMolecular Biology Institute276 Bessey HallMichigan State UniversityEast Lansing, MI 48824(517) 355-2277



Program services:

Links industry with university resources,Grants for research.

Description:

Originally formed by Governor Mil!iken’s Task Forcefor High Technology Industry and located close toMichigan State University, the Molecular Biology Insti-tute will be a biotechnology coordinating developmentcenter spanning the entire State. Interuniversity projectsand university-industry collaboration will be emphasizedwith a strong orientation toward projects with potentialfor early commercialization. Building on Michigan’sstrong forest and agricultural resources, Biology Institutescientists are dedicated to the development of new bio-products and processes from renewable resources. Ad-vanced biotechnology techniques including recombinantDNA, plant tissue culture, and immobilized enzymes areintegral parts of the research and development program.In addition, a project in protein design and function isunder development.

A scientific advisory board is being assembled consist-ing of nationally recognized scientists in the field of bio-technology. This group will help in the identification ofnew research opportunities and guide progress of indus-try projects.

Institute startup funds were provided by the Kelloggand Dow Foundations and a major grant has been pro-vided by the Michigan Economic Development Author-ity. The Molecular Biology Institute will favor Michigan-based commercialization of its research and expects tobe self-supporting from industrial royalties and contractsafter 8 years.

Minnesota

Minnesota is distinguished by the aggressive economicdevelopment efforts of its private sector and educationalgroups. Several firms and industry-labor-education coali-tions have set up programs to provide incentives for high-technolog y industrial development. Minnesota Well-spring, chaired by the Governor, includes 28 repre-sentatives from labor, business, agriculture, education,and government. Its goal is to mobilize statewide sup-port for new and better jobs, technological innovation,business growth, and changes in public policy. The Uni-versity of Minnesota has created an agency for computerliteracy through local schools and community colleges.In 1983, the State Legislature is considering a MinnesotaChallenge Grant Program to provide high-technology

skills training.In addition, several private sector groups in Minnesota

are working to promote high-technology development.

— —— ..— ——

Appendix—Directory of State High-Technology Strategies and Programs ● 45

One of these is the Minnesota Information and ScienceCenter (MISC), which is largely funded by four majorcorporations but has a board of representatives fromgovernment, education, and industry. MISC formulatesbroad policy recommendations, proposes strategies foreconomic development, and designs training courses forhigh-technology skills. This group plans to work closelywith other private sector groups such as the MinnesotaHigh-Technology Advisory Council, which is assessingthe technological needs and resources of the State, andthe Minnesota Seed Capital Corp., which will providestartup financing for new firms. Another large privatesector initiative is the Business and Technology Centerin Minneapolis, sponsored by Control Data Corp., whichprovides incubator space and technical and managementassistance to help entrepreneurs develop new high-technology products and processes.

ProgramsHigh-technology education

Microelectronics Information and Science Center


Microelectronics Information and Science Center

General industrial developmentMinnesota Wellspring

Microelectronics Information andScience Center

Dr. Ted DavisChairman, Department of Chemical EngineeringUniversity of Minnesota421 Wash Ave., S.E.Minneapolis, MN 55455(612) 373-2299


Program type:

High-technology education.Labor/technical assistance.

Program services:

Grants available.Grants for research.Grants for startup.Grants for development.Links industry with university resources.Trains technicians for business.

Description:

This private sector effort has a small amount of Statemoney through university funding. It has requested $1.5million for 1983. Major private contributors are Sperry

Corp., Control Data Corp., and 3M. This project pro-vides advice and technical assistance to high-technologyprojects on a contract basis, and uses technical staff fromthe universities in the State. In addition, money is avail-able as seed for matching grants in new research ideasinitiated by the university which will be joint projectswith industry. The assistance is generally not productoriented, and the Center does not help new firms getstarted. The Center will offer courses to help keep tech-nical people current in their field.

Minnesota Wellspring

Ms. Donna KnightExecutive DirectorMinnesota Wellspring101 Capital Sq.St. Paul, MN 55101(612) 296-4858


Program type:


Program services:

Information dissemination.

Description:

This nonprofit corporation represents a collaborativeeffort among Minnesota business, labor, education, andgovernment. The State provides one-third of the programbudget, with private sources supplying the rest. The mis-sion of the corporation is to increase the number of newjobs in the State, and to expand the State’s technol-ogy-based industry.

Mississippi

Mississippi has taken stock of its needs and made amajor investment in education to enhance its future eco-nomic growth. This includes a financial investment inprimary and secondary schools funded by a tax increase,as well as reform of curriculum to reflect the increasingemphasis on science and mathematics in the Nation’s in-dustrial sector. In addition, the State already has an ag-gressive high-technology training program customized tothe needs of a particular firm.

Another State program is the Mississippi Research andDevelopment Center (MRDC) which coordinates publicand private resources to promote technology transfer.MRDC’s Business Services Bureau and New VenturesBranch provide complete analyses of the commercial po-tential of research projects, and they work closely with

46 ● Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives

industry to help with new product and process develop-ment. Both groups assist in preparing financial projec-tions, finding sources of financing, locating sources ofraw materials, determining manpower needs, and obtain-ing or licensing patents. The Mississippi Legislaturerecently passed a bill establishing enterprise zones andhigh-technology zones for establishment of high-technol-ogy business and industry.


Mississippi Research and Development Center

High-technology educationVocational Education Program

Capital provision assistanceSmall Business Loan Guarantee Program

Labor/technical assistanceIndustrial Development DivisionMississippi Research and Development CenterVocational Education Program

General industrial developmentIndustrial Development DivisionSmall Business Loan Guarantee Program

Industrial Development Division

Mr. James MillerDirectorIndustrial Development DivisionP.O. Box 849Jackson, MS 39205(601) 359-3439


Program type:Labor/technical assistance.General industrial development.

Program services:Industrial revenue bonds.Tax–favorable business climate.State resources promotion (infrastructure).Information dissemination.

Description:This office, with five individuals who travel throughout

the United States and two who travel internationally,contacts industries that might be interested in relocatingin Mississippi. The State offers financing under the Indus-trial Revenue Bond program, and provides business taxincentives such as exemptions from property taxes. This

office surveying of high-technology firms to determinewhat the State can develop to attract these industries.In addition, with a view towards overall economic devel-opment, the Mississippi Legislature recently passed a $106million initiative to improve public education.

Mississippi Research andDevelopment Center

Dr. Jim MeredithDirectorMississippi R&D Center3825 Ridgewood Rd.Jackson, MS 39211(601) 982-6606Date of establishment: 1964

f

Annual State funding (millions): $4.2Program type:

High-technology development.Labor/technical assistance.

P r o g r a m s e r v i c e s :

State resources promotion.Market development assistance.Information dissemination.Product development assistance.

Description:This Center coordinates industry and university re-

sources, to help with product and process development,and to transfer technologies from R&Q centers to indus-try. The Center also provides organizational and opera-tional services to small business, manufacturing opera-tions, and new ventures.

Small Business

Mr. James MillerDirectorIndustrial DivisionP.O. Box 849Jackson, MS 39205(601) 354-6700

Loan Guarantee Program

Date of establishment: 1977Annual State funding (millions): $1.0Program type:


Program services:Loan guarantees.

Description:The State modeled this program on a Federal Small

Business Administration program that guarantees loans

— — . — — — .——

Appendix—Directory of State High-Technology Strategies and Programs ● 47— . — — — - — — — . — . . — — —

for businesses creating new jobs. While not focused exclu-sively on high-tech firms, the program looks for com-panies that can expand and survive.

Vocational Education Program

Mr. Elwin WheatVocational-Tech DivisionState Department of EducationP.O. Box 771Jackson, MS 39205(601) 359-3088Date of establishment: N/AAnnual State funding (millions): N/AProgram type:


Program services:

Trains technical staff for business.Technical support provided by State.Links industry with university resources.

Description:

This program provides labor for new and expandingindustry and provides training for displaced workers byfunding up to 100 percent of new and upgrade trainingprograms. The program accepts anyone who applies fora job, and trains them to the level needed by industry.It also helps workers who are not trained for a specificposition to find jobs. This program recently started aseries of three workshops in advanced technology skills.The State maintains eight mobile industrial training unitsthat provide courses in computer-aided design, metal-working, and robotics.

Missouri

Missouri has developed an aggressive program to at-tract, develop, and retain high-technology industry. Thisprogram is largely dependent on the interaction, throughresearch funding, of university and industry in the State.Much of the initiative for this program came from in-dustry, which saw the potential for high-technology prod-uct development in the basic research conducted atMissouri universities.

In 1982, the University of Missouri at Rolla began acomputer-aided design and manufacturing (CAD/CAM)and robotics center to train engineering students in state-of-the-art manufacturing technologies. Seven Missouriand national firms have contributed funds and equip-ment to the center, which also receives National ScienceFoundation (NSF) funds through Computer Assistance

for Undergraduate Science Education grants. Anotheruniversit y program is the Office of Science and Tech-nology, which has negotiated contracts for research withlocal industry.

In addition, the State has taken stock of the trainingneeds of workers displaced from traditional industry anddeveloped a retraining program to teach new high-tech-nology skills. The State also provides funding for businessdevelopment, tax incentives for new and expanding in-dustries, and active local groups working on economicdevelopment.


University of Missouri-Office of Science andTechnology

High--technology education

Higher Education Research and AppliedProjects Funds

University of Missouri-Office of Science andTechnology


Higher Education Research and AppliedProjects Funds

Industrial Development Funding ActMissouri Economic Development Commission


High-Technology Skills for Auto WorkersUniversity of Missouri-Office of Science and

TechnologyHigher Education Research and Applied

Projects FundsMissouri Enterprise Zones


Industrial Development Funding ActMissouri Economic Development CommissionMissouri Tax Program for Business

High-Technology Skills for Auto Workers

Mr. J. H. FrappierDirectorConsumer Affairs, Regulation, and LicensingP.O. Box 1156Jefferson City, MO 65102(314) 751-3946


Program type:


48 ● Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives-—. ——.. -————. — -- - ———.—— . —— —

Program services:

Links industry with, university resources.Technical support provided by State.

Description:

This program represents a cooperative effort betweenGeneral Motors and the State to retrain displaced auto-workers in new skills needed by automated manufactur-ing processes in automobile factories.

