SSTI Digest

The Advanced Manufacturing Program within the U.S. Department of Energy’s Office of Energy Efficiency & Renewable Energy awarded nearly $140 million to companies and universities in 25 states and the District of Columbia to support 55 advanced manufacturing research projects. Recipients are contributing an additional $47.8 million toward project costs. Projects received an average of $2.5 million, but range from $400,000 to $12 million. The accompanying map presents the distribution of awards across the country and brief details on each recipient.

Thematically the R&D addresses three broad topics: 

A report on employment trends from hiring firm Robert Half found that 2020 presents greater challenges for employers looking to expand their workforce as the country’s labor market is near full employment and job openings remain at high levels. When looking specifically at technology hiring, the report reveals that in a survey of IT hiring decision makers, 86 percent reported challenges finding skilled workers. Such conditions have many states seeking new ways to address the skills gap and develop their workforce to attract or keep business. Several recent efforts are detailed below.

Although changes in gross domestic product (GDP) give us an idea of how economies are changing, this measure fails to tell the full story. This edition of Useful Stats examines county-level GDP-per-capita, the measure of economic output for each resident in an area. What we see is strongly skewed data with high 2018 GDP-per-capita levels and high 10-year growth rates concentrated primarily in low population-high output counties. We also see that rural populations have declined over the period while metropolitan areas have grown, yet the median GDP-per-capita growth rates between the groups are essentially the same.

The U.S. Economic Development Administration has announced the FY 2020 notice of funding availability for the Regional Innovation Strategies program. There are multiple changes to the program this year, including that EDA is now referring to the program as “Build to Scale.” A total of $35 million is available this year due to support from Congress with advocacy from SSTI’s Innovation Advocacy Council. The Trump Administration budget proposal for FY2020, and again for FY2021, proposed eliminating the program. Initial applications are due March 24.

The following are significant changes to the program this year:

Just days after the White House proposed eliminating EDA’s and SBA’s innovation programs, SSTI’s Innovation Advocacy Council held more than two dozen meetings on Capitol Hill. Teams of universities, venture development organizations and statewide entities talked with congressional staff about the importance of the Regional Innovation Strategies (now “Build to Scale”), the Regional Innovation Clusters, and Federal and State Technology Partnership (FAST) programs. Offices were largely interested in, and supportive of, the message. While this first Hill Day of the year is over, you can still support funding for these programs by contacting your congressional offices. SSTI is happy to facilitate this for members — contact Jason Rittenberg (rittenberg@ssti.org | 614-901-1690) to get started.

The Trump administration released its FY 2021 budget this week. As with the past three iterations, Congress is unlikely to consider the proposal, which would cut domestic spending by 20 percent over a decade. Nonetheless, a quick review of the White House’s budget reveals the administration’s priorities: EDA, ARPA-E and MEP would be eliminated; total R&D would be cut by nine percent while dramatically increasing funding for AI and quantum information science; loan programs at USDA and SBA would see funding cuts made up through increasing user fees; and, technical education would see a boost through both investments in high school programs and apprenticeship initiatives.

With nearly 40 of the state governors now having given a state of the state or budget address, innovation themes continue to echo in their reviews of past accomplishments and plans for the coming year. There is a priority on education (both on teacher salaries and preK initiatives as seen in Alabama, in addition to higher education and a focus on its affordability with Connecticut proposing free tuition for community college for recent high school grads and Pennsylvania putting additional dollars into scholarships), energy, workforce, broadband and a special emphasis on distressed communities in Connecticut and Tennessee. While SSTI continues to review the addresses and features excerpts as they relate to innovation intiatives in this series, remaining speeches will be scattered over the coming weeks.

Alabama

During 2018 and 2019, the American Institute of Physics (AIP) National Task Force to Elevate African American Representation in Undergraduate Physics & Astronomy (TEAM-UP), examined the persistent underrepresentation of African Americans in physics and astronomy in the U.S. as measured by bachelor’s degrees in these fields. The 2020 report spotlights its findings that African American students have the same drive, motivation, intellect, and capability to obtain physics and astronomy degrees as students of other races and ethnicities; however, they are choosing to pursue majors perceived as being more supportive and rewarding.

In 2015, state and local business incentives across the nation combined for a total annual cost of roughly $45 billion, according to Timothy Bartik's 2017 report for the Upjohn Institute for Employee Research. New research suggests states and regions trying to attract business through the use of firm-specific tax incentives may want to try another tactic. The National Bureau of Economic Research (NBER) recently released a working paper analyzing the impacts of business tax incentives, finding little evidence of long-term benefit for the local economies. Evaluating State and Local Business Tax Incentives examines three major state and local business tax instruments used to attract potential industrial development: lowering corporate tax rates, narrowing the corporate base, and providing firm-specific tax incentives.

Last week, the Carnegie Foundation for the Advancement of Teaching designated 119 U.S. colleges and universities as Carnegie Community Engagement Classification recipients. The universities undergo a self-study and review process that considers their relationship within their larger communities and includes areas such as institutional commitment, student impact and outreach and partnerships. Among those designated or re-designated this year, nine are SSTI members. 

Uncommon innovation is more likely to be found in high density areas, according to recent research. An article by Enrico Berkes of The Ohio State University and Ruben Gaetani of the University of Toronto, found that high-density areas boast more unusual combinations of prior knowledge, often across technologically distant fields. Their results indicate that geography affects innovation, as high-density areas produce more diverse, original research (i.e. unconventionality) while low-density areas are more likely to produce research within specific clusters.

While the longest economic expansion in modern times in the U.S. continues and fears of a nationwide recession have subsided, there are signs that growth is slowing, and some states may be at risk for a recession. According to projections reported last month from the Federal Reserve Bank of Philadelphia, several states’ economies are forecasted to slide into varying degrees of contraction within the next six months — the most since the financial crisis over a decade ago.