NWPA KIZ
BFTDA Competitive Grant Submission
DCED Web Application #8013247
September 22, 2010Page 1
I. PROJECT DESCRIPTION (25 PTS) INCLUDING PROGRAM DESCRIPTION, PROPOSED PROGRAMS AND HOW THESE ACTIVITIES RELATE TO THE KIZ-BOARD APPROVED STRATEGIC PLAN
A. Brief Zone Description
The Northwest PA Keystone Innovation Zone (NWPA KIZ) was established in 2007 and is a network of businesses, service providers and Institutions of Higher Education (IHE) in four counties in Northwest PA. The purpose of the network is to help aggregate resources within the smaller rural communities throughout the NWPA KIZ service territory, thereby providing services similar to those found in larger urban areas that are designed to stimulate new technology start-up companies and entrepreneurs. A corollary and vital purpose also involves building capacity of the participating IHEs, which tend to be smaller and more rural colleges and universities. The NWPA KIZ is accomplishing this task by fostering collaborations, innovations, and creative economic opportunities to increase technological and entrepreneurial development.
The NWPA KIZ is a catalyst for change within the focused business sectors and among participating educational institutions throughout the targeted rural Northwest Pennsylvania region. This partnership is transforming the regional economy as directly evidenced in the job creation/retention figures that are included in this proposal. Subtle signs of change are noticeable when observing the growth of technological capacity occurring throughout the region.
Signs of tangible progress to expand from a traditional manufacturing and agrarian based economy are visible. A new focus is being placed on industries that are needed to access the economy of the future. Northwest Pennsylvania is applying resources to the core growth industries surrounding science, technology, engineering and mathematics (STEM) as evidenced in the following examples of KIZ companies and IHE partnerships;
Ernst Biomass is in collaboration with Professor Rich Bowden (of Allegheny College) and his student research team(s) to develop an optimal commercial switchgrass product as a competitive renewable source for biomass.
Greenville Neuromodulation Services (GNS) is in collaboration with Thiel College to offer tuition remission and discounted laboratory facilities for employees and physicians who operate GNS’s neurotargeting and recording devices.
NanoBlox, Inc. and Clarion University are collaborating to share a Clarion University faculty member. The University is also providing the company with discounted laboratory resources to study the applications of nanodiamond particles.
Clarion Research Group and Clarion University are collaborating to develop bone growth technology for multiple medical applications including dental implants.
B. Current Composition of NWPA KIZ Including IHEs, Businesses and Partners
The NWPA KIZ is presently comprised of four (4) IHE’s and sixteen (16) active start-up businesses located within Crawford, Warren, Clarion and Mercer Counties. Lawrence County has expressed interest in joining the NWPA KIZ, which would bring additional education partners and their targeted high tech cluster businesses into the zone, and expand our service area from four (4) to five (5) counties. For a complete list of partners and companies please see Appendix A.
Each of the established sixteen (16) NWPA KIZ businesses has developed an innovative product or process within one or more of the identified industry clusters (life sciences, information technology, clean technology/green technology or advanced manufacturing
C. Targeted Industry Clusters
The NWPA KIZ industry clusters were determined during early program planning based upon NAICS codes and regional research, as well as through dialogue with the WIB. Additionally, these specific clusters were chosen because they were viewed as the most likely to produce technology related businesses and/or spin off businesses from existing businesses and Institutions of Higher Education (IHE).
NWPA KIZ Industry clusters are also recorded with the Department of Community and Economic Development (DCED) and are listed below with a few examples of the businesses that are currently within each cluster of the NWPA KIZ:
Clean Technology/Green Technology
Ernst Biomass -to develop a sustainable biomass fuel product from renewable resources such as switch grass.
Wilson Engineering-to provide engineering services to renewable energy projects.
Advanced Manufacturing
NanoBlox, Inc-to study the applications for nanodiamond particles.
Scribe Printing Technologies-to develop advanced printing technology, which incorporates robotics.
Forward Vision-to develop an infrared visioning system.
Life Sciences
Clarion Research Group-to develop a vein stay tool to stabilize veins for needle insertions and to develop OsteoXcell a recipe for building bone forming cells called osteoblasts.
