Michigan’s 21st Century Jobs Fund is a $2 billion, a 10-year initiative to accelerate the diversification of the state’s economy and devotes approximately $800 million for technologies in the targeted sectors of life sciences, alternative energy, advanced automotive materials and manufacturing, and homeland security/defense. The annual awards are administered by the Michigan Economic Development Corporation (MEDC) with contracts that establish conditions and mileposts for receipt of receipt for funds.
The Competitive-Edge Technologies Program within the broader Jobs Fund invests in funds or alongside qualified private equity funds, qualified mezzanine funds, and qualified venture capital funds and a commercial enhancement program to assist small companies
Maryland’s Biotechnology Investment Tax Credit program provides income tax credits for individuals, corporations and qualified Maryland venture capital firms that invest in qualified Maryland biotechnology companies. The value of the credit is equal to 50 percent of an eligible investment made to a qualified Maryland company during the taxable year. The maximum amount of the credit cannot exceed $50,000 for individual investors and $250,000 for corporations and qualified Maryland venture capital funds.
A qualified Maryland biotechnology company has its headquarters and base of operations in the state, has fewer than 50 employees and has been in active business no longer than 10 years. A qualified venture capital firm has at least two principals who each have at least 5 years of venture capital experience and has its principal place of operation in Maryland.
Missouri’s New Enterprise Creation Tax Credit through their Department of Economic Development offers a $20 million pool of 100 percent tax credits to individual and corporate investors in venture funds that are approved by the statutory Missouri Seed Capital Investment Board. The board in turn has selected Prolog Ventures as the (to date) sole eligible investment, based on Prolog's commitment to invest in Missouri-based seed- and early-stage companies, primarily in the life sciences.
The Kentucky Investment Fund Act provides a 40 percent tax credit capped at $3 million a year is available to certain personal and corporate investors in approved venture funds. After credits are allocated to a fund, they are proportionately granted to the fund's investors upon completion of the fund's investment program. They must invest in qualifying companies that are Kentucky-based small businesses half of whose assets are in state, with net worth less than $5 million or net income less than $3 million, and fewer than 100 employees.
Oklahoma’s CAPCO Tax Credits Act, rather than direct or indirect investment of appropriated funds, uses tax credits as levers to increase the level of indigenous capital that is invested in¬-state in various kinds of targeted enterprises. The Oklahoma Capital Investment Board has set up as a state-beneficiary public trust, and uses contingent tax credits to guarantee $30 million generated from public utility corporations operating in-state by the Oklahoma Capital Formation Corporation.
Incubators and Economic Development Centers
By the early 2000s, governors and legislators in almost every state recognized commercialization of university research and support for small business innovation as a valuable means of economic development. Through the recent economic downturn, lawmakers and state agencies have continued to appreciate and support a broad range of initiatives that foster bioscience industry growth.
Some states have established and funded privately-run organizations dedicated to promoting bioscience investment, entrepreneurship and new product development. Such organizations are often supported by, or operate, as an extension of state economic development agencies.
Other states and regions have adopted more modest strategies while maintaining a broader tech-focus. Despite the variations of strategy, virtually every state recognizes the financial payoff from fostering the unique conditions needed to attract and grow biotech innovation - generally known as the "incubator model."
Biotechnology incubators support early stage companies in a number of ways - providing access to investors, managerial support, and often laboratory and office space. The incubator facilities generate a return on their investment through equity shares in the sponsored companies.
More broadly speaking, states and municipalities eventually see a benefit in the form of tax revenue that come from both company profits and the expanding workforce needed to staff successful ventures. Furthermore the bioscience industry creates a higher than normal indirect employment ripple in terms of jobs generated by essential service industries.
Here is a listing of several state-supported organizations that are singularly focused on supporting bioscience industry development: