SSTI Digest

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).

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. 

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.

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.

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.

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.

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.

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.

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.

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.

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 Massachusetts Life Sciences Center (MLSC) plans to launch a seed fund to support the development of life sciences startups outside of the Greater Boston area. These areas, many already rich in major research university and medical center anchor institutions, should be bolstered by this early-stage funding currently concentrated in Boston.

Although the MLSC hopes to expand the program in future years, the fund will provide individual investments of up to $250,000 in convertible notes with up to $1 million of capital investment available Lowell, Worcester, Springfield, Amherst, and Pittsfield. Having won a $300,000 grant from the U.S. Department of Commerce’s Office of Innovation and Entrepreneurship, the MLSC board has approved $300,000 in matching grants, which will be administered in conjunction with the Massachusetts Transfer Technology Center.