Editor’s Note: In this four-part series, Tom Chapman, director of innovation and entrepreneurship for the Greater Omaha Chamber of Commerce, breaks down four bills that are a part of Nebraska Governor Dave Heineman‘s “Talent and Innovation Initiative.”

• LB 386: Nebraska Internship Bill

• LB 387: Business Innovation Act – Special Series Post

• LB 388: Site and Building Development Act – Special Series Post

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• LB 389: Angel Investment Tax Credit Act – Special Series Post

Chapman can be found on Twitter, @tchap623, or you can contact him at tchapman@omahachamber.org.

Governor Heineman giving the State of the State Address on January 13, 2011, from governor.nebraska.gov.

Since 2006 and before, the forces of good have pleaded with the State of Nebraska to bring the State into the 21st century regarding incentives for new innovative ventures. Governor Heineman’s 2011 budget included many features that have been requested and are a significant regulatory improvement for the state and its entrepreneurial ecosystem. Without further adieu, one of the four bills that make up the core of the Governor and the Legislature’s efforts:

LB 386: Nebraska Internship Bill

The Nebraska Internship Bill provides a matching grant to private, for-profit employers who add internship jobs that did not exist prior to the program. The goal of the program is to keep students in and from Nebraska in the state working for interesting, high growth companies.

The grant from the state is either 40% of the total amount of the cost of the internship or $3,500 whichever is less. In a distressed area of the state, those numbers increase to 60% of the total amount of the cost of the internship or $5,000 whichever is less. The annual cap on the program is $1.5 million in total to all companies for both 2011-12 and 2012-13.

To be considered an intern, an applicant must be attending either a two or four year college in Nebraska or be attending a four year college outside of the state but with their permanent residence in Nebraska. An intern must get paid more than minimum wage and must work at least 200 hours (over a 12 week period) but no more than 1,000 hours (over 50 weeks).

To apply, companies must be from a Tier Three industry under the Nebraska Advantage Act.

In addition, companies must apply to the Department of Economic Development to be certified. Companies can receive no more than five job training grants and can only apply for two for the same intern. Also, if the company is more than 30 miles from the college campus of an intern, the intern can telecommute.

The Department of Economic Development will attempt to ensure that there is equitable access for all geographic regions of the state.

The internship bill will go into effect if and when the bill is passed by the legislature.

The internship bill is an important step forward to help college students with new, innovative ideas and skills transition into high growth companies in the state. Over the course of the last two years, THE fundamental issue that is at play in the innovation ecosystem is the battle for human capital. So, I applaud the state legislature and Gov. Heineman for addressing the issue. Finding ways to retain students is an important aspect of this battle.

However, retaining more students is not the only issue – we need to recruit more students who have no or limited ties to the Silicon Prairie. We also need to do a better job of helping all people with unique skill sets see the Prairie as a place where they can be nourished, enriched and accomplished. For example, there is a significant demand currently for people with the ability to program in Ruby on Rails and to build apps for the mobile market. There is an even greater demand to find people that can inventively innovate around these new platforms. This is not an Omaha, Nebraska or Silicon Prairie problem – this is a national problem. However, for us to take a step up as a region, success in this challenge is required. Otherwise, communities on the Prairie will be fighting a continuous scale problem (not enough people to grow fast enough to compete) for individual companies and clusters of companies. Retaining students is an element of this success – but it is even more important to create an environment where students (and everyone else) – whether retention targets or new – feel this is THE place to achieve great things.

More and better potential employees and entrepreneurs is the fundamental issue at play in 21st century economic growth and development. Thus, finding ways to transition students into key roles in this state is critically important. The bill will allow approximately 500-600 students to have fully-funded internships in the state in industries that companies strongly desire some experience to fill out key roles in their workforce. Getting more graduate students in the sciences, engineering and technology engaged in innovation opportunities is one aspect of the bill that I strongly applaud. However, I think that one of the big issues that this bill will help identify is the number of students that are not prepared to take on technical jobs upon graduation even with an internship. The State of Nebraska produces significantly more business graduates than Science, Technology, Engineering and Math (STEM) graduates. We need to help people move past marketing degrees or general business degrees and into these technical fields that teach both skills and innovation.  (By the way, I have English, History, MBA and Law degrees – so I am basically calling the kettle black.)

My fear is that there is an irrational expectation that interns will be ready with 1,000 hours of seasoning to step into key software development or technical development roles within high tech, high growth companies. In certain cases, that will be the case – but often interns and new employees will need years of seasoning to fully participate and be leaders in the next great innovation movement for this state. For example, large insurance companies have consistently stated that upon graduation, it takes thousands of dollars of training and a minimum of 18 months to train an underwriter. To some, this timeline may seem short compared to how quickly one can train a technical person to both be competent and to innovate within a company’s strategic priorities. To others, it will seem ridiculously long. The reality is that the whole region struggles because of our current position on the human capital supply chain. We need more people. And we need more people with more technical skills.

Critically important is changing the perception of the region, Silicon Prairie News has been the loudest, most outspoken voice for innovation and entrepreneurship in the region. But it is critical that we help interns and students believe that this is a place that welcomes their innovative spirit and ideas. Not just because we’d like them to fill out our teams – but because their ability to be virally impactful is higher than any other sub-group within the region. They have friends around the country with who they are in constant contact via Twitter, Facebook, etc. Their impact to spread a re-envisioning message is critical. We need them not just as employees but also as ambassadors. Thus, the internship bill is one mechanism to engage. Others should be sought because the Silicon Prairie needs to retain those currently here but also to help those who know nothing about the Silicon Prairie to believe that this is a place for success – not fly over country.

Now is the time that the state should be aggressively recruiting key personnel and human capital. Many states and industries have felt the economic hiccup – so there are key personnel that are potentially available now. But, Nebraska has remained somewhat unscathed. Moreover, many Nebraskans desire a return to the state if they can find a job that pays a reasonable salary (Gallup, 2009). However, many high growth companies turning the corner on their hockey stick are desperately seeking talent. Internships and aggressive efforts (such as the virtual high school that Gov. Heineman proposed in a separate bill) will help fill the pipeline downstream – but immediate demands of high growth employers should also receive priority, funding and attention.

The Nebraska Innovation Initiative and the internship bill are steps forward – but there is much more to do over the next couple of years to push the Silicon Prairie, Nebraska and Omaha/Lincoln specifically into the next tier of innovation ecosystems. So, the Chamber strongly supports LB386 – but it also hopes to keep attention focused on this battle for human capital because a single internship bill is not enough.

Look for the next three posts in our “Talent and Innovation Initiative” series in the coming days.