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Regionally focused investors yielding more than ROI

An SSTI analysis of exits occurring during the second quarter by a number of venture development organizations reveals equity investment in innovation companies undertaken as strategic public-private partnerships for regional growth can yield more for their communities than just hitting the return on investment expectations of seed and traditional venture capital. The recent exits highlighted below reveal a variety of economic development impacts resulting from effective innovation investment strategies, including:

  • Increased competitiveness and growth of local firms through mergers and acquisition;
  • New market entry and new product lines for existing manufacturers;
  • Opportunities to broaden wealth generation among wider population;
  • Foreign direct investment and company relocation; and of course,
  • Wealth generation, tax revenues and job growth within the local community.

Note: this is SSTI’s second look at recent VDO exits; selected first quarter 2017 exits for VDOs are available here.  Second quarter highlights include:

Finding causes for states’ tax return shortfalls

Many states took another hit to their budgets in April, with income tax revenue falling 4 percent compared to last year according to a new report from the Rockefeller Institute of Government. By the Numbers takes a look at the declining revenue, which it says was worse for April and May this year than had been forecast, but not as large as some states have experienced in recent years. Several explanations are explored.

USPTO ‘lottery’ creates huge economic advantage for winners

In a recent paper from the National Bureau of Economic Research (NBER), the authors contend the U.S. Patent Office (USPTO) has created a lottery-type system that creates great economic benefit for startups and other patent-seekers that drew lenient patent examiners. In What Is A Patent Worth? Evidence from The U.S. Patent “Lottery,” the authors found that patent applications by startups that were reviewed by lenient USPTO examiners had, on average, 55 percent higher employment growth and 80 percent higher sales growth five years later. Those startups also pursue more and higher quality, follow-on innovation. These results are, in large part, due to increased access of funding from VCs, banks, and public investors.

Record number of doctoral degrees conferred in US in 2015, NSF

U.S. institutions of higher education awarded 55,006 research doctorate degrees in 2015 according to the National Science Foundation’s Survey of Earned Doctorates (SED). This figure represents the highest number ever reported. The report also highlights several other multi-year trends.

Thanks to SSTI member outreach, House committee votes to fund Regional Innovation Strategies in FY 2018

When SSTI learned that the House commerce appropriations subcommittee’s draft FY 2018 bill did not specifically fund the Regional Innovation Strategies (RIS) program, we called on members to contact the full committee and ask that the bill designate funding for RIS. Thanks to the quick action of SSTI members, the House Appropriations Committee passed the bill last week with level RIS funding of $17 million for FY 2018.

White House indicates FY 2019 budget will again propose deep science, innovation cuts

The White House Office of Management and Budget sent a letter directing all agency heads to prepare FY 2019 budget requests with the figures provided in the administration’s FY 2018 request. Because the long-term budget provided few year-over-year changes for science or innovation, the administration will therefore again propose to eliminate Regional Innovation Strategies, the Manufacturing Extension Partnership, much of the SBA’s entrepreneurial development funding and other innovation programs, while also making deep cuts to many R&D initiatives. Read SSTI’s full coverage of the administration’s FY 2018 budget request for more information.

Pew finds Republicans increasingly negative on higher ed

new survey released by the Pew Research Center reveals a much more negative view of the  impact of colleges and universities on America on the right, with a majority (58 percent) of the Republicans and Republican-leaning independents surveyed saying that colleges and universities have a negative effect on the country compared to 45 percent last August. Democrats and Democratic leaning independents (72 percent) say the colleges and universities have a positive effect. The differences between the parties extend to other areas covered in the survey, including the national news media and religious organizations, but overall opinion has remained about the same.

Building bridges focus of SSTI 2017 Annual Conference

SSTI’s annual conference will focus on building bridges for a better future by establishing new connections and wading through an uncertain political climate during a three-day conference filled with tips and insights. The agenda is now online at ssticonference.org and early bird rates are available. The conference, held in Washington, D.C., Sept. 13-15, will feature speakers on innovation, capital, policy, workforce, R&D, manufacturing and more.

R&D and innovation funding sees some increases, more decreases in state budgets: CA, IL, MS, NC, OH

Breaking a two-year impasse, legislators in Illinois were able to pass a state budget that reinstitutes an R&D tax credit and implements workforce development programs. In California, the Governor’s Office of Business and Economic Development (Go-Biz) will see a 28 percent increase in funding, while other innovation initiative are receiving level funding. In other states whose budgets SSTI analyzed this week for TBED-related funding, we found that Innovate Mississippi was able to maintain state funding and new funding was appropriated for workforce development at the state’s community and junior colleges; a variety of programs were cut in North Carolina; and, Ohio will not get funding for a state office focused on commercializing research across key industries that the governor had proposed. More findings from California, Illinois, Mississippi, North Carolina and Ohio are detailed below.

Research highlights declining auto industry, manufacturing next?

In a recent post, the Brookings Institution’s Mark Muro raises concerns about the U.S. manufacturing sector’s health due to the leading indicators of slowed growth in both auto sector output and auto manufacturing employment. Muro contends that these slowdowns are driven by plateaued consumer demand and automakers investing billions in developing technologies necessary for electric and self-driving cars.

Entrepreneurs invited to pitch clean energy ideas

Startup innovators from around the country have the opportunity to exhibit their ideas and win $10,000 during the Catalysts of the Climate Economy national innovation summit in Burlington, Vermont, Sept. 6-8. Innovators in the climate economy are encouraged to enter a contest that will result in five competitors pitching their ideas to a panel of judges, with the winning idea garnering the top prize.

Administration delays International Entrepreneur Rule, plans to rescind

One week before implementation, the Department of Homeland Security (DHS) announced that the International Entrepreneur Rule would be delayed until March 2018 and that a new proposal to rescind the rule will be made. The rule would have provided immigrants who have founded a high-potential startup with equity investment to remain in the country up to five years to scale the company.

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