SSTI Digest

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.

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.

When Gov. Janet Mills addressed the United Nations General Assembly on Sept. 23, it was the first time a sitting governor of Maine has been asked to address the body. She had been invited as part of her participation in the UN Climate Action Summit 2019, and has made tackling climate change and embracing renewable energy key priorities of her administration. She is not the only governor stepping into the role where the federal government has backed out. Twenty five states are now part of the United States Climate Alliance; a collection of states that have committed to taking action that addresses the climate challenge and implement policies that advance the goals of the Paris Agreements, aiming to reduce greenhouse gas emissions by at least 26-28 percent below 2005 levels by 2025. Mills, along with governors from Illinois, Montana, Nevada, New Mexico and Pennsylvania, all joined this year. They are part of the increasing action seen across the states in clean energy, climate change and carbon reduction. This story takes a look at some of the 2019 developments in the states.

California

The Department of Defense commissioned a pilot study by TechLink of the economic impact of cooperative R&D agreements (CRADAs) at three Defense labs — U.S. Army Combat Capabilities Development Command Aviation & Missile Center, the Naval Surface Warfare Center Crane Division, and the Air Force Research Laboratory 711th Human Performance Wing. The study received information on 628 of 645 completed CRADAs from 1996-2018, 168 of which resulted in sales for the lab’s industry partner. Related sales were $8.7 billion, of which $4.9 billion went to the U.S. military, and TechLink’s IMPLAN analysis estimates $3 billion in federal, state and local tax revenues as part of a $23 billion economic impact. CRADAs are a partnership mechanism available across the U.S. federal lab system: learn about this, and other tools, from the Federal Laboratory Consortium for Technology Transfer.

Addressing common misperceptions about the industry, Manufacturing Day — held tomorrow, Oct. 4 — strives to address skilled labor shortages manufacturers face by opening the doors of different manufacturers to the public and showing what manufacturing is, and isn’t. The day was created in 2012 with the support of many organizations educating the public on modern manufacturing, including the National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP). With more than 2,600 events planned across the U.S., there is still time to check one out in your area. You can also celebrate the day by catching up on the latest trends in manufacturing, such as these stories from the Weekly Digest:

Expanding and diversifying the nation’s Skilled Technical Workforce (STW) is vital to the nation’s future, according to a new report from the policymaking board of the National Science Foundation (NSF) that predicts a shortfall of 3.4 million skilled technical workers by 2022 unless changes are made.

The Skilled Technical Workforce: Crafting America’s Science and Engineering Enterprise report found that there are currently about 17 million workers without college degrees who use science and engineering skills in jobs such as health care technicians, computer systems analysts and administrators, and operators of “smart” infrastructure.

For years, there have been arguments back and forth on which companies are the greatest job creators. The argument began with advocates for small businesses saying that small businesses were the engine of job creation. In recent years, others have argued that it’s not the size of the business that’s significant so much as the age of the business and that it’s young businesses that create most of the jobs.

Analysis by SSTI of Census Bureau’s Business Employment Dynamics (BDM) data finds a more nuanced picture when examining states’ shares of net job creation by firm age.

New Mexico Gov. Michelle Lujan Grisham became the latest governor to propose a plan for free tuition, with what has been called the “one of the most ambitious attempts to make higher education more accessible.” If approved, the plan would allow in-state students to attend any of the 29 state public colleges or universities, regardless of income. It is designed as a “last-dollar” program. If approved, it would be just the second state to offer full tuition coverage to its residents (New York offers the Excelsior scholarship, which will be fully phased in in 2020), according to New Mexico’s governor.