Greenville Neuromodulation Services-to develop micro recording and micro targeting Neural Devices to treat neurological movement disorders.
Information Technology
2W Technologies-to perform custom network application and software design; network and IT support services; data conversion; customized integration programming.
Dynasty Software-to develop software to assist with the inventory of medical devices.
D. Existing Programs
The NWPA KIZ has supported multiple programs designed to assist targeted early stage start up businesses inside the KIZ geography. These programs have provided multiple companies with resources to develop and grow new technologies that demonstrate promise for commercialization. A few examples of these programs include:
- KIZ Business Assistance Micro Grant Program
The business assistance micro grant program offers $10,000 grants to companies with innovative technological business concepts. The program specifically concentrates on offering assistance to support those concepts that offer a high potential of commercialization.
Nine (9) NWPA KIZ companies including: Novocell Semiconductor, Clarion Research Group, Abbatron, Dynasty Software, Optical Filters, U.S.A, Greenville Neuromodulation Services, Ernst Biomass, Forward Vision and Wilson Engineering have been awarded $86,420 in micro grant awards to seed their respective business concepts and to further KIZ research. At least three (3) NWPA KIZ businesses including: NanoBlox Inc., Scribe Printing Technologies and a pipeline company are expected to submit proposals for micro grants in 2010. Below are examples of the micro grant proposals, which have been funded through the NWPA KIZ business assistance micro grant program.
a. Clarion Research Group
NWPA KIZ offered assistance with Beta testing of the vein stay product, which decreases errant needle insertions, thereby decreasing the risk for injury of the vein and/or infection. This product was developed by two Clarion University Professors and Dr. James Rutkowski.
b. Ernst Biomass, LLC
NWPA KIZ offered assistance to fund a partnership to conduct soil feasibility, life cycle green house gas emissions and other properties vital to the implementation of densified switchgrass as an efficient and environmentally friendly fuel source.
c. Optical Filters, USA
NWPA KIZ supported a study exploring the feasibility of direct bonding with UV adhesives for an application in enhanced display panels. This research was originally shelved due to lack of resources to dedicate to the product. This product has since been successfully tested and has lead to the development of a new line of enhanced display products for the company.
- NanoBlox Inc. and Scribe Printing Technologies are new KIZ companies, which will be applying for micro grant funding to help further their business concepts.
The NWPA KIZ micro grant program continues to demonstrate the value for early stage startup businesses to be able to have a source of capital for their innovative and entrepreneurial research projects that can help position Pennsylvania as a national leader.
- KIZ Internship Program
The student internship program has afforded businesses an opportunity to conduct meaningful research and development while simultaneously providing students with applied research opportunities and real world employment experiences. NWPA KIZ interns have assisted our companies with vitally important research and development projects, and have also assisted with development of our marketing strategy and design and creation of the NWPA KIZ website.
Nineteen (19) NWPA KIZ internships have been placed with KIZ companies and/or participating KIZ partners. NWPA KIZ companies have been awarded $49,825 to reimburse up to $3,000 dollars per intern each semester. NWPA KIZ companies are currently preparing fall and spring internship descriptions for distribution within the NWPA KIZ member IHEs.
- KIZ Tax Credits
KIZ tax credit assistance has aided these rural NWPA KIZ companies during the recent economic down turn, and can be partially credited for the growth that these companies have realized despite the downturn in the economy. Five (5) NWPA KIZ companies have been awarded Pennsylvania tax credits totaling $500,000: Three (3) NWPA KIZ companies have filed for $227,000 in KIZ tax credits in 2010: One of the three has listed tax credits as a contributing factor in their plan to hire additional personnel.
II.IMPLEMENTATION (20 PTS)
The NWPA KIZ, in its second round of funding, is committed to the continuation of servicesto the 16 KIZ companies that are enrolled in the program as well as identifying new entrepreneurs and technology companies that may be eligible for benefits. It is the return on investment to the communities and partners involved that drives this decision. Some of the tangible returns include the employment of student interns at the conclusion of their secondary education, the spin-off of a student business from a college project, the collaboration among our rural IHEs, and the investment of thousands of dollars into several of our KIZ companies by Ben Franklin that shows confidence and promise in these businesses. For these reasons and many more intangible the Board will continue to invest in the NWPA KIZ.