Higher Education Research andApplied Projects Funds

Mr. Mike McManisCoordinatorMissouri Department of Higher Education600 Monroe St.Jefferson City, MO 65102(314) 751-2361

Date of establishment: 1982Annual State funding (millions): $1,5

Program type:

Capital provision assistance.High-technology education.Labor/technical assistance.

Program services:

Grants for research.Links industry with university resources.Grants for development.

Description:

This program offers challenge grants to Missouri col-leges and universities for research and applied develop-ment projects likely to stimulate private investment andcreate new jobs in high-technology areas.

Industrial Development Funding Act

Mr. Barry JacksonManager of FinancingMissouri Division of Community and Economic

DevelopmentP.O. Box 118Jefferson City, MO 65102(314) 751-2686


Program type:


Program services:

Industrial revenue bonds.Long-term,low-interest loans.

State resources promotion.Physical plant provision.

Description:

The Missouri Division of Community and EconomicDevelopment was established to enhance economic sta-bility in the State. The Industrial Development FundingAct program encourages businesses to locate in Missouri,expand existing facilities in the State, promote foreigninvestment, and increase State imports. In addition, theprogram offers low-interest loans for capital improvementneeded to attract new industry. The program issuesbonds to help promote growth in diverse areas of industryand trade.

Missouri Economic DevelopmentCommission

Mr. Barry JacksonManager of FinancingMissouri Division of Community and Economic

DevelopmentP.O. Box 118Jefferson City, MO 65102(314) 751-3674


Program type:


Program services:

Loan guarantees.Industrial revenue bonds.State resources promotion.Physical plant provision.

Description:

This Commission has the authority to pledge up to$1 million from the State reserve to guarantee loans forprojects that will generate new jobs and contribute tothe economic well-being of the State, Approval also re-quires that the borrower can repay the loan, and theproperties financed are secured by a mortgage or deedof trust. The commission can guarantee 90 percent ofthe value of privately obtained loans, up to $1 million,which must be for machinery, equipment, and/orbuildings,

In addition, this office provides special services to smallbusiness through assistance in loan packaging for devel-opment using all sources of financial assistance.

. - — .— -— .

Appendix-LW??ctory of State High-Technology Strategies and Programs 49—-—.—— .—— —-. . — — — ——— -—.—. .—— - ..- .—.—.——.

Missouri Enterprise Zones

Mr. Bob SimonesManagerMissouri Division of Community and Economic

DevelopmentP.O. BOX 118Jefferson City, MO 65102(314) 751-4849


Program type:


Program services:

Enterprise zones.Training vouchers for new jobs,Tax–favorable business climate.Abatement of local property tax.

Description:

This legislative initiative authorizes tax credits to busi-nesses that establish or expand business operations in anenterprise zone and invests in capital or creates new jobs.Firms locating in a zone would be eligible for an invest-ment tax credit equal to 10 percent of the first $10,000in investments, 5 percent of the next $90,000, and 2 per-cent of the rest, up to $1,200 tax credit for each newemployee hired.

Missouri Tax Program for Business

Mr. John KleindienstSenior Research AssociateMissouri Division of Community and Economic

DevelopmentCapitol Bldg.Jefferson City, MO 65101(314) 751-3674



Program services:

Tax—favorable business climate.Training vouchers for new jobs.

Description:The Missouri tax program for business includes two

different packages-the Tax Relief Credit for New or Ex-panded Business Facilities, and Missouri Tax IncrementFinancing:

1. The Relief Credit program offers tax credits for em-ployers who create new jobs and generate new in-

vestment. The credit allowed to an existing businessemployer is equal to $100 for each new job createdand/or $100,000 of new investment. The credit al-lowed to a new employer is equal to $75 for eachnew job created and/or $100,000 of new investment.

2. The tax investment financing program rebates taxfunds to local community to repay Industrial Reve-nue Bonds used for development.

University of Missouri—Office ofScience and Technology

Dr. Thomas C. CollinsAssociate Vice PresidentUniversity of Missouri309 University HallColumbia, MO 65211(314) 882-4893

for Academic Affairs

Date of establishment: 1981Annual State finding (millions): $0.1Program type:

High-technology development.High-technology education.Labor/technical assistance.

Program services:

Training provided by the State.Links industry with university resources.

Description:This program coordinates industry and university re-

sources, to help with product and process developmentin the manufacture and use of robotics, and to transferthis technology from research and development centersto industry. The Center has recently received a $250,000grant from the National Science Foundation for com-puter-aided design and manufacturing training.

Montana

As part of “Build Montana,” a general industrial de-velopment campaign, the Governor recently convenedan ad hoc Council of Technology to advise him on high-technology development in the State. The State boastsan excellent living environment and low taxes as incen-tives for industrial business development. In addition,the State is exploring the use of State resources to developnew technologies. The legislature is also considering aproposal to allow Montana’s Unified Investment Fundto invest in State industry.

The legislature also has before it a proposal to createa Council on Science and Technology, which would de-velop specific priorities in scientific, technical, and

50 . Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives. — — .

engineering research for economic development purposes.The Council will have the ability to conduct specificscientific and research projects which may be of use tohigh-technology firms in Montana. It may also have theability to develop technology transfer mechanisms forlicensing university-developed patents and disseminatingtechnological and engineering information.


Montana Department of

Montana Department

Mr. Gary BuchananDirector

Commerce

of Commerce

Montana Department of Commerce1424 9th St.Helena, MT 59620(406) 449-3494Date of establishment: N/AAnnual State finding (millions): N/AProgram type:

General industrial development.Program services:

State resource promotion.Tax.Physical plant assistance.

Description:

The State provides technical and management assist-ance in such areas as accounting, plant design, productdevelopment, and marketing analysis. It provides assist-ance through grants utilizing private consulting servicesand the university systems’ teaching and research staffs.

In addition, to encourage economic development inthe

●

●

●

State of Montana: -

local governments may issue industrial revenuebonds;local governments may authorize a 50 percent prop-erty tax reduction for the first 5 years of a business’operation; andState government may authorize tax credits againstcorporate income tax for jobs created. (This provi-sion virtually eliminates corporate income taxes dur-ing the first 3 years of operation for labor-intensivefirms.)


Ms. Dolores WilsonIndustrial AnalystIndustrial Development DivisionP.O. BOX 94666Lincoln, NE 68509(402) 471-3774



Program services:

Investment capital.Links industry with university resources.

Description:This office recently completed a study of State resources

and future economic growth, considering the develop-ment of high-technology industry in the State. As aresult, it recommended a closer working relationship be-tween industry and the universities. In addition, the Stateplans to strengthen university research and developmentcapabilities, and to target specific industries whose growthin the State appears promising. In order to help new andexpanding business grow, the State provides funding forplant development through the Development FinanceFund. This office is also working closely with the FederalSmall Business Innovation Program.

Nebraska

The Governor plans to implement the recommenda-tions of a recently completed study on State resourcesin economic development. These include: promoting uni-versity-industry relations; strengthening university re-search and development; and targeting certain high-growth industries for development in the State.

The State Department of Economic Development ad-vises individuals and firms on product development. Thisis done in cooperation with the University of Nebraska’sCollege of Engineering, which evaluates product ideas.Discussions are currently underway to expand these ef-forts. The University’s Business Development Center alsoplans to assist small businesses with technical mattersrelating to research grants under the Federal SBI Pro-gram.

. — . — — —

Append/x-D/rectory of State High-Technology Strategies and Programs . 51— — . — . . — - — - — — - — — - — . — — - — — — —

ProgramsLabor/technical assistance

Patent Development ProgramGeneral industrial development


Patent Development Program

Mr. Darrell UnmanManager, Licensing and Patent OfficeNebraska Department: of Ecomonic DevelopmentP.O. Box 94666Lincoln, NE 68509(402) 471-3786

Date of establishment: 1967Annual State funding (millions}: N/A

Program type:


Program services:

Patent searches.Grants available.Licensing assistance.

Description:

The Nebraska Department of Economic Development’sPatent Development Program is responsible for the ad-ministration and commercialization of patents owned bythe State of Nebraska. Efforts in commercialization havebeen particularly sucessful because the Department, aspart of its regular programs, also works closely with com-panies interested in plant reloc ation and business expan-sion opportunities.

Benefits to the State may accrue in the form of royaltiesand/or licensing fees, new industrial locations, expandedemployment and increased tax revenues. Moneys accru-ing to the program are reiinvested in additional contractresearch projects.

Nevada

‘The Commission on Economic Diversification., ap-pointed by the former Governor, recommended creatinga new public development organization—NEVADAINC.–to assist new and expanding industries, with par-ticular emphasis on economic diversification. OtherCommission recommendations included tax exemptionsfor capital improvement and new equipment; State as-sistance to local governments for economic development;and development of State education to promote technicalskilIs. The newly elected Governor, who campaigned

against cuts in university funding and in favor of diver-sifying the State’s industrial base, has indicated that hewill implement most of these recommendations.


Nevada Office of Economic Development

Nevada Office of Economic Development

New Hampshire

New Hampshire borders on eastern Massachusetts, amajor growth center for high -technology industries, andit has received some of the benefit of proximity. TheState’s economic development strategy encourges newand expanding businesses, and several high-technologycompanies have located branch plant in New Hamp-shire to take advantage of its favorable tax structures andthe availability of capital and skilled labor. The Stateworks closely with private business and universitiesthrough the nonprofit Center for New Hampshire's Fu-ture, but to date there are no dedicated government pro-grams to develop high-technology industry.

The new Governor, himself an engineer and the found-er of a high-technology company, supports such develop-ment and places greatest emphasis on industry-universitypartnerships, with the private sector taking the lead.However, he recently told his fellow governors that “Welike all of you will plagiarize all the good ideas” that havebeen developed in other States. He has also stressed the

52 ● Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives— —

need to define “high technology” more broadly, so asto include the delivery of health care and social services.ProgramsGeneral industrial development

New Hampshire Department of Resources andEconomic Development

New Hampshire Department of Resourcesand Economic Development

Mr. George GilmanCommissionerDepartment of Resources and Economic DevelopmentP.O. Box 856Concord, NH 03301(603) 271-2591Date of establishment: N/AAnnual State finding (millions): N/AProgram type:


Market development assistance.Assists in finding venture capital.Licensing information.

