CAPCO legislation, which would have spurred capital investment in Mississippi and moved the state toward increased access to risk capital, failed for the second legislative session. If passed, it would have provided incentives in the form of insurance premium tax credits to boost investment in the state.
“The largest gap we have in Mississippi technology is access to risk capital,” said Jack Harrington, vice president for business and venture development for the Mississippi Technology Alliance (MTA).
“CAPCO was maybe not the first choice for risk capital, but in Mississippi, where we don’t have anything — not a single structure for risk capital equity funding — this would have provided $100 million of risk capital at a relatively small impact to the state general fund of only $10 million each year. Even so, it didn’t get past the House or Senate,” he said.
Michael Olivier, co-founder of the Gulf Coast Technology Council, said he believed CAPCO legislation didn’t pass because too many legislators “had in mind the Magnolia Venture Fund and that’s not what CAPCO is.”
“All they need to do is look at other states and see the introduction of the CAPCO program and how it has led to access to venture capital for small- to medium-sized companies,” he said.
Clay Lewis, senior technology officer for the Mississippi Development Authority, said the lack of access to venture funding in Mississippi is a problem that needs to be resolved.
“We need to look long and hard in the seed capital/venture capital areas to see what we can do with a more receptive Legislature next year,” he said.
When the Mississippi Legislature adds technology committees to the House and Senate, Mississippians “will see the value of a focused legislative body, with resources on staff to help state lawmakers understand what the sector needs,” said Hancock Bank COO John Hairston.
“The budget crisis right now in the Legislature, and the fight between the House and Senate precludes it, but I can see the day in the next five years when we will have a robust effort to push technology centers in high schools,” he said. “That would mean things like getting high schoolers certified in Novell and Microsoft. Kids are so literate in technology now that by the time they reach high school, it would just be natural.”
Small victories, other news
Continued funding for the Enterprise for Innovative Geospatial Solutions, formerly known as the Mississippi Space Commerce Initiative, and the Mississippi Technology Alliance, were victories for the state’s technology sector, said Lewis.
“Because of the budget situation, some other ideas got lost or weren’t introduced this time,” he said. “We were probably not too aggressive on new programs.”
Senate Concurrent Resolution 619, which died in committee May 9, would have created a private/public forest products and furniture development council to study industry issues and provide a forum for joint collaborative action, said Lewis.
“We took a council approach rather than an association approach, like CIT.ms, because it’s a mature cluster and there are already groups functioning in that area,” he said.
Technology leaders say Gov. Haley Barbour’s workforce development reorganization plan will provide better coordination across all industry sectors.
“The governor’s workforce training program is an investment in a more technically competent workforce, whether that’s in word processing skills for people in clerical areas or advanced robotics in the satellite production facility at Lockheed,” said Hairston.
Program changes will not only benefit basic manufacturers, but also technology-related companies, said Olivier.
“It’s a step toward meeting the trends of business and industry today,” he said. “That’s one reason why the Gulf Coast Technology Council was created. Every workplace has changed so rapidly in the past decade. The levels of training have changed and that tells us that the levels of training and retraining are going to change even faster. That’s where this restructuring, you might call it, is going to have its most important application.”
MTA also followed legislators’ actions concerning the Land Water and Timber Resources Fund — a bonding bill, not a general appropriations bill, Harrington pointed out.
“In the past, that’s provided about $10 million a year to help fund companies that use land, water and timber resources,” he said. “It’s not risk capital, but it is an important source of funding for startup companies, which includes technology companies.” (By press time, the legislation had not passed, but could be considered during the special session.)
Billy Mounger II, chairman of CIT.ms and chairman of TeleCorp PCS, the largest affiliate of AT&T Wireless PCS, said the state’s legal climate remains highly unfavorable to Mississippi technology companies.
“All the lawsuits out there just kill innovation,” he said. “Without significant tort reform, nothing else really matters.”
Contact MBJ contributing writer Lynne W. Jeter at firstname.lastname@example.org.