Melissa Withers is the Director of Communications and Market Development for the Rhode Island Economic Development Corporation.

Congratulations to Bionica Corp., Lighthouse Security Group (a subsidiary of Lighthouse Computer Services), Ocean State Solutions (doing business as mPay USA), Providence Health Solutions, Public Display, Inc., and Tizra, Inc, each of which received pre-approval for the state's new Innovation Tax Credit program. The program offers investors up to a 50 percent credit on eligible investments, with a maximum credit of $100,000.

This program reminds us it's important, even during times of budgetary crisis, we must stay focused on programs that align with our economic development strategy and help promising companies grow. In the long haul, this is how we will increase state revenue.

I think Saul Kaplan, RIEDC executive director, got it right when he said that: "Many of our incentive programs are outdated and reflect old assumptions about the kind of economy we need to create greater prosperity for our citizens. The Innovation Tax Credit directs resources toward innovative companies that are poised to create new, higher wage jobs. This program is a strategic investment for Rhode Island and one that is in-line with our economic development strategy."

Proposed by the Rhode Island Science and Technology Advisory Council (STAC) and enacted into law in 2006, the Innovation Tax Credit is designed to attract and retain serial entrepreneurs and stimulate economic growth in high-wage, high-growth industries. The first round of applicants clearly reflect that mission.

To be eligible for the credit, an investor must invest in a Rhode Island business that produces traded goods or services and has annual gross revenues of less than $1 million in the prior two calendar years. Companies must be categorized as one of the following innovation industries: biotechnology and life sciences; communication and information technology; financial services; marine and defense manufacturing; professional, technical and educational services; industrial and consumer product manufacturing and design.

No surprise that the first round of applicants came from the info-tech & digital media sector (ITDM)—one of the state's most entrepreneurial and innovative sectors.

Recipients of the pre-approval underscored how these small but strategic investments can stimulate growth. Kipp Bradford, chief technology officer, Bionica Corporation said: "Early stage investment in burgeoning technology companies plays an extremely important role in new company creation. In our particular instance, we are company that grew out of the local scientific, industrial design and engineering communities, which saw great potential in developing new innovative technologies for the hearing impaired. It is our intention to leverage the innovation tax credit to attract more local investment in our company and see this as an integral part of our business growth strategy."

The companies/investors pre-approved for the credit have six months to make the investment and provide proof of investment back to the RIEDC board of directors. Upon completion of this process, the RIEDC will certify the investor's eligibility for the credit with the Rhode Island Division of Taxation. The RIEDC, which will review applications for the credit quarterly, may not approve more than $2 million in credit applications in any two-year calendar year period. The credit sunsets in 10 years.

All of the applicants were hopeful that they could grow jobs and expand revenues in the next 3-5 years, with all looking to make innovation central to that growth. We wish them good luck and quick progress!