SSTI Digest

A recent New York Times article points to high-profile stumbles by tech startups, particularly underwhelming IPOs by billion-dollar companies and thousands of people laid-off, and declares “start-up bloom deflates, tech is humbled.” As SSTI expressed concern about in the past, the trends of equity capital being invested at later stages, companies remaining private for longer, and (relatedly) valuations inflating beyond reason, have clearly set up the broader venture capital market for high-profile failures. What really caught our eye in the article was the Times reporting a dramatic drop in the number of deals in the last quarter of 2019 and their contention that this represented a significant slowdown. The key to evaluating the impact of the trends, of course, is to look at the data, and this is where the Times article misses the mark. The article uses investment data from PitchBook and the National Venture Capital Association to show that the number of deals in the 4th quarter of 2019 was the lowest of any quarter since 2016. There are several issues with the Times report: First, there is the perennial data issue — as SSTI regularly disclaims in our “…

STEM and the American Workforce, a new report backed mostly by science associations, points to STEM jobs as one-third of direct employment, two-thirds of total employment, and 69 percent of America’s GDP. The authors highlight that 60 percent of STEM jobs are filled by people without bachelor’s degrees. Those are eye-popping numbers until one starts to dig into what the report considers a STEM job, which were decided on a case-by-case basis according to the occupation’s sector and educational requirements. This is not the only recent STEM employment study to take an expansive view of the field. Earlier this year, the Idaho STEM Action Center reported that the number of unfilled STEM jobs in the state had doubled, to 7,633, in just three years. Digging into the state labor agency’s data indicates that a large portion of these openings are in healthcare, with the plurality of openings seeking registered nurses. As far as basic political calculus goes, the motivation behind the expansive view of STEM taken by these reports, and others, is clear: increase the number of stakeholders who feel relevant to STEM employment so that there will be more support to increase the…

Two new reports, one from the National Association of Counties (NACO) and the other from the Pew Charitable Trusts, provide new data on the gaps in access to broadband and some tactics for how states can effectively develop their broadband expansion projects.

Nine national, nonprofit think tanks and innovation-focused associations have written a letter urging the Commerce-Justice-Science (CJS) appropriations subcommittees to provide $50 million in FY 2021 for Regional Innovation Strategies (RIS; now Build-to-Scale). Similarly, 50 current and former awardees have written to ask Congress to continue expanding the program’s support. These efforts follow dozens of meetings between SSTI members and congressional offices early last month. Congress is already well into the FY 2021 appropriations process, holding numerous budgetary hearings and accepting formal funding requests from constituents. Innovation coalition letter to the Senate CJS subcommittee Innovation coalition letter to the House CJS subcommittee Regional Innovation Strategies awardee letter to Congress Add your voice to the FY 2021 appropriations process on behalf of RIS and other, effective innovation programs. Contact Jason Rittenberg (rittenberg@ssti.org | 614-901-1690) to get involved today.

As the country’s working age demographic continues to get older, state budgets, especially those in the Northeast, will face greater pressure from increased Medicaid costs, says a new report from S&P Global Ratings. Environmental, Social, And Governance: Increasing Generational Dependency Poses Long-Term Social Risks To U.S. States' Fiscal And Economic Stability examines those trends resulting from the shifting demographics. By 2035, the number of people age 65 and older is expected to outnumber those under the age of 18 for the first time in U.S. history. This is expected to create economic, fiscal and social challenges for state governments.

Proving that innovation is appealing to states regardless of their size or political leanings, new initiatives in both Democratic and Republican states, as well as large states like California and small states like Vermont, are driving innovation agendas into action in areas ranging from clean energy and aid for students and colleges, to new venture capital investments and bond financing to support business collaborations with higher education to help translate cutting-edge research into products and companies. It is important to note that these new initiatives are in addition to important work that is already occurring in many states. SSTI continues to bring you news of these actions as governors, legislatures, and economic development organizations capitalize on proven programs to build out their innovation economies, with several examples provided here. In Arizona, Gov. Doug Ducey’s proposed budget includes $10 million in one-time General Fund support that would provide the state match portion for Arizona’s public universities to pursue major competitive national research grants. It is part of a larger $165 million plan put forward by the Arizona Board of Regents…

