SSTI Digest

The U.S. House has now passed 10 of the 12 annual appropriations bills that fund federal agencies. Agencies with House-approved budgets include the Department of Commerce, Department of Energy, National Institutes of Health, National Science Foundation, and Small Business Administration. Federal R&D and Commerce’s Regional Innovation Strategies would see substantial increases, and — due to amendments made on the House floor — SBA’s accelerators and clusters programs would retain their funding. Unfortunately, of the four budget questions SSTI identified at the start of the year, most remain insufficiently answered to provide confidence for how the final FY 2020 budget will ultimately resolve. House appropriations highlights From the 10 bills that have been passed by the House so far, several line items are significant for regional innovation economies. Economic Development Administration. Regional Innovation Strategies program would receive $30 million (from $23.5 million), and a new STEM apprenticeship program would receive $5 million. SBA. Regional Innovation Clusters would receive $5 million (level funding), and the Growth Accelerator…

This month, SSTI research has examined changes in total R&D and total R&D intensity for each state over a 15-year period from 2002 to 2016. In this final installment of the series, this article looks at how the performance of R&D in the states changed over time. In half of the states (25 states), the share of total R&D performed by colleges and universities increased more than any performer (e.g., industry, federal government) from 2002 to 2016. Meanwhile, 20 states saw industry’s share of total R&D performance increase more than any other performer. The share of total R&D performed by industry increased the most in Wyoming (32.7 percentage point increase), followed by Iowa (19.6 percentage point increase) and Missouri (18.5 percentage point increase). The chart below highlights changes in total R&D performance and total R&D intensity by state, with the size of each dot representing total R&D performance (in dollars) and the color of each dot representing which type of performer increased its overall share by the most percentage points.       As can be seen in the chart above, most of the…

Reshoring manufacturing companies claim to be able to innovate at increasing rates, but some cite challenges with hiring qualified workers and with the country’s regulatory and trade policy environment, according to a new report from Select USA, a national program led by the U.S. Department of Commerce focused on business investment.  In Reinvesting in the USA: A Case Study of Reshoring and Expanding in the United States, authors from Select USA look at the experiences of six manufacturing companies that chose to reinvest in their U.S. operations, providing detail on what drove them to reshore, challenges and benefits to the move, and general lessons learned. They find that, although the reshoring process was more expensive and time consuming than the case companies expected, local partners such as economic development agencies provided valuable resources to make the process easier.  The main drivers of a company’s decision to reshore, according to the report, are a commitment to making products in America, a desire for increased product and design control, and a need to decrease the time between orders and deliveries. Finding a skilled workforce…

In a recent report focused on the impact of the small-scale manufacturing sector, the Urban Manufacturing Alliance (UMA) compiled what they say is a first-ever examination of what this emerging sector looks like and what may help charge its growth. They found an information gap on these businesses, as many of them combine design, art and production, and fall outside of data collection categories used to classify manufacturers. The report begins to identify the role and economic potential of these emerging businesses to help local stakeholders identify actions they might take to grow the small-scale manufacturing sector. UMA focused on firms in six cities: Baltimore, Cincinnati, Detroit, Milwaukee, Portland (Oregon), and Philadelphia. They surveyed nearly 600 producers and found the consistent theme that many innovative, hard-working entrepreneurs are fabricating goods in local economies that have fewer resources, and they need more help. To help build these businesses and overcome challenges, the UMA report includes potential solutions to some of the common problems they found. For example, they suggest more diverse and creative approaches to connect job candidates to…

An issue brief this month from the Pew Research Center asserts that despite the current national economic expansion still underway, states are still coping with lasting effects of the 18-month recession that ended in 2009. Calling it a “lost decade,” the authors found that although budget pressures have eased in several ways, states still have not fully restored cuts in funding for infrastructure, public schools and universities, the number of state workers, and support for local governments. The report, ‘Lost Decade’ Casts a Post-Recession Shadow on State Finances, details 10 ways that states face a legacy from the lost decade, including foregone tax revenue, decreased state spending, and less funding for higher education. The issue brief notes that even where overall state results have recovered, many individual states still lag behind — nearly a fifth of states collect less revenue that before the downturn and a third have smaller rainy day funds. If another recession were to hit before states fully recover from the previous recession, there may be permanently reduced levels of support for some state services, the authors caution.

Two recent executive orders issued by the White House have met with mixed reactions. While one order intended to ease the regulatory process for certain biotech products was met with favor by some in that industry, another order that could eliminate at least one third of the current federal advisory committees that was issued just days later, was roundly criticized. In his June 11 Executive Order, the president directs federal agencies to streamline the agricultural biotechnology regulatory processes. The order gives the leaders of the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA) and the Department of Agriculture 180 days to design a plan that will provide regulatory information and guidance in a coordinated response to inquiries from developers of agricultural biotechnology products. A fact sheet issued by the White House says the order will “help eliminate delays, reduce developer costs, and provide greater certainty about the review process for farmers” as well as “help create an environment that fosters greater investment in these innovative crops.” The order states that any regulatory regime for…

