SSTI Digest

A rulemaking committee, convened by the U.S. Department of Education, has begun work to rethink higher education and is considering ways to refine and streamline the accreditor recognition process and role, while also reviewing regulatory areas affecting innovation in higher education. The committee was convened to develop proposed regulations related to a number of higher education practices and issues, including: accreditation; distance learning and educational innovation; TEACH grants; and participation by faith-based educational entities. Two Department of Education reports released last month will help inform the committee’s work and concern accreditation reform and rethinking higher education. The department’s white paper, Rethinking Higher Education, posits that America’s legacy in higher education is under threat from higher costs and growing differences regarding the purpose of postsecondary education. It presents many principles for reform that include goals to empower students, institutions and innovators. The suggestions include empowering students  by enabling academic and career mobility and improving access to federal student aid; empowering…

When it comes to paying off student loan debt, rural individuals who move to metro areas fare better than those who stay, according to new research from PJ Tabit and Josh Winters of the Federal Reserve Board’s Division of Consumer and Community Affairs. Using panel data from Equifax and the New York Fed, the authors explore the relationship between the student loan balances of rural millennials and where they choose to live when they begin repayment. Their analysis offers a deeper understanding of the rural brain drain phenomenon and approaches to addressing the challenge. In ”Rural Brain Drain”: Examining Millennial Migration Patterns and Student Loan Debt, Tabit and Winters look at the changes in the census tract locations of borrowers at several points in time: when they start their credit history, when it is estimated that they enter repayment, and each of the first three years after they enter repayment. The authors find that individuals with student loan debt are considerably less likely to remain in rural areas than those without any student debt, and that those individuals with the highest student loan balances are the most likely to leave rural…

This week, we see broadband investment in Indiana; education initiatives that begin with pre-K and extend beyond high school in a number of states; lifelong learning approaches; apprenticeships; climate change and green energy initiatives in Nevada and Washington; and more on governors’ agendas. As governors across the country continue to deliver their state of the state addresses to their legislatures and constituents, SSTI monitors the speeches for news of innovation related initiatives. This week we bring you news of innovation funding from governors in Indiana, Iowa, Kansas, Missouri, Nevada, Rhode Island and Washington. Indiana Gov. Eric Holcomb gave his address Jan. 15 before the General Assembly, highlighting among other things the state’s growing tech ecosystem. His plan is to take the state to “the next level”: “But to stay ahead of our competition and keep breaking those jobs records, we must keep sharpening our economic development tools to give us the flexibility to attract more capital investment and more people to locate here. …” “… But all students should be doing their…

From FY 2018 to FY 2019, state fiscal support for higher education grew by 1.6 percent nationwide and increased in 45 states, according to new data from the Grapevine Survey, a project of Illinois State University’s Center for the Study of Education Policy in cooperation with the State Higher Education Executive Officers (SHEEO). Inside Higher Ed has a thorough rundown of the study, including an interview with James Palmer, a professor of higher education at Illinois State University and Grapevine’s editor, who declared it “a marginally better year” for state fiscal support for higher education.  Using data directly from the Grapevine Report, the following map highlights FY 2019 support (point-size) and percent change over the five-year period from FY 2014 to FY 2019, as well as state rankings. Data can be downloaded directly through Grapevine.  

Maryland Governor Larry Hogan’s FY 2020 budget proposal includes $56.5 million in new funding to attract businesses to Opportunity Zones. Other new innovation funding would support manufacturer hiring credits and a seed fund for minority entrepreneurs. Under the governor’s proposal, TEDCO, the state’s primary innovation agency, would see its spending increase from $27 million to $45 million. The Opportunity Zone proposal is likely to garner the most attention from other states, as regions throughout the country are still attempting to make sense of how to leverage the incentive to encourage positive growth. Details are still forthcoming on the exact nature of the proposed programs, but highlights show a multi-faceted approach to encouraging development in the zones: A technology infrastructure fund, operated by TEDCO, would have $16 million to “promote technological development;” A $6 million tax credit fund would incentivize companies to locate or expand in the zones; The state’s Employment Advancement Right Now (EARN) training program would have an additional $3 million for businesses in zones; and, Housing and community…

As the partial government shutdown enters its second month, the impacts across America are increasingly disruptive. The agencies that do not have a current budget were appropriated more than $38.9 billion for R&D, technology transfer, entrepreneurship, broadband, science, economic development and other activities related to regional innovation economies in FY 2018. Most of these programs stand to receive at least this amount for FY 2019. While some programs were able to spend funds from remaining 2018 dollars or from the continuing resolution that expired in December, many other activities have been delayed by more than a month — and with no clear endpoint in sight. To help your organization track the shutdown, SSTI has compiled a list of the most significant impacts on regional innovation.   Primary regional innovation funding agencies with limited, or essentially zero, current staff support: Department of Commerce (including EDA and NIST) National Science Foundation Small Business Administration Programs with awards or funding processes disrupted: EDA Regional Innovation Strategies (FY 2018 winners) SBA Innovation Clusters (FY 2018 awards…

