SSTI Digest

Last week, SSTI examined the geography of “America’s Seed Fund,” the SBIR/STTR awards, on a state-by-state basis. A look at how the more than 25,500 awards were distributed at the regional level over the five-year period from 2013 to 2017 yields additional insight. The metropolitan areas with the largest concentrations of SBIR/STTR awards include knowledge hubs with large universities and access to federal R&D, such as Boston, Los Angeles, and Washington D.C. Smaller regions with a large federal R&D presence, like Huntsville, Alabama, Santa Maria, California and Dayton, Ohio also rank highly. Compared to venture capital, the geography of SBIR/STTR deals is considerably less concentrated. Overall, less than half (44.2 percent) of the SBIR/STTR award dollars distributed between 2013 and 2017 went to the top 10 metropolitan areas. The top 10 metropolitan areas represent approximately 80 percent of all venture capital dollars, according to CityLab. The map below includes the 254 metropolitan areas for which SBIR/STTR and Gross Metropolitan Product (GMP) data are available. The interactive, searchable map below highlights the average SBIR/STTR…

The President’s Task Force on Apprenticeship Expansion released a new report focused on “strategies and recommendations to promote apprenticeships, especially in sectors where existing apprenticeship programs are insufficient.” A key element of President Trump’s federal workforce development agenda, apprenticeships are seen as an effective tool for addressing the skills gap confronting U.S. employers and a pathway to a well-paying careers for American workers. The report includes recommendations across five areas related to apprenticeships including: education and credentialing; attracting business to apprenticeship; expanding access, equity, and career awareness; and, administrative and regulatory strategies to expand apprenticeship. While proponents of apprenticeships were supportive of several recommendations proposed within the report, the task force also faced criticism due to proposed cuts to other Department of Labor programs to pay for the expansion of federal funding for apprenticeships, and push back and questions from those in higher education.  

State economic growth relies on the availability of a workforce capable of filling open positions. But increasingly around the country, one of the top concerns of employers is finding the right talent to fill these roles. Beyond corporate strategies in hiring, states are increasingly developing new initiatives to keep their pipeline of talent flowing. SSTI has found a variety of new initiatives being considered around the country, from foundation support for scholarships for credentials in high-demand fields in New Hampshire to pending legislation to support, with state funding, a Pathways in Technology Program (P-Tech) in California. Alabama Earlier this month Gov. Kay Ivey announced a new initiative to help the state add half a million skilled employees to its workforce by 2025, but the plan will use existing funds to help achieve this goal. The new initiative, called Success Plus, prioritizes five areas: awareness; access and success; pathways; leadership and collaboration; and assessment and continuous improvement. It focuses largely on ways to inform the state’s residents about the increasing needs for skilled workers, make them more aware of available…

This June, the Innovation Growth Lab's (IGL) third global annual conference will explore future innovation, entrepreneurship and small business policies. The summit, happening in Boston June 12-14 at Harvard Business School and MIT, includes more than 50 world-leading experts and participants from over 20 countries coming together as part of a global community at the forefront of innovation. Discussions will range from how to accelerate economic growth and make it more inclusive to support for local startup ecosystems and how to increase innovation and productivity in small businesses. There will also be a range of capacity-building workshops on new policy tools and methods led by organizations such as NASA, the SBA, the World Bank, Harvard Catalyst, and others. Registration is still open and more information is available here.

Several recent articles covered in the National Bureau of Economic Researchers (NBER) Digest suggest that current understanding of policies surrounding wages, clusters and labor concentration may warrant revisiting. In one piece of academic research, a historical argument of shared productivity gains with employees is challenged, while another article shows a loss of bargaining power for employees in concentrated labor markets. Industry consolidation slowing wage growth, productivity In Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages? Efraim Benmelech, Nittai Bergman, and Hyunseob Kim explore the impact on wages resulting from the increased consolidation of most industry groups over the past forty years. The authors found a negative relationship between employer consolidation and wages. Most vulnerable to the impact of consolidation and downward wage pressure are less populated counties with manufacturing facilities dominated by just a few firms (called “monopsony markets”).  Firms in these markets were found to be less likely to share productivity gains with employees, contrary to one of the historical social…

The SBIR/STTR program, which dubs itself as “America’s Seed Fund,” is one of the broadest forms of early-stage capital available to small technology companies. During the five-year period from 2013 to 2017, the 11 federal agencies participating in the SBIR/STTR program distributed 25,524 awards. Using charts, maps, and a downloadable spreadsheet, this Digest article looks at trends in SBIR/STTR awards by state over the period, including the companies with the most awards and states where SBIR/STTR awards outnumber VC deals. A future article will look at awards by metropolitan area. Federal agencies with extramural R&D budgets exceeding $100 million are required to allocate 3.2 percent of their R&D budgets to the SBIR/STTR program. The U.S. Small Business Administration, which oversees the SBIR/STTR program, releases data on individual awards across agencies. SSTI has collected this data and compiled it by state. The interactive graphic below displays the data by award type (SBIR/STTR), phase, agency, and year.         SBIR awards comprise 87 percent (22,316 awards) of the 25,524 total SBIR/STTR awards…

