SSTI Digest

Knowing that research universities are integral to the innovation in this country, states continue their efforts to build the economy by supporting efforts to move the research from the labs to the market. In our ongoing review of state activities in 2019 (see our stories on free tuition offerings, climate change and clean energy), this week we report on new initiatives launched in 2019 that were focused on commercialization of technology. The following programs represent some of those efforts. Alabama Alabama Gov. Kay Ivey participated in a ribbon-cutting ceremony in June for the state’s Invention to Innovation Center (I²C) on the campus of the University of Alabama in Huntsville. The I²C is a regional initiative that will serve as the focal point for incubation, education and support for entrepreneurs across a 15-county region in northern Alabama and south central Tennessee. The program seeks to foster, promote and accelerate the commercialization of technology-based ventures through incubation, co-working, mentorship, funding, and strategic support. The I²C is focused on stimulating the growth of both new and existing regional science and…

President Donald Trump this week issued an executive order reinstituting the President’s Council of Advisors on Science and Technology (PCAST) to advise the president on matters involving science, technology, education, and innovation policy and named the first seven people to the council. The council will also provide the president with “scientific and technical information that is needed to inform public policy relating to the American economy, the American worker, national and homeland security, and other topics.” According to a report last year from the James A. Baker III Institute for Public Policy on the role of PCAST, the current model for PCAST was active in the past four administrations, and while President Trump had renewed the PCAST charter earlier in his administration, the Department of Energy had eliminated appropriations for PCAST from its FY 2018 and FY 2019 budget requests. However, the current executive order states that funding, administrative and technical support will be provided by the Department of Energy. The report found that despite differing administrations’ priorities and how they utilized the council, it was effective…

In recent weeks, three separate reviews of R&D grants and awards at NIH have shed new light on issues of minority and women representation among researchers and on potential conflicts of interest by investigators. NIH has been publicly working to address concerns about representation and trustworthiness among its investigators. While the results from these studies show that the agency has more work to do, the availability of this information speaks favorably to NIH's transparent approach to these conversations.  A study in Science Advances of 157,000 research proposals from 2011-2015 found that topic choice accounts for 21 percent of the funding disparity between black and white applicants. Topics proposed by black scientists were more likely to address community interventions, health disparities and other topics that appear to be of less interest to NIH reviewers. Science reported on gender bias in the Early Independence Award, which has seen a lower share of female winners than applicants or finalists in eight of the last nine years. NIH has already adjusted the 2020 invitation to target a broader array of scientists. An NIH inspector general audit for 2018…

Business R&D activity has been historically concentrated in a few states and became even more so in 2017, according to a National Science Foundation issue brief on the latest Business Research & Development and Innovation Survey (BRDIS). Despite finding total business R&D surpassed $400 billion in 2017, reflecting a 6.8 percent increase over 2016 results, NSF’s data also reveals R&D activity in five states alone – California, Massachusetts, Michigan, Washington and Texas – captured well over half of all of the nation’s business R&D investment in 2017. These top states represented 55.2 percent of the total in 2017, while five years earlier their share was “only” 49.4 percent of the reported results. Private sector investment into research and development is a critical component of innovation, new product development, and regional economic vitality. The continued gains in R&D activity in top performing states are offset by losses across other states, both in real dollars and in the share of the U.S. total. Thirteen states saw real dollar declines between 2016 and 2017; the 2017 figure in 15 states was below their five-year average. The growing…

Wyoming Gov. Mark Gordon recently announced that changes are coming to the state’s ENDOW initiative, a 20-year vision that was crafted under his predecessor, Gov. Matt Mead. As part of the coming changes, Gordon said the initiative will target certain industries (such as aerospace, defense and healthcare), be smaller in its scope, and incremental in its strategy. The governor said in a statement that while the vision of ENDOW will continue driving state economic diversification, efforts will now shift toward targeted implementation plans. With the 20-year strategy and action plans already submitted, the governor will no longer convene the executive council, but the ENDOW-initiated programs and committees will continue. The governor said he will announce plans in the coming weeks on the next steps on economic development. 

