Rural Economic Development Organization Green Business Fund Presentation


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Rural Economic Development Organization Green Business Fund Presentation

  1. 1. The Green Economy & Rural North Carolina Presented at the Annual Meeting of the Rural Economic Development Organization October 2, 2008 John Hardin, Ph.D. * Acting Executive Director North Carolina Board of Science & Technology *with considerable assistance from RV Rikard, Grants Administrator, NCBST
  2. 2. Presentation Outline: <ul><ul><li>Board of Science and Technology </li></ul></ul><ul><ul><li>Economic Context in NC </li></ul></ul><ul><ul><li>Green Economy in the US </li></ul></ul><ul><ul><li>Green Economy in NC </li></ul></ul><ul><ul><li>NC Green Business Fund </li></ul></ul>
  3. 3. NC Board of Science and Technology
  4. 4. Board Mission: <ul><ul><li>In 1963, NC General Assembly established the Board to encourage, promote, and support scientific, engineering, and industrial research applications in NC </li></ul></ul><ul><ul><li>Investigates new areas of emerging science and technology and conducts studies on the competitiveness of state in these fields </li></ul></ul><ul><ul><li>Works with State officials to establish the infrastructure that keeps NC on the cutting edge of science, technology, and economic development </li></ul></ul>
  5. 5. Board Structure: <ul><ul><li>Administered by the NC Department of Commerce </li></ul></ul><ul><ul><li>19 Board members (all from NC): </li></ul></ul><ul><ul><ul><li>17 appointed by governor; 2 appointed by legislature </li></ul></ul></ul><ul><ul><ul><li>From academia, business, non-profits & government </li></ul></ul></ul><ul><ul><li>4 full-time staff; periodic interns </li></ul></ul>
  6. 6. Sample Board Achievements: <ul><ul><li>NC Biotechnology Center </li></ul></ul><ul><ul><li>NC School of Science and Mathematics </li></ul></ul><ul><ul><li>MCNC </li></ul></ul><ul><ul><li>Tracking Innovation Index (2003) </li></ul></ul><ul><ul><li>One NC Small Business Program (2005) </li></ul></ul><ul><ul><li>NC Nanotechnology Roadmap (2006) </li></ul></ul><ul><ul><li>NC Green Business Fund (2007) </li></ul></ul>
  7. 7. Economic Context in NC
  8. 8. Economy: <ul><ul><li>A system for allocating scarce resources </li></ul></ul><ul><ul><li>A given economy is the result of a process reflecting its: </li></ul></ul><ul><ul><ul><ul><li>geography </li></ul></ul></ul></ul><ul><ul><ul><ul><li>resource endowment </li></ul></ul></ul></ul><ul><ul><ul><ul><li>history </li></ul></ul></ul></ul><ul><ul><ul><ul><li>technological evolution </li></ul></ul></ul></ul><ul><ul><ul><ul><li>social and political organization </li></ul></ul></ul></ul><ul><ul><ul><ul><li>ecology </li></ul></ul></ul></ul><ul><ul><ul><ul><li>etc. </li></ul></ul></ul></ul>
  9. 9. Past Economic Conditions <ul><li>1950s NC: </li></ul><ul><ul><li>High concentration in agriculture/manufacturing industries </li></ul></ul><ul><ul><ul><li>Tobacco, Cotton </li></ul></ul></ul><ul><ul><ul><li>Furniture </li></ul></ul></ul><ul><ul><ul><li>Textiles </li></ul></ul></ul><ul><ul><li>Low-wage Jobs </li></ul></ul><ul><ul><ul><li>49th in per capita income in the US </li></ul></ul></ul><ul><ul><li>“ Brain Drain” </li></ul></ul><ul><ul><li>Need to diversify & expand economy </li></ul></ul>