Description:The department offers to business: a list of industrial

location recommendations; documented labor analysis;community and regional information; financial assist-ance; market demand studies; commercial retail marketstatistics; and marketing assistance programs. In addition,six Vocational-Technical Colleges and the State Techni-cal Institute are located throughout the State to permithigh school graduates obtain advanced training and de-velop skills.

This department also supports the Industrial Develop-ment Authority, which offers guaranteed loans and in-dustrial revenue bond financing. In addition, it refersbusinesses to financial sources in other State governmentoffices and the private sector.

New Jersey

New Jersey has recently set up a Commission on Sci-ence and Technology to develop an overall strategy forthe development of high-technology industry in theState. The-Commission’s four task forces will identifytechnologies to be targeted and mechanisms for mobiliz-ing the State’s considerable resources, including venturecapital, skilled labor, strong universities, and a privateresearch base in pharmaceuticals and telecommunica-tions.

Several high-technology bills have been introduced inthe legislature, including proposals to create a publicfoundation to assume the functions of the Commission,and a public-private corporation to provide venture cap-ital and technical assistance for high-technology entre-preneurs. An earlier State initiative of this kind, the Of-fice for Promoting Technological Innovation (OPTI), suf-fered from financial and design problems that will be cor-rected in future initiatives.

The State also has the advantage of a private, non-profit corporation, the Research and Development Coun-cil of New Jersey, which makes policy recommendationsin science and technology and promotes university/in-dustry relations in the high-technology field.ProgramsHigh-technology Development

Governor’s Commission on Science and Technology

Governor’s Commission onScience and Technology

Mr. Edward CohenExecutive DirectorGovernor’s Commission on Science and Technology225 W. State St., CN 542Trenton, NJ 08625(609) 292-1970Date of establishment: 1982Annual State funding (millions): N/AProgram type:

High-technology development.Program services:

Task force.Description:

The Governor of New Jersey created the Commissionon Science and Technology to develop a comprehensiveplan and make policy recommendations to foster a high-technology economy, especially where economic growthand job creation are concerned. A primary objective isto strengthen linkages between New Jersey’s industriesand universities for applied research, with governmentfacilitating these relationships.

New Mexico

The Committee on Technical Excellence in New Mex-ico, in its report on Enhancing New Mexico's Lea&-ship in H&h- Technology lndustry Development, hasrecommended the promotion of a “Rio Grande ResearchCorridor,” the promotion of technical excellence at New

. . .—— -—. -—


Mexico’s universities, and the commercialization of de-sirable technologies by firms in the State.

The new Governor has also called for the further de-velopment of centers of excellence in high-technologyfields and for strengthening university/industry cooper-ative ventures. State agencies have also- targeted high-technology industries in their general economic develop-ment programs, and government officials are looking intothe development of venture capital and product develop-ment agencies.


Department of Commerce and IndustryEconomic Development Division

High-technology education

Technology Programs at Albuquerque TechnicalInstitute


Technology Programs at Albuquerque TechnicalInstitute

Department of Commerce and Industry

Mr. Russell AutrySecretaryDepartment of Commerce and IndustryState Capital Bldg.Santa Fe, NM 84501(505) 827-3008


Program type:


Program services:

Task force.Tax—favorable business climate.Licensing assistance.

Description:

This office administers the recommendations of theState Task Force on Technical Innovation and Excel-lence. In addition, it helps new and expanding industryobtain licensing, train new workers, find plant locations,help with mortgage financing and residential propertylocation. In addition, one division works closely withsmall businesses to help them become established.

Economic Development Division

Mr. James GarvinDirectorEconomic Development DivisionBataan Bldg.Santa Fe, NM 87503(505) 827-6026


Program type:


Task force,State resources promotion (infrastructure).

Description:

This department administers recommendations of theGovernor’s Committee on Technical Excellence. It is cur-rently helping develop the Rio Grande Research Corri-dor, promote focused areas of technical excellence at NewMexico Universities, and encourage industrializationwith desirable industries.

Technology Programs atTechnical Institute

Mr. Robert Dorak

Albuquerque

Chairman of Technology ProgramsAlbuquerque Technical Vocational Institute525 Buena Vista, S.E.Albuquerque, NM 87106(505) 848-1400


Program type:


Program services:

Labor assistance.Technical support provided by State.Trains technical staff for business.

Description:

This Institute has targeted several important technol-ogies for developing the skills of students and industrialworkers. The programs specialize in areas such as solarpower development and installation, computer program-ing, robotics, and fiber optics. The courses offer train-ing to young people in advanced technologies and retraindisplaced workers who wish to advance their careers.

54 . Technology, Innovation, and Regional Economic Development: Background Paper— Census of State Government Initiatives

New York

The primary goal of New York’s high-technology de-velopment strategy is to retain and expand the State’sexisting technology-related industrial base. The formerGovernor designed comprehensive policies for advanc-ing high-technology economic growth, as well as the con-tinued development of the traditional industrial base.The new Governor is expected to continue this overallstrategy. Its goals include improving the efficiency andproductivity of the State’s existing industry and nurtur-ing the growth of small high-technology firms.

Overall, this State’s approach is considered moresophisticated and rigorous than those of many otherStates. The New York Science and Technology Foun-dation, reconstituted in 1981, coordinates efforts tostimulate research and encourage technological innova-tion. Many of the initiatives launched by the Founda-tion have later been integrated with the programs of theCommerce and Education Departments.

State officials report that there is strong support forfurther high-technology development from the privatesector, including the State’s existing high-technology

firms, and from the university and educational systems.One innovative program at SUNY Stony Brook is theCenter for Industrial Cooperation, which assists memberbusinesses in technology transfer, product and marketdevelopment, and research. The State also reports beingsuccessful in attracting venture capital and foreign in-vestment,


New York Science and Technology FoundationCorp. for Innovation Development


Corp. for Innovation DevelopmentNew York State Urban Development Corp.New York Job Development Authority


New York Job Development Authority

New York Science and Technology FoundationNew York State Department of Commerce


New York Job Development AuthorityNew York State Department of CommerceNew York State Urban Development Corp.

Corp. for Innovation Development

Mr. John DefiggosDeputy Executive Director for OperationsNew York State Science and Technology Foundation99 Washington Ave.Albany, NY 12210(518) 474-4349


Program type:


Program services:

Loan–debt,Equity loans.Subordinated loans.Stock or royalty rights.Investment capital.Market development assistance.Product development assistance.Assists in finding venture capital.

Description:

The New York Corp. for Innovation Development,established within the Science and Technology Founda-tion, provides financial assistance and technical servicesto innovative technology-based new business ventures/startups. A special grant from the U.S. Department ofCommerce (EDA) funds this Corporation, which focuseson startup situations with no track record but with signif-icant potential. The Corporation will generally invest be-tween $50,000 and $100,000 but not more than $250,000.

New York Job Development Authority

Mr. Robert T. DormerPresidentNew York Job Development Authority3 Park Ave., 34th FloorNew York,, NY 10016(212) 578-4181

Date of establishment: 1962Annual State funding (millions): Bond

Program type:

Capital provision assistance.General industrial development.Labor/technical assistance.


Program services:Bond issue to raise funds.Low-interest loans.

Description:The principal activity of the Job Development Author-

ity (JDA) is making business and industrial loans, tech-nically described as “special purpose” loans. JDA func-tions as a bank, making long-term, low-cost loans for realestate, machinery, and equipment. It may lend up to 40percent of project costs in connection with construction,acquisition, rehabilitation or improvement of industrialor manufacturing plants, research and development facil-ities, or other eligible business facilities.

JDA may also participate in financing the purchase ofmachinery and equipment to be located and used withinthe State. These loans may not be subordinate, but maycover up to 90 percent of machinery and equipmentcosts. JDA is set up to act as a catalyst for the invest-ment of private funds.

New York Science and TechnologyFoundation

Mr. John DefiggosAssistant DirectorNew York State Science and Technology Foundation99 Washington Ave.Albany, NY 12210(518) 474-4349


Program type:


Program services:

Information dissemination.Market development assistance.Assists in finding venture capital.Grants for development.Technical support provided by State.Grants available.Investment capital.Physical plant provision.

Description:

The purpose of this Foundation is to identify and shapethe “critical massing” of industrial, scientific, and aca-demic talent and resources necessary to foster high-tech-nology industries in New York. A nine-member Boardof Directors represents the private sector, with the Com-missioners of Education and Commerce also serving. Themission of the Foundation is: to assume a central rolein stimulating research and development; to support and

encourage technological innovation; to diffuse benefitsderived from new developments in science and technol-ogy; and to strengthen the State’s leadership position asa research and development center. The Foundation hassix major program areas:

●

●

●

●

●

●

Policy and Strategy Development-studies expansionpossibilities;Assistance and Services–develops special trainingprograms;Regional High Technology Development—encour-ages locally formed high-technology councils;Research and Development-awards research anddevelopment grants for university-based researchwith commercial application;Centers for Advanced Technology Development–grants to universities; andCorp. for Innovation Development–see above.

The Foundation has targeted two technology areaswhich represent the greatest economic opportunity forthe State: electronics/information and medical/bio-logical.

New York State Department of Commerce

Mr. William J. DonohueCommissionerNew York State Department of Commerce99 Washington Ave.Albany, NY 12245(518) 474-4100

Date of establishment: N/AAnnual State funding (millions): $27

Program type:


Program services:

State resource promotion.Tax—favorable business climate.Physical plant provision.Information dissemination.Technical training provided by the State.

Description:

The Department of Commerce promotes domestic andinternational investment in New York State to createprivate sector jobs and to generate additional tax rev-enue. The Department works with new and expandingindustry, imports and exports, and State infrastructureto enhance the overall State economic welfare.

In addition, this office administers the State tax pro-gram which includes the following: Job Incentive Pro-gram, Capital Investment Credit, Employment IncentiveCredit, Research and Development Tax Credit, Small

56 ● Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government /initiatives

Business Tax Incentives, and Business Property TaxExemption.

New York State Urban Development Corp.

Mr. Donald GlickmanActing Chief Executive Officer and Vice PresidentNew York State Urban Development Corp.1515 Broadway, 52nd FloorNew York, NY 10036(212) 930-0200Date of establishment: 1968Annual State finding (millions): $800 bondProgram type:


Program services:Bond issue to raise venture capital.Product development assistance.Market development assistance.

