Innovation-Based Economic Development vs. State Budgets

Before we get too far into the new fiscal year, we
thought we’d go back and look at how the IBED world
fared in the last round of state budgets. Tax credits
continue to be a favored tool to spur growth and
investment in the IBED world.

Even though budgets
are tight, many states have maintained or increased
funding for IBED-related tax credits, and a few, such
as Nebraska and Virginia have introduced new ones.
Supporting commercialization efforts was also high on
the list this legislative season. Ohio’s Third Frontier,
for instance, has a new Commercial Acceleration
Loan Fund worth $25 million.

With waning investment
from traditional venture capital firms, several states
are stepping in to fill the gap. Maryland’s new
InvestMaryland program allocates $70 million for
venture capital in the innovation economy sector.
And though it was developed back in 1989, Economic
Gardening has only recently started to catch hold
on the regional and state level.

Nebraska, Virginia,
Pennsylvania, and Michigan have all introduced new
initiatives this year. The trend of the year, though,
seems to be the restructuring of state-level economic
development efforts, with a particular emphasis on
engaging the private sector. Many of these efforts are
currently facing some controversy, but we wouldn’t be
surprised if once the wrinkles get ironed out, this is a
trend that’s here to stay.

Full Paper: http://fourtheconomy.com/wp-content/uploads/2011/11/Perspecitves-IBED-vs.-State-Budgets.pdf