SSTI Digest

At SSTI's 2018 Annual Conference this week, the U.S. Department of Commerce announced 40 awardees for $21 million in the latest round of the Regional Innovation Strategies program. The program which makes grants for the i6 Challenge and Seed Fund Support, has now provided $78 million to 180 projects across 46 states, DC and Puerto Rico. Congratulations to SSTI members: Ben Franklin Technology Partners, Excell Partners, Kansas State University, Launch New York, Launch Place, Massachusetts Life Sciences Center, New Jersey Innovation Institute, Research Foundation for SUNY, University of Michigan, University of Missouri, and VilCap on their awards.

Over the last two years, foreign-born workers have faced  increased difficulty in obtaining work visas, a condition that could lead to negative impacts on the future economic prosperity of the United States. Under the Trump administration, there also has been a reduction in the cap for H-1B visas from 85,000 in 2016 to 65,000 this year. In addition to a reduction in the number of H-1B visas offered, human resource professionals report that the U.S. visa application process has become more difficult due to increased complexity, longer preparation times, and increased requests for additional information, according to a survey by Envoy.  The cap reductions have driven public discourse regarding the policy’s economic impact. Proponents of the reductions argue that H-1B visas reduce opportunities for domestic-born workers. Critics of these policies contend that generally domestic workers actually benefit from federal policies that attract skilled foreign-born workers. Over the past several months, three research articles looked to measure the impact that these immigration policies can have and have had on domestic workers and economic growth.

Strict balanced budget requirements, tax or expenditure limits and party control of a state legislature and governorship can influence innovation funding when states respond to deficits. As states face new political landscapes and decision makers in their legislatures, the implications of a recent study on the topic emphasize the importance of keeping innovation on a state’s agenda. The analysis by the Tax Policy Center (TPC), Budget Processes and the Great Recession – How State Fiscal Institutions Shape Tax and Spending Decisions, explores how strict balanced budget requirements (BBRs) and tax or expenditure limits (TELs) influence states and their decisions to either cut spending or raise revenues in response to surprise deficits and finds that budget processes and party control influence a state's response. When studying the effect of budget processes in the period during and following the Great Recession, the authors found that states with strong balanced budget requirements, binding revenue limits, or a combination of strict revenue and expenditure limits bridged the largest share of their deficit gaps (compared with states that had weaker…

Rural communities across the country have the opportunity to build capacity to create innovation-based jobs with a new initiative spearheaded by the Center on Rural Innovation. Communities that are already working on building new entrepreneurship capacity will receive on-site technical assistance as they execute an innovation hub strategy. Those communities will need to secure live-work space for the hub, raise up to $500,000 in operating funding and apply for matching funds at the end of Q1 2019.  Successful communities will ideally have a combination of the following attributes: Existing high-speed broadband; Available real estate, or significant portions of the community located in New Market Tax Credit census tracts and/or Opportunity Zones; Proximity to a selective, 4-year endowed residential college or university campus willing to partner; and A willing non-profit organization prepared to lead the initiative. Interested communities should complete an interest form by Jan. 15, 2019, and while there is no cost to apply, the Center on Rural Innovation notes in its release that “participation will take a real commitment of time and energy from local…

The National Association of State Budget Officers (NASBO) is reporting that total state spending rose in FY 2018, exceeding $2 trillion for the first time. While spending increased in both FY 2017 (3.8 percent) and 2018 (4.6 percent), it was still below the historical average of 5.6 percent, with the strongest growth in spending reported in the far West and Southeast. All program areas experienced an increase in total state spending, with Medicaid showing the largest percentage increase. Higher education expenditures increased by 3.2 percent in estimated FY 2018, and by 3.1 percent in FY 2017. NASBO reports that the average higher education annual general fund spending growth has been 3.4 percent from fiscal 2013 to fiscal 2018, compared to total general fund spending on all program areas, which has grown by an average annual rate of 3.7 percent over the same period. General fund revenue grew more rapidly in FY 2018, a 6.2 percent increase over FY 2017 and the highest rate of growth since FY 2011. The strong growth is attributed to unusually high income tax payments from non-withholding income sources along with continued growth in the national economy. States are…

Higher education R&D expenditures (HERD) grew by 38.9 percent from 2008 to 2017, an increase of more than $21 billion, according to an SSTI analysis of recently released data from the National Science Foundation’s National Center for Science and Engineering Statistics. From 2016 to 2017, HERD grew by $3.8 billion, the largest year-over-year increase since 2010-2011. Higher education R&D expenditures grew the fastest in Connecticut (66.2 percent), Massachusetts (63.9 percent), and Wyoming (63.0 percent) over the 10-year period, while New York ($2.3 billion increase), California ($2.0 billion), and Massachusetts ($1.6 billion) saw the largest absolute gains during this time. From 2016 to 2017, higher education R&D expenditures grew by $3.8 billion, the most in year-over-year new funding since 2010-2011. Of the new funds, 43.1 percent came from federal sources, 27.2 percent came from institutional funds, and 17.0 percent came from other sources, like nonprofit organizations. The remainder (12.7 percent) came from businesses, and state and local governments. California remained the national leader in higher education R&D expenditures, with $9.2…