Description:The Urban Development Corp. (UDC), a corporate

governmental agency of New York State, executes financ-ing and development programs designed specifically tohelp business and industry expand, modernize, or re-locate and assists new companies coming into the State.UDC has the power to purchase, lease, sell, and acquireproperty, apply for and administer grants, and issue tax-exempt revenue bonds. Working in partnership with pri-vate enterprises, UDC’s economic development programsmaximize private sector opportunities for growth andstimulate investment in the economy of the State. Sinceits inception in 1976, UDC economic development pro-grams have generated $800 million worth of projects,which have been completed or are presently under con-struction. UDC’s staff includes financial analysts, law-yers, engineers, architects, and planners who can pro-vide technical services and expertise to accelerate andfacilitate projects.

North Carolina

The State of North Carolina is often looked to for lead-ership in the area of high-technology industrial develop-ment. Starting with the North Carolina Board of Scienceand Technology and the Research Triangle Park, theState has become a model of government-industry-uni-versity cooperation to develop new technology-based in-dustries. In addition, the State works aggressively to re-tain existing industry and attract new firms to the State.To date, in fact, the State has been more successful in

attracting branch plants and relocating facilities, ratherthan encouraging the creation of new businesses.

The Board of Science and Technology, chaired by theGovernor, was established in 1963. It functions as a“nerve center” connecting research institutions with Stateand local government agencies and with the private sec-tor. Working closely with the State university system,the Board has helped to encourage cooperative univer-sity-industry research and development. More recently,the Governor appointed a Science and Technology TaskForce in 1982, composed of Board members plus 15 lead-ing citizens, to recommend policy in science and math-ematics education, research and higher education, andtechnological innovation.


North Carolina Board of Science and TechnologyHigh-technology education

Microelectronics Center of North CarolinaNorth Carolina Biotechnology Center

General industrial developmentDivision of Industrial Development

Division of Industrial Development

Mr. Alvah H. Ward, Jr.Director, Division of Industrial DevelopmentNorth Carolina Department of Commerce430 N. Salisbury St.Raleigh, NC 27611(919) 733-4151Date of establishment: N/AAnnual State finding (millions): N/AProgram type:


Market development assistance.Location assistance.Labor.

DescriptionThis office offers many different services to help indus-

try locate or relocate in the State. It provides: industrialinformation about State communities; business trendsand market development possibilities; industrial locationservices; environmental services; labor availability serv-ices; and financial services such as finding capital forphysical plant or product development. In addition, thisoffice makes new industries aware of the tax and regula-tion structure, offers marketing services, and helps withinternational trade, importing, and exporting.

—

Appendix—Directory of State High-Technology Strategies and Programs “ 57———

Microelectronics Center ofNorth Carolina (MCNC)

Dr. Donald BielmanDirectorMicroelectronics Center of North CarolinaP.O. Box 12889Research Triangle Park, NC 27709(919) 541-7286



Program services:

Links industry with university resources.

Description:

MCNC was created to help North Carolina’s univer-sities educate students in fields related to microelectronicsby providing research and training facilities. MCNC isa nonprofit coordinating body, helping five State univer-sities work together in this area.

North Carolina Biotechnology Center

Dr. Quentin LindseyScience and Public Policy AdviserOffice of the Governor116 W. Jones St.Raleigh, NC 27611(919) 733-6500



Program services:Links industry with university resources.

Description:The North Carolina Biotechnology Center conducts

research and development in biotechnology. The Centeracts as a State cooperative effort to experiment and “learnby doing.” The Center plans: to stimulate further devel-opment of North Carolina’s interdisciplinary researchcommunity; to facilitate mutually beneficial collabora-tion between industry and universities; and to stimulatethe biotechnology industry in the State.

North Carolina Board ofScience and Technology

Dr. Quentin LindseyScience and Public Policy AdviserOffice of the Governor116 W. Jones St.Raleigh, NC 27611(919) 733-6500

Date of establishment: 1979Annual State funding (millions): $0.4 (1968 original

funding)


Program services:Links industry with university resources.State resource promotion.Research and development.

Description:

The Board’s mission is to identify and support researchneeds of public and private agencies, institutions andorganizations, and to recommend policies, procedures,organizational structures, and financial requirements thatwill promote effective use of scientific and technologicalresources in fulfilling research needs.

The Board work plan is organized into programs, in-cluding: R&D in North Carolina; Scientific Personnel,Equipment and Facilities; Institutional Support for Eco-nomic Development; Environmental Management; Hu-man Resources Development; Local Government-RelatedResearch; Public Understanding of Science; Small GrantsProgram; and Exploration of New Fields. Each programis implemented through specific projects, sponsored bythe Board and generally carried out through joint effortby research institutions and government finding.

The Board consists of seven members from the publicsector, six from the university sector, and two from theprivate sector, with the Governor acting as Chair. TheBoard is divided into committees that guide particularactivities pertaining to the need and/or use of scientificresources in relation to the following objectives: strength-ening science and technology base, improving publicunderstanding of science, forming policy, assisting Stateagencies and local governments, and assisting private in-dustries and institutions.

58 ● Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives

North Dakota

The State government provides numerous incentivesfor general industrial development, and the Governorplaces particular emphasis on the need to create challeng-ing jobs in the State. As one official put it, “NorthDakota’s largest export is its young people.” The Stateprovides a tax package favorable to business developmentand offers labor training for new and expanding industry.

The private sector has joined with the universities toset up an “Industry North Dakota” program, which willtake inventions by citizens to the universities for devel-opment. North Dakota also boasts the only wholly State-owned and State-operated bank in the Nation, estab-lished in 1919 to encourage industry, commerce, and agri-culture. Most of the bank’s financial assistance is cur-rently provided to the agricultural community, but thereis a new “Beginning Businessman’s Program” that willfinance up to 60 percent of a new business, in hopes ofencouraging growth in technology-based industries.


Bank of North DakotaGeneral industrial development

Economic Development Commission

Bank of North Dakota

Mr. Herb ThrondallPresidentBank of North DakotaP.O. Box 1657Bismark, ND 58502(701) 224-5600


Program type:


Program services:Loans.Loans guaranteed.

Description:

This bank, the only State-owned and operated bankin the Nation, has a special program for small and newbusinesses called the “Beginning Businessman’s Program,”which pays up to 60 percent of startup costs for a newventure. In addition, the bank guarantees loans, providesfunding for physical plant acquisition and improvement,and helps businesses relocate into the State. Accordingto State information, this program has helped many typesof small business.

Economic Development Commission

Mr. David TorkelsonChief Research AnalystEconomic Development Commission1050 E. Interstate Ave.Bismark, ND 58501(701) 224-4190Date of establishment: N/AAnnual State funding (millions): N/AProgram type:


Tax—favorable business climate.Link industry with university resources.Reduction in State corporate business tax.State resources promotion (infrastructure).Technical training provided by State.Abatement of local property tax.

Description:This office develops industrial possibilities for the State.

It aims to increase the amount of science and math taughtin schools, help upgrade engineering taught in the Stateuniversities, provide tax incentives for business, and helpbusinesses locate in the State.

Ohio

In 1982, as part of a high-technology development strat-egy, the Ohio Legislature created the Industrial Tech-nology and Enterprise Board to make recommendationsto the Governor about industrial development. ThisBoard will also work closely with the Ohio DevelopmentFinancing Commission (ODFC) to provide capital andproduct development assistance to new and expandingindustry in the State. The Governor plans to implementother changes designed to encourage high-technology de-velopment in a State that must cope with both high un-employment and a changing industrial base.

The State has enacted enterprise zone legislation to en-courage development in underdeveloped areas; the zoneswill be administered on the local level. Active local ini-tiatives are already under way in several cities, includingColumbus, Cleveland, and Toledo.ProgramsHigh-technology development

Industrial Technology and Enterprise Board of ODFCCapital provision assistance

Economic Development Financing ProgramIndustrial Technology and Enterprise Board of ODFCOhio Development Financing Commission

Appendix-Dkectory of State High-Technology Strategies and Programs 59

General industrial developmentOhio Development Financing CommissionOhio Enterprise Zones

Economic DevelopmentFinancing Program

Ms. Mary BeardanLoan Officer, Special ServicesDepartment of DevelopmentP.O. Box 1001Columbus, OH 43216(614) 466-7784

Date of establishment: 1980Annual State funding (millions): $70 bondProgram type:

Capital provision assistance.Program services:

Long-term, low-interest loans.Bond issue to raise capital.Loans.

Description:This corporation was created by legislative mandate

to provide direct loan assistance and guarantees to Ohiocompanies that want to expand their facilities and in sodoing provide new jobs or preserve existing ones. Fund-ing for this program is obtained by designating 15 per-cent of liquor profits, to retire original bond debt. Thetypes of assistance available are: I) State guarantees whichwould provide for repayment of up to 90 percent of theunpaid principal amount of a project loan upon default;and 2) direct loans, at favorable rates, of up to 75 per-cent of project cost. In order to be eligible, the proposedproject must be located in an “economic needs” area ofthe State, must be financially sound, adequately secured,and the applicant must be unable to obtain necessaryfinancial assistance at comparable terms through ordi-nary financial channels.

Industrial Technology and EnterpriseBoard of ODFC

Mr. Steve HoltzmanDirector, Industrial Technology and Enterprise BoardOhio Development Financing CommissionP.O. Box 1001, 30 E. Broad St.Columbus, OH 43216(614) 466-5420Date of establishment: 1982Annual State finding (millions): $0.15


Program services:Venture capital provision assistance.Direct investment in startup.Loan-stock or royalty rights.Loan-equity.Links industry with university resources.

Description:The Industrial Technology and Enterprise Board

(ITEB) of the Ohio Development Financing Commission(ODFC) administers two grant programs: 1) the Develop-ment Grant program, and 2) the Resources programs.Modeled after the Massachusetts Technology Develop-ment Corp., this program was set up to support thegrowth of high-technology firms, and to encourage en--hanced university/industry cooperation. This programhas just been established; a request for $10 million inoperating funds has been made of the 1983 Ohio Legis-lature.

1. The ITEB Development Grant Program will furnishcapital to small- and medium-sized innovative firmswhose projects will benefit the State by creating jobsand promoting the development of new technol-ogies.