A new innovation hub slated to open in January in Washington promises to connect 5G startups with investors and technology labs, while also creating a pipeline of jobs for students interested in the emerging sector. A separate effort in Virginia will become a testbed for 5G wireless security that is expected to accelerate cyber research and include 39 universities and four federal partners. Last year, the president directed the secretary of commerce to lead the creation of a long-term spectrum plan and the White House Office of Science and Technology Policy (OSTP) has since outlined development priorities for American leadership in the emerging technology.  But with no 5G network up and running yet, one may begin to wonder if all the attention is hype, or rooted in reality of a truly disruptive technology that will largely advance society. A recent briefing paper from the Berkeley Roundtable on the International Economy seeks to answer who is likely to benefit from this promised vastly faster connectivity, and how that value will be captured.

A review of recent reports finds the rise of financial technology (fintech) has the potential to improve the financial health and literacy of the traditionally underbanked and decrease discriminatory practices as more people gain access to services and are included in financial markets. However, regulators face new challenges as a result of fintech.

Last week Pennsylvania Gov. Tom Wolf issued an executive order directing the Department of Environmental Protection (DEP) to join the Regional Greenhouse Gas Initiative (RGGI), joining nine other Northeast and Mid-Atlantic states in a market-based collaboration to reduce greenhouse gas emissions from power plants and combat climate change. And in North Carolina, Gov. Roy Cooper’s Climate Change Interagency Council presented four key plans related to clean energy and climate change, the result of the governor’s executive order signed last year to reaffirm the state’s commitment to fighting climate change and transition the state to a clean energy economy.

If Americans are going to build better careers and share prosperity as technological changes occur, the U.S. will have to implement more comprehensive policies, according to an MIT task force’s preliminary report titled The Work of the Future: Shaping Technology and Institutions. The task force, convened in spring 2018, was motivated by the paradox that despite a decade of low unemployment and rising prosperity in the U.S., there is a pessimism surrounding technology and work, which it says is “a reflection of a decades-long disconnect between rising productivity and stagnant incomes for the majority of workers.”

The Appalachian Regional Commission (ARC) announced $44.4 million in 54 awards to help expand and diversify the economy in Appalachia’s coal-impacted communities through the Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative. One third (more than $14.6 million) of these investments will develop business incubators, increase access to capital, and provide other services to advance entrepreneurship in Kentucky, Ohio, Pennsylvania, Tennessee, and West Virginia. Nearly 30 percent (over $13 million) will support broadband development and expansion in rural and/or underserved areas in New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia. And another 19 percent ($8.3 million) will focus on workforce-to-recovery and other comprehensive strategies to strengthen the recovery ecosystem in Kentucky, North Carolina, Ohio, Virginia, and West Virginia.  A full list of the awards and more information about the POWER Initiative is available here.

PitchBook and NVCA just released the 3rd quarter Venture Monitor, and the year-to-date figures show another year of robust activity. Total deal value is set to exceed $100 billion again, and exit value is already at $227 billion. Deal and exit count, however, appear on pace to finish below the last several years, with 7,862 investments and 633 exits to date so far. The report shows continued, challenging trends for early investments, with 55 percent of seed deals now over $1 million and first financings on pace for a slower year by both investments and value. Several sections of the report speak to contextual challenges and uncertainty likely to face the venture capital market, including well-publicized IPO disappointments and the general threat of a looming recession. Despite — or, perhaps, because of — these concerns, the report’s interview with an executive from sponsor Perkins Cole is remarkably upbeat. The company does not believe valuations are “unexpectedly high” despite an internal “joke about how $10 million is the new $4 million.” The executive also notes that the amount of dry powder is “still helping support…

Federal agencies fail, on average, 24 percent of the time to notify applicant small businesses of award decisions within required deadlines. A small business has a zero percent chance of being able to plan to start an innovation project within six months if they apply to ARPA-E (the Department of Energy’s Advanced Research Projects Agency) or the Defense Threat Reduction Agency, both of which never met the deadline.  These competitiveness-throttling facts were uncovered in the latest SBIR-related report from the General Accounting Office (GAO), released Sept. 26.  “Small Business Innovation Programs: Many Agencies Took Longer to Issue Small Business Awards than Recommended,” reports only 13 of the 28 federal agencies, offices and components included in the analysis were able to make timely awards (within 180 days) more than 50 percent of the time. For its analysis, the GAO looked at the time from application to notification for more than 15,000 SBIR and STTR awards made during the fiscal years 2016, 2017 and 2018.  The number of proposals received or awards made appears to have no bearing on the performance records of the agencies…