Updated 9:00 p.m.: LaunchTN ppt dataset added below after receipt this evening by VNC.-Ed.
LAUNCHTN, aka the Tennessee Technology Development Corporation, responded this afternoon with some thoughts on VNC's report earlier today highlighting portions of the "New Economy Index" published in June by the Information Technology and Innovation Foundation (ITIF), based in Washington, D.C.
With ITIF's permission, ahead of ITIF's formal release of their report June 11, VNC had provided Tennessee Economic and Community Development (ECD) and LaunchTN access to the report in early June.
After publication of the summary earlier today, ECD told VNC the agency would defer to LaunchTN for a response. VNC queries via LaunchTN CEO Charlie Brock were followed by the statement that appears below from LaunchTN. The statement does not refute the overall ranking, nor most of its extensive findings; but, LaunchTN offers potentially countervailing comment regarding a few metrics. Notably, LaunchTN says it continues to work with various sources to improve the availability and accuracy of Tennessee data available to analysts and others.
The "New Economy" report and any responses thereto are welcomed by VNC, and all such material will be considered in the course of future coverage. Strong interest expressed by readers, thus far today, is greatly appreciated.
ECD/LaunchTN Statement, 7 July 2014 (verbatim):
Added: Slides 1-4 referred to below are available for download at this link.-Ed.
The State New Economy Index ranks Tennessee 40 out of 50 states, but we feel that while the organization may be capturing data from many sources, the underlying data may not be complete. For example, in "Entrepreneurial Activity," Tennessee ranks 9th in the Southeast, according to this report but 4th in the Southeast according to Startup America Partnership and 4th in the Southeast according to Inc 500 magazine (slides 3-4 in the attached). In addition, Tennessee ranks #1 in Gigabit internet (slide 2 in the attached), which is not captured in this report. Further, Launch Tennessee collected venture capital investment figures (slide 1 in the attached) which indicate 2x the number of venture data that the authors of this report were able to obtain. We are working with PwC and other suppliers of the underlying data to inform them of the discrepancy.
From the standpoint of this particular report, there are many positives that we can highlight. The state's R&D momentum is stronger than ever, as evidenced by Tennessee having the second highest increase in its ranking of percentage of private-sector jobs held by scientists and engineers than any state from 2010. Companies in Tennessee have easy access to ORNL, the largest science and energy lab in the country, Vanderbilt University and the UT Space Institute/Arnold Engineering Development Complex, an advantage not available to other states.
Additionally, below are two metrics that are specific focus areas of Launch Tennessee which we feel the report does not accurately assess. We have provided additional detail around these metrics to paint a more accurate picture of the state's entrepreneurial and investment activity.
Launch Tennessee has established a statewide network of 9 business accelerators. Collectively, these accelerators have screened over 2,200 businesses and graduated over 220 startups from their cohort programs since 2012. They have also mentored many other startups while hosting over 1,000 events promoting entrepreneurship. The accelerator assisted companies, many of which are technology-enabled, have gone on to raise over $48 million in early stage seed/angel/venture capital and create over 1,300 jobs over the past two years.
While tech enabled companies are a focus, one of the Launch Tennessee accelerators has developed a "CO.STARTERS" program to assist more traditional, local market-focused businesses. There are over 400 CO.STARTERS graduates since 2012 and this highly effective program is currently being rolled out across the statewide network as well as to other startup communities across the country.
"Venture Capital Investment"
Tennessee had $211 million and $223 million of venture capital investment in 2012 and 2013, respectively, representing a 5.5% growth rate, as collected by Launch Tennessee; the data relied on in the State New Economy Index from PwC of $109 million (for Venture as well as Seed & Early Stage) respectively, understates the state's total early/angel/venture capital investment in Tennessee by more than 50%.
Additionally, Tennessee had rapid angel capital investment growth over the past year, with 7 angel funds and 3 angel networks developed across the state, collectively wielding over $50 million of investment capital; substantially all of these funds did not exist 2 years ago.
With the ever increasing access to mentors, capital and resources, Tennessee is on a well-paved path to be one of the nation's top states for entrepreneurs to start and grow a business. In addition, thanks to Governor Haslam's intense focus on these areas mentioned above, we're raising the bar as a state to ensure that more of our citizens are educated to become workforce ready in an array of fields whether it be IT-based, innovation, manufacturing or science. We are confident that this will ensure innovative growth across the entire state. [End of ECD/LaunchTN statement]
VNC welcomes further comment on the ITIF New Economy Index and related matters. VNC