  10. 10. <ul><ul><li>36th in per capita income in the US </li></ul></ul><ul><ul><li>Population of nearly 8.9 million –11 th largest in US </li></ul></ul><ul><ul><li>Share of NC’s workforce in manufacturing (~14%) is higher than the US average (~9%) and 11 th in US </li></ul></ul><ul><ul><li>Economy is in rapid transition </li></ul></ul><ul><ul><li>High rate of plant closings in NC’s traditional industries (textiles, apparel, tobacco, furniture) </li></ul></ul><ul><ul><li>Service industries is now largest sector (80% of all employment and 42 nd in US) </li></ul></ul>Current Economic Conditions
  11. 11. <ul><ul><li>NC was among first states to recognize that technology-based economic development creates high-growth companies and well-paying jobs </li></ul></ul><ul><ul><li>Over fifty years ago we began making long-term investments in our universities, science, and technology as drivers of economic growth </li></ul></ul><ul><ul><ul><li>Most notable investment is the Research Triangle Park (RTP) </li></ul></ul></ul><ul><ul><li>Today, NC is recognized around the world for its strategic policy initiatives (e.g., biotechnology) </li></ul></ul>Current Economic Conditions
  12. 12. <ul><ul><li>Funding </li></ul></ul><ul><ul><li>Facilities & Equipment </li></ul></ul><ul><ul><li>Industry-University Nexus </li></ul></ul><ul><ul><li>Policies </li></ul></ul><ul><ul><li>Culture & Goals of Commercialization Organizations </li></ul></ul>Commercialization <ul><ul><li>Funding </li></ul></ul><ul><ul><li>K-16 Education System </li></ul></ul><ul><ul><li>Industry Training </li></ul></ul><ul><ul><li>Policies </li></ul></ul><ul><ul><li>Culture & Goals of Education/Training Organizations </li></ul></ul>Education & Workforce Environment Public Leadership Public Understanding Public Leadership Public Understanding <ul><ul><li>Funding </li></ul></ul><ul><ul><li>Facilities & Equipment </li></ul></ul><ul><ul><li>Researchers </li></ul></ul><ul><ul><li>Policies </li></ul></ul><ul><ul><li>Culture & Goals of Research & Development Organizations </li></ul></ul>Research & Development * * [Inputs] [Outputs] [1 st -Order Outcomes] Economic Development Technology Companies ( New & Enhanced) * [2 nd -Order Outcomes] Innovative Ideas Innovative Technologies Tech-Based Economic Development Framework End Goal
  13. 15. <ul><ul><li>We have built an enormous capacity for innovation in science and technology </li></ul></ul><ul><ul><li>But even with NC’s successful investments in technology, the state ranks only: </li></ul></ul><ul><ul><ul><li>in the middle of US states in terms of the vigor and impact of its high-tech economy </li></ul></ul></ul>Current Economic Conditions
  14. 16. Summary of National Position NC ranks in the 2nd tier of innovative states Milken Institute: State Technology and Science Index: Enduring Lessons for the Intangible Economy (2008)
  15. 17. <ul><ul><li>Other states are catching up quickly by spurring large-scale tech-based economic development </li></ul></ul><ul><ul><li>NC’s R&D investments/strengths are heavily academic rather than applied </li></ul></ul><ul><ul><li>NC is heavily dependent on a few geographically concentrated knowledge clusters such as RTP </li></ul></ul><ul><ul><li>Thus, </li></ul></ul><ul><ul><ul><li>To continue to produce benefits from these investments, NC must do a better job of converting its innovation capacity – its research, ideas, and people – into companies and jobs throughout NC </li></ul></ul></ul>Current Economic Conditions
  16. 18. Location of University R&D
  17. 19. Location of Patent Awards
  18. 20. Location of Venture Capital
  19. 22. Location of Businesses
  20. 23. Location of High-tech Businesses
  21. 24. Location of Master’s Degree Holders
  22. 25. Location of Bachelor’s Degree Holders
  23. 26. Location of Associate Degree Holders
  24. 27. Location of Secondary Ed Institutions
  25. 28. In conclusion . . .
