Tech Council `white papers’ recommend investing in next-generation jobs, economy

29 Jan Tech Council `white papers’ recommend investing in next-generation jobs, economy

Posted at 10:44h in Economy, Entrepreneurs, Press release, Venture Capital by

MADISON – Improving access to capital for Wisconsin entrepreneurs, building the supply of human capital, enhancing the startup and business climate, and improving tech development, delivery and transfer are four major themes of the Wisconsin Technology Council’s 2015 “white papers” report.

The Tech Council is the bipartisan, non-profit science and technology policy adviser to the governor and the Legislature, and a catalyst for tech-based development in Wisconsin. The Tech Council periodically issues “white papers” and special reports to assist those policymakers.

“The ideas offered in the Tech Council’s 2015 white papers are intended to set the table for a renewed public discussion about improving the state’s tech-based economy,” said Toni Sikes, chairwoman of the Tech Council. “As the state weighs its budget priorities for the next biennium, policymakers deserve to hear ideas that will focus on the creation of next-generation jobs for Wisconsin – and keeping our best and brightest young people at home.”

Here are highlights of the 2015 report, “Investing in Next-Generation Jobs”:

Increasing access to capital for Wisconsin entrepreneurs: There are eight recommendations in this category.

  1. Raise the $8 million cap on credit-eligible investments in an Act 255 firm, unchanged since 2005, to $12 million.
  2. Raise the credit from 25 percent to 40 percent for the first $1 million in eligible investments.
  3. Increase Wisconsin’s investment in venture capital over time to help fuel the state’s entrepreneurial growth.
  4. Eliminate state capital-gains taxes on investments held, three years or longer, in a Wisconsin business.
  5. End tax on capital raised by C corps deemed “foreign corporations” making sure changes are targeted to firms of a certain size, age and other factors.
  6. Establish a process to leverage unused Act 255 credits via legislative approval for WEDC to handle as a direct matching fund to privately vetted investments.
  7. Create and sustain a Wisconsin follow-on platform to federal SBIR Program.
  8. Grow the next generation of Wisconsin early stage capital professionals akin to the state of Michigan model.

Improve technology development, delivery and transfer: There are four recommendations in this category.

  1. Build upon interdisciplinary clusters and “centers of excellence” first highlighted in 2002 through the Tech Council’s “Vision 2020: A Model Wisconsin Economy.”
  2. Support the creation of enhanced cyberstructure in Wisconsin.
  3. Work with the state’s congressional delegation to identify ways Wisconsin companies and institutions can help meet national science and technology priorities (National Academy of Sciences).
  4. Encourage the state not to enact laws or rules that put the state at a competitive disadvantage in terms of technology research and development.

Build Wisconsin’s supply of human capital: There are three recommendations in this category.

  1. Support state funding for the Youth Options and Course Options programs, which enable students to earn college credits while still in high school.
  2. Make student financial aid more broadly available.
  3. Encourage support from the Department of Workforce Development for creation of an “information assurance” training program to ensure that Wisconsin have trained professionals in cybersecurity and related fields.

Enhance Wisconsin’s startup and business climate: There are seven recommendations in his category.

  1. Create a merger and acquisition “strike force” or “welcome wagon” to work with companies that acquire Wisconsin-based companies and help them acclimate to the state.
  2. Adopt a benefit corporation as a new corporate legal entity in Wisconsin.
  3. Revise legislative requirements for “schedule of expenditure” reports that place extra costs and administrative burdens for startup companies.
  4. Review unemployment compensation/workers compensation taxes on small businesses.
  5. Continue to focus on the need for enhanced broadband connectivity in Wisconsin.
  6. Enhance access to out-of-state power.
  7. Make it easier for Wisconsin to participate in the “sharing economy.”

In addition to recommendations to state policymakers, ideas for Wisconsin’s congressional delegation include:

  • Keep the existing “accredited investor” threshold currently being reviewed by the Securities and Exchange Commission (individual income exceeding $200,000 or joint income with a spouse exceeding $300,000 and/or $1 million net worth).
  • Support for the HALOs Act, or “Helping Angels Lead Our Startups Act,” which provides clearer definition of what constitutes “general solicitation” and clearly exempting demo fairs, pitch conferences and angel group presentations.
  • Create a federal tax credit, similar to Wisconsin’s Act 255 tax credit program that would incentivize investing in technology startups.
  • Create new visas for U.S.-educated students and entrepreneurs.
  • Eliminate artificial per-country caps for employment based immigrant visas.

“Our board is made up of people who understand Wisconsin’s tech economy from a variety of angles – as company founders and executives, researchers, investors, educators and service professionals who work with emerging companies every day,” said Tom Still, president of the Tech Council. “Their ideas, along with those contributed by our members across the state, form the foundation for this report.”

Still noted that past white papers have contributed to a number of executive and legislative branch actions, including:

  1. Passage of the Badger “Fund-of-Funds” in 2013. This $25 million investment by the state will be matched by private dollars on a 2-to-1 basis as the venture capital fund becomes established in 2015;
  2. Passage of AB-729 in 2014, which allows the UW System to pursue classified research projects through a mechanism that allows for faculty governance with regular reporting to the Legislature;
  3. Passage of the Act 255 investor tax credits (2004) and revisions to the nationally recognized program (2009 and 2013);
  4. Creation of the Wisconsin Angel Network, which has expanded from five networks and angel groups in early 2005 to two-dozen early stage groups today;
  5. Expansion of the scope of allowable bonding projects for the Wisconsin Health and Educational Facilities Authority;
  6. Repeal of the shareholder wage lien law, which discouraged investment in Wisconsin startup companies;
  7. Improvements in laws governing entrepreneurial activity by University of Wisconsin faculty;
  8. Improvements in processes and regulations vital to expanding broadband availability, especially in rural Wisconsin;
  9. Extension of the “single-sales factor” sales apportionment for corporate income to technology and service firms in Wisconsin;
  10. Enactment of an Education Tax Credit to assist employers in hiring and training workers;
  11. Support for the “Emerging Technology Centers” concept within the UW System, which was first envisioned as Centers of Excellence in the Tech Council’s Vision 2020 report; Support for an Interdisciplinary Research Center, also through Vision 2020, which was consistent with the Wisconsin Institutes for Discovery and Morgridge Institute for Research, which opened in December 2010;
  12. Broader recognition of the economic value of academic research and development in Wisconsin, which attract nearly $1.3 billion in sponsored research each year;
  13. Creation of the I-Q Corridor branding concept and support for multi-state relationships;
  14. Extension of funding for the WiSys Technology Foundation, which assists UW System campuses in transferring technology to the marketplace.

To learn more, visit: http://www.wisconsintechnologycouncil.com/publications/white_papers/