SSTI Digest

The U.S. Small Business Administration adopted new rules in 2023 that made it easier for venture capital funds to leverage federal resources under the Small Business Investment Company (SBIC) program, thereby increasing the capital they have available for early-stage investments. (See SSTI’s previous reporting on these changes here.) As noted in the article, the most significant change in this direction is the creation of an accrual funding mechanism. As venture funding moves to larger and later-stage deals and TBED initiatives face the prospect of funding challenges, awareness of innovation capital resources such as the SBIC program  is an increasingly important TBED strategy.  The SBIC program was established in 1958 and supports the development and growth of thousands of small businesses with billions of dollars of funding annually. At a basic level, the SBIC program increases access to capital by allowing licensed finance companies (SBICs) to borrow funds and provide those resources to businesses. Under the standard model, businesses make regular payments to the SBIC, which then makes regular payments on the SBA-leveraged funds.  Historically,…

The U.S. Small Business Administration announced a new funding opportunity through the Regional Innovation Cluster (RIC) Program. The program is designed to enable new RICs to assist small businesses in matching innovative technologies to industry needs, with the aim of reshoring critical industrial and manufacturing capabilities, securing domestic supply chains, and spurring job creation. SBA is interested in competitive offers from organizations with relevant partnerships and small business expertise in critical industries, including:  Advanced Manufacturing Critical Minerals Nuclear Energy (Microreactors) Disruptive Technology Quantum Information and Enabling Technologies Artificial Intelligence Information Technology (cybersecurity, cyber operations, data storage, etc.) Semiconductors The RIC solicitation is now open and will close on August 8, 2025, at 4:00 p.m. EDT. The solicitation can be found on SAM.gov by searching "Regional Innovation Clusters." The full solicitation link is here. You can submit questions related to the solicitation through July 28, 2025, at 4:00 p.m. to sba_ric_2025@gsa.gov. All answers will be posted publicly on the…

After the tremendous learning and community-building experience at SSTI’s conference last December at the beautiful Sheraton at Wild Horse Pass in Arizona, many people are looking forward to our next gathering. We are too, but have decided to postpone the event until next year with dates to be determined.As most readers likely know, staging conferences of the size and complexity of SSTI’s last one takes months of planning. A critical first step is securing the appropriate site. Given the continued uncertainty in the federal economic development and R&D funding landscape that many likely conference participants are navigating, we were not comfortable committing SSTI to an expensive hotel contract for a 2025 event. Look for news in the coming months about a round of tailored SSTI convenings this fall and winter, designed to keep the conversation and exchange robust and make your regional innovation work even more impactful and better resourced in the future. While we will not hold our annual conference in the traditional sense this year, we remain committed to delivering the high-quality and unique blend of cross-sector interaction among government,…

The Opportunity Zone (OZ) program, first established in 2017 with a ten-year lifespan, has been made permanent in Public Law No: 119-21. As noted in a July 10 Digest article recapping the reconciliation package, OZ has undergone significant revisions. Some of the changes may address criticisms raised with the program design, also covered in the Digest, here, here, and here. The newly enacted revisions include updates to zone eligibility, rural incentives, and reporting requirements that preserve the program design, yet add significant changes that will impact how the program functions moving forward.  The Opportunity Zone program is, at its core, an incentive to drive private investment to low-income communities by deferring and reducing capital gains taxes on investments made in selected census tracts. To benefit from the program, investors must invest through Qualified Opportunity Funds (QOFs) using the proceeds from prior investments. The QOF then invests in businesses located in Opportunity Zones. Investors are able to defer and reduce capital gains tax on the initial investment by…

Massachusetts’ Gov. Maura Healey recently proposed a multi-year funding strategy (Five-Year Massachusetts Capital Investment Plan (CIP) [FYs 2026-2030] that  would include investment of $890.4 million, including general obligation bonds and private sector contributions, for many of the state’s TBED and innovation initiatives (programs are outlined below). If approved by the state legislature, the package would also provide capital funding resources to implement the Mass Leads Act passed last fall (see this Digest article for more information). It is unclear how federal budget cuts included in the recent reconciliation act will impact the state legislature’s decision, but if passed as introduced by Gov Healey, a significant portion of the new capital plan funding to the state’s the Executive Office of Economic Development (EOED)–$685.10 million–would be distributed in total over the next five years to the following TBED key priority initiatives…: $251 million to support implementation of the Mass Leads Act; $230 million for the Life Sciences Capital program, which supports the Massachusetts Life Sciences Center with research grants to encourage…

Vaccine and therapeutics storage and delivery may never be the same as Emory University and Micron Biomedical recently announced the first clinical trial of a novel rotavirus vaccine, CC24, delivered via dissolvable microarray technology. This clinical trial was the first clinical evaluation of any drug or vaccine delivered via patch or microarray that is sponsored by the U.S. Centers for Disease Control and Prevention (CDC).  Micron’s technology promises to solve many barriers to delivering vaccines and therapeutics to the global population. These barriers, according to commentary in the Lancet, include preserving vaccines at a specific temperature and having enough vaccine recipients on hand to justify opening vaccine containers, which lose potency when they are not used in a timely manner. Vice President at Georgia Research Alliance and Managing Director of the GRA Venture Fund Connor Seabrook mentioned additional benefits like painless administration and no need to safely dispose of sharps waste, since no needles are used. As Micron explained in a 2023 press release, their patented microarray technology …