Two more governors have delivered their state of the state addresses over the past two weeks, with help for students taking the stage in New Hampshire while California’s governor enumerated the state’s growth and strengths, but devoted most of his remarks to the ongoing problem of homelessness. There are just a few remaining addresses, and SSTI will continue to cover the governor’s remarks and bring you excerpts of their speeches as they relate to their innovation initiatives. New Hampshire In Feb. 13 address, Gov. Chris Sununu lauded the state’s population growth, credited the state’s workforce initiatives and said the state is now ranked as the third most popular destination in the Northeast for millennials. “Last year we announced the creation of the New Hampshire Career Academy — an innovative program that allows for students in New Hampshire schools to receive a high school diploma, associate's degree, and a guaranteed job interview — all at no extra cost to the student or taxpayer. And just last week, we officially opened enrollment in the program at our community colleges. Students can start signing up now. …” “… Last year, I budgeted for…

Clean energy innovation provides an opportunity for state-level policymakers and other stakeholders to expand economic opportunities and increase the impact of federal activity on climate and energy while also creating local economic development opportunities, according to a new report. Regional Clean Energy Innovation, produced by the University of Maryland in partnership with Energy Futures Initiative (EFI), identifies a multi-step process for state-level policymakers to strategically advance clean energy innovation, based on a 50-state assessment and case studies of Colorado and Maryland. Clean energy innovation offers many benefits to regional and state policymakers such as the opportunity to grow in-state research, development, and demonstration (RD&D) and manufacturing firms, reduced costs of electricity for consumers through new technologies, and an environment with clean air and water. A number of key recommendations are made in the report; a few are highlighted here. Regional policymakers need to include not only wind, solar, geothermal, and biofuels in their definition of clean energy, but also technologies for decarbonization such as low-carbon…

U.S. Secretary of Agriculture Sonny Perdue recently announced a new Agriculture Innovation Agenda (AIA) to accelerate innovation so that American agriculture can achieve the goal of increasing production 40 percent while cutting the environmental footprint of U.S. agriculture in half by 2050. To help achieve the goal, the USDA is making several commitments including creating a comprehensive U.S. agriculture innovation strategy to align public and private research efforts. To do that USDA will seek input from the agricultural community on what innovative technologies and practices are needed to meet these demands. The department also says it will integrate the latest innovative conservation technologies and practices into USDA programs. Additionally, the USDA will improve data collection and reporting, which will serve as a catalyst for innovation and improved conservation decision-making. The USDA has outlined numerous benchmarks to hold themselves accountable to each of their commitments.

This edition of Useful Stats examines — by state and over the period from 2000 to 2018 — how many new establishments were founded, how many jobs these new establishments created, how many establishments closed, and how many jobs were lost from those closing establishments. In only one year, the last year of the period, 2018, all states experienced positive net gains in employment and establishments, based on data from the Bureau of Labor Statistics. As shown in the interactive map below, the states that had the greatest number of new establishments in 2018 were California (63,073), Florida (31,063), Texas (28,079), Washington (20,525), and New York (13,967). The states that experienced the greatest net employment numbers in 2018 were California (177,061), Florida (117,746), Texas (115,624), Washington (45,394), and New York (44,045).

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:  Innovations for the Manufacture of Advanced Materials: $124.6 million for 36 projects focused on new, low-cost manufacturing processes to catalyze domestic battery manufacturing, phase-change storage materials for heating and cooling applications, and the development of innovative materials for harsh service conditions. Lower Thermal Budget Processes for Industrial Efficiency & Productivity: $28.7 million for eight projects to conduct novel research on industrial process heating and drying technologies to increase energy efficiency and…

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. Last month, Pennsylvania’s Keystone Economic Development and Workforce Command Center, a public-private partnership created last year by the governor to study workforce development, presented its first report to the Wolf administration. It found five major barriers to employment and a list of 42 recommendations to address those barriers. Gov. Tom Wolf’s budget proposes investing $14 million to support the recommendations, building on a $124 million investment to fully fund PAsmart, career and technical centers, industry partnerships, and apprenticeships to provide job skills training.…