SSTI Digest

As the U.S. Senate works toward a vote on a bipartisan bill targeted at lifting regulations for some banks, several studies published within the last year have looked at the impact community banks have had on serving small- to mid-sized businesses (SMBs) across the country. Historically, community banks have been the loan originator for nearly 60 percent of business loans made to SMBs and have served as drivers of economic growth and opportunity in rural and underserved communities. The reports highlight the impact of these community banks on small business lending pre and post Great Recession; the resiliency of SMB lending activities by these banks during the Great Recession; and policy recommendations to support community banking.

As explored in last week’s Digest, the presence of Eds and Meds institutions can positively influence the levels of human capital in a region, but the need to keep costs low can hinder their overall growth. SSTI’s analysis subsequently found that employment in Eds and Meds industries increased in every state from 2005 to 2015. This article looks at Eds and Meds employment for the largest metropolitan areas in the United States. Mid-sized regions in the Northeast like Rochester, New York (4.4 percentage points), New Haven, Connecticut (2.9 percentage points), and Harrisburg, Pennsylvania (2.3 percentage points) experienced the largest growth in per-capita employment in Eds and Meds industries between 2010 and 2015.

A new map of broadband access based on Federal Communications Commission (FCC) data offers a granular look at the internet options available to Americans. Based on data submitted by internet service providers through FCC’s Form 477, the map provides insight on the types and speeds of internet access available on a block-by-block basis across the country. Notably, the maps do not include information on the cost of internet service. 

In an effort to support research collaboration among the state’s largest universities, Illinois Gov. Bruce Rauner’s proposed FY 2019 capital budget would provide $500 million for the University of Illinois Discovery Partners Institute in Chicago’s South Loop. The funds would serve as a state match for private donations from individuals, corporations, and other entities. Originally announced last October, the Discovery Partners Institute would provide a space for the state’s colleges and universities to work on targeted research projects in partnership with the private sector.

The National Science Foundation’s new strategic plan argues that the U.S. must continue investing in world-class research, develop a globally competitive scientific and engineering workforce, and foster greater understanding of science and technology among the American public. However, the pressure of new priorities and level funding proposed for FY 2019 have yielded some surprising directions for the agency’s planned investments.

Research and innovation process goals

For decades, state and local economies have leaned heavily on their anchor institutions during times of economic uncertainty and transition. An analysis finds that total employment in “Eds and Meds” industries increased in every state from 2005 to 2015. This article breaks down the growth and geography of Eds and Meds employment at the state level, while next week’s issue of the Digest will explore this data by metropolitan area.

Investments in STEM education, apprenticeship programs, and tech-focused tuition assistance are among a handful of proposals included in the “Marshall Plan for Talent” last Thursday. The plan includes $100 million in talent investments and utilizes a three-pronged approach to training by addressing K-12 education, higher education and the state’s existing workforce. The funds would come from savings due to a state bond refinancing, according to the governor.

The World Economic Forum (WEF) identified cybersecurity breaches along with environmental degradation caused by human-induced climate change, as the top two risks to the global economy over the next 10 years, according to the 2018 Global Risks Report, the Forum’s annual survey of nearly 1,000 experts from across the planet.  With evidence mounting of Russian hacking of the U.S. elections in 2016, increasingly common cyberattacks on the mega databanks of several of the country’s largest corporations, and computer viruses growing more serious in their potential disruption, the WEF concerns seem justified.

Three recent news items shed important light on educational attainment and economic well-being and one promising approach to increasing educational attainment among lower income people. While the Pew Research Center finds the share of college-educated young adults in the U.S. workforce is higher than ever before, the Economist reports that the “return on investment” in getting a college degree is leveling off. And as the number of individuals holding a degree and participating in the workforce increases, so has the number of jobs that now require higher credentials even though those requirements may not be necessary.

The tax law signed at the end of last year introduced a provision that will significantly affect many economic development offices and related nonprofits across the country: “contributions to capital” will now typically be included in a corporate taxpayer’s gross income. Previously, grants, free land and certain types of tax credits from governmental units or civic groups to support capital expenses were tax-free awards for the beneficiary. Since the signing of the bill, many of these awards are now taxable. The exact circumstances under which previous awards were exempt and new awards are not are complicated: Bloomberg provides a detailed analysis of the law and its implications, pending further guidance from the IRS.

For hundreds of years, libraries have helped drive American innovation by serving as a trusted resource and providing information to a wide range of individuals. As libraries continue to implement their own initiatives in this space, policymakers across the country have recently turned to them as a way to level the playing field around workforce development and entrepreneurial support.

The World Economic Forum’s (WEF) latest survey of more than 1,000 experts and decision makers on the likelihood and impact of 30 global risks over a 10-year period found four areas of concern: environmental degradation; cybersecurity breaches; economic strains; and geopolitical tensions. Despite experiencing a year-long global economic recovery, the survey revealed that respondents are pessimistic about the year ahead (59 percent say they expect an increase in risk for the year, compared to 7 percent who expect declining risks). The report cautions that we are struggling to keep up with the pace of change and are pushing systems to the brink.

The latest annual Global Risks Report compiled by the WEF asserts the world has moved into a new and unsettling geopolitical phase. This year, WEF has added a new series of reports examining the possibilities of dramatic future breakdowns as well as reassessing past surveys to the report to broaden the analytical reach.