The $50,000 requested will support successful programs developed by the NWPA KIZ with new initiatives that would not be possible during this second round except for the possibility of funding by the BFTDA.
Project Descriptions, Milestones, Quantifiable Goals and Objectives
1. Coordination /Business Competition Support$5,000
Providing opportunities for KIZ companies to showcase innovation to leaders in technology and receive constructive criticism as well as kudos is a key tool in the entrepreneurial infrastructure of rural Pennsylvania. Raising investment is a key to the success of any start-up business any opportunity to help companies prepare for this effort is a benefit. Therefore, this proposal continues to supportthe Northwest Pennsylvania Collegiate Business Plan Competition in collaboration with the Erie KIZ as well as collaborates with the Tri County KIZ in the development of a business idea competition.
Milestones:Inform Companies & KIZ partners of the OpportunitiesWinter 2011
Offer Support by the KIZ partners/coordinator for submissionWinter 2011
Goal:Create a greater awareness of the competitions
Create a greater awareness of the NWPA KIZ
Create a demand for the NWPA KIZ and partner services
Objectives:Identify 2 new pipeline companies for the NWPA KIZ
3 business ideas be presented to the Business Idea Competition
3 business plans be presented to the Business Plan Competition
2. Industry Focused Student Interns$21,000
Provide interns to companies in the NWPA KIZ providing the opportunity for students to apply the knowledge they have learned in the classroom to a real experience in a business and allow the business owner to spend time in areas where they can grow the business insuring success.
Milestones:Reach out to companies to determine need for internsWinter2011
Spring 2011
Work with IHEs to identify Suitable Interns for Company SelectionWinter 2010
Spring 2011
If no Interns are found within NWPA KIZ reach out to other KIZsWinter 2010
Spring 201
Compile comments and feedbackFall2011
Goal:Provide students attending the four IHEs with a practical experience
Provide KIZ companies to build partnerships with local IHEs without the added cost
Objectives:7 interns placed in KIZ businesses
Place 1 intern with a KIZ company that has never had an intern
3. Marketing Outreach/Public Education$ 4,000
Utilize a multi county traveling road show (meet and greet) program to inform prospective partners such as attorneys, bankers and accountants about the benefits available to companies through the multitude of KIZ resources showcasing the success of the NWPA KIZ program.
Milestones:Hold Meet & Greet events in the four counties served by KIZSpring 2011
Combine the NW Commission KIZ website & NWPA KIZ siteWinter 2011
Hold meetings with Accountants, Attorneys and BankersWinter 2011
Complete an inventory of all IHEs Summer 2011
Hold meetings with New College PresidentsWinter 2010
Goal:Create a greater awareness of the KIZ program
Create a greater awareness of the NWPA KIZ
Establish credibility for the program and the partners among companies and entrepreneurs
Establish credibility among the staff & faculty of the IHEs
Objectives:Identify at least 1 new pipeline company from this effort
Establish a faculty blog across IHEs in the NWPA KIZ to discuss KIZ initiatives
Establish rapport and a referral system between Accountants, Attorneys, and Bankers with NWPA KIZ Coordinator
4 qualified referrals from the Accountants, Attorneys, and Bankers to the NWPA KIZ
Establish a Social Network Page(s) for NWPA KIZ
4. Capital Assistance Grants$20,000
Provide grants up to $10,000 to NWPA KIZ companies for new technology development and innovation with the potential for commercialization.
Milestones:Market grant funds to eligible NWPA KIZ companiesWinter 2011
Award 2 grants to companies Fall 2011
Refer 1 new company to Ben Franklin and the CIC for assistanceFall 2011
Goal:Identify new technologybeing developed in the KIZ area
Establish new businesses in the KIZ region
Commercialize new technology
Create the awareness that technology is being developed
Create the demand for Angel and Venture funds in the zone
Objectives:Inventory technology being developed on IHE campuses
Provide grants to KIZ companies with new technology
Develop a list of companies/technologies that were not funded
Market Success Stories locally and in the Commonwealth
5. Fiscal Sustainability Plan $0
The NWPA KIZ Board understands the importance of ensuring the long term viability of The NWPA KIZ for the success of communities in the region. There are no funds requested for this effort but the NWPA KIZ wanted to ensure the BFTDA that we are working on such a plan for the future.