2. The Resources Program is designed to investigateand assist the implementation of programs and proj-ects that could enhance cooperative university/industry relations in Ohio.

Ohio Development Financing Commission

Mr. Louis KuhmanDirector, Ohio Development Financing CommissionP.O. Box 100130 East Broad St.Columbus, OH 43216(614) 466-5420



Program services:Industrial revenue bonds.Long-term, low-interest loans.Subordinated loans.Loans guaranteed.

60 ● Technology, Innovation, and Regional Economic Development: Background Paper—Census of State Government Initiatives

Description:The Ohio Development Financing Commission

(ODFC) operates three industrial financing programs:1) Direct Loans; 2) Economic Development RevenueBonds; and 3) Guaranteed Loans. Since its inception in1965, OFDC has helped finance more than a quarterbillion dollars of projects.

1.

2.

3.

Direct Loans. -This program is designed to lend upto 30 percent of the total cost of land and buildingsfor an industrial project. ODFC attempts to targetdirect loan funds into what they term “future-ori-ented” industries.Economic Development Revenue Bonds –This pro-gram allows the State to finance up to 100 percentof the fixed assets of a project at an interest rate usu-ally 3 percent below the conventional rate. Thefunds from the bond issue may be used for land,building and certain equipment as well as profession-al costs such as attorney, architect, and underwritingfees.Guaranteed Loans. -This program authorizes theState to use the Ohio “unclaimed funds” to insurepayment of first mortgage loans made by lending in-stitutions to an expanding company. This guaranteeallows a company to obtain a loan which wouldotherwise be difficult to obtain.

ODFC also operates a financial clearinghouse serviceto identify potential capital sources for expanding busi-nesses throughout the State.

Ohio Enterprise Zones

Mr. Larry BlakeDirectorDepartment of Development, Special ServicesP.O. Box 1001Columbus, OH 43216(614) 466-7784


Program type:


Program services:Enterprise zones.Training vouchers for new jobs.Tax—favorable business climate.

Description:This Enterprise Zone program is a cooperative venture

of local and State government, in which the State definesan enterprise zone in local areas in need of industrialdevelopment. The local area grants some real estate orpersonal property tax deductions relating to the creationof jobs, wages to unemployed, or day care expenses.

Oklahoma

Oklahoma has a two-part plan to attract and retainindustry in the State: 1) create subdivisions that can in-dependently develop infrastructure or change local or-dinances to attract specific kinds of industry; and 2) pro-vide a customized training program for industry. How-ever, there are at present no State programs specificallytargeted on high-technology development.

The State has a strong program in vocational/technicaltraining, and the government works closely with the pri-vate sector in economic development, with strong inputfrom labor. An example of this is the privately fundedOklahoma Productivity Center at Oklahoma State Uni-versity, which serves as a resource for worker involve-ment in decisionmaking and innovation. Another non-profit organization is the Industrial Research and Devel-opment Center, which develops innovations of economicbenefit to rural parts of the State.

Programs


Oklahoma Department of Economic Development

Oklahoma Department o fEconomic Development

Mr. Eastal HartDirectorDepartment of Economic DevelopmentP.O. Box 53242Oklahoma City, OK 73152(405) 521-2401


Program type:


Program services:

Labor assistance.State resources promotion (infrastructure).Information dissemination.Tax–favorable business climate

Description:

This office is working closely with political subdivisionsin the State to develop infrastructure and train labor toattract industry.

The State reports a favorable tax climate for business,claiming a corporate tax rate of “only 4 percent. ” Othertax incentives for industry include industrial exemptionsfrom retail, sales, and use taxes, and a constitutionallylimited property assessment. Oklahoma has 100 percentindustrial revenue bond financing available for land,buildings, and equipment.

Append/x-Directory of State High-Technology Strategies and Programs . 61

Oregon

Oregon has a well-established industrial base in elec-tronics and has attracted a considerable amount of high-technology development, partly due to its proximity toCalifornia. High-technology growth, centered primarilyin the Portland area, has thus far taken place withoutsignificant direct State assistance.

The Governor has appointed an Economic Develop-ment Action Council to plan changes in the State ap-proach to growth, with the goal of attracting high-tech-nology industry. The Economic and Employment Recov-ery Plan and the Orgeon Economic Growth Plan are twoparts of Governor’s strategy to enhance economic devel-opment in the State. These plans include a computer-ized inventory of all industrial land in the State; Statetechnical assistance to the business community; and arevolving loan fund to provide the infrastructure neces-sary for industrial development.


Economic Development Department

Economic Development Department

Mr. Peter TryonDevelopment SpecialistEconomic Development Department155 Cottage St., N.W.Salem, OR 97310(503) 373-1200


Program type:

Capital provision assistance.General industrial development.Labor/technical assistance.

Program services:

Loans.Industrial revenue bonds.Abatement of local property tax.Tax—favorable business climate.State resources promotion (infrastructure).Task force.Assists in finding venture capital.Licensing assistance.

Description:

Although there is no dedicated high-technology devel-opment program operated by the State, the State govern-ment has encouraged the growth of the high-technologysector. The State has prepared an Economic and Employ-

ment Recovery Plan and the Oregon Economic GrowthPlan which are designed to diversify its industrial bases.Both plans recommend a variety of action that will assistand encourage all areas of industrial growth. The Eco-nomic and Employment Recovery Plan would create acomputerized inventory of all industrial land statewide,and establish a revolving loan program to help countiesprovide public services for business development. TheOregon Economic Growth Plan contains over 30 separateprojects such as improving State permit procedures, co-ordinating educational offerings with industry needs, andencouraging international trade activities.

Special training programs are offered by the OregonCommunity Colleges, and others. Generally, these pro-grams are tailored to meet the needs of a particular indus-try. On the university level, several of these programs areaimed at high-technology skills development.

In addition to these efforts, the State has put togethera list of high-technology firms located in the State to at-tract other firms to the State.

Pennsylvania

Pennsylvania reports a major initiative to advance tech-nology development and promote future economicgrowth in the State. The key to this effort is a plan todiversify the State’s economy away from its traditionalreliance on basic manufacturing and resource-based in-dustry, and thus to minimize unemployment resultingfrom the economic troubles of older industries. In addi-tion, State planners are looking toward advanced pro-duction technologies to improve efficiency, productivi-ty, and profitability in traditional sectors.

The Governor, along with the State Department ofCommerce, has proposed a four-part plan to promotehigh-technology development:

1. increase capital and financing available to advancedtechnology industries;

2. provide technical assistance to new and expandingindustry;

3. enhance labor skills; and4. promote the expansion of high-technology markets.The State has begun to pursue this strategy by setting

up new high-technology programs and assisting busi-nesses through existing programs. Dedicated programsinclude: funding technology innovation centers; targetingState economic assistance to technology-based firms; andincreasing marketing and recruiting of high-technologyfirms. The State Department of Commerce has targeted27 industry groups for special attention from State agen-cies. In addition, the State is working closely with theeducation sector at all levels to enhance math, science,and technical education in the State.

62 c Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives


Ben Franklin Partnership FundPennsylvania Industrial Development Authority

High-technology educationPennsylvania School for the Sciences

Capital provision assistanceBen Franklin Partnership Fund

Labor/technical assistanceMILRITE Council (“Making Industry and Labor Right

in Today’s Economy”)PENNTAP

General industrial developmentMILRITE CouncilPennsylvania Industrial Development Authority

PENNTAP

Ben Franklin Partnership Fund

Mr. William J. CookDirector, Bureau of Technological DevelopmentDepartment of Commerce462 Forum Bldg.Harrisburg, PA 17120(717) 787-4147


Program type:


Program services:

Grants available.Grants for research.Grants for development.Links industry with university resources.Product development assistance.Assists in finding venture capital.

Description:

This partnership of government, business, and educa-tion would provide $1 million in seed money to stimulatePennsylvania research, development, and training in ad-vanced technology industries through the PennsylvaniaScience and Engineering Foundation (which has recently

been reactivated). The Partnership will link resources andskills in the public, private, and academic sectors to ex-pand and encourage the development of scientific andtechnological education, research, and innovation in theState.

Governor Thornburgh has requested for the 1982-83budget year that funding be increased to $10 million, to

be matched on a one-to-one basis by the private sectorand higher education. This Challenge grant program willcreate regional Advanced Technology Centers. Thesecenters, which will be designated by the end of February,will focus on joint research and development, education,and training and entrepreneurial development.

In addition, the Board has $350,000 available this yearfor the funding of miniresearch and developmentprojects.

MILRITE Council (“Making IndustryLabor Right in Today’s Economy”)

Mr. Gregg RobertsonExecutive DirectorMILRITE Council513 Finance Bldg.Harrisburg, PA 17120(717) 783-7408


Program type:


Program services:

Task force.Labor.

Description:

and

The Pennsylvania MILRITE Council is an independentState economic development agency, created to seek solu-tions to Pennsylvania’s economic problems through thecooperative efforts of business, labor, and government.Its board has 15 members-five each from business, labor,and government. The Council has undertaken a programto create a venture capitalbe capitalized with public

limited partnership that willand private pension funds.

PENNTAP

Mr. Paul HouckInformation CoordinatorPennsylvania Technical Assistance ProgramJ. Orvis Keller Bldg.University Park, PA 16802(814) 865-0427


Program type:


Program services:

Links industry with university resources.


Technical support provided by State.Market development assistance.Technical training provided by State.Trains technical staff for business.Information dissemination.

Description:

The Pennsylvania Technical Assistance Program(PENNTAP) offers access to technical information andassistance for State business, encouraging economicgrowth. It services primary technology-transfer and tech-nical assistance for small business. PENNTAP acts as a“technology middleman” by helping firms with technicalproblems access technology resources that can produceanswers and solutions. The Advisory Council consistsof 15 executives from the private sector who help guideand plan program activities.

Pennsylvania IndustrialDevelopment Authority

Mr. Gerald KappDirectorPennsylvania Department of Commerce405 Forum Bldg.Harrisburg, PA 17120(717) 787-6245

Date of establishment: 1956Annual State finding (millions): $15

Program type:

General industrial development.High-technology development.

Program services:

Physical plant provision.

