SSTI Digest

The conclusion from the working paper, The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work, by Erling Barth, James C. Davis, Richard B. Freeman, and Andrew J. Wang, is pretty clear for manufacturers and policy advocates for improving U.S. manufacturing: firms should hire as many scientists and engineers as possible.  The research finds, Morgan Foy explains in an NBER Digest article, that occupational statistics reveal approximately 80 percent of people trained as scientists and engineers do not work in R&D jobs.  Filling a company’s payroll with as many of these people, regardless of their position, seems to pay off. The authors’ research concluded a 10 percent increase in the proportion of scientist and engineer employment within a manufacturing establishment was associated with a 4 percent increase in total factor productivity for the firm.

A new report from the Department of Energy (DOE) highlights examples of major scientific accomplishments emerging from 40 years of Basic Energy Sciences (BES) research support, including how these discoveries have helped fulfill DOE’s mission and have led to new technologies and industries that contribute to American innovation and prosperity. By examining past successes, “A Remarkable Return on Investment in Fundamental Research,” seeks to illuminate guiding strategies and approaches that will be critical to ensuring future U.S. leadership.

Although the report is not intended to be comprehensive, it provides key examples of major technological, commercial, and national security impacts directly traceable to BES-supported basic science. As it looks forward to the next 40 years of research and the challenges from global competition, the report recommends that BES be bold in choosing new research and facilities to support and experimenting with new funding mechanisms where appropriate.

Over the past few weeks, Delaware, New Jersey, and Tennessee have proposed, announced or expanded investment tax credit programs to spur job creation and innovation. In Delaware, Gov. John Carney signed the Angel Investor Job Creation and Innovation Act, while Tennessee is expanding its Angel Tax Credit criteria, and New Jersey is proposing establishing innovation zones and tax credits for high-tech businesses within those zones.

Although SBIR/STTR matching programs have existed at the state and regional levels for years, Montgomery County, Maryland, recently launched the country’s first county-based match program. The county council overwhelmingly approved the program, which will target Montgomery County-based small businesses receiving Phase I or Phase II SBIR/STTR grants through the National Institutes of Health (NIH), whose main offices are also within the county. Subject to appropriations, Bill 41-17 awards will be valued at up to 25 percent of a Phase I grant ($25,000 cap), or 25 percent of a Phase II grant ($75,000 cap). Grantees under this program may receive one county matching grant each year, up to five total grants.

The Senate Committee on Appropriations this morning advanced a funding bill that includes $25 million for Regional Innovation Strategies — $4 million more than the current funding round. Commerce, Justice and Science Subcommittee Chairman Jerry Moran (R-KS) spoke to the importance of funding scientific innovation in a statement, and the bill strongly supports many science-related activities. The bill would provide level funding of $140 million for MEP; increase NSF to $8.1 billion (nearly $100 million less than the House bill), with more for research, STEM education and EPSCoR; and, NASA would see a nearly $600 million increase, including $179 million more for science and $10 million more for education.

The U.S. biosciences industry directly employs 1.74 million people and indirectly supports $2.0 trillion in economic output and roughly 8 million jobs nationwide, according to "Investment, Innovation and Job Creation in a Growing U.S. Biosciences Industry," a new report by TEConomy Partners on behalf of the trade association BIO. The report, released at BIO’s annual conference last week, finds that biosciences venture capital investment is reaching new highs, while overall innovation ecosystem strength and patent activity is bolstered by increasing NIH budgets and growth in academic R&D. The report’s authors also take an in-depth look at the industry, its components, its contributions to the national economy, and the state and metropolitan areas where it is most concentrated.

USTAR hosted the Utah Technology Innovation Summit last week to celebrate the state’s achievements in the field. The event featured strong pro-science and innovation statements from a variety of politicians and awards to teachers and scientists. During the opening, USTAR Director Ivy Estabrooke was named the governor’s science advisor (pictured at right). The summit was held in the same venue as SSTI’s 2018 Annual Conference.

A well-known fact about the venture capital industry is the notorious underrepresentation of women partners in the firms.  That could change, suggests research presented in the NBER working paper And the Children Shall Lead: Gender Diversity and Performance in Venture Capital if male VC partners spend more quality time with their daughters.  Deborah Krueze writes in her NBER Digest article that the authors of the research, Paul A. Gompers and Sophie Q. Wang, suggest that the proportion of daughters among a VC senior partner’s offspring is correlated with their firms hiring more women VC partners. Firms whose partners had more daughters also performed better than their competitors, the research finds.

Krueze writes, “At firms whose senior partners had more daughters than sons, the female hiring rate was 11.87 percent; the rate was 9.78 percent at firms where senior partners had equal numbers of daughters and sons, and 8.68 percent where they had more sons than daughters.”

EDA’s Regional Innovation Strategies program — which makes i6 challenge and seed fund support awards — has released its notice of funding opportunity for FY 2018. Applications are due August 29. SSTI hosted a free webinar featuring EDA’s Office of Innovation and Entrepreneurship on June 14.*

EDA has $21 million available to award in 2018, thanks to the support of a bipartisan group of congressional champions and the outreach of organizations throughout the country coordinated by SSTI’s Innovation Advocacy Council.

The FY 2018 notice of funding opportunity is largely similar to the FY 2017 notice, but i6 awards can now request a maximum of $750,000 in federal support. Of course, all potential applicants are encouraged to review the opportunity in detail.

NIST’s Manufacturing Extension Partnership program launched a new Policy Academy focused on manufacturing this week. Funded by NIST MEP and organized by SSTI and  the Center for Regional Economic Competitiveness (CREC), the Policy Academy is designed to help states build upon existing strategies, leverage available resources, and spur creative new ideas about how to address major challenges or leverage opportunities around the manufacturing sector. Through a customized and collaborative experience, the Policy Academy will help teams of four-to-ten members representing a cross-section of policymakers and practitioners from relevant state agencies and stakeholder groups to identify best practices, partnerships, and policies to strengthen the manufacturers in their states.

Six years after the passage of the Jumpstart Our Business Startups Act of 2012 (JOBS Act), SSTI continues to examine the impact that the legislation has had on startup capital. In previous weeks, SSTI has looked at Regulation A+ offerings and equity crowdfunding (also known as regulation crowdfunding or Reg CF). This week, we look at SAFEs (simple agreements for future equity), an early stage, equity agreement that has gained  popularity due, in part, to the JOBS Act streamlining companies’ ability to raise capital privately. A future story will focus on their use for TBED organizations.

Noting that we have reached a point in time where STEM “influences every aspect of our education, work, and community life,” STEMconnector, a professional services firm, has released a new report that examines the current state of the field, identifies gaps and makes recommendations for action and investment. State of STEM highlights “five critical gaps” in the STEM workforce: a fundamental skills gap; belief gap; postsecondary education gap; geographic gap; and, demographic gap. The interaction of these gaps throughout the STEM ecosystem creates an overall opportunity gap for students and job seekers, a workforce development challenge for educators and a business imperative for employers, the report states.