SSTI Digest

Why are people registering for SSTI's 2024 conference at a record pace? It might be the timing of SSTI's conference—one month after a tumultuous election season. It could be our focus of the four plenary sessions being what regional innovation and tech-based economic development needs to look like in the future when you consider other great unknowns like what impact artificial intelligence will have on local economies. 

A recent National Bureau of Economic Research (NBER) working paper, Immigrant Entrepreneurship: New Estimates and a Research Agenda provides fresh insights into the growth and characteristics of immigrant-founded firms across the United States. The study also outlines directions for future research in this field. Key findings from the authors’ statistical analysis include: In a sample of 25 states, immigrants’ representation among top earners in new firms rose from 22.5% in 2003 to 28.9% in 2020. Nearly two-thirds of this growth came from a general rise in immigrant entrepreneurship across all regions in the sample rather than concentrated booms in specific states. The overall share of immigrant entrepreneurship increased from 18.7% in 2007 to 24.2% in 2019.

State support for higher education in the United States over the last four decades can best be characterized as having fluctuations and shifts in priorities. Using fiscal year (FY) 1980 as a starting point, while overall state support for higher education has grown, it has done so with volatility driven in part by decreased revenue as a result of recessions, and it has frequently taken years for state support to recover to pre-recession levels. In four states, state support on a constant 1983-dollar basis is still less than was spent in 1980. Looking back at the impacts of the Great Recession of 2008 is even more illustrative of the long recovery period after recessions; in FY2024, just 20 states and Washington, D.C., spent more in constant dollars than they did in FY2008. An additional nine states surpassed their FY2008 spending levels at some point after FY2011 but did not maintain that through FY2024. In fact, just one state, North Dakota, has provided support for higher education above FY 2008 values in every year since. About the data and our methodology Data for this article comes from the Grapevine Report on State Fiscal Support for Higher Education, produced…

In this Digest issue, SSTI continues its examination on the state of higher education. Today, we start with rising student loan debt, which research shows has dire consequences on borrowers, including delayed home ownership, hindered retirement savings, and financial stress. Then, we examine college costs and consider why they are rising so fast. We delve into the effects of tuition and fees outstripping household income. Also, our research details the many contributing factors passed on to students, including expanded administrative staffing, inflation, and facilities improvements.   This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.

In the last 20 years, college tuition has doubled, making tuition and required fees the major component of the rising costs of attending college. Figure 1 shows that the average tuition and fees at public four-year schools increased by 84% between the 1999-2000 and 2019-2020 academic years, far faster than the 15.7% increase in median household income during that period (note this period was chosen to avoid pandemic era swings in data). Figure 1: Percentage change from reference year (1999) for bachelor’s tuition and required fees at 4-year universities and real median household income, fall 2000-2019.   In addition to tuition, EducationData.org reports that between 1999-2000 and 2019-20, when adjusted for inflation, the cost of the average dorm room for one year increased by 65%, while the average meal plan for one year increased by 35%. This lower rate of increase for room and board compared to that of tuition suggests that factors specific to the academic component of higher education are driving the overall cost increases. Room and board cost increases are in line with the inflation rate of 70% from 2000 to 2020 reported by the Federal Reserve…

Total student loan debt in the United States increased 558% from the first quarter of 2003 to the second quarter of 2024, increasing from $240 billion to $1.58 trillion, according to Federal Reserve Bank of New York data. However, as seen in Figure 1, the rate of change has remained essentially flat since the first quarter of 2021, coinciding with a dip in undergraduate enrollment and federal loan forgiveness programs totaling nearly $160 billion, as the U.S. Department of Education reported. Figure 1. Total student loan debt increased from $240 billion to $1.58 trillion between the 1st quarter of 2003 and the 2nd quarter of 2024.   Student loan debt has severe implications for borrowers, including delayed homeownership, hindered retirement savings, and financial stress, according to the Pew Charitable Trusts. Experian, one of three major credit bureaus, reported that the average student loan debt in Q3 2023 was $38,787, a decrease of 0.6% from Q3 2022 and about the same as in 2020, as many borrowers saw their payment requirements and interest accrual paused for more than three years. The Federal Reserve Bank of New York reported that the…