Description:

The Pennsylvania Industrial Development Authority(PIDA) was created in 1956 to stimulate acquisition andconstruction of industrial buildings to increase employ-ment in the State. It participates in three kinds of proj-ects: industrial development projects; industrial park proj-ects; and multiple tenancy building projects.

The authorizing legislation allows PIDA to make loansfor projects in “critical economic areas,” designated basedon unemployment statistics. The percentage of costsPIDA will finance depends on the area of the develop-ment and the nature and size of the buyer or tenant.PIDA also generally requires participation by an individ-ual development agency.

For small businesses, a new emphasis in the Agency,PIDA can provide as much as 70 percent of financingf o r e l i g i b l e p r o j e c t s .

In addition, the PIDA Board recently approved a newpolicy earmarking 25 percent of its annual cash flow to

advanced technology industries. Since 1980, the amountof PIDA loans to advanced technology industries hassteadily increased.

Pennsylvania School for the Sciences

Mr. John McDermottDirector, Pennsylvania School for the SciencesPennsylvania Department of Education333 Market St.Harrisburg, PA 17108(717) 783--6598


Program type:


Program services:

Links industry with university resources.State resource promotion.

Description:

This program offers summer school courses in mathand science for students interested in high-technologycareers. A number of students took advantage of this pro-gram in 1982, and the program will continue in thefuture.

Puerto Rico

The Governor has recently introduced a bill in thePuerto Rican Legislature which would extend to researchand development companies the same package of tax ex-emptions currently enjoyed by qualifying manufactur-ing firms. This is just one part of an aggressive industrialdevelopment strategy that includes several programs forencouraging high-technology growth. The Common-wealth’s Economic Development Administration offerstraining, research grants, and labor analysis for high-technology firms. The education sector supports high-technology development through the Center for Engi-neering Research, which provides product and marketdevelopment assistance to new and expanding firms. TheUniversity of Puerto Rico is also the home of the Centerfor Energy and Environmental Research, which is coor-dinated by the U.S. Department of Energy.


Government Development Bank


Economic Development AdministrationElectronics Industry Centers

64 . Technology, Innovation, and Regional Economic Development: Background Paper-Census of State Government /initiatives

General industrial developmentEconomic Development AdministrationGovernment Development Bank

Economic Development Administration

Mr. Jose R. MaderaAdministratorEconomic Development AdministrationG.P.O. Box 2350San Juan, PR 00936(809) 758-4747Date of establishment: 1950Annual State finding (millions): $17.2

Program type:General industrial development.Labor/technical assistance.

Program services:Tax—favorable business climate.Reduction in State corporate business tax.Training provided by the State.Location assistance.

Description:The Economic Development Administration (EDA) is

the agency responsible for the expansion of manufactur-ing activity in the Island. Besides monitoring performanceof the economy and conducting economic research proj-ects of immediate interest, EDA actively promotes thedevelopment of new manufacturing plants and industriesin Puerto Rico.

The industrial training section of the EDA offersspecialized services to manufacturers in the identification,study, implementation, and evaluation of training pro-grams for technicians, supervisors, and production work-ers in advanced job skills, It also advises manufacturerson the organization, time requirements, and trainingcosts for necessary personnel.

EDA offers scholarships in managerial, scientific, andtechnical areas.

Special locational incentives in the form of negotiablecash grants are available for establishing manufacturing

facilities in areas of high unemployment in Puerto Rico.The incentives are administered by the Puerto Rico In-dustrial Development Co., which is responsible for con-struction and maintenance of industrial buildings on theIsland.

Electronics Industry Centers

Mr. Luis Diaz GandiaDirectorEconomic Development AdministrationP.O. Box 6419Caguas, PR 00626(809) 833-2955



Program services:Technical training provided by the State.

Description:The main thrust of the two Electronics Industry

Centers is a specialized, intensive, 38-week training pro-gram, leading to a certificate in digital electronics andcomputer techniques.

The Economic Development Administration, jointlywith the Puerto Rico Industrial Development Co.(PRIDCO) created the Electronics Industry Center.PRIDCO provides funding for the facilities and equip-ment.

Personnel, books, and expenditures are paid from local-ly generated funds of the Puerto Rico Department ofLabor and Human Resources.

Government Development Bank

Mr. Julio PietrantoniPresidentGovernment Development BankBox 32001, Minillas StationSanturce, PR 00940(809) 726-2525



Program services:Long-term, low-interest loans.

Description:The Government Development Bank has been active

and effective in fostering economic growth with its loan

Appendix-D/rectory of State High-Technology Strategies and Programs ● 65

to finance fixed assets and working capital. Normallyloans are made for up to 70 percent of the appraised valueof the real estate and up to 50 percent of the appraisedvalue of machinery and equipment. The rate is tied intothe prime rate of major New York banks, although nego-tiated rates are also possible.

Rhode Island

This State has begun an examination of high-technol-ogy possibilities for its economy. This effort includes aproposal to put a computer in every elementary and sec-ondary school, as well as in community and vocationalcolleges.

A Strategic Development Commission has studied thepossibilities of using State resources in high-technologyeconomic development and has recommended targetingspecific industries and linking university research capaci-ties with high-technology industry.

Programs

High-technology developmentStrategic Development Commission

Labor/technical assistanceStrategic Development Commission

Capital provision assistanceIndustrial Development Bond Program

Industrial Development Bond ProgramD r. Norton Berman

Acting DirectorRhode Island Department of Economic Development7 Jackson WalkwayProvidence, RI 02903(401) 227-2601


Program type:


Program services:Industrial revenue bonds.Loans.Product development assistance.

Inscription:

This program was revived in 1977 to provide financ-ing for industrial development. The program encouragesgrowth of Industrial Parks, offers mortgage guaranteesand insurance to industry, and helps the State in its ef-forts to attract high-technology industry.

Strategic Development Commission

Dr. Norton BermanDirectorRhode Island Department of Economic Development7 Jackson WalkwayProvidence, RI 02903(401) 277-2601Date of establishment: 1982Annual State funding (millions): N/AProgram type:


Program services:

Task force.State resources promotion.Links industry with university resources.

Description:This Commission was set up to identify high-technol-

ogy growth possibilities for the State of Rhode Island,and to link industry with university resources. This pro-gram, only recently started, will identify target industriesfor the State.

South Carolina

South Carolina has long been recognized for its out-standing vocational training program. This has been ex-tended into the high-technology area with “Design forthe Eighties,” a plan to provide high-technology skillstraining in the State’s 16 community colleges, in orderto produce a work force that will make the State attrac-tive to expanding high-technology firms.

The State government has targeted seven specific in-dustries and is planning to develop research parks aroundits three major universities: Clemson, the University ofSouth Carolina, and Charleston Medical College. Thelegislature is also considering the creation of a financeauthority and State support for cooperative research.These efforts will be coordinated with several small busi-ness development centers in the university system,funded by the U.S. Small Business Administration.


Task Force on Industrial Development

kfigh-technology educationDesign for the Eighties

Labor/technical assistanceDesign for the EightiesTask Force on Industrial Development

General industrial developmentSouth Carolina Development Board

Design for the Eighties

Mr. William DudleyDirectorDesign for the Eighties111 Executive Center Dr.Columbia, SC 29210(801) 758-6915

Date: of establishment: 1978Annual State funding (millions): $0.45

Program type:


Program services:

Technical training provided by State.Technical support provided by State.Links industry with university resources.Trains technical staff for business.

Description:

Design for the Eighties is now establishing trainingresource centers for the development of high-technologyskills needed in six fields: robotics, machine operation,computer design, microprocessors, advanced office sys-tems, and water control. South Carolina has traditionallyoffered strong technical education, and these centersshould enhance capabilities for the high-technologysectors.

South Carolina

Mr. Robert LeakDirectorState DevelopmentP.O. Box 927

Development Board

Office

Columbia, SC 29202(803) 758-3145


Program type:


Program services:

Links industry with university resources.Trains technical staff for business.Industrial revenue bonds.Task force.

Description:South Carolina has targeted seven industries to attract

or promote within the State. These include pharmaceuti-cals, microprocessors, machine tools/robotics, agricul-tural processing, defense-related industries, structuralfibers and plastics, and fiber optics.

In addition, the Board is proposing to the State legis-lature that it establish a finance authority to pool smallIndustrial Revenue Bond issues, and establish financingplans for small and large manufacturing firms. The Boardworks closely with the Federal Small Business Develop-ment Centers.

Task Force on Industrial Development

Mr. John S. HooksDirectorOffice of the GovernorP.O. Box 11450Columbia, SC 29211(803) 758-3208Date of establishment: 1981Annual State funding (millions): N/AProgram type:


Program services:Task force.Links industry with university resources.State resources promotion (infrastructure).Information dissemination.

Description:This group proposed an Industrial Research Board to

promote the economic development of high-technologyindustry in South Carolina, and to enhance the capabil-ities of South Carolina’s State and private universities.Board membership would include representatives fromgovernment, education, and industry. Its objectiveswould include promoting and maintaining a high levelof interaction between industrial and academic research-ers in the State. In addition, the State hopes to attracthigh-technology industry by developing industrial re-search centers on land adjacent to State universities.

South Dakota

This State’s economic strategy does not include a spe-cific plan to encourage high-technology industry, but of-ficials report a favorable business climate and a cooper-

Append/x—D/rectory of State High-Technology Strategies and Programs ● 67

ative relationship between the banks and industry. SouthDakota emphasizes the autonomy of its communities, butthe State government works closely with local efforts intowns that are aggressively seeking industrial develop-ment. The State also supports six vocational-technicaltraining schools that can provide a customized trainingprogram for any new or expanding industry, includingan increasing number of skills required in high-technol-ogy manufacturing.

Programs


Bureau of Industrial Development

Bureau of Industrial Development

Mr. Eugene MillerDirectorBureau of Industrial Development221 S. Central Ave.Pierre, SD 57501(605) 773-3158


Program type:


Program services:

Tax–favorable business climate.Labor assistance.Industrial revenue bonds.State resources promotion (infrastructure).

Description:

This State boasts a favorable tax package to attract in-dustry. In addition, it has six vocational technical schoolsthat will design customized programs for firms.

Tennessee

This State has a large manufacturing sector, and likethat of the industrial Midwest it has been hard-hit byeconomic changes. The labor and financial communities,therefore, are looking to high-technology growth as asource of jobs and revenue.

