Innovation Challenge Grant Program Matched Critical Federal Research and Development Dollars for SIU Carbondale Spin-Off Company
CHICAGO – In his continuing efforts to support technology-driven enterprises, Gov. Rod R. Blagojevich today announced a $75,000 Innovation Challenge Grant to Midwest Energy Group Inc. (MEGI), a spin-off company from Southern Illinois University Carbondale (SIUC), to help it advance efforts that will cut the cost of biodiesel production. The company, which is based in Carbondale, received an initial contract through the federally-administered Small Business Technology Transfer (STTR) program, which this funding helped match. This support comes as a part of Opportunity Returns, the Governor’s pro-active, comprehensive economic development strategy designed to create even more jobs and spur continued growth throughout the region.
“Illinois is filled with world-class research and promising new technologies, but, in order to successfully translate this research into viable ventures, companies need access to the critical dollars to get there. By investing in innovative, high-growth companies like the Midwest Energy Group, we are helping them leverage critical federal contracts that will turn cutting-edge research into successful new products. We will continue creating a business environment that encourages innovation, so emerging firms can access the resources they need to build their businesses and create even more high-paying jobs,” Gov. Blagojevich said.
Midwest Energy Group formed in March 2006 as a spin-off from the Chemistry Department at SIUC based on proprietary technologies developed at the university. MEGI’s efforts focus on innovative approaches to cutting the cost of biodiesel production, which has become a bottleneck to greater biodiesel use. The worldwide biodiesel market is expanding at an unprecedented rate, and the annual biodiesel demand in the U.S. is projected to be more than 1 billion gallons in 2010. SIUC has given the company full access to its major research instruments and facilities on campus and is located at the Dunn-Richmond small business incubator center. The company currently employs two technical personnel and an executive advisory panel of three people.
“Our growth would not be possible without STTR funding and the Governor’s matching assistance, which will allow us to continue to advance our research and translate this technology into commercial development and manufacturing processes. The Governor’s Innovation Challenge Program is an excellent resource to better help high growth companies like ours secure technologies and increase success,” said Dr. Yong Gao, President of Midwest Energy Group, Inc.
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This funding comes from the Illinois Department of Commerce and Economic Opportunity’s (DCEO) Innovation Challenge Matching Grant program, which is designed to help companies across various technology sectors tap into federal contracts, like the Small Business Technology Transfer (STTR) and Small Business Innovation and Research (SBIR) programs and to develop technologies that can lead to commercial products. The Governor committed $1 million toward this program, which provides an up to 50 percent match on federal funding to assist with technology development and commercialization efforts.
“In order to keep expanding our regional economy, it’s important that the necessary resources are available for our young, tech-based businesses, which leads to more good jobs. Southern Illinois University is a national leader in biodiesel research, and the Midwest Energy Group is a prime example of why we need to invest in new technologies and cutting-edge research. I commend Gov. Blagojevich for establishing the Innovation Challenge Matching Grant Program, which is helping to increase tech transfer opportunities for more high-growth Illinois firms like Midwest Energy,” said SIU President Glenn Poshard.
STTR and SBIR provide early-stage R&D funding directly to small technology companies or individual entrepreneurs across the country developing leading-edge technologies of interest to eleven federal departments and agencies. Companies apply first for a phase I award of up to $100,000 to test the scientific, technical and commercial merit and feasibility of a particular concept. If phase I proves successful, the company may be invited to apply for a two-year phase II award of up to $750,000 to further develop the concept, usually to the prototype stage. As such, these programs provide seed capital of up to $850,000 to develop technologies that can lead to commercial products. The Innovation Challenge Matching Grant program helps to assist Illinois companies in receiving SBIR/STTR contracts, while increasing their attractiveness to acquire additional investment.
Gov. Blagojevich also created the Innovation Challenge Technical Assistance program to increase the number of SBIR/STTR applications in Illinois through assistance with the proposal writing process. DCEO is working in partnership with the Champaign County Economic Development Commission and the Science Applications International Corporation (SAIC) to perform SBIR/STTR-related proposal writing and assistance services for technology-based entrepreneurs, innovators and new venture start-ups to access federal funding opportunities, driving technology-based job creation and economic development.
“Gov. Blagojevich and I strongly believe that in order to create more good jobs we must be strategic about providing our young, tech-driven firms with the resources they need to develop into economically viable and sustainable companies. The Midwest Energy Group is a prime example of a growing, high-tech firm that is in need of these critical early stage dollars to position it for long-term success. Through initiatives like the Innovation Challenge Matching Grant Program, we will continue the state’s progress to further develop a vibrant tech industry throughout the region and statewide,” DCEO Director Jack Lavin said.
Since January 2004, Illinois has gained more than 186,000 jobs, which is best in the Midwest. Illinois led the nation in new job growth in January with 18,900 new jobs and in June of this year with 11,800 new jobs. In 2006, Illinois gained 71,000 new jobs, which is the best calendar year gain since 2000. Over the last 4 years, from January 2003 to December 2006, Illinois had the second largest unemployment rate drop in the nation. The federal Bureau of Labor Statistics and the Illinois Department of Employment Security compiled these statistics.
For more information about the program, contact Scott Henkel in the Technology and Industrial Competitiveness Bureau at DCEO, 217/557.6880 or scott.henkel@illinois.gov