SSTI Digest

NSF’s Regional Resilience Innovation Incubator (R2I2) project has awarded Phase 1 funding to six teams, each addressing specific regional climate challenges and demonstrating solutions. The award includes funding for a seventh team to create the R2I2 National Office, which will support the collective and coordinated implementation of R2I2 award activities.

In perhaps the most difficult budget season of the last 25 years, where the President’s budget has proposed eliminating funding for scores of programs, both the House and Senate subcommittees with budget oversight for the Economic Development Administration (EDA) have proposed continuation funding of $50 million for FY2026 for the popular Build 2 Scale (B2S) program—referred to as the Regional Innovation Program Grants in budget language. B2S is one of three key funding priorities for SSTI’s Innovation Advocacy Council (IAC). Under IAC’s coordination, dozens of organizations weighed in with their members of Congress to explain the importance of the program and asked them to support it. This direct communication has taken the program from authorization but no funding to $50 million per year. While a relatively small amount of money, B2S is the largest federal pool of competitive funding to support individual, regionally designed innovation initiatives across the country.

House and Senate subcommittees with oversight for Commerce, State and Justice appropriations differ on funding recommendations for the EDA Regional Technology and Innovation Hubs program, commonly referred to as Tech Hubs. While any funding in a tight budget environment is good, the $50 million in the House version of the CJS bill or the Senate subcommittee’s $60 million is far short of Congress’s original vision for the Tech Hubs, authorized at $10 billion over ten years. Congress provided EDA $500 million in FY2025 for new Tech Hubs.

The Financial Services and General Government (FSGG) subcommittee of House Appropriations has turned against the Federal and State Technology (FAST) Partnership in its budget recommendations for the Small Business Administration, zeroing out the only program that provides funds to help states level the competitive field of applicants for the SBIR/STTR program. While the FAST funds were decreased from the $9 million enacted in FY2024, the SBDC line item received a $10 million increase in the FSGG appropriations proposal. The corresponding Senate subcommittee has not taken any action yet regarding FAST. SSTI’s Innovation Advocacy Council (IAC) is working to protect the funding in the Senate bill and in the final conference bill. Broadening the distribution of SBIR awards nationally is a priority within SBIR reauthorization bills under consideration in both chambers of Congress.

The nearly status quo nature of the FY 2026 budget of $9.0 billion for the National Science Foundation advanced by the Senate Appropriations Committee stands in striking contrast to the Administration’s $3.9 billion request. House appropriations, meanwhile, appropriated $7.0 billion for NSF, a reduction of $2.06 billion or 23% from the FY 2025 enacted level. The fate of the popular Regional Innovation Engines program, as well as NSF’s entire R&D funding portfolio, remains in play for a future conference bill.

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…