  26. 29. Green Economy in the US
  27. 30. In its infancy
  28. 31. But it’s starting to wake up and make itself known
  29. 32. And it is sometimes politically sensitive
  30. 33. The Green Economy in the US <ul><ul><li>General/contextual level: </li></ul></ul><ul><ul><ul><li>What is the green economy? </li></ul></ul></ul><ul><ul><ul><li>Depends on who you ask… </li></ul></ul></ul><ul><ul><li>Includes any sector of the </li></ul></ul><ul><ul><ul><li>economy related to: </li></ul></ul></ul><ul><ul><ul><li>renewable energy </li></ul></ul></ul><ul><ul><ul><li>energy efficiency </li></ul></ul></ul><ul><ul><ul><li>conservation of natural resources </li></ul></ul></ul>
  31. 34. Notable Facts <ul><ul><li>Bill Gates calls the green economy the “biggest economic opportunity in the country” </li></ul></ul><ul><ul><li>Venture capital investment in energy technology start-ups increased to $2.4 billion in 2006, up 262% </li></ul></ul><ul><ul><li>U.S. Department of Commerce’s Deputy Assistant Secretary for Economic Development advised that if he could give one piece of advice, it would for communities and states to develop their green economy </li></ul></ul>
  32. 35. The Green Economy in the US <ul><ul><li>Why is the Green Economy important? </li></ul></ul><ul><ul><ul><li>We face three interconnected realities: </li></ul></ul></ul><ul><ul><ul><ul><li>Weakened National Security </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Environmental Damage/Climate Change </li></ul></ul></ul></ul><ul><ul><ul><ul><li>De-industrialization of U.S. Economy </li></ul></ul></ul></ul>20 th Century Energy Economy 21 st Century Green Economy “ Drill and Dig” Renewable Energy Technologies Fossil Fuel is Discovered Renewable/Sustainable Energy is conceived in basic science
  33. 36. The Green Economy in the US <ul><ul><li>New Technology and the Green Economy: </li></ul></ul>New Technologies Enact policies and programs to drive commercialization Prepare green-collar workforce: -Training Partnerships Leverage success to build political support for new initiatives Driven by an Innovation Ecosystem
  34. 37. The Green Economy in the US <ul><ul><li>The future of the Green Economy </li></ul></ul><ul><ul><ul><li>Still VERY early to determine the impact </li></ul></ul></ul><ul><ul><ul><li>Four estimates: </li></ul></ul></ul><ul><ul><ul><ul><li>By 2030: </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>40 million jobs in the U.S. ,with an estimated $4.5 trillion in revenue (American Solar Energy Society) </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Over the next decade: </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>3.3 million jobs (American Solar Energy Society) </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>2 million jobs (Economic Policy Institute) </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>2 million jobs (Center for American Progress) </li></ul></ul></ul></ul></ul>
  35. 38. Examples of Green Economy Jobs
  36. 39. Green Economy in NC
  37. 40. The Green Economy in North Carolina <ul><ul><li>NC has nearly 500 companies related to efficiency, renewables, and sustainability (NC Sustainable Energy Association) </li></ul></ul><ul><ul><li>For example: </li></ul></ul><ul><ul><ul><li>ABB </li></ul></ul></ul><ul><ul><ul><li>CAROLINA SOLAR ENERGY </li></ul></ul></ul><ul><ul><ul><li>INI POWER SYSTEMS </li></ul></ul></ul><ul><ul><ul><li>ITRON </li></ul></ul></ul><ul><ul><ul><li>MICROCELL </li></ul></ul></ul><ul><ul><ul><li>PIEDMONT BIOFUELS </li></ul></ul></ul><ul><ul><ul><li>And many more….. </li></ul></ul></ul>
  38. 41. The Green Economy in North Carolina <ul><ul><li>The Economic Policy Institute (2008) highlights NC as one of the top 10 states for new Green Energy Investment: </li></ul></ul><ul><ul><ul><li>Over the next 10 years – 28,544 jobs </li></ul></ul></ul><ul><ul><ul><li>$5.26 billion in investment </li></ul></ul></ul><ul><ul><li>The N.C. Sustainable Energy Association estimates that 6,470 jobs in the state are directly related to energy efficiency or renewable sources </li></ul></ul><ul><ul><li>In NC, such jobs are increasingly related to manufacturing, construction, and building design </li></ul></ul>
  39. 42. The Green Economy in North Carolina <ul><ul><li>Innovative Steps thus far: </li></ul></ul><ul><ul><ul><li>North Carolina is the first state in the Southeast to enact a mandatory Renewable Energy and Energy Efficiency Portfolio Standard (REPS) </li></ul></ul></ul><ul><ul><ul><li>Colleges offering Green Economy workforce training programs include: </li></ul></ul></ul><ul><ul><ul><ul><li>Wake Technical Community College </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Central Carolina Community College </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Asheville-Buncombe Technical Community College </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Appalachian State University </li></ul></ul></ul></ul>
