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Tech Industry Needs Dollars
Can state government provide Florida's technology entrepreneurs with anything more than token
subsidies and good-luck wishes?
By Francis X. Gilpin
Associate Editor
Florida's resourceful high-technology business owners don't need another study to tell them the painfully obvious: They must get more direct financial support from state government. What they need is somebody to make it happen.
ITFlorida, a nonprofit set up by Gov. Jeb Bush to coordinate business, education and government officials who think the state has a bright high-tech future, is at least cataloging the needs.
Besides more funds for getting ideas out of the lab and into production, ITFlorida recommended in a recent "white paper" that the state offer marketing assistance and tax credits as well.
But leaders in this undercapitalized-if-not-unappreciated sector of the Gulf Coast economy are pessimistic that the ITFlorida recommendations will be adopted.
"It's nice to have lofty declarations like that," says Michelle Bauer, executive director of the Tampa Bay Technology Forum, a leading advocate for local tech businesses. "It's just that to succeed the state is going to have to fully fund the program so there's real traction."
ITFlorida's recommendations for a prosperous high-tech sector in Florida are indeed high-minded:
×Amend state law to include information technology on the list of manufacturers that are eligible for tax-exempt financing through Florida's federal allocation of industrial revenue bonds.
×Develop more tech companies with Florida headquarters to reduce the outsourcing of knowledge-based jobs overseas.
×Buy advertisements in Business Week, Fortune and other national magazines to boost the image that Florida is trying to project as the "Innovation Hub of the Americas."
"They make great sense," Bauer says of the suggestions. "What about the implementation phase?"
Gov. Bush set aside $100 million in his 2003 budget for university campus research. ITFlorida is very high on the "centers of excellence" program. But the Legislature appropriated just $30 million. When the state board of education handed out the money earlier this year, the University of South Florida and Florida Gulf Coast University were shut out.
Three $10 million grants went to the University of Florida for development of regenerative health biotechnology, the University of Central Florida for photonics, and Florida Atlantic University for marine biotechnology.
"As a leading cyber state, Florida has developed a large and robust technology base, with a strong and recognized record of accomplishment," Bush is quoted in a press release that accompanied ITFlorida's white-paper.
The white-paper is equally generous in its assessment of the state's high-tech profile nationally. Citing a report from a Washington, D.C., trade group, ITFlorida says the state ranks fifth in the country in high-tech employment. Florida also finished seventh in tech employment growth, ahead of established hotbeds like California, Massachusetts and Texas.
But the same report, entitled "Cyberstates 2002: A State-by-State Overview of the High-Technology Industry," notes that only 3,600 new jobs were created in Florida. The time period covered by the report coincides with the dotcom collapse that threw thousands out of work in California and elsewhere.
Private investment in Florida tech startups decreased by 69% between 2000 and 2001, according to the "Cyberstates" report, an unpleasant fact that ITFlorida does get around to acknowledging in the white-paper.
Florida is far behind other states in helping tech companies, according to George M. Gordon, chairman and chief executive officer of Enporion Inc. in Tampa. If Florida is ever to catch up, Gordon says heavy state subsidies are a given.
Enporion facilitates electronic-commerce between energy companies and their suppliers. Before coming to Harbour Island to head up the 3-year-old company, Gordon worked in the San Jose and Philadelphia areas.
Stanford University was the impetus for tech spending in Silicon Valley. Drug manufacturers around Philadelphia such as Wyeth finance biomedical research there.
Those regions have what Gordon calls mature "technology ecosystems," with built-in support structures for young enterprises.
"What does Florida or the Tampa Bay area have?" Gordon says. "Who is the grandparent of this area that started the technology ecosystem? We don't have one."
In the absence of an educational or industrial progenitor, the Gulf Coast has to depend on government for the foreseeable future. "Somebody has to drop the seeds that can germinate and grow up into the big trees," Gordon says.
State budget woes may choke off subsidies altogether for the next few years. But Florida public officials could still assist struggling tech companies in other ways.
The tech forum's Bauer says state, county and city governments don't buy many software products and other services from local suppliers. Government purchasing agents should give some preference to competent tech firms in their own backyard. "And the global companies in our area have to buy from the local companies," adds Bauer.
A shortage of skilled labor has been and remains an enormous threat to the survival of local tech startups. Florida colleges and universities may be turning out engineering and related majors. But these graduates don't stick around their alma maters.
