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Technology Investment Gets Stronger in Illinois
The seven-county metropolitan Chicago region is among the nation's few global economic centers. GO TO 2040 seeks to maintain and strengthen this position. A global region needs to have a modern infrastructure; a diversity of business types and economic activity; a skilled workforce, including a strong higher education system; active cultural institutions; and a high overall quality of life. Economic innovation plays a major role in producing sustainable economic prosperity and enhancing the global competitiveness of places around the world.
Since innovation is generated by the private sector, the role of the public sector is to find ways to help spur innovation by supporting ideas, institutions, and relationships. The public sector should be primarily focused on providing support and services that are essential to innovation, but that are unlikely to be provided by private businesses.
This July, Chicago hosted Tech Week 2011, a four-day event that brought together global technology companies, innovators, and investors to discuss how to develop and nurture innovative industries in the Midwest. During Chicago TechWeek, Governor Quinn also signed two pieces of legislation directly related to innovation -- SB 107 and HB 1876.
SB 107 supports the GO TO 2040 recommendation to increase venture capital funding in support of economic innovation in the region. It amends the Technology Development Act (TDA I, passed in 2002), with the goal to attract, assist, and retain high-quality technology businesses in Illinois. The TDA allowsthe State Treasurer to invest in Illinois-based venture capital firms. These firms then invest in technology businesses that are seeking to locate, expand, or remain in Illinois. Through TDA I, the state was allowed to invest up to one percent of its investment portfolio (approximately $75 million) to be used for expenses such as seed capital, research and development, introduction of a product or process into the marketplace, or similar needs requiring capital. Under TDA I, state money for venture capital firms resulted in those firms' investing $115 million in 37 Illinois companies -- which attracted an additional $450 million in private investment -- and created approximately 1,200 direct jobs and about 2,700 indirect jobs, according to the Illinois Venture Capital Association (IVCA). In March 2011, the state invested in eight Illinois-based firms located in the region, according to this IVCA report.
The new law (TDA II) doubles the amount the state is allowed to invest to two percent of its portfolio -- an estimated $150 million, which will generate an estimated $300 million into Illinois companies according to this press release. This is because any firm receiving money through TDA II is required to invest twice the amount received from the State Treasurer.
To become a leader in innovation, it is important to support the experimentation and creativity necessary to produce commercial innovations -- this is why one of GO TO 2040's recommendations is to create a culture of innovation. Community and state colleges that are training today's workforce are ideal places to prepare individuals for entrepreneurial careers. In conjunction with SB 107, Governor Quinn signed HB 1876, creating the Higher Education Technology Entrepreneur Center Act. The law enables boards at the state's public institutions and community colleges to start their own technology entrepreneur centers where students can take their ideas and turn them into marketable goods or services. The law is modeled after the Technology Entrepreneur Center at University of Illinois at Urbana-Champaign's Department of Engineering.