SSTI Digest

Earning a college degree has long been touted as a prerequisite for getting a good job with the wages needed to support a middle class lifestyle, or better. However, as tuition rates have continued to rise across the country, so too has the burden of student loan debt.

Outstanding student loan debt increased by $20 billion from the second quarter of 2019 to a total of $1.5 trillion in the third quarter, according to the New York Federal Reserve Bank’s most recent quarterly report on household credit and debt. This amount — second only to mortgages at $9.4 trillion — accounted for nearly 11 percent of total household debt in 2019, increasing from roughly 4 percent in 2005. The most pronounced rise (37.8 percent) comes from people aged 18 to 29 — the age group for most college students — swelling from approximately 15 percent in 2005.  Not only has the total value of student loan debt increased, but so has its delinquency rates.

If reading more is on your list of New Year’s resolutions, SSTI has you covered as we bring you some thoughts from the staff on books we read in 2019. There are those we enjoyed and would recommend, as well as those you may want to skip. Also, feel free to drop us a line and let us know if you have any recommendations to share with us. Perhaps they’ll show up on our list next year!

Dan Berglund, president and CEO

This edition of Useful Stats examines the Bureau of Economic Analysis’ first full release of county-level gross domestic product (GDP) data. Specifically, this analysis considers total county GDP in 2018 and the contributions to each county’s GDP by industry.

While finance and insurance in New York ($222.5 billion) accounted for the single largest contribution to both total county GDP and total U.S. GDP in 2018 — followed by real estate and rental and leasing in Los Angeles ($150.2 billion) — the manufacturing sector was the highest contributor to county GDP in the greatest number of counties. Manufacturing was the primary source for county GDP in 927 out of more than 3100 counties — accounting for nearly $2.3 trillion of total U.S. GDP in 2018. Government and government enterprises (768 counties) accounted for the second most frequent leader in county GDP contributions — totaling $2.4 trillion nationally — followed by real estate and rental and leasing (647 counties) — totaling $2.7 trillion nationally. The next closest industry was agriculture, forestry, fishing and hunting which was the top contributor to GDP in only 209 counties — and only accounting for a national total of $138.4 billion.

The map below shows counties with manufacturing, government, real estate, mining, and agriculture  as their predominant industry. The map shows that manufacturing is the leading industry in counties in the Midwest and South while agriculture is centered primarily within the Plains region.

NIH has taken an expanded approach in defining scientists from disadvantaged backgrounds, in an effort to encourage and enable more biomedical scientists. NIH determined that the criteria they were using in defining disadvantaged was too narrow; for example, what was considered low-income ($25,750 for a family of four) is actually considered severe poverty and represents an overly strict threshold, the reviewers found. They have issued new guidelines and will consider scientists to have come from a disadvantaged background if they meet at least two criteria from their expanded list, including no parents or legal guardians who completed a bachelor’s degree, past eligibility for the federal free and reduced lunch program for two or more years, and were or are currently eligible for federal Pell grants.

A trio of plans focused on economic development at the state level were released this month. Noting that it is at an economic crossroads and facing serious challenges, Maine’s Department of Economic and Community Development has issued a new 10-year economic development strategy for the state. Massachusetts has also proposed a new economic development plan, focusing on four key areas, while a new report in Maryland is targeting clean energy as an opportunity for the state to invest in the future.

Maine’s plan

Maine’s challenges include what they say is a likely global economic downturn, an aging workforce and threats to some of its largest industries due to technology and climate change. Noting that it has not had such a strategy in more than two decades, the new plan was developed incorporating feedback from more than 1,300 Mainers. Talent and innovation emerged as the two major necessities to spur growth in the state.

Congress is expected to pass the FY 2020 budget this week, and as anticipated, the bills include billions in new appropriations. Innovation policy priorities, such as Regional Innovation Strategies, Manufacturing Extension Partnership, and NSF, did well in the final budget. Here are the top things to know about innovation initiatives in the final budget.

1. Regional Innovation Strategies receives $33 million

The Economic Development Administration (EDA) is seeing its funding increase by $29 million to $333 million for FY 2020. This growth includes an increase of $9.5 million — or 40 percent — for Regional Innovation Strategies.

Expanding the program has been a top priority for SSTI’s Innovation Advocacy Council, and RIS has strong support on the Hill. At the time of the subcommittee markup for EDA’s budget, Chairman Jerry Moran said, “I am proud to say that the program will receive its largest year-over-year increase in the program’s history.”

2. Increased support for manufacturing innovation

This year’s national defense authorization act (NDAA) includes extensions of the Regional Innovation Strategies (RIS) program and Manufacturing USA. The House and Senate have passed the FY 2020 legislation, which authorizes up to $738 billion in appropriations and sets policy for a wide range of defense-related activities. The NDAA is one of the few bills that passes Congress each year. For this reason, the bill is often viewed as a vehicle for defense-related policies that may not garner sufficient attention separately. In 2018, for example, the NDAA extended SBIR/STTR pilot programs. The following policy areas addressed in the FY 2020 NDAA are the most relevant to regional innovation economies:

Regional Innovation Strategies

Advancing programs to increase students’ tech skills, raising awareness of the skilled trades, attracting out of state workers by paying moving expenses, and creating a Governor’s Workforce Council, were just a few of the new programs across the states dealing with current and looming shortages in the workforce. This week SSTI takes a look at some of the different workforce development initiatives that surfaced in 2019 as part of our ongoing coverage of innovation programs that were implemented this past year.

In a new working paper, Sabrina T. Howell of New York University and Filippo Mezzanotti of Northwestern University provide a systematic review of state angel tax credits. One of the most notable aspects of their research is a seemingly-comprehensive index of all of the relevant programs authorized by states over the past 30 years. The results indicate that angel tax credits have some impact on investment activity but not on economic outcomes. The authors provide evidence that the reason for this seeming discrepancy could be due to program design allowing existing activity to benefit from the new credits.

Brookings and the Information Technology and Innovation Foundation (ITIF) are proposing a new concentration of federal investment into 10 metros with a goal of creating new innovation hubs. The Case for Growth Centers is likely an early entry of what will be many suggestions between now and next November for “massive federal” policies, but may be one of the most directly relevant to regional innovation economies. More details on their proposal and its potential impacts follow.

This week’s edition of Useful Stats covers Higher Education Research & Development (HERD) expenditures at the metropolitan level, pulling from the recent NSF updates to its HERD performance data. High levels of college and university R&D activity is not surprisingly clustered heavily in the East Coast — ranging from the District of Columbia up to Boston — and on the West Coast in California. The 10-year average HERD expenditures were the greatest in the New York-Northern New Jersey metro area ($3.7 billion), Boston ($2.8 billion), Baltimore ($2.8 billion), Los Angeles ($2.6 billion), and Houston ($2.0 billion). These five metro areas account for nearly 21 percent of the nation’s total 10-year average R&D spending by universities and colleges. Of the 209 metro areas included in this analysis — and excluding nonmetropolitan areas — the top 15 metros account for approximately 45 percent of the 10-year average of total HERD expenditures.

The number of students enrolled in all levels of school in 2018 was 76.8 million, a drop of 2.8 percent from the 79 million enrolled in 2011, according to a new study by the U.S. Census Bureau. The biggest decrease in enrollment was at two- and four-year colleges. Enrollment in two-year colleges was down from 5.7 million to 4.3 million, a 25-percent drop, while enrollment in four-year colleges was down from 20.4 million to 18.9 million, a 7.6 percent dip over the 2011-2018 period.  The number of graduate-school students is up to 4.3 million, a 300,000 jump from the 2011 total. The number of minority students has increased as well.