The overall objective is to capture a larger share of newjobs in emerging growth sectors that are dependent onadvances in technologies. Part of this effort is reflectedin the Governor’s strong support for the KnoxvilleWorld’s Fair, which centered on new energy technologiesand other innovations. In addition, the Governor estab-lished a Technology Corridor Task Force to study re-

gional development and technical education in the Knox-ville-Oak Ridge area. This task force has been replacedby the Technology Corridor Foundation, which will im-plement its recommendations.

The State’s high-technology development strategy isfocused on nurturing new ventures as well as attractingexpanding industry. Part of this effort includes a “Stateinventory” of existing technology-based firms and re-sources. Among these are the Oak Ridge National Lab-oratory, the Tennessee Valley Authority, and the Uni-versity of Tennessee, all of which have contributed tothe birth of a small high-technology business communi-ty around Oak Ridge-Knoxville.


High-Technology Initiative for IndustriesTennessee Technology Corridor Foundation

High-technology education

Tennessee Comprehensive Education StudyTask Force

High-Technology Initiative for Industries

Dr. John CrothersDirector of High-Technology DevelopmentTennessee Department of Economic and Community

Development1011 Andrew Jackson State Office Bldg.Nashville, TN 37219(615) 741-5070


Program type:


Program services:

Assists in finding venture capital.Task force.Capital provision assistance.

Description:

With State funding, the Department of Economic andCommunity Development created the Division of HighTechnology, Finance, and Service Sales. This office alsoacted as the host for the Governor’s Technology TaskForce. In addition, it is looking at in--State developmentand recruitment of high-technology industries. The De-partment is evaluating State resources, and plans to findventure capital sources for new and expanding businesses.This office will also work closely with the university sec-tor to link research with lndustrial development.

68 ● Technology, Innovation, and Regional Economic Development: Background Paper— Census of State Government Initiatives

Tennessee Comprehensive EducationStudy Task Force

Dr. William H. PayneExecutive DirectorTennessee Comprehensive Education Study16th Floor–James Polk Bldg.Nashville, TN 37219(615) 741-5230Date of establishment: 1981Annual State funding (millions): $0.3Program type:


Program services:

Task force.Links university with industry resources.

Description:

This Task Force works closely with the recommenda-tions of the Regional Technology Corridor Governor’sTask Force, and implemented joint recommendations forindustry and education. The State plans to establish a$20 million comprehensive technical institute to belocated within the Knoxville/Oak Ridge TechnologyCorridor. This will allow interaction between university

personnel and industry, transferring technology betweenthe two groups. In addition, this group will study theorganization structure of the State.

Tennessee Technology Corridor Foundation

Dr. David PattersonStaff DirectorTennessee Technology Corridor FoundationP.O. BOX 2752Knoxville, TN 37901(615) 966-2804


Program type:


Program services:

Market development assistance.Assists in finding venture capital,Product development assistance.

Description:

This office helps implement the State strategy to de-velop a high-technology corridor in the Knoxville/OakRidge area, coordinating industry with educational andState resources, The Foundation expects to have a 1983funding level of between $4 million and $5 million, which

will permit the completion of the initial development ofthe Knoxville/Oak Ridge area and allow similar supportservices to other selected areas of the State.

Texas

The Governor recently received the report from theTexas 2000 Commission, which was appointed by hispredecessor. This Commission looked at long-range eco-nomic planning issues, including high-technology in-dustrial development, and recommended that the Stateconcentrate on strengthening its research and develop-ment facilities. It also recommended establishing a Re-search and Development Council, coordinating R&Defforts with the private sector; increasing salaries to re-tain university faculty; providing technical assistance toentrepreneurs; and working with the Federal Govern-ment to create incentives for private sector research.

Efforts in university research include a planned elec-tronics research center uniting the resources of TexasA&M, Rice, and the University of Houston. A new In-stitute for Ventures in Technological Innovation at TexasA&M will work with both the private sector and Federalagencies to promote technological innovation. Con-siderable high-technology development has also occurredin Austin, in part because of resources and programs atthe University of Texas.

In addition to these State efforts, Texas has a tradi-tion of community-based initiatives. One of the most for-ward-looking communities is San Antonio, which is de-veloping the human resources to become a high-technol-ogy center in the years to come.


Institute for Ventures in New Technology


Industrial Start-up Training


Texas 2000 CommissionTexas Engineering Experiment Station

Industrial Start-up Training

Mr. Joe FerranManagerTexas Industrial CommissionP.O. Box 12728, Capitol StationAustin, TX 78711(512) 472-5059


Date of establishment: N/AAnnual State funding (millions): N/AProgram type:

Labor/technical assistance.Program services:

Trains technical staff for business.Links industry with university resources.State resource promotion.

Description:The Texas Industrial Commission, through its Indus-

trial Development Department, serves as a liaison be-tween new and expanding industry and the Vocational-Technical Division of the Texas Education Agency. TheCommission encourages the Education Department tostructure education programs to accommodate the needsof industry currently locating or expanding. It aims toput trained people in touch with jobs.

Institute for Ventures inNew Technology (INVENT)

Mr. Franklin SekeraDirectorThe Texas Engineering Experiment StationThe Texas A&M University SystemCollege Station, TX 77843(713) 845-0537Date of establishment: 1982Annual State funding (millions):Program type:


Links industry with university

$0.856

resources.Market development assistance.Product development assistance.

Description:INVENT integrates science and engineering with the

commercial disciplines of marketing, management, andfinance to help determine the “credibility” of new ideas.

Texas 2000

Ms. Meg WilsonDirector of Policy ResearchTexas 2000Governor’s Office, P.O. Box 13561Austin, TX 78711(512) 475-8386Date of establishment: 1980Annual State finding (millions): $0.40

Program type:


Task force.State resources promotion.Information dissemination.Links industry with university resources.

Description:The Texas 2000 Commission reports periodically to the

Governor and legislature on the role of research anddevelopment, advanced technology, and the State, ineconomic development. The mission of Texas 2000 is tolook at long-range planning issues for State economicdevelopment, including high-technology industrial devel-opment. The Commission’s concerns include rapidgrowth, research and development, water resources, en-ergy resources, transportation availability, governmentfinancing, and Mexican relations.

The Commission recommended that the State focusmore clearly on research and development facilities andestablish a research and development center. It alsorecommended that the State coordinate research anddevelopment efforts with the private sector, ensure re-sources for research and development, compensate uni-versity faculty on a market basis to retain them, evaluateagencies’ roles in research and development, developtechnical assistance to entrepreneurs, provide capitalthrough State channels, and work with the Federal Gov-ernment to create private sector research and develop-ment efforts. The Commission helped develop the Insti-tute for Ventures in Technical Innovation (INVENT)at Texas A&M University, which will link universityresources with entrepreneurs. The Commission alsoworked to reorganize traditional industrial developmentoffices to attract advanced technology industries to theState.

Texas Engineering Experiment

Mr. W. Arthur PorterDirector

Station

The Texas Engineering Experiment StationThe Texas A&M University SystemCollege Station, TX 77841(713) 845-0537

Date of establishment: 1914Annual State finding (millions): $30


Program services:

Links industry with university resources.State resource promotion.

70 ● Technology Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives

Description:The primary purpose of the Texas Engineering Experi-

ment Station (TEES) is to serve and support the businessand industrial community of Texas and the Nationthrough research and development. TEES has 25 sepa-rate research divisions with at least that many identifiablesubdivisions. There are a total of some 800 people in-volved in the collective research activities of more than400 projects annually. Funds to support this research aregenerated primarily through outside sponsored researchprojects with a small but very important percentage com-ing from State general revenue funds.

Utah

Utah has a strong high-technology manufacturing baseto build on, particularly in microelectronics, robotics,and computer graphics. Utah firms also conduct ad-vanced research in biomedical and aerospace technol-ogies. State officials report that Utah has had the fifthhighest growth rate in high-technology jobs in the Na-tion over the past 5 years.

The State government cooperates closely with the pri-vate sector through the Office of Industrial Development.The University of Utah also has several initiatives to pro-mote high-technology innovation, including a nonprofitResearch Institute and an Industrial Research Park whereuniversity and industry cooperate on R&D projects. Pri-vate sector programs include the Utah Innovation Centerin Salt Lake City, which assists small- and medium-sizedfirms in product and process innovation.ProgramsGeneral industrial development

Office of Economic Development

Office of Economic Development

Ms. Evelyn LeeDirectorEconomic Development200 South Maine, Suite 620Salt Lake City, UT 84101(801) 533-5325Date of establishment: 1968Annual State finding (millions): $0.85Program type:


State resources promotion.Industrial revenue bonds.

Description:Utah has had an ongoing program to attract high-tech-

nology firms and to nurture the growth of existing high-technology firms since 1975.

Over one-third of the division budget is targeted tohigh-technology industries such as biomedical and bio-engineering, computer and electronics, and pharmaceuti-cals and medical instruments. The office helps new andexpanding high-technology industry in locating plantoperations; provides information on area marketing,wages, and education; provides training; and will assistin locating capital.

The office works closely with the University of UtahResearch Park, the Utah Innovation Center, and theGovernor’s Council on Science and Technology in at-tracting and retaining new industry.

The State reports a good and rapidly growing techno-logical base and an educated labor force.

Vermont

The Governor supports higher education as a meansof strengthening the State’s economy and preparing theway for high-technology industrial development in thefuture. The State also has a number of general loan pro-grams for businesses, several of which are reported to bemore liberal with high-technology industries given theirspecial capital needs.ProgramsGeneral industrial development

Vermont Industrial Development AuthorityCapital provision assistance

Vermont

Vermont

Mr. AlbertManager

Industrial Development Authority

Industrial Development Authority

Coffrin

Industrial Development Authority109 State St.Montpelier, VT 05602(802) 828-2384Date of establishment: 1972Annual State funding (millions): $1.1Program type:


Program services:Loans.

Append/x—D/rectory of State High-Technology Strategies and Programs ● 71

Long-term, low-interest loans.Subordinated loans.Industrial revenue bonds.

Description:

This program, currently being implemented, has a “set-aside” for high-technology business provided in conjunc-tion with the State Pension Fund. The initial investmentsfor the pension fund as a venture capital source will likely

take place with other nongovernment institutional ven-ture capitalists in a private company that would makedirect equity purchases.