Gordon would like to hire talent from Florida rather than constantly having to recruit in Northern California or along Greater Boston's Route 128. "As a technology company CEO, I need a fertile ground for resources so I don't have to import from Silicon Valley or the 128 corridor," he says.
If Florida higher education is letting down tech entrepreneurs, retired professors are coming through - indirectly.
Fortress Technologies Inc. received $13 million last year from an equity fund that invests assets from Florida's state employee and teacher pension funds. The Oldsmar company creates security systems for wireless communications.
Ken Evans, vice president of marketing and product development at Fortress, came to Florida from Seattle. In the tech forum and the Florida High Tech Corridor Council, Evans sees the beginnings of a support network for entrepreneurs like the one he grew accustomed to tapping in Seattle.
"The TBTFs, the tech corridors and the incubators are what really bootstrap these companies," says Evans.
The tech forum is planning a how-to seminar for aspiring entrepreneurs in October. Evans says Seattle holds similar events on a regular basis for innovators who think they have a viable project. "You can cull from those who really has a business here," says Evans.
Calendar
HILLSBOROUGH, PINELLAS AND PASCO COUNTIES
Sept. 18 - The Greater Tampa Chamber of Commerce will announce Small Business of the Year award winners at 6:30 p.m. at A La Carte Pavilion, 4050 Dana Shores Drive.
Oct. 28-29 - Tampa Bay Technology Forum will hold a two-day entrepreneurial boot camp at the Raymond James office in St. Petersburg. Speakers include company founders, venture capitalists and angel investors. Cost is $199 for forum members and $299 for all others. Call (727) 510-2524.
SARASOTA AND
MANATEE COUNTIES
Sept. 2 - Fast Pitch Networking will hold a fast pitch meeting from 5 to 7 p.m. at Sammy Frogs, 6260 Lake Osprey Drive, Sarasota. Cost is $40. Attendance limited to 75 people. Call (941) 730-1793 or fastpitchnetworking.com.
Sept. 4 - The Sarasota-Manatee Association of Legal Support Specialists will hold its monthly meeting discussing Immigration Law with Richard Reinhart of Reinhart and Moreland PA, at 6 p.m. at the Hillview Grill, 1920 Hillview St., Sarasota. Call Lisa Folis at (941) 366-4800, Ext. 3777 or [email protected].
Sept. 8 - Guest speaker Judge Lee Hayworth will discuss "What to Expect When You are Chosen" at the 6 p.m. meeting of the Suncoast Chapter of the Paralegal Association of Florida Inc. at the Waterside Room at the Sarasota Quay, 333 N. Tamiami Trail, Suite 216, Sarasota. Cost is $20 for members, and $25 for non-members. Call (941) 485-1571.
Sept. 10 - The Sarasota County Association of Realtors will discuss the code of ethics for all Realtors from 9 a.m. to noon in the association office, 3590 S. Tuttle Ave., Sarasota. Cost is $5 and provides 3-hours of continuing education credits. Call (941) 923-2315.
Sept. 10 - The Manatee Chamber of Commerce will hold "The Impact of Good Ethics in the Workplace" from 11:45 a.m. to 1 p.m. in the Chamber Board Room, 222 10th St. W., Bradenton. Cost is $15 for members and $20 for non-members. Reservations are required by Sept. 5. Call Lisa Reeder at (941) 748-4842, Ext. 123.
Sept. 11 - The All Achievers Chapter of the American Business Women's Association will hold a dinner meeting at 6 p.m. at Troyer's Dutch Heritage Restaurant, 3713 Bahia Vista St., Sarasota. Call Nancy Taussig at (941) 952-1440.
Sept. 17 - The Southwest Florida Paralegal Association Inc. will hold a dinner meeting "Construction Lien Law" with guest speaker Stuart Levine, Esq., from 6 to 8:30 p.m. at the Sarasota Yacht Club, 1100 John Ringling Blvd., Sarasota. Call Kim Swartz at (941) 364-8787.
Sept. 25 - The Sarasota County Openly Plans for Excellence will hold a Community Principles for Redevelopment and Infill Study Group meeting with Karen Rushing, the Sarasota County Clerk of Court, from 4:15 to 5:45 p.m. at the Hospice of Southwest Florida, 5955 Rand Blvd., Sarasota. Call (941) 365-8751 or e-mail [email protected].
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