CHANGING ROLE AND SCOPE OF VENTURE CAPITAL


Innovation and Commercialization Policy Statement" (1985) begins by de-
scribing a long-range economic development program for Florida that tar-
gets science and high technology industries as key markets, and stresses the
importance of working relationships among education, government, busi-
ness and industry to maximize economic development opportunities. The
paper describes two additional development strategies being proposed:
spin-off industries and innovation industries. Spin-off industries are the
result of expansion and/or diversification by existing industries. Innovation
industries are the result of new industry development based on scientific
discovery and technological innovation. One of the key components in this
concept is Florida's educational system, which must provide both the idea
generators (via the university system), and the idea implementors (via the
vocational technical schools). As the generator of high technology innova-
tion, the university system is shown to be the cornerstone of the economic
development process. This document also stresses the point of view that
"business, particularly small entrepreneurs, needs a steady, reliable stream
of risk capital. Encouraging support of new business by the investing pub-
lic is identified as a key factor of development success. Recent state initia-
tives to fund technology start-ups provide a partial solution."
 The key issue for the state is how to expand the working relationship
between industry and the universities with special attention directed to-
wards (Florida, 1985-a):

 1. Removing the barriers to collaboration between university faculty
 and industry.
 2. Improving university research programs, particularly in areas with
 potential economic return.
 3. Providing incentive mechanisms to promote a broad range of cooper-
 ation and collaboration between universities and industry with spe-
 cific emphasis on support for research efforts with potential economic
 benefits.
 4. Improving the availability of risk capital. A particular problem re-
 lated to university research is the availability of capital for the initial,
 high-risk components of the technology transfer process.

 Over the past few years, Florida has made significant strides in address-
ing each of these issues.
 Biotechnology is extremely dependent on the universities, perhaps more
so than other high tech industries. The plan for developing a biotechnol-
ogy industry for Florida has three major components (Florida, 1985-b):

 1. The enhancement of those emerging biotechnology strengths at the