In DC, in Spring 2011, the Gray administration convened a group of civic minded, technology entrepreneurs, investors and impressarios from around the region to put together recommendations for the city. These were our recommendations.

1. Technology Business Innovation
Transition Team Overview
1 Gray Transition: Technology Business Innovation March 6, 2011

2. Process
We gathered more than 20 of the most respected business technology leaders in the region
and asked them to help guide us to transform the District’s Technology Business Ecosystem
Group included:
 Serial Entreprenuers
 Venture Capitalists
 Angel Investors
 Gov 2.0 experts
 Digital Impressarios
 University Technology Incubation and tech transfer experts
 Government Technology and Gov 2.0 Leaders
 Workforce Development Experts
 Economists
 Visionaries
This group of technologists turned to the Internet to “crowdsource” ideas for the region by
posing a series of questions on the Transition Team’s behalf on Quora a new Internet
platform for harvesting knowledge out of a community of experts.
This is what we learned:
1 Gray Transition: Technology Business Innovation

3. Problem Statement
The District of Columbia has been consistently rated last,
or near last, by independent studies of jurisdictions
attractive to small technology enterprises.
Given that:
 60 to 80 percent of net new jobs are created by small
businesses;
 technology is projected to be the second strongest job creation
industry over the next seven years;
 the fact that DC is surrounded by attractive business
technology ecosystems
The consensus of every member of the Technology
Business Innovation team is that it is critical to the future
of the city that this situation be remedied and that the
District become a leader in technology business
innovation
1 Gray Transition: Technology Business Innovation

4. Why are technology, entrepreneurial education and
startups critical to District Job Creation?
 DC ranks 51st for high school graduates
 Between 2008 and 2018, the District of Columbia will
create 225,000 job vacancies. The District of Columbia’s rank in jobs forecast for 2018, by
 157,000 of these job vacancies will be for those with education level.
postsecondary credentials, 45,000 for high school Education level 2018 Jobs Rank
graduates and only 23,000 for high school dropouts. High school 78,000 20
dropouts
 • 71% of all jobs in the District of Columbia (500,000
jobs) will require some postsecondary training beyond High school 155,000 51
graduates
high school in 2018.
 Source: GU Center for Education and the Workforce Some college, no 116,000 51
degree
 There is a common misperception that the next wave
Associate’s degree 28,000 51
advanced technology R&D jobs require advanced
graduate degrees
Bachelor’s degree 188,000 4
 According to the NSF, 71% of the 2.8 million jobs being
created through advanced R&D programs will be ideal
Graduate degree 211,000 1
for High School graduates with 2 years of post
secondary education
 BOTTOM LINE: DC needs technology companies to create
great jobs for our youth AND our Schools need to produce
technically competent 2-4 year degreed students with 21st
century skills in science, technology or entrepreneurship in
order to move the city forward…
4 Gray Transition: Technology Business Innovation

5. Operating Assumptions
 Short Term – Spark Innovation
 The city faces enormous budgetary challenges today
 Many of best initiatives would be low or no cost or could leverage the DC’s unused
resources
 The Obama administration recently kicked off Startup America
 Short term we recommend aggressively rolling out and marketing a series of low cost
initiatives marketed as “Startup DC”
 Medium Term – Address Drag on the Ecosystem
 It is critical that the city invest in technical and entrepreneurial education of its youth
 It is critical that the city update its laws, regulations and policies to shed its reputation as
hostile to small innovative businesses
 We recommend that the Gray administration create a comprehensive plan and
permanent entity for encouraging technology business innovation
 Long Term – Continuously invest in technology business
ecosystem
 Having addressed short and medium term priorities, the District will be well positioned to
compete regionally, nationally and internationally when the economy comes back
 By this time the District should have a comprehensive strategic plan to invest
continuously in:
 Having at least one nationally recognized research University inside the city in key government
service verticals
 The ongoing education of youth and emerging workforce in math, science, technology and
entrepreneurship
 Permanent high technology resources, campuses and capital equipment to attract the best R&D
1 and scientific talent in the world to locate their companies inInnovation of Columbia
Gray Transition: Technology Business the District

