Successful State Initiatives That Encourage Bioscience Industry Growth
Biotech Start-Ups Benefit From A Supportive Policy and Regulatory Environment
With the financial backing of the state legislature in 2010, the state’s research universities, private foundations and other supporters, the Eminent Scholars Program is marshalling the required talent and resources and driving an effective strategy for achieving these results.
To date, the Alliance has invested some $400 million, which has helped to attract more than 50 Eminent Scholars, leverage an additional $2 billion in federal and private funding, create more than 5,000 new technology jobs, generate some 120 new technology companies, and allow established Georgia companies to expand into new markets.
To support the development of technology prior to company formation, the Alliance created VentureLab, a strategy for enhancing and accelerating the process of spinning new technology-based enterprises out of university research. The goals of VentureLab are to provide earlier and increased awareness by the business and investment community of university commercialization opportunities and to provide an easier and more efficient process for turning these technologies into new companies or new markets for established startups.
Under the Kentucky Innovation Act, the General Assembly directed the Kentucky Science and Technology Corporation (KSTC) to invest in research and development activity to promote innovation and build a pipeline of new ideas and technologies that could add value to the scientific and economic growth in the Commonwealth.
In 2004 and 2005 action by the General Assembly established the Venture Capital Investment Act to increase the availability of venture capital funds to help strengthen the state's economic base and to support South Carolina’s economic development goals. The legislation created the Venture Capital Investment Authority to oversee the program that provides tax credits for private investment companies offering equity, near-equity or seed capital for companies in the state that are emerging, expanding, relocating or restructuring.
State bioscience trade associations advocate to lawmakers and government agencies at every level in favor of public policies that support the responsible development of the bioscience industry. These associations are often the driving force behind state initiatives that address the need for expanded worker training and technology transfer programs. As such, they are a critical component of the mix in both established and emerging bioscience clusters.
Supporting Bioscience Industry with Venture Capital and Discovery Funds
A significant number of state governments over the past 15 years have legislatively endorsed measures that pro-actively promote the formation of venture capital and discovery funds that benefit targeted technology sectors, especially at early stages that are underserved by existing capital markets. Understanding that if they are to effectively compete to create and retain biosciences companies, states have modified their supportive investment structures to more accurately reflect the changing nature of the industry and competitive funding techniques.
From encouraging pension fund investments and quasi-public investments mediated by privately managed venture funds to funds of funds mechanisms, several useful capital formation initiatives were created by the states that provide vital “deal flow” funding for companies at various stages of research and development.
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