SSTI Digest

This past summer Ohio joined a growing number of states that allow community colleges to offer four-year degrees when it enacted legislation allowing community colleges, state community colleges, and technical colleges to apply to offer applied bachelor’s degrees. If approved, the programs will join a growing number of applied baccalaureate degree programs being offered by community colleges across the country. The trend has met with resistance from some higher education institutions, while students and employers voice their support.

States enacted cautionary budgets for 2018 with general fund spending projected to grow 2.3 percent in fiscal 2018, the lowest increase since 2010, according to the most recent NASBO survey. The National Association of State Budget Officers (NASBO) released its Fiscal Survey of the States showing caution on the part of policymakers following two years of sluggish revenue growth and spending pressures. Meanwhile, the survey finds most states are forecasting moderate improvements in their general fund revenue collections in fiscal 2018 (median growth rate of 3.2 percent) and that most states are continuing to strengthen their reserves.

The budgetary process was strained this year with a number of states calling special sessions to deal with their plans and 11 states starting the fiscal year without a fully enacted budget. New funds were directed mainly to K-12 education and Medicaid.

The survey also found that:

Expenditures for R&D from state government agencies increased by 17.3 percent from FY 2011 to FY 2016, reaching $2.3 billion, according to data from the Survey of State Government Research and Development, a survey sponsored by the National Science Foundation’s National Center for Science and Engineering Statistics (NCSES). Nearly two-thirds of this total – 64 percent – came from just five state governments (California, New York, Texas, Florida, and Ohio).

Estimates indicate that R&D expenditures in the United States reached $510 billion in 2016, marking the first time this total has eclipsed the half-trillion mark, according to recently released National Science Foundation data. The majority of R&D expenditures and performance comes from the private sector. From 2011 to 2016, R&D growth kept pace with the economy as a whole, and R&D intensity – measured as R&D expenditures as a share of gross domestic product – was essentially flat. The analysis finds, though, that federal expenditures on R&D decreased during this period.

Due to their positive impact on entrepreneurship (31 percent of VC-backed founders are immigrants) and innovation (76 percent of patents from top 10 U.S. patent-producing universities had at least one foreign-born author) in the United States, many institutions of higher education are working to understand the opportunities, challenges, and gaps that exist in supporting international students from their first year of study through graduation, the job search process, and entry into the labor force. Institutions of higher education are seen as uniquely positioned to enhance international students’ employability as they provide access to work experience as well as cultural acclimation to increase the likelihood those individuals will remain in their host country after graduation.

Gov. Andrew Cuomo announced more than $755 million in economic and community development funding awarded through Round VII of the Regional Economic Development Council initiative. The Regional Councils were established in 2011 as a community-based and performance-driven approach to economic development. Each of the 10 regions of the state must develop strategic plans tailored to their region. Each region also competed for designation as a “top performer,” to receive up to $20 million in additional Empire State Development grant funding.

The most recent announcements, including the five top performers are:

The final part of this series explores the tactics and strategies associated with increasing exposure to innovation and broadening economic opportunity.

Last week, The Digest explored recent research examining the role that exposure to innovation plays in determining future inventiveness. The study’s authors, led by Stanford’s Raj Chetty, find that a child’s characteristics at birth – their neighborhood, socioeconomic class, race, and gender – are highly predictive of their propensity to file a patent later on in life. Based on their results, the authors recommend strategies that focus on increasing exposure to innovation and broadening intergenerational economic mobility. This article explores these types of policies in depth, as well as additional tactics that may help reconnect America’s communities with greater economic opportunity.

Forces weighing on the manufacturing industry, including globalization and technology, do not indicate its decline, says a recent report from the McKinsey Global Institute. Instead, the coming decade will reshape manufacturing as demand grows, technology produces gains and companies find new growth in parts of the value chain. To be able to be able to compete in the future, U.S. manufacturing needs to scale up efforts on multiple fronts, the report maintains.

Last week, The Digest covered newly released data from the National Science Foundation’s National Center for Science Education Statistics, which found that for the first time in five years, federal funding for higher education research and development increased in both current and constant dollars. For the country as a whole, higher education R&D expenditures increased by roughly 10 percent from FY 2011 to FY 2016, while gross domestic product increased by nearly twice as much. This article examines state-by-state trends in R&D activity at colleges at universities.

Asserting that the country’s future competitiveness is linked to a quality education, a recent report from the American Academy of Arts and Sciences Commission on the Future of Undergraduate Education argues that the completion rate of students pursuing post-secondary education must be increased. The report, The Future of Undergraduate Education, The Future of America, found that while nearly 90 percent of high school graduates expect to enroll in an undergraduate institution at some point, completion rates at those institutions average about 60 percent for students pursuing a bachelor's degree and 30 percent for students pursuing associate's degrees and certificates, with significant disparities within those categories by gender, race/ethnicity, and socioeconomic status. To address the problem, three national priorities are outlined: improving students' educational experience; boosting completion rates and reducing inequities; and controlling costs and ensuring affordability.

Adding to the national debate regarding U.S. immigration policy, the Center for American Entrepreneurship (CAE) reviewed the 2017 Fortune 500 list, finding that 43 percent of the companies were founded or co-founded by a first or second generation immigrant. Those companies account for 52 percent of the top 25 firms, are headquartered in 33 different states, and accounted for $5.3 trillion in global revenue in 2016, the CAE analysis found. CAE posits that such analysis provides strong support for the creation of an entrepreneur visa, a piece of the Startup Act, the bipartisan legislation which SSTI has supported.

Tuesday’s announcement by Revolution of the creation of a $150 million Rise of the Rest Seed Fund for companies located outside of Silicon Valley builds on Steve Case’s tour to connect with entrepreneurs throughout the middle of the country. The Rise of the Rest Seed Fund enjoys the backing of more than three dozen other big investors from Jeff Bezos and Eric Schmidt to the Waltons and Kochs, and is intended to provide support and connections to entrepreneurs in small towns and underserved cities. However, Case said in a New York Times article it is not intended as a social impact fund. In order to get investors to change the way they think about the rest of the country, Case said the main goal is “to generate top returns.”