6. DC SWOT Analysis
Strengths:
There is a thriving if underserved entrepreneurial tech ecosystem already in DC
Ability of StartUps to work with Government is one of strongest competitive advantages of DC location
Federal laboratories and major technology early adoptors are here (NRL, NASA, NIST, NSF, DoD, NIH,
NASA)
Regional University programs are solid and UMD has one of the top engineering schools in country
DC is vibrant, attractive world class city that can attract talent from around the world
Weaknesses:
DC Gov has never had a comprehensive strategy for technology business innvoation and must catch up
Reputation is that DC is unreceptive to entrepreneurship and does not promote it in education and job
training
DC does not currently provide competitive services to startup ecosystem (access, capital, mentors, and
incubation)
Entrepreneurs are are afraid to locate in DC because of DCPS high dropout rates and poor workforce
readiness
No world class engineering programs in the city and workforce ill prepared for technical/scientific careers
Opportunities:
Easy for Gray administration to take leadership position in tech business innovation as compared to
predecessors
Tight alignment with Education and Job Creation reform
Challenging economy creates an opportunity to gain ground on region as investment has been stifled
Low or no cost initiatives can be undertaken through creative leveraging of underutilized District assets
Threats:
Budget crisis becomes so distracting that city is not able to execute new important long term programs
Business Technology Innovation becomesTechnologyalong socio-economic, racial or geographical lines
Gray Transition: politicized Business Innovation

7. Technology Business Innovation Policy Goals
Incentivize technology entrepreneurship
 Startup incubation
 Capital availability
 Market DC proximity to federal customers
Reduction of drag and business inhibition
 Reduce regulatory burden
 Eliminate regressive business taxes
 Provide strategic tax incentives
 Education and workforce development
 Entrepreneurship Education
 Technology workforce development
 Higher Education technology transfer
1 Gray Transition: Technology Business Innovation

8. Policy Goal One: Incentivize technology
entrepreneurship
• Launch startup.dc.gov and announce intent to be a national and regional leader in technology business
innovation
• Develop/source a location for start-ups to cluster in. This building/block/zone should include an incubator
for tech startups, as well as co-working facilities for freelancers and individual entrepreneurs.
• Sponsor a formal matching system for entrepreneurs to meet the right investors coupled with mentorship
program powered by seasoned entrepreneurs.
Short Term • Announce and fund robust and effective curriculum and after-school programs with DCPS to build the
engineering base from an early age. Invest more in technology and entrepreneurial curriculum for all age
levels.
• Encourage capital formation by providing tax incentives to investors: tax creditsfor investing in start-ups
and lowering DC’s capital gains tax to make it the lowest in the region.
• Setup a Capture Team for securing grants, federal funds, and all manner of free money for start-ups to
leverage. DC Gov handles the process, finds the teams, and start-ups build the solutions.
• Grow the available talent pool by aggressively partnering with university Computer Science programs, and
Medium by launching a national PR campaign highlighting DC base tech start-ups.
Term • Work on convincing large, innovative companies to put satellite offices in DC
• Leverage StartUp America funding opportunities to attract investment in the District
• Create permanent entity tasked with incentivizing and investing in technology entrepreneurship in the
District
• Invest strategically in facilities and advanced equipment to make available to R&D companies in the
District
• Match Iuniversities and government labs creating Intellectual Property with startups interested in tech
transfer
• Consider possibility of creating advanced R&D startup incubation facility focusing on attracting
Long Term businesses to the District leveraging SBIR and STTR programs to fund commercialization.
• Create SBIR or other investment arm of the DC government to invest capital in local entrepreneurs
alongside of professional
• Consider self-employment assistance from US Department of Labor– (DE, ME, MD, NJ, NY, OR, PA all
offer) Allows people to collect unemployment benefits if they are starting new businesses.
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9. Policy Goal Two: Reduction of drag and
business inhibition
• Survey regional startups and technology companies and survey them about why they chose to locate in
MD and VA
• Survey advisors, investors and lawyers about why they are advising startups to locate in MD and VA
• Reach out to District entrepreneurs and learn where dealing with the Dc gov causes pain, cost and
Short Term frustration
• Put together plan to address concerns and publicize plan to address through dc.gov and town halls
• Partner with the city council to identify bad legislation and create a plan for making DC entrepreneur
friendly
• Bear down with DCRA and other agencies to streamline processes for starting ventures in DC
• Introduce legislation giving the mayor’s office authority to reduce taxes and create incentives on par with
programs offered at surrounding jurisdictions
• Systematically eliminate or change legislation that is overtly hostile to startups and technology business
Medium formation
Term • Do a public outreach campaign locally, regionally and nationally regarding commitment to StartUp DC
• Consider elimination of gerrymandered tech tax incentive programs. They don’t work. Incentive startups
throughout city
• In the long term the District will need to work on policies to RETAIN the technology companies it attracts
• It is a point of pride in the District that we have the most labor friendly worker’s compensation, insurance,
and liability policies and regulations of any jurisdiction in the United States
• If we intend to retain technology companies we incubate it will be important for the District Government to
Long Term either refactor these policies or counteract them with a clearly articulated set of compensatory incentives
for large government shareholders
9 Gray Transition: Technology Business Innovation