Faced with one of the largest drawdowns in defense spending in American history, the Defense Manufacturing Assistance Program (DMAP) targeted affected companies and communities across Michigan, Ohio and Indiana for assistance. The program aimed to support economic stabilization and diversification across the region during the five-year period from 2013 to 2018. After five years of projects, an evaluation of DMAP found that for every one dollar that went into the program, companies obtained an average of $18 new dollars in additional revenue. The effort was funded primarily by the Department of Defense’s Office of Economic Adjustment and led by the University of Michigan in partnership with Ohio State and Purdue. DMAP practitioners worked with more than 300 companies over this time, which led to approximately 20,000 jobs created and retained – including 662 new jobs – and $183 million in new sales. The program also helped drive innovation in these companies, resulting in 139 new products and 26 commercialized technologies. Manufacturers eligible for DMAP support were those that experienced at least a 5 percent decline in sales, production or…

While diversity plays a critical role in both improving the quality and increasing the rate of innovation, women and several minority groups remain underrepresented in STEM fields. Several studies find that improving the retention rate of women and other underrepresented groups in STEM at the college level can have significant impacts on improving the diversity and representativeness of the STEM workforce. For women and other underrepresented groups, the college experience can create unique roadblocks and barriers that ultimately cause them to switch majors or even leave college. Several recent studies have examined strategies to improve the retention rate of women and other underrepresented groups in STEM degrees at institution of higher education. The strategies range from pre-college STEM academies to establishing cohorts of underrepresented students.

For communities hoping to start and register an apprenticeship program, a new toolkit by the Department of Labor may offer some insight. Launched as part of National Apprenticeship Week (Nov. 12-18, 2018), “Building Registered Apprenticeship Programs” provides a guide to help start and register your apprenticeship program. The toolkit includes five steps: exploration of apprenticeships as a strategy to meet regional needs; partnerships with key players to develop the program; building the core components of the program; registration with the broader apprenticeship network; and, launching the program.

The New York state manufacturing report released this morning by the Federal Research Bank of New York is one of the brighter spots among the manufacturing surveys provided by the Fed banks each month.  Manufacturers in the Empire State remain fairly optimistic in the six-month outlook as new orders continued to grow, business conditions improved, and employment levels increased. The news is a little more disconcerting in the third, tenth and eleventh districts of the Federal Reserve. The states of Delaware and New Jersey, and the eastern half of Pennsylvania make up the third district and are served by the Federal Reserve Bank of Philadelphia, which released its manufacturing survey results this morning as well. Indices remained positive for manufacturing in the Philadelphia-Delaware Bay region (see image below) but they continued to weaken on several counts. In its most recent report, released Oct. 29, the Federal Reserve Bank of Dallas, serving the eleventh district, found similar signs suggesting the pace of expansion is slowing for manufacturers in Texas. The finding were not all bad, however. The Texas manufacturing index was positive but declined by…

The Federal Reserve System released a new digital book – Investing in America's Workforce: Improving Outcomes for Workers and Employers – that challenges the existing American mindset that treats workers as a cost to industry. Instead, the authors contend that industry and communities across the country must view workers as assets that with investment can create significant returns including greater productivity, faster national income growth, and a more vibrant and satisfied pool of working Americans. To help shift this mindset, the book brings together more than 100 experts to explore contemporary research, best practices, and resources related to workforce development. The authors also propose a set of  steps to develop well-structured, effective workforce programs and public policy that could result in better economic outcomes for individuals, businesses, and their communities.

A community system and a technical college center were among the five recipients of the nation’s highest honor for quality, the Malcolm Baldrige National Quality Award, according to the National Institute of Standards and Technology (NIST) announcement released this morning.  A third community college system received recognition for establishing and maintaining a best practice in leadership. The two education institutions were: The Alamo Colleges District (ACD) ACD is the largest institution of higher learning in South Texas, serving over 100,000 students enrolled in for-credit, continuing education and workforce courses every year. ACD holds a rare AAA bond rating, based on the strength of its financial policies for managing debt and evolving sources of revenue. Simultaneously, ACD students’ four-year graduation rate has increased 150 percent since 2009, and students have given the institution’s advisor program a 94 percent effectiveness rating. Tri County Tech (TCT)One of 29 public technology centers in the Oklahoma Career and Technical Education System, TCT serves the…