The Fearless Fund and Fearless Foundation, which made awards restricted to Black female entrepreneurs, announced a settlement on September 10 with the American Alliance for Equal Rights (AAER) and will end its Fearless Strivers Grant Contest that was targeted in a racial discrimination lawsuit by AAER. The settlement means that states within the U.S. Court of Appeals for the 11th Circuit’s jurisdiction will be subject to the rationale behind the court’s preliminary injunction that found grants awarded through contracts cannot be restricted based on race. For grantmakers outside of these states, the implications are less clear. The Atlanta Journal-Constitution article notes that Arian Simone, Fearless Fund co-founder and CEO, decided to settle because the decision would apply nationwide if they lost in an appeal to the U.S. Supreme Court. Background on the case provided by CNN and others clarifies that the court’s ruling was largely based on the Fearless Foundation’s use of contracts in its grants, as the court found that anti-discrimination contracting law likely made restricting the awards to Black female entrepreneurs impermissible. Section 1981 prohibits…

While production of internal combustion engine (ICE) vehicles are expected to decline from 12 million in 2023 to 5.2 million in 2029 and battery electric vehicles (BEVs), powered exclusively by an electric battery, would increase from 1.1 million to 7.3 million vehicles during the same period, the Federal Reserve Bank of Chicago concludes the change is unlikely to cause much change in the geographic location of automobile manufacturers, according to an Economics Perspectives paper. The paper's authors investigated what impact, if any, such a change in the number of types of vehicles produced would have on the locations where cars are manufactured. They concluded that the changeover to manufacturing electric vehicles (EVs) should not cause much disruption to the geographic location of automobile manufacturers. In North America, auto manufacturers are clustered in "auto alley," a corridor between southwestern Ontario, Canada, and the Gulf of Mexico. There is a second cluster in central Mexico. The researchers distinguished assembly plants in the U.S. as those north of the Ohio River (home to Ford, General Motors, and Stellantis) and those located south of it (home to…

With the release of the Economic Development Administration’s (EDA) 2024 Notice of Funding Opportunity (NOFO) for its Build to Scale program, time has begun ticking towards the October 28 application deadline. To assist organizations with determining eligibility under EDA’s Equity Investment Priority, SSTI has developed a map visualizing counties that are either rural or in persistent poverty, made public through SSTI’s Technology-Based Economic Development (TBED) Community of Practice (CoP). Figure 1: Rural and Persistent Poverty Map with Engines and Tech Hubs overlay   In addition to showcasing rural and persistent poverty counties, the above map visualizes the 10 inaugural National Science Foundation Regional Innovation Engines (NSF Engines) awardees and 31 EDA-designated Regional Technology and Innovation Hubs (Tech Hubs). There are five points available in the evaluation criteria for applicants within the regions of these awardees, for projects aligned with these awardees.   This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of…

The Economic Development Administration has released the 2024 Notice of Funding Opportunity (NOFO) for its Build to Scale program. With $50 million in available funding, the program continues to support regional commercialization, entrepreneurship, and capital formation efforts. This year’s competition, however, comes with a restructured application process and updated evaluation criteria. Key changes for 2024 The most significant change for 2024 is the consolidation of the Venture, Capital, and Ignite challenges into a single “Implementation Challenge.” This new format streamlines the application process by allowing organizations to submit one comprehensive proposal that includes related activities instead of separate applications for each challenge. Additionally, the maximum award has increased to $5 million. However, with EDA planning to make 40-50 awards, applicants should expect an average award amount below the $5 million cap. This year’s NOFO also features updated scoring criteria. While core themes like leveraging ecosystem resources and growing innovation economies remain central, repeat applicants should note the multiple changes to scoring…

Ohio recently awarded more than $97 million for the Northwest Ohio Glass Innovation Hub in Toledo, the onMain Innovation Hub in Dayton, and the Greater Akron Polymer Innovation Hub in Akron. These hubs are part of the recently created a $125 million Ohio Innovation Hubs Program. The program is “designed to make Ohio a national leader in innovation, creating new jobs and business opportunities by supporting world-class research in industry-aligned platforms that build upon Ohio’s existing legacy industries and research strengths,” according to the Ohio Department of Development which administers the program. The Ohio Innovation Hubs Program’s $31.25 million award to fund the Greater Akron Polymer Innovation Hub project, led by the Polymer Industry Cluster, will be matched by $10.4 million from local partners. Approximately $25 million will support a Polymer Pilot Plant to scale, test, and prototype new materials. The remaining funds will be distributed to support work within the areas of R&D, workforce, startups, and staffing to support the longevity of the Polymer Industry Cluster. Over the next seven years, the Polymer Industry Cluster anticipates the…

Quantum technologies are revolutionizing sensors, computation, and communication, according to an article from the World Economic Forum. This reality is inspiring many states to build foundations for reaping the economic benefits of these technologies. This year, several states, including Colorado, Illinois, New Mexico, South Carolina and South Dakota have passed legislation, provided new funding or have launched new quantum initiatives.