SSTI Digest

The Kentucky and Mississippi gubernatorial elections were held on Nov. 7, with both incumbents, Andy Beshear (D) and Tate Reeves (R), winning re-election. Legislative elections were also held in Mississippi (where simple majorities were guaranteed for Republicans in both chambers), New Jersey, and Virginia. With all 40-person Senate and 80-person Assembly seats in the New Jersey Legislature up for election, the Democrats not only retained their legislative majority, which they have held since 2004, but expanded it. Meanwhile, Virginia Gov. Glenn Youngkin’s hopes to advance his conservative agenda were dashed as voters kept the state Senate in Democratic hands and flipped the state House blue.  In Michigan, which did not hold a legislative election this year, the Democrats lost their slim majority in the House (as well as its first majority of both chambers in four decades) when voters elected two state representatives as mayors to southeast Michigan communities. Although the twin victories were planned for by leadership, it also means that the Democrats will, at least temporarily, lose their two-seat edge (56 to 54) in the state House of Representatives. The even split between the two parties returns Michigan to a divided government until Gov. Gretchen Whitmer calls for a special election.

In Mississippi, the state auditor released a report  in September 2023 that rated academic degrees by whether the degree would lead to a well-paying job. He suggests that Mississippi invest more in programs in the subject areas leading to those high-paying, in-state jobs. Basing appropriations on immediate wage outcomes implies that near-term economic return is the only benefit that matters, and it is a theme that is recurring frequently. In contrast, liberal arts advocates take a more holistic view of the value of higher education.

The Economic Development Administration (EDA) announced 60 organizations receiving $53 million from the Build to Scale program today. This is the program’s 10th and largest award cycle, following years of consistent appropriations growth from Congress. The Build to Scale program, which includes the Venture Challenge and Capital Challenge, funds the launch or expansion of programs that address regional needs to achieve a more robust innovation economy. SSTI has been a staunch supporter of Build to Scale and participating organizations since it was first formed.

While there has been increasing public questioning of the value of a college degree, statistics on net worth by educational attainment paint a clear picture. In 2022, the median net worth of those without a high school diploma was approximately $38,000, while those with a college education sat at around $464,000. When looking at averages instead, the difference becomes even more pronounced, with non-high school graduates averaging a net worth of approximately $176,000 compared to college graduates’ $1.92 million.

Startup Genome and the Global Entrepreneurship Network recently released a new report offering a fresh perspective on what it takes for a startup to scale. The report draws on an eleven-year study involving 100,000 startups to provide a nuanced look at the factors contributing to startup scalability, offering actionable insights that underscore the importance of networks for entrepreneur support organizations, entrepreneurs, and policymakers. 

Incorporating systems thinking into economic development planning could lead to better solutions to potential and pressing problems, says a Quarterly Research Brief from the National Economic Research and Resilience Center (NERRC). The paper emphasizes that systems, or integrated planning, is essential when writing a Comprehensive Economic Development Strategy (CEDS).

The Biden Administration issued an executive order earlier this week that provides guidance on the safe, secure, and trustworthy development and use of Artificial Intelligence (AI) in the U.S. The EO includes guidance for agencies to work to provide new opportunities for small businesses and entrepreneurs in AI and other directives.

Despite a $4.1 trillion increase in annual output since 1987, manufacturing industries in the United States have been declining in both their labor productivity and share of output. The Bureau of Labor Statistics’ labor productivity (output per hour) index, tied to 2012 values, for manufacturing industries has dropped by nearly five points since its all-time high of over 101 in Q2 2013.

Not all publicly traded companies use savings from tax cuts the same way, NBER researchers James Cloyne, Ezgi Kurt, and Paolo Surico report in “Who gains from Corporate Tax Cuts?  While changes in marginal tax rates and investment tax credits (ITC) can have significant effects on the behavior of publicly traded C-corporations, manufacturers and goods producers are much more likely to recirculate the savings into additional capital expenditure and employment than firms in the service sector.  Publicly traded service sector companies typically use the proceeds from a tax cut to increase dividends to current investors in the firms.

By April of 2023, state legislatures had filed 99 anti-ESG bills, according to Reuters. Many of these bills are motivated by the perception that investors who prioritize environmental, social, and governance (ESG) compliance by companies in which they are investing are imposing their political beliefs on others. Furthermore, some believe that ESG considerations inhibit investors and thus hurt returns. On the other hand, some critics of these bills argue the opposite: that it is restricting ESG investing that jeopardizes investment returns. In fact, Research from Pitchbook found ESG investing can have as big a return as investing in non-ESG-driven investments.

Three states are holding gubernatorial elections this fall, with voters in one of those states (Louisiana) having already chosen a new governor to replace a term-limited incumbent. In the remaining states, Kentucky and Mississippi, elections will be held next week (Nov. 7), with the incumbents facing tough opponents in their reelection bids. Six states (Colorado, Maine, New York, Louisiana, Ohio, and Texas) will vote on 36 statewide ballot measures this fall. Of those measures, 30 of the 36 measures are legislatively referred constitutional amendments or statutes, while the other six are citizen initiatives. Many of this year’s measures are focused on taxes and state funds. At the same time, state legislative elections will be held in Mississippi, New Jersey, and Virginia.

The Appalachian Regional Commission (ARC) recently awarded new grants totaling over $16.4 million to boost green energy manufacturing and workforce development through its Appalachian Regional Initiative for Stronger Economies (ARISE) funding opportunity.  ARC’s Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative recently awarded nearly $54 million to projects that will leverage entrepreneurship, workforce development, and infrastructure to bolster re-employment opportunities, create jobs in existing or new industries, and attract new sources of investment in communities and regions that have been affected by job losses in coal mining, coal power plant operations, and coal-related supply chain industries due to the changing economics of America’s energy production.