10. Policy Goal Three: Education and workforce
development
•Announce effective curriculum and after-school programs with DCPS to build the technical base from an early age.
•Take a field trip to GW, UMD, MTech, NVTC, TedCo and CIT to look at some of their programs as best practices.
•Focus on improving Science, Technology, Engineering and Mathematics (STEM) opportunities to bring more training
and entrepreneurship education to schools at all levels
•Tap into existing networks of entrepreneurial talent to provide mentorship and access for aspiring entrepreneurs and
Short Term technologists: NFTE, GWU office of entrepreneurship, UDC center for urban entrepreneurship, MTech, Dingman
Center, Social Matchbox, Tech Cocktail, Affinity, DC E-week, EO, YPO, Vistage and Sptringboard.
•Coordinate with UDC and Community college to prepare for
•Introduce entrepreneurial educational models directly to the schools (e.g. NFTE, Year Up and the Youthbuild Model)
•Integrate Entrepreneurial leaders into the classrooms to bring real life mentoring and access to learning of the
business world
•Bring Career Technology Education to the forefront with required courses that include: decision making, problem
solving, financial literacy, STEM skills and Entrepreneurship for all DC youth.
Medium • Integrate internships especially at the college level to make learning relevant and practical.
Term •Build an Adopt a Class Model to connect businesses to schools through Public/Private partnership model
•Indentify STEM aptitude at an early age and deliver specialized educational opportunities to help resident youth
reach full potential
•Invest more in technology and entrepreneurial curriculum for all age level including establishment of at least one
world class engineering and technical University program
• Augment traditional teaching at DCPS through online education for specialized technical education for DC youth
•Build a culture around entrepreneurship (small business is a proven motivator for high school students) that is linked
to high school graduation and college attendance.
•Establish a pipeline or pathway model (e.g. NFTE Pathway model) from middle school to high school with
Long Term programming that includes Dual Enrollment College Credit to incentivize graduation and college attendance.
•Create 2 year technical degree certificate programs at UDC and the new community college in support of staffing
startup ecosystem as it grows from StartUp DC programs
10 Gray Transition: Technology Business Innovation

11. Request for Immediate Action
The recommends the following immediate action:
 Appoint an internal champion for this initiative (DM of Economic Development? Office of Planning?
DCRA?)
 Establish website and branding for startup.dc.gov and announce intent to be a national and
regional leader in technology business innovation
 Identify an underused or unutilized property belongning to the DC govennment and turn it into a
temporary technology incubator through a public private partnership with a local devloper.
(unoccupied school such as Stevens or an unopened library or unoccupied office space)
 Sponsor a formal matching system for entrepreneurs to meet the right investors coupled with
mentorship program powered by seasoned entrepreneurs. Leverage this matching system both for
entrepreneurs and workforce readiness
 Announce intention to establish effective curriculum and after-school programs with DCPS to build
the engineering base from an early age.
 Begin surveys of local and regional businesses to identify legistlative and regulatory changes
needed to improve DC’s reputation as a technology business innovator
 Launch at least one innovative tax incentive program to encourage investors to consider StartUp
DC and get engaged.
 DC govt could offer an investment tax credit to DC residents investing in DC start ups. Credits might be structured to
enable a near zero sum game for the DC tax coffers in the short term.
 For example, DC resident invests $10k this year in a DC company and is able to deduct a $2.5k tax credit in each of the
next four years. The start up receiving the investment puts it to work immediately to hire and grow which creates tax
reveunes (pay roll, rent related, incremental sales taxes, etc).
1 Gray Transition: Technology Business Innovation