Technology companies in Arizona are asking the Legislature to make changes in the law to help expand tech-related businesses.
The Arizona Technology Council wants lawmakers to give $50 million to the Arizona Commerce Authority to start a venture capital fund in the next three years, said Alex Rodriguez, Southern Arizona director of the council.
The trade association for technology companies has 750 members statewide, about a quarter of which are in Southern Arizona, Rodriguez said.
The proposed venture capital fund would finance start-up technology businesses, and although the money would be in the Arizona Commerce Authority budget, it would be managed by a separate entity, he said.
“In Arizona today, we have a very active entrepreneurship community, and it continues to improve, but one of the problems we’ve noticed is once companies launch, and they’ve been in business in the early stage of their life cycle, what tends to happen is they need capital to grow," Rodriguez said. "That’s been a big problem in this state because we have very little presence of venture capital."
It is hard for new tech businesses to grow if they don’t have capital, and they may be inclined to leave the state if they can't get it here, he said.
“Our hope is to be able to retain the most promising technologies and companies here in Arizona," he said. “That fund could be used to help support these early stage companies.”
Another of the council's legislative priorities, drafted by the businesses that are members of the council, would encourage technology transfer, Rodriguez explained. That involves moving technology from the research stage at the state's universities to profitable businesses.
The council hopes the state will help simplify that process, Rodriguez said.
“What we want is a process that helps engage the researcher and the entrepreneur or business," he said. That could be helping improve intellectual property rights, for example.
The council also wants the state to expand its research and development tax credit program.
On a first-come, first-served basis, $5 million is distributed annually to companies investing in research and development and hiring Arizona residents to do the work. The council wants to expand that to $15 million a year by 2016, Rodriguez said.
“We see that as a very important piece of legislation to help impact the growth of Arizona businesses and jobs," he said.
Those who aren't in the technology industry should also push for this legislation, Rodriguez urged, because strengthening tech businesses can increase the state's average household income.
"The tech sector is a foundational base on the Arizona economy," he said. "There’s a huge multiplier effect that happens when there’s business growth and new jobs, generally higher paying jobs in the tech sector that spill over into other industries and other parts of the statewide economy.”