As policymakers consider how to invest limited dollars to stimulate R&D across the U.S. while other countries increase their investments, it’s important to examine whether newer regional policy approaches have the potential to increase national competitiveness versus traditional individual programs. For example, should programs such as EDA Tech Hubs and NSF Engines—both of which are designed to stimulate greater innovation results from existing, strengthened and new assets within more geographic areas across the country—be continued or even expanded? Would networked, regionally oriented innovation policies increase collaboration and accelerate economic growth? A recent NBER working paper, "The Geography of Innovative Firms" by Craig A. Chikis, Benny Kleinman, and Marta Prato, may help answer these questions by examining the spatial distribution of innovation. They look at how the physical location and expansion of innovative firms contribute to a nation's innovative capacity and economic growth. Their model examines what they call "multi-market innovative firms," companies that conduct R…

July 293:00 p.m. EDTFree Please join us for the Innovation Finance subcommunity meeting where we will discuss Innovation Finance 101. This meeting is intended to be the first in a series of foundational conversations on innovation finance and will focus on the terminology, process, and structure of venture capital investment. Register here.    August 122:00 p.m. EDTFree The Lab-to-Market subcommunity meeting occurs every 2nd Tuesday at 2:00 p.m. Eastern time) The August discussion will focus on the national and regional ecosystems for moving technologies out of the laboratory to create new products, companies, and jobs. Come prepared to share about initiatives in your region: What’s working and what’s not? How have you worked around bottlenecks in the process? Register here.   August 132:00 p.m. EDTFree The Innovation Finance subcommunity is hosting a conversation with SBA staff on the updated SBIC Accrual model that can serve to expand venture capital funding. Attendees will hear from program staff about the details of this program, which allows fund managers to access up to 1.25…

The New York City Economic Development Corporation (NYCEDC) recently announced that it is awarding Fordham University $3 million from its Greenlight Innovation Fund. The university will also receive additional funds, including a $1.1 million grant from Councilman Oswald Feliz, to create the Bronx Green Job Center (BGJC), a workforce development and entrepreneurship hub that aims to create an equitable green-job pipeline in the Bronx. BGJC’s programs and services are expected to support workforce development initiatives in the green economy. Its workforce development programs are set to launch in the Fall of 2026. The Greenlight Innovation Fund grants money to programs for the development of facilities in New York City that support the green economy, life sciences, and advanced technology (collectively, the “Innovation Industries”). According to the announcement, the Greenlight Innovation Fund “supports projects which generate good-paying jobs, support commercialization of technologies in future-focused sectors, and catalyze an ecosystem of entrepreneurs with a focus on equity.” NYCEDC has an initial allocation of up to $50 million of City Capital dollars for the…

The overlap between applicants and recipients of the three large regional innovation approaches attempted by the federal government so far continues with the July 9, 2025, NSF narrowing of the field for the second NSF Regional Innovation Engines competition to 29 semifinalists across the country. Predominantly with teams led by universities and university affiliates (25 of the 29 selections), the contenders include 17 NSF Engines Development Awards teams who received two-year planning grants in 2023 and early 2024 that they leveraged to help build coalitions and refine visions for dynamic innovation ecosystems within their regions. It also includes regions that have served as EDA Tech Hubs designees, Tech Hub winners, and recipients of Building Better Regions Phase I and/or Phase II awards. Seventy-one teams engaged in this round of the competition. One may view a map of the 29 new NSF Engines semifinalists here. During the next stage of the competition, NSF will conduct virtual interviews and assessments of the semifinalist teams to gain further understanding of their regional coalitions, the alignment of their proposed leadership teams and core partners, and…

Please note: this article is not intended as a comprehensive review of Public Law No. 119-21, nor should our reading of the law be treated as tax or legal advice. Now that the dust has settled on the federal budget reconciliation package, Public Law No: 119-21, SSTI presents to its Digest readership our look at the legislation from a technology-based economic development (TBED) perspective. The process nuances, potential fiscal impacts, and broad policy changes of the 870-page act have been extensively covered elsewhere, so we won’t rehash those here. Instead, we will focus on a few key highlights of changes to the tax code and what those could mean for TBED activities. The majority of the new law is focused on federal revenues through tax changes, there are new spending items of note for the TBED community. There is a new provision that funds an artificial intelligence-driven research initiative at federal labs. The law establishes the American Science Cloud and appropriates $150 million to the Department of Energy to use AI to support the development of novel microelectronics and energy technologies from Department of Energy and National Labs data. Only…

Over the past 40 years, many people involved in SBIR and empirical analysts in the research, finance, and technology sectors have said SBIR awardees, as a group, are uniquely important for America’s innovation goals. Research presented in a recent NBER working paper provides further evidence backing up those claims and reveals SBIR companies may be preferable for innovation productivity and efficiency—particularly for advancing strategic national, social and environmental goals—to innovation-oriented companies simply backed by venture capital, the finance instrument most often tracked for evidence of innovation success or progress. Researchers Kyle R. Myers, Lauren Lanahan, and Evan Johnson write in “Small Business Innovation Applied to National Needs” that SBIR-backed businesses produce three times more patents per firm and nearly eight times the federal contract engagement than their VC-based counterparts, yet SBIR firms have 15% lower employment figures.  SBIR winners also were found to have less revenue than VC-backed…