  40. 43. The Green Economy in Rural North Carolina <ul><ul><li>What does this mean for rural North Carolina? </li></ul></ul><ul><ul><ul><li>Economic Development </li></ul></ul></ul><ul><ul><ul><li>Jobs </li></ul></ul></ul><ul><ul><ul><li>Improved Environmental and Personal Quality of Life </li></ul></ul></ul>
  41. 44. NC Green Business Fund enacted in 2007; given $1 million
  42. 45. Purpose: The North Carolina Green Business Fund is designed to award funds (up to $100,000 per project) to North Carolina small for-profit and non-profit businesses, and State and local governmental entities, to encourage the development and commercialization of promising green technologies RV Rikard NCBST (c) 2008
  43. 46. Priority Areas: <ul><ul><li>Development and commercialization of the biofuels industry </li></ul></ul><ul><ul><li>Development and commercialization of the green building industry </li></ul></ul><ul><ul><li>Attracting and leveraging private sector investment and entrepreneurial growth in environmentally conscious clean technologies and renewable energy products and businesses </li></ul></ul>RV Rikard NCBST (c) 2008
  44. 47. Examples of Projects: Across all three categories include but are not limited to: <ul><ul><li>Biofuels and Renewable fuels </li></ul></ul><ul><ul><li>Building design, control systems </li></ul></ul><ul><ul><li>Alternative energy (e.g. hydrogen, solar, wind, wave, tidal, biomass, etc.) </li></ul></ul><ul><ul><li>Fuel processing </li></ul></ul><ul><ul><li>Fuel cells, batteries </li></ul></ul><ul><ul><li>Power Generation </li></ul></ul><ul><ul><li>Combustion processes </li></ul></ul><ul><ul><li>New Power Generation technologies </li></ul></ul><ul><ul><li>Hybrid vehicles </li></ul></ul><ul><ul><li>Energy efficiency </li></ul></ul><ul><ul><li>Industrial processes (e.g. chemical production, pulp and paper) </li></ul></ul><ul><ul><li>Advanced materials </li></ul></ul><ul><ul><li>Sequestration technologies </li></ul></ul><ul><ul><li>Biomass processing systems </li></ul></ul><ul><ul><li>Soil quality improvement technologies </li></ul></ul>RV Rikard NCBST (c) 2008
  45. 48. <ul><ul><li>Be technically sound </li></ul></ul><ul><ul><li>Be collaborative in nature </li></ul></ul><ul><ul><li>Commercialize any newly developed technologies </li></ul></ul><ul><ul><li>Ensure broad benefits for all North Carolinians </li></ul></ul>The Proposed Project Must: RV Rikard NCBST (c) 2008
  46. 49. Four-Stage Review Process: <ul><li>In spring 2008, received 85 proposals, for a total request of nearly $7 million; each was reviewed in four stages: </li></ul><ul><ul><li>Stage I – Compliance Review by Grant Administrator </li></ul></ul><ul><ul><li>Stage II – Compliance Review by Executive Director </li></ul></ul><ul><ul><li>Stage III – Merit Review by Advisory Committee Members </li></ul></ul><ul><ul><li>Stage IV – Final Decision Executive Director </li></ul></ul>
  47. 50. Where did proposals come from?
  48. 51. Advisory Committee <ul><li>A 25-member Advisory Committee—composed of scientists, engineers, and qualified experts from across NC—reviews all proposals to determine their merits </li></ul><ul><li>Quantitative Evaluation Criteria: </li></ul><ul><ul><li>Technical Merit and Feasibility – 40% of final score </li></ul></ul><ul><ul><li>Experience /qualifications of key personnel /facilities – 20% of final score </li></ul></ul><ul><ul><li>Effectiveness of the Proposed Work Plan – 20% of final score </li></ul></ul><ul><ul><li>Budget Realism – 20% of final score </li></ul></ul><ul><li>Qualitative Evaluation Criteria: </li></ul><ul><ul><li>Commercial Merit and Market Opportunity </li></ul></ul><ul><ul><li>Economic Development Merit </li></ul></ul>RV Rikard NCBST (c) 2008
  49. 52. Where were grants awarded?
  50. 53. 2008 Awardees
  51. 54. <ul><ul><li>Evans Environmental of Wilson -- $75,000 to remove residual water in the final stage of biodiesel production. This innovative process will facilitate increased production to commercial-grade biodiesel by 300%. </li></ul></ul><ul><ul><li>Alganomics of Southport --$60,000 to produce reliable, environmentally responsible, natural and renewable bioproducts from algal sources. The primary bioproduct is extracted oil/fatty acids for use as a biodiesel fuel feedstock. </li></ul></ul><ul><ul><li>Piedmont Biofuels of Pittsboro -- $75,000 to develop a cavitation reactor to produce biodiesel fuel. The process uses less energy than traditional methods, has a much smaller physical footprint and causes a more complete reaction with higher fuel yields. </li></ul></ul><ul><ul><li>Nanotech Labs of Yadkinville -- $70,000 to develop and commercialize an energy storage device that has extremely high volume capacity but small overall dimensions. </li></ul></ul>Rural Awardees
  52. 55. The Green Economy in North Carolina <ul><ul><li>Immediate Needs: </li></ul></ul><ul><ul><ul><li>Enhance and integrate technology innovation and commercialization programs to support world-class domestic manufacturing and labor productivity </li></ul></ul></ul><ul><ul><ul><li>Provide the engine for Clean/Green Re-Industrialization! </li></ul></ul></ul>