Virginia

In 1982, the Governor appointed a Task Force on Sci-ence and Technology to assess the current state of tech-nological development within the Commonwealth andto prepare recommendations for the Governor and Gen-eral Assembly. The Task Force, which consists of 36members drawn primarily from the business and aca-demic communities, will address such issues as education,finance, and State intervention.

The State government feels strongly that existing in-dustry should not subsidize new industry, so there areno targeted loans or special financing for new and ex-panding industry. However, the State has a good businessclimate and an excellent higher education system, as wellas growing high-technology concentrations in the Nor-folk and Charlottesville areas and in the suburbs ofWashington, D.C. The State provides labor trainingthrough the community college system and has a goodsupply of technically trained personnel. Its banks are fair-ly conservative, so venture capital is hard to find insidethe State, a situation the Task Force is expected toaddress.


Governor’s Task Force on Science and TechnologyScience, Engineering, and Technology Advisory

Service


Department of Industrial Development

Department of Industrial Development

Mr. Hugh KeoghAssistant DirectorDepartment of Industrial Development100 Washington Bldg.Richmond, VA 23219(804) 786-3791

Date of establishment: 1%2Annual State funding (millions): $4.2

Program type:


Program services:

State resources promotion (infrastructure).Labor assistance.Information dissemination.Market development assistance.Industrial revenue bonds.

Description:

Although there are no special tax incentives for newor expanding industry, the State reports a low businesstax in the State, with strong support for business. In ad-dition, the State boasts a good overall location, good ac-cess to transportation, and an excellent higher educa-tion sector. The State is currently exploring ways to bemore responsive to the high-technology sector througha Governor’s task force which will report in 1983.

Governor’s Task Force onScience and Technology

Mr. Scott EubanksDirectorDepartment of Industrial Development100 Washington Bldg.Richmond, VA 23219(804) 786-3791



Program services:

Task force.

Description:

This Task Force will report to the Governor in June1983, on Virginia’s science and engineering communityon how to mobilize talent in support of high-technologyindustry. The Task Force is currently working in six com-mittees preparing reports on different aspects of theState’s economic development.

Science, Engineering and TechnologyAdvisory Service

Mr. Robert J. GriffisDirectorDepartment of Planning and BudgetP.O. Box 1422Richmond, VA 23211(804) 786-8303

Date of establishment: 1982Annual State funding (millions): $0.01Program type:


Program services:

Task force.

Description:

This office acts as the technical consultant to the TaskForce on Science and Technology. In addition, it helpsnew and expanding industries develop products, andhelps businesses develop contacts with university techni-cians. The office is helping coordinate the efforts ofuniversity research and the development of high-tech-nology industry in the State.

Washington

The Governor’s Committee on High-TechnologyTraining and Advancement, established in 1982, will ex-amine engineering education, tax and land use policy,development of high-technology centers, specializedtraining programs, and the attraction of high-qualityteachers. Its mission is to identify programs that en-courage innovation and to recommend legislation thatwill promote high-technology growth.

Other State initiatives include the Washington Re-search Foundation, funded primarily by private sectorsources, which was set up to coordinate university R&Dactivities with the needs of industry. The University ofWashington is also working with local corporations andbusinessmen to promote innovation and entrepreneur-ship in the Seattle area.ProgramsHigh-technology development

Washington Research Foundation

High-technology educationGovernor’s High-Technology Training and

Advancement Committee

Labor/technical assistanceWashington Research Foundation

Governor’s High Technology Trainingand Advancement Committee

Mr. Alan HagerCommittee CoordinatorDepartment of Commerce and Economic Development101 General Administration Bldg.Olympia, WA 98504(206) 753-3065

Date of establishment: 1981Annual State funding (millions): N/AProgram type:

High-technology education.Program services:

Task force.Description:

The mission of this Committee was to develop policyrecommendations aimed at developing high-technologyindustr y in the State of Washington. Specific issue areasconsidered include: engineering education, tax and land-use policy, development of high-technology centersaround State universities, developing specialized trainingprograms, and attracting and maintaining high-qualitypersonnel to the State.

Washington Research Foundation

Mr. Hunter SimpsonStaff DirectorGovernor’s High-Technology Transfer TaskState CapitolOlympia, WA 98504(206) 000-0000Date of establishment: 1981Annual State funding (millions): -O-Program type:


Program services:Task force.Links industry with university resources.

Description:

Force

The Foundation, funded primarily by private industrysources, resulted from the Governor’s High TechnologyTransfer Task Force. The purpose of the Foundation isto finance applied research and development on newtechnology-based products.

West Virginia

West Virginia is looking for ways to diversify its in-dustrial base by encouraging product and process innova-tions in the manufacturing sector. The State governmentalso works closely with local development authorities toplan and develop industrial parks, and to attract expand-ing industry. Targeted industries include robotics, elec-tronics, chemicals, and energy.

The University of West Virginia established a Centerfor Entrepreneurial Studies and Development in 1981 to

— — . —.


bring the resources of university faculty and students tothe direct support of West Virginia businesses, particular-ly small and developing enterprises.

Programs


Governor’s Office of Economic andCommunity Development

Governor’s Office of Economic andCommunity Development

Mr. Douglas ScaffDirector of Economic DevelopmentGovernor’s Office of Economic and Community

DevelopmentCapital ComplexCharleston, WV 25305(304) 348-2234


Program type:


Program services:

Long-term, low-interest loans.Industrial revenue bonds.Training provided by the State.Site location.Market development assistance.Information dissemination.

Description:

This agency is the economic development arm of theGovernor’s office, providing new and expanding industrywith: financial assistance and packaging, labor studies,marketing research, facility location, and training pack-ages. The organization serves as interface for industrywith other State agencies.

A close relationship exists with local developmentauthorities in bringing plans for local industrial parks tofruition. Targetted industries include: robotics, electron-ics, chemicals, high energy users, as well as supportingindustries.

This agency works closely with the West VirginiaDevelopment Authority (WVDA). WVDA was set upby legislative mandate, and has funds appropriated bythe State, but works independently of State control.WVDA provided low-interest loans (4 percent) to quali-fied high technology, (as well as any industry qualifying)to fund up to ) 50 percent of new and expanding projects.

Wisconsin

Wisconsin’s aggressive program to attract high-technol-ogy industr y is distinguished by the efforts of the privatesector and public-private coalitions. The State is active-ly marketing its resources as a high-technology center,and government industrial development efforts includecustomized labor training, licensing and finance assist-ance, and tax credits for R&D and job creation. Thelegislature will soon be considering proposals to increasetechnical training, tax incentives, and R&D tax credits.

Two private sector groups working closely with theState government are Competitive Wisconsin and Wis-consin for Research. Both are nonprofit groups represent-ing business, education, and government, Anothergroup, the Wisconsin Alumni Research Foundation ofthe University of Wisconsin, holds patents on alumniinventions; income received as a result of licensingagreements is channeled into further university research.

At the community level, the State works closely withthe Greater Milwaukee Committee and the MilwaukeeChamber of Commerce to develop high technology inthat city. In addition, the Heritage Bank in Milwaukee,a privately chartered bank, has committed $50 millionto the development of high-technology industry in thecity.


Business Development ServicesWisconsin Department of Development

Business Development Services

Mr. Fred PearceDirectorBusiness Development ServicesP.O. Box 7970Madison, WI 53707(608) 266-0165


Program type:


Program services:

Information dissemination.State resources promotion (infrastructure).Links industry with university resources.Market development assistance.Licensing assistance.

74 . Technology Innovation, and Regional Economic Development: Background Paper-Census of State Government Initiatives

Description:This office is responsible for a significant amount of

the State effort in attracting targeted high-technology in-dustry by providing services they need. These servicesinclude information about State resources, and helpingbusiness use them. Although established as a general in-dustrial development effort, this office is now targetingadvanced technology industries for special services.

Wisconsin Department of Development

Ms. Kay PlantesDivision AdministratorWisconsin Department of DevelopmentP.O. Box 7970Madison, WI 53707(608) 266-1018



Program services:

Link industry with university resources.Tax-favorable business climate.

Description:

This office is charged with guiding coordinated andeconomically efficient development of the State’s generalindustrial development. Recently, however, the State hasrecognized the importance of high-technology develop-ment, and is pursuing a number of strategies to encouragesuch development: through university-industry ties, re-search and development tax credits, matching State fundsfor university-industry consortia, and other tax incen-tives to draw equity and/or venture capital investmentsinto the State.

Wyoming

High-technology industry is part of Wyoming’s agen-da for economic development, but thus far the State leg-islature has taken a cautious approach. There is valid con-cern about the secondary effects of development, par-ticularly for the environment, and there is a natural con-straint in the lack of water. In addition, there is highunemployment in the State but the existing work forceis not trained in high-technology skill areas.

The Wyoming Industrial Development Corp., estab-lished by the legislature in 1967, is authorized to pro-vide financing to Wyoming businesses as venture capital

or for expansion. Although it receives no State fundingat this time, it works closely with the Wyoming Officeof Economic Development. The State does boast the low-est tax structure in the Nation, and there is a concen-trated effort at the community level to attract new in-dustry. This is usually traditional manufacturing in-dustry, but it is hoped that it will provide a foundationfor future high-technology growth.

Programs


Wyoming Economic and Planning DevelopmentCommission

Wyoming Economic and PlanningDevelopment Commission

Mr. John LoganChief, Industrial DivisionEconomic and Planning Development CommissionBarrett Bldg., 3rd FloorCheyenne, WY 82002(307) 777-7285


Program type:


Program services:

Tax—favorable business climate,Information dissemination.State resources promotion.

Description:

This office is responsible for providing technical assist-ance to existing industries in the State considering ex-pansion, and to outside firms for possible location toWyoming. The State labor force is predominately skilledto semiskilled, with some shortages in professional andmanagement areas. State infrastructure dictates that con-centration is placed on smaller manufacturing firms thatwill hire up to 500 employees. The State Industrial Divi-sion and those active local economic development coun-cils work together to attract industry and diversify theeconomic base, emphasizing smaller high-technology

firms.The University of Wyoming has expanded its research

and development centers to include state-of-the-art skillsand machinery in high-technology areas. Training pro-grams are also being established throughout the Statethrough efforts of the Division of Manpower Planning.