The Small Business Innovation Research (SBIR) program dubs itself as “America’s largest seed fund.” Three recent research articles add to the existing literature on the program. First, a study finds that SBIR supports high-risk efforts to convert R&D. A second study suggests that SBIR awardees are more likely to locate in denser regions but in less dense neighborhoods in those regions. A third study finds that SBIR awardees from federal agencies with more diverse workforces tend to perform better. For the economic development community, these findings may influence the way SBIR-related services such as entrepreneurial assistance programs and matching grants are delivered. SBIR supports higher-risk efforts to convert research and development A recent article published in Science and Public Policy finds new support for SBIR’s policy mission. The research indicates that SBIR awards are not only largely successful in helping companies to convert promising innovations into new products or services, but that the program specifically encourages companies to develop higher-risk technologies than would be developed without the award. …

The federal government’s priorities for funding research and development do not necessarily match those of the general public, an analysis of ScienceCounts and National Science Foundation data suggests. ScienceCounts is a national nonprofit with the objective of enhancing the public's awareness of, and support for, federally-funded scientific research. Last year, alongside Research America, the organization released the results from their first study. In an analysis of education, ideology, gender, and age, the study looks at public opinions on whether a variety of scientific issues should be an urgent focus of research.  Overall, a comparison of these findings with the actual federal funding levels of R&D finds a disconnect between the general public and the federal government’s priorities. The interactive chart below looks at the relative ranking of seven scientific categories (defense, health, space, energy, environment, commerce, and education) based on their public support and federal R&D funding. Overall, there appears to be a negative relationship between public support for categories and their level of federal funding. With health…

For the economic development community as a whole, the issue of retaining and attracting talent is of the utmost importance. While a visualization in a Wall Street Journal article looks at where graduates move after college, an interactive analysis by the Pew Research Center examines where foreign student graduates work in the United States. Taken together, these two tools allow the user to learn more about their region by shedding light on the destinations of recent domestic and international college graduates. The WSJ analysis by Danny Dougherty, Brian McGill, Dante Chinni and Aaron Zitner uses data from the labor-market research firm EMSI, which collected information on alumni from 445 colleges and universities in the U.S. They also show the movement of graduates to the 70 largest metropolitan areas, as well as the share of graduates that move to smaller communities. While cities with concentrations in finance, tech, and government services – places like New York City, Boston, San Francisco, or Washington D.C. – are able to attract talent from schools across the country, other cities like Las Vegas have less of a national draw, they find. As a way of…

Venture development organizations (VDO), nonprofit organizations across the country investing in innovation startups to help grow their regional economies as well as earn a respectable return, saw at least 20 exits in the first quarter of 2018, based on data entered on Pitchbook.com. Here are some examples from the quarter: A spinout of the Carnegie Mellon University Endowment, Pittsburgh-based Wombat Security Technologies has been acquired for the sum of $225 million to become an operating subsidiary of Proofpoint. Among the nine exiting investors, who injected a combined total of $11 million into the firm since 2011, are Idea Foundry, Innovation Works and Riverfront Ventures. Idea Foundry also was an exiting investor during the quarter resulting from the acquisition of Zulama by EMC Publishing. MobilPhire and ClearEdge3D were both acquired during the quarter by MobileSense and Topcon, respectively.  Among the exiting investors in both deals was the Center for Innovative Technology Gap Funds managed by the longstanding VDO, CIT in Herndon, Virginia. Teampassword, a cloud-based password management service, was acquired by Jungle Disk for an undisclosed…

New data analyzing the first cohort of Tennessee Promise students reveals a higher graduation rate and increased number of students earning a college credential when compared to the previous year’s non-Promise cohort. The inaugural class of Tennessee Promise students graduated from high school in 2015 and completed their five semesters of eligibility in December. The program is showing impressive early results including:

While the increasing gaps between the coasts and the heartland continues to capture the media’s attention, a collection of recent research suggests that inequality within regions may be the greatest factor hampering economic growth. Five recent articles tell a nuanced story of how economic and racial inequities may impede regional economic development efforts. The research presented here from a variety of outlets examines the role of inequality in the overall economy of regions. For example, research in the Journal of Regional Studies examines how the Great Recession challenged the economic resilience of metropolitan areas and how income inequality worsened these impacts. A separate analysis by the Urban Institute finds that economically healthy cities are more likely to be inclusive.  In particular, older industrial cities struggle with issues stemming from inequality. Additionally, to complicate matters further, research from the Center for Economic and Policy Research finds inequality is likely worse than actually reported. Economically healthy cities are more likely to be inclusive. In Inclusive Recovery in US Cities, Urban Institute authors…