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States Expanding High Tech Businesses

Hawaii is proposing to create a Hawaii Innovations Fund, which could grow to $200 million in government funds over four years to invest in Hawaii's renewable energy, life science and technology companies-- a program following in the wake of similar venture funds in other states. While Hawaii already has generous tax credits for technology investments, that program does not track the number of jobs created-- and the state has the goal of expanding the technology sector which remains a minor part of the economy. Thirty-six states run venture capital funds, including New York's Small Business Technology Investment Fund and the largest state-run fund, the Maryland Venture Fund, which has not only had a large rate of return to the state for its investments -- 30% per year over the last ten years -- but more importantly, has encouraged economic development through early support for local businesses. Other states-- including California and Colorado -- have targetted portions of their state pension funds for local investments, getting good returns for retirees and strengthening the tax base which is the other key leg for supporting those pension funds for the future.