Manufacturing growth is helping fuel one of the longest expansions in the U.S., steadily adding jobs since 2010, according to Economic Innovation Group’s (EIG) recent data brief, Manufacturing’s Real But Patchwork Rebound. While manufacturing job growth has risen over the past two years, the report notes that its growth was broad but uneven. Counties in western states saw the highest annual growth rates from December 2016 to December 2018, and the South saw the largest number of new manufacturing jobs over that period: 173,900. However, authors Kenan Fikri and August Benzow also found that after two years of accelerated growth, the U.S. manufacturing sector is showing signs of slowing down. Food and beverage manufacturing powered the latest two-year surge (84,400 jobs added), while job losses were concentrated in apparel in print-related industries (28,700 jobs lost). Even though the sector has expanded overall, the authors point out that the U.S. economy is still far from recovering manufacturing jobs lost between 2000 and 2010 due to offshoring, automation and the Great Recession. It would take over two decades for total U.S. manufacturing employment to…

Last week, Agriculture Secretary Sonny Perdue announced plans to relocate nearly 550 USDA scientist positions from the agency’s headquarters in Washington, D.C., to the Kansas City metropolitan area. Originally announced in August 2018, the planned relocation of scientists within the USDA Economic Research Service, a statistical agency, and the National Institute of Food and Agriculture, has gained widespread attention. The scientists involved are arguing that the move is political: that their research is so important to setting policy that they should be in the Beltway. On the other hand, proponents of the decision argue that the move will cut costs and bring the scientists closer to stakeholders in the nation’s agricultural heartland. Here are four takeaways about the proposed move. Takeaway One: This marks another step in the politicization of federal science. Americans are increasingly polarized when it comes to public trust in science, according to an analysis by the blog FiveThirtyEight, and politics play a major role. The reaction from USDA scientists subject to the move have been overwhelmingly negative, according to the Washington Post…

Founded in 2015, venture-backed aerospace firm, Relativity Space, is poised to disrupt the rocket manufacturing and launch markets as it secures long-term contracts at NASA’s Stennis and Kennedy Space Centers. Relativity is reimagining the process to iterate and scale rockets quickly, relying on its revolutionary “Stargate” metal 3D printer and new autonomous facilities to build and launch rockets in days rather than years. The Mississippi Development Authority supplied the cost reimbursement and tax incentive package that, combined with a $59 million infrastructure investment from Relativity, enabled the firm to move into a 220,000 square foot facility, unused for the last 20 years, in southern Mississippi. Relativity will begin operations at its new facility in July, bringing 190 new tech jobs to the area over the next five years. It is currently on track to complete development and testing of the world’s first 3D printed rocket by 2020 for entry into commercial service in 2021.

Are you looking to increase the success rate of your state’s SBIR/STTR proposals? If so, a reminder that applications for the Small Business Administration’s Federal and State Technology (FAST) Partnership Program are due next Friday, June 28, at 4 p.m. EDT. This program provides one-year funding to organizations executing programs related to SBIR/STTR outreach, technical assistance, or financial support. As a way to help inform these proposals, SSTI has updated the data from a January Useful Stats article on NIH SBIR/STTR success rates to include the most recent year available, FY 2018. Overall, Montana had the highest combined success rate for NIH SBIR/STTR awards in FY 2018 (38.7 percent), while California received the most total NIH SBIR/STTR funding (271 awards), nearly twice as many as second-place Massachusetts (137 awards). The map below highlights total NIH SBIR/STTR awards and overall NIH SBIR/STTR success rate for each state in FY 2018.       Detailed NIH STTR/SBIR success rate data for each state from 2008 to 2018 can be found in this spreadsheet, or at the NIH website. Here is a link to the funding solicitation:…

After 18 months, some communities are starting to see Opportunity Zones (OZ) investments. LISC, a community development entity with a long track record of project finance, has published a new guide to help communities plan to capitalize on the investment. These activities remain heavily focused on real estate projects but may still be informative for groups looking to bolster their regional innovation economy. Several sizeable OZ projects have been announced in the last few days. In Denver, a 10-story apartment building in an up-and-coming neighborhood is thought to be one of the first in the region. A $23 million apartment building in Cleveland is said to be “80 percent” financed with OZ investments. Of course, many more projects could be occurring without public announcement. A new analysis tracks real estate investment in OZs, Census tracts that were not selected but were eligible as OZs (called “also ran” by Real Capital Analytics), and ineligible tracts. The data indicate that real estate sales in OZs were up substantially in 2018 versus 2017 and have continued to grow into 2019. Some of this activity, which includes substantial…

While higher education remains a viable path to economic advancement, adults without a postsecondary degree are increasingly benefitting from non-degree certificates and certifications, according to a recent report. As automation and technological advances demand more skills from workers in the changing economy, Strada Education Network and Lumina Foundation partnered to determine the value and impact of the growing number of non-degree credentials. They found that certificates and certifications can stand as a beneficial stand-alone credential, leading to higher full-time employment rates and annual incomes, although the findings vary among occupations and there are gender gaps across all occupations. The report, Certified Value: When do Adults without Degrees Benefit from Earning Certificates and Certifications, is based on data from the Strada-Gallup Education Consumer Survey, using a subset of nearly 50,000 individuals aged 25-64 in the labor force who do not have postsecondary degrees and are not currently enrolled in college. It found that those who hold a certificate or certification are more likely to perceive themselves as marketable, lending credence to the…