By Milt Capps
Published Wednesday, October 21, 2009 12:37 pm
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Tennessee Technology Development Corporation leaders see the next 30 days as crucial to TTDC's continued ability to add value to the state's tech-driven economic development.
While preparing to advocate for further funding from the Bredesen Administration, TTDC is also considering lifeboat strategies that might help some programs survive if funding falls short. Those strategies might include spinning-off into new entities TTDC's entrepreneurship network, which would help manage the flow of deals to venture capitalists; and its effort to accelerate commercialization of technology.For now, though, the goal is to obtain adequate state funding to keep TTDC intact, and avert suspension of TTDC's work.
During a recent meeting of the TTDC board of directors, Chairman Bill Evans said his latest discussions with Tennessee Economic and Community Development Commissioner Matt Kisber – who is de facto Bredesen Administration sponsor of TTDC – made clear that while TTDC has significant progress to report for its two years of work, winning a place in Gov. Phil Bredesen's budget proposal for fiscal year 2011 will naturally require "tangible pieces of evidence" of value added by TTDC to the state's tech-driven economic development.
TTDC seeks a second round of funding to follow the state's initial $5.2 million subsidy, which will be exhausted by June 30.
TTDC board member and State Rep. Craig Fitzhugh (D-Ripley), at left, said during that board meeting, "It would be stupid to stop" TTDC's efforts by failing to fund the organization, given what he sees as the momentum the nonprofit group has built.Fitzhugh and most other board members present weighed-in in favor of TTDC's continued funding, citing TTDC's role in passage of the TNInvestco venture-capital program; its key role as as "connector" of scattered technology, investment, entrepreneurial and academic players; and, its success in spurring new dialogue for commercialization of intellectual property.
Board member and Pinnacle Enterprises CEO Jim Phillips said that without TTDC there would be "a lot of talk, but no action" in many situations, adding that in his view most technologies that begin life within universities "have a tendency to vaporize."
Similarly, BioTN Executive Director Leslie Wisner-Lynch, DDS, DMSc, who served briefly as chair of Tennessee Biotechnology Association, said TTDC is vital to unifying "science, technology industry organizations to support existing and growing businesses," and provides a missing link in improving economic outcomes and in helping existing states businesses "resist being pulled over state lines," as have a number of life-sciences businesses, in particular.
There seemed consensus among the board that while ECD is having great success in "traditional" economic development, only TTDC is presently positioned to help accelerate the emergence and success of tech transfer and the cultivation of seed- and early-stage companies, even though ECD does perform some related duties, particularly as relates to rural economic-development.
Fitzhugh, who is chairman of the House of Representatives committee on finance, ways and means, said that TTDC must nonetheless overcome a lack of awareness among some members of the Tennessee General Assembly regarding TTDC's mission and accomplishments.
Some legislators, Fitzhugh said, mistakenly think TTDC has something to do with the state's tech-education centers, rather than with promoting commercialization spawned on university campuses across the state; improving the climate and infrastructure for entrepreneurship; and, contributing to improved access to venture capital for state-based businesses that create new, higher-wage jobs for Tennesseans.With budget deadlines already looming, TTDC President and CEO Eric Cromwell reported to the board his concern that a great
deal of work must be done to ensure that Gov. Bredesen is sufficiently "engaged" to continue supporting TTDC's "innovation-based agenda," and that the General Assembly must be enlisted to not only support, but "demand long-term sustainability" of TTDC-led initiatives.In his written comments provided the TTDC board prior to its meeting, Cromwell (at right) wrote that despite TTDC's successes, the past year of economic and operational challenges has "revealed some underlying weaknesses that the organization must overcome" before its current state contract ends. Said Cromwell, "We must candidly face the reality that TTDC is not where we need to be with key relationships in the public sector, and because of this, TTDC is not relied upon nor fully utilized to seve many of the purposes for which the organization was created..."
Cromwell noted in update that an inadvertent delay in payments scheduled from State Economic and Community Development, plus the TTDC's intensive support of ECD and the Department of Revenue in the push for TNInvestco led to dramatic gains in venture capital, but lagging progress on several other fronts.
Cromwell went further during the board meeting, itself: TTDC, he said, has met "excessively burdensome" challenges in advancing tech-driven economic development, adding, "we just haven't been able to break through" on a number of fronts. Still, Cromwell said, "the burden is on us" to communicate more persuasively, later adding that he claims only modest expertise in dealing with the politics of such matters within the legislature. He added that while "jobs" has always been the long-term goal, that message needs more weight, and TTDC may need to retain lobbyists to address the General Assembly, effectively.UT-Battelle Director of Partnerships Tom Ballard stressed that the "criticality" of TTDC's role must be proven and the case made for "why should TTDC be spared" amid what are likely to be deep budget cuts.
Cromwell stressed that whomever succeeds Bredesen as governor in January 2011 may have little influence on budgeting until fall 2011, when they and their new administration begin preparing the budget for fiscal year 2012-13. TTDC's current funding will be all-but exhausted less than nine months from now, in June 2010. (Nonetheless, several board members, including Ballard and former TTDC Chairman Dan Marcum stressed the importance of briefing gubernatorial candidates during the election cycle on the role and value-added by TTDC.)
Speaking from his expertise as Finance chairman, Fitzhugh advised the board and TTDC management that TTDC should aim to secure a place in Bredesen's next budget by November. Fitzhugh explained the next budget debate – which will take place in January-May 2010 – will bring "serious reductions" in outlays, due to the erosion of state revenue and the tailing-off of federal Stimulus funding, and that will translate into "a lot of competition" for agency berths in the state budget.
TTDC Chairman Evans agreed that economic circumstances are causing the Bredesen Administration to focus on
programs with much larger needs than TTDC, in an effort to keep "a lot of ships afloat."Kisber and his Cabinet colleagues may be thinking-through their budget requests, now: Many of the key budget figures – including Bredesen, Kisber and Fitzhugh – are together on a China-Japan trade mission, now underway.
Bredesen spokeswoman Lola Potter told VNC earlier this week, "The process for assembling the Governor's budget starts with budget hearings in November, which are open to the public and streamed on the web. During those hearings, agencies make their budget requests to the Governor. After those hearings, the Governor begins assembling his recommended budget, which is typically presented to the General Assembly between late January and early March..."
Former TTDC Chairman Dan Marcum, who remains on the TTDC board and whose Marcum Capital is a TNInvestco finalist, said that a strong communications push is needed now. Marcum said he well remembers how the lack of adequate engagement between state government and TTDC, which was created during the term of Republican Tennessee Gov. Don Sundquist, nearly led to the demise of TTDC during the early days of the Bredesen Administration.
Cromwell said that given the importance of advancing the state's economy, "what this organization cannot go through is another period of dormancy," such as that which occurred while the ECD Commissioner Matt Kisber and the Bredesen Administration were developing their strategy for tech-driven economic development.
Until he joined TTDC, Cromwell worked for Kisber in ECD, as the state's first director of technology-driven economic development. ♦