Milestones:Establish a subcommittee of theBoard to propose sustainability plan Fall 2010
Adopt a Sustainability PlanWinter 2011
Implement PlanSpring 2011
Goal:Sustain the NWPA KIZ
Objectives:Inventory other KIZs to see how they have sustained their programs
Subcommittee to present options and recommendations to NWPA KIZ Board
Board to adopt a Sustainability Plan
The NWPA KIZ has applied for an EDA I-6 Challenge Grant along with 13 other Pennsylvania KIZs, to help provide a source for lost administrative support dollars. Other funding options will continue to be explored.
*All goals are all in direct support of the NWPA KIZ strategic plan as outlined on page six (6) under item 2 b. Goals.
III. USE OF FUNDS (10 PTS)
The NWPA KIZ is requesting $50,000.00 to support programmaticinitiatives from the Ben Franklin Technology Development Authority through the statewide KIZ Competitive Grant Program.
Grant Funding
Coordination/business competition $ 5,000
Focus Industry Student Interns$ 21,000
Marketing (Outreach/Public Education)$ 4,000
Capital Assistance Grants $ 20,000
Total$ 50,000
Match Funding
Coordinator/Operating Expenses$34,000
Entrepreneur Infrastructure$ 7,000
Focus Industry Student Interns$16,500
Business Research Services$ 1,000
Marketing (Outreach/Public Education)$ 1,500
Total:$60,000
IV. MATCH COMMITMENT (10 PTS)
Northwest Pennsylvania Regional Planning and Development Commission$34,000
Allegheny College$ 7,000
Clarion University$19,000
Total:$60,000
V. PROPOSED DELIVERABLES (15 PTS)
Deliverables as presented to BFTDA during the 1st and 2nd rounds of funding. Proposed deliverables are provided for the KIZ Competitive Grant Funding program.
DELIVERABLE / Round One Proposed / Round One Achieved / Round Two Proposed / Round Two Achieved as of June 30th, 2010 / Proposed deliverables for Competitive Grant FundingJobs Created / 20 / 17 / 10 / 68 / 12
Jobs Retained / 20 / 57 / 40 / 246 / 33
Interns Placed / 15 / 21 / 25 / 12 / 4
Funds Leveraged / $500,000 / $1,148,641 / $750,000 / $409,667 / $223,626
New Company Formation / 4 / 7 / 8 / 2 / 1
Businesses Assisted / 20 / 17 / 20 / 8 / 3
Facilitate new projects that lead to corporate partnerships/research contracts between KIZ companies – academic partners / 4 / 3 / 5 / 1 / 1
VI. CROSS ZONE COLLABORATION (10 PTS)
The NWPA KIZ consists of a comparatively large rural geography. This model for regional collaboration will soon contain five (5) rural counties in Northwest Pennsylvania, which is much larger than many other KIZs. Additionally, the education partners within the NWPA KIZ are not tier one research institutions.
This proposal contains a signed agreement between the NWPA KIZ and the Tri County KIZ to participate on a regional business plan competition. It is further understood and agreed in the joint MOU that each zone will make the resources of the businesses and schools within the each zone available to another in the interest of maximizing resources and opportunities for KIZ businesses. For example: Penn State Dubois will be utilized as a resource to fill internships in neighboring counties in the event that schools within the NWPA KIZ would have non-existent or inadequate resources to fulfill the request of a company for an internship position, and vice versa.
The NWPA KIZ will continue to provide support for the Northwest Pennsylvania Collegiate Business Plan Competition in collaboration with the Erie KIZ, and students from NWPA KIZ campuses will be encouraged to submit proposals. Allegheny College has already begun planning workshops to encourage their students to participate in this competition, as a warm up to their own Gator Innovation Challenge.
Opportunities to collaborate with statewide KIZs will continue to be a priority to the NWPA KIZ. Examples of this willingness include our recent partnership with the Greater Susquehanna KIZ to offer an online tutorial for our businesses to aid them in completing their online KIZ Force reporting requirement.