In fiscal year (FY) 2024, the most recent year of available data from the Federal S&E Support Survey, nearly 40% of all federal obligations for science and engineering (S&E) to universities and colleges were concentrated in just five states: California, New York, Maryland, Texas, and Pennsylvania. Institutions in California, the state with the highest concentrations of these obligations, accounted for 12% of the total in FY 2024. At the institutional level, there is a similar level of concentration, with five institutions receiving 13% of the total, the 10 largest recipients accounting for 21%, and the 20 largest accounting for over one-third (35%).
States and policymakers are seeking a better understanding of the risks and vulnerabilities of extreme heat and its associated weather events; and, in doing so, are beginning to develop strategies for a hotter future, including anticipated fiscal impacts. Arizona, California, Delaware, New Jersey, New York, North Carolina and Wisconsin have all developed and begun implementing those heat action plans. Meanwhile, a recent report on the impact of extreme heat found that Mississippi is among the states with the largest heat-related economic losses. The United States loses an average of $100 billion annually from heat-induced declines in labor productivity.
Between fiscal years (FYs) 2023 and 2024, federal obligations to higher education institutions for the support of science and engineering (S&E) activities experienced a year-over-year decrease. This decrease of $2.1 billion (4.3%) was the first since FY 2014 to FY 2015, reveals new Federal S&E Support Survey data. Data for FY 2024, the most recent available year, indicate that obligations remain much higher than previous years, up 135% since 2020, despite a sharp decline from the prior year in FY 2023.
Note that FYs 2020 through 2022 obligations include additional funding provided by supplemental COVID-19-related appropriations, which accounts for the higher funding amount.
Ask most university leaders how their institution contributes to the regional economy and the answer is likely to include research expenditures, patents, startups, and jobs. Those measures remain important, but they overlook one of the university's most valuable contributions. In today’s economy, where innovation, talent, and technology shape how regions grow, universities are helping communities adapt, connect, and compete.
When a new TBED project comes to town, the TBED practitioners inside know the long-term benefits of technology-based economic development: they can see and understand their progress in building a strong economic foundation for their host region. But for community-based and workforce development organizations and K-12 education systems in the surrounding area, the TBED project might appear to be an opaque operation that operates independently of its neighbors.
Governments have long used tax policy to encourage economic growth, investment, and entrepreneurship. But debates over tax cuts often focus on who benefits rather than on whether different groups respond to tax relief in different ways. A recent working paper by researchers at Yonsei University finds that, in the U.S., tax relief benefiting entrepreneurs generated larger increases in output, employment, and consumer spending than comparable tax relief benefiting wage earners. For state economic development practitioners, the study suggests that the impact of tax relief depends not only on its size, but also on the role recipients play in the economy.
Following SSTI’s recent look at the timing and type of exits, we continue our look at investment activity to characterize returns on investments so that TBED investors can more accurately project and adjust program parameters to support long-term sustainability. Accurate data on venture capital investment returns and fund performance on private investment vehicles is not readily or consistently available. Anecdotal stories and the occasional press release on a major transaction exist, but VC exits are often done quietly. As such, parties interested in understanding performance outcomes must rely on focused reports and other aggregate data.
On June 25, California Gov. Gavin Newsom announced the launch of the California AI-Unemployment Tracker (CAIT), an early-warning system to help the state monitor anticipated AI job losses and trends. The dashboard was developed in partnership with the University of California California Policy Lab and released as part of the Governor’s recent executive order, which was issued to prepare workers, small businesses, and communities for the economic disruption that artificial intelligence will bring.
In an era marked by constrained regional innovation funding and a national AI training need growing exponentially, it seems odd to be writing that a new $25 million federal funding competition may receive fewer than the necessary qualified applications to spend all of the available money for awards. The program at risk is the AI Upscale Accelerator Program, launched by the Economic Development Administration, which has a rapidly approaching deadline of July 10.
Gina Raimondo, the 40th U.S. Secretary of Commerce and 75th Governor of Rhode Island, and Eric Holcomb, the 51st Governor of Indiana, today launched RAISE US, a nonpartisan national organization that will partner with governors, employers, workers, and training organizations to help the American workforce make a successful transition to an AI economy. RAISE US will design and pilot new corporate incentives to retrain and redeploy workers, new approaches to support people through job transitions, and new training models tied to changing employer demand.
There’s a lot of churn in state budgets this year, but the bottom line is clear: tighter budgets are ahead for most states. As a result, governors and legislatures—with a few exceptions—are approaching Fiscal Year 2027 (FY 27) with cautious or constrained funding priorities.
The warning signs are clear.
Research finds young innovation-centered firms operating at a loss realize one-third less value from the federal R&D tax credit than the national average. Federal support for business R&D in the United States relies heavily on tax incentives. The federal R&D tax credit and deduction together provide far more support for private-sector research than direct federal funding programs, making them one of the government’s primary tools for encouraging innovation.