Based upon the finding of two reports – the 4Q Pitchbook-NVCA Venture Monitor and the MoneyTree Report –   SSTI identified three significant trends that impact the startup capital community: geographic concentration, mega-rounds/funds, and strong VC-backed exit activity. Approximately $130.9 billion was invested across nearly 9,000 deals in 2018 by the venture capital (VC) industry, according to the 4Q PitchBook-NVCA Venture Monitor. This marks the first year since the height of the dot-com boom that annual capital investment eclipsed $100 billion. The report indicates a decline in the number of seed-stage deals made during the year, although PitchBook will continue to add deal data as it becomes public, which may ultimately change the direction of this trend (as happened in 2017). Reporting on seed-stage investments as a share of all deals, the MoneyTree Report from PricewaterhouseCoopers and CB Insights finds a third consecutive year of decline, to just 25 percent in 2018. The year did see more large, later-stage, mega-rounds including a record number of 54 VC-backed U.S. companies obtaining $1 billion valuation — a record for the…

The 20 new governors elected last November are filling out their appointments, and SSTI’s analysis of those named as state economic development directors reveals an array of backgrounds leading into their new roles. New Republican governors have shown a greater propensity to choose a leader with an industry background, while new Democratic governors have been more likely to appoint  directors with economic development experience. From a former U.S. representative to the owner of a regional pizza chain, here are the highlights of the 16 state economic development directors appointed since November.   Industry Of the 15 economic development administrators named so far, seven come directly from the private sector, with two of those appointees having a background in the tech sector; newly elected Democratic governors appointed both. Half of the new Republican governors appointed an economic development director straight from the private sector. Gov. Tim Walz’s (D) appointee to lead the Minnesota Department of Employment and Economic Development, Steve Grove, recently…

The state of America’s foreign policy and the livelihoods of its middle-class are inextricably linked, according to a new report from Ohio State’s John Glenn College of Public Affairs and Carnegie Endowment for International Peace. The report’s authors, using Ohio as a lens for their examination, conduct a thorough quantitative and qualitative analysis on this relationship. They find that the relationship between foreign policy and the middle class is complicated, but that improving outcomes for the middle class will ultimately require a comprehensive foreign policy strategy that is tied to economic development. Notably, unlike the many pieces authored from academics and think-tank researchers on the coasts that focus on “the heartland” or foreign policy more broadly, this report features local perspectives from more than 100 economic development stakeholders across six regions in Ohio. The Carnegie Endowment for International Peace plans to release additional state-level case studies throughout 2019. U.S. Foreign Policy for the Middle Class: Perspectives from Ohio explore changes in the state’s manufacturing sector, the impact these…

A note from the publisher (aka, Dan Berglund): Two of the most frequent questions SSTI staff is asked are: “What program, initiative, movement has piqued your interest?” and, “Who should we be watching and learning from?” While the answers are somewhat implied in what we cover in The Digest, host webinars on, and feature in conference content, look for occasional pieces in 2019 labeled “SSTI Feature” that offer a sampling of our answers to those questions. Some folks hope sharing a pot of coffee might be enough to spur entrepreneurial revolutions. Meanwhile, Leslie Lynn Smith, her team at Epicenter Memphis and their growing network of regional partners are working on a better way to create a region-wide movement to support innovation and entrepreneurship with tangible impact in a big way. So much of the entrepreneurship, innovation, and capital literature focuses on the celebrity of the individual person, program or company undertaking the mission. Epicenter Memphis demonstrates that the real work of regional innovation is done by emphasizing shared goals — and achievements — in the pursuit. The venture development…

Last week, U.S. trade representatives traveled to Beijing for a round of trade talks with the hope of coming to an agreement that would end the U.S.-Chinese trade dispute. Alongside large corporations, many U.S. tech startups are watching the results of these talks with a close eye because they face significant concerns over the impact that increased tariffs will have on their business. But while tariffs have garnered most of the press attention, U.S. startups also face reduced access to foreign capital, increased regulatory scrutiny, and potential talent issues. Conversely, China is developing new strategies to ensure that more investment dollars will remain in their domestic startup capital community.

Reviewing another slate of governors’ state of the state and inaugural addresses reveals some recurring themes. With a focus on maintaining gains made since the Great Recession and increasing budgets, many governors are holding off on major new initiatives, but are proposing means to increase broadband access, diversify their economies, build renewable energy efforts, and increase their rainy day funds in case of an economic downturn. SSTI presents part 2 of our Tech Talkin’ Govs series, with coverage of governors in Colorado, Connecticut, Oregon, Virginia, West Virginia and Wyoming. Follow along in the coming weeks as we continue to cover all of the governors’ addresses for 2019, bringing you excerpts of their words, promises and programs that touch on the innovation economy. Colorado Gov. Jared Polis reiterated his goal of reaching 100 percent renewable energy in the state by 2040 and desire to expand broadband: “As Governor, my goal is to lead the statewide transition to a clean, sustainable, and growing economy. It is imperative for our climate, our security, our health, and our economic growth for all Coloradans. We will lead…