SSTI Digest

The third annual National Apprenticeship week will be celebrated next week, with more than 700 activities planned across the country to showcase programs, facilities and apprentices. For those still interested in participating through an open house, skills competition, or other event, there is still time to register your event.

Later this month, National Entrepreneurs’ Day will be celebrated on Nov. 21. Earlier, the White House declared all of November entrepreneurship month with a statement focused on entrepreneurs’ need for regulatory relief and IP protections and expanding opportunities for women. Global Entrepreneurship Week will also be celebrated the week of Nov. 13-19, encompassing events and competitions in 160 countries and supported by a network of of more than 15,000 partner organizations.

The United States has no global equal when it comes to scientific output, producing more publications than China, Germany, and the United Kingdom combined, according to the recently updated Nature Index. The index, a product of the scientific journal Nature, measures output of high-quality research in the natural sciences at both the national and state levels. However, the most recent update finds that U.S. contributions have declined in both absolute and relative terms since 2012, and if current trends remain, China could become the world’s top contributor by 2027.

As the image below notes, California, Massachusetts, New York, and Maryland contribute the most to the United States’ score in the index. In the past five years, reduced contributions from states like these have made the biggest dents in the country’s overall score, according to Nature. From 2012 to 2016, the majority of states saw a decline in their contribution to the Nature Index. 

Since no single measure of performance can completely capture the important role that research universities play as drivers of economic growth in the innovation economy, a different approach is required, according to new research from BioCrossroads and TEConomy Partners. Using Indiana as a case study, The Importance of Research Universities highlights the multitude of ways that research universities contribute to prosperity, including economic development, enhanced capabilities of human capital, knowledge expansion and innovation, and societal well-being and quality of life. In Indiana, the report’s authors find that the direct economic impacts of the state’s three main research universities’ (Indiana University, Purdue University and the University of Notre Dame) research expenditures are more than four times that of the famous Indianapolis Motor Speedway.

Around the country, free or greatly reduced tuition programs at institutions of higher education – oftentimes called “promise scholarships” – are being increasingly utilized as a way to support education and workforce development. With a focus on those programs occurring at the community level, a new interactive database from the Upjohn Institute sheds light on more than 85 examples of place-based promise programs, including their history, their scope, and their impacts. Last month, SSTI examined recent legislation around promise scholarships in seven states, including Tennessee, whose program provides two years tuition-free at state community or technical colleges.

This week we continue our series on state legislation pertaining to the innovation economy that has been enacted this year around the country. This third installment of the States of Innovation 2017 series deals with innovation and entrepreneurship-focused tax credits.

Over the past year, state lawmakers in approximately have looked to grow innovation and entrepreneurship in their respective states by introducing and expanding tax credit efforts intended to increase the availability of startup capital, support R&D activities, facilitate business growth, and spur job creation. The two most common types of tax credits proposed to support innovation at the state level are angel tax credit programs and R&D tax credit programs. In addition to these two areas, states also proposed other tax credits intended to support job creation and business growth.

Connecticut and Wisconsin both ended their protracted budget negotiations with the governors signing budgets in late September and late October. Faced with budget constraints and uncertainty about the spending plan, Connecticut’s funding for economic and community development is decreasing along with funding for the state’s MEP center and Manufacturing Supply Chain program, with no general funds provided for them in the second year of the biennium. Wisconsin appears to be maintaining its status quo on TBED-related initiatives and has increased funding to universities that increase enrollments for “high-demand” degree programs, making $5 million available on a competitive basis.

Through the third quarter of 2017, the venture capital market saw an average deal that invested more money into larger and older companies than in prior years. With fewer exits and deals occurring throughout the industry — as well as a historic $90+ billion in uninvested capital (aka “dry powder”) — a reasonable expectation might be that funds would have a difficult time raising capital. In fact, fund raising, while likely to finish behind 2016, is set for another straight year with greater than $30 billion raised, and this money is going into more funds with an overall increasing fund size.

The Science and Technology Directorate (S&T) within the Department of Homeland Security is looking for partners to help develop scientific advancements and technological innovations that solve homeland security challenges. The directorate is open to a broad range of potential partners, from technology developers and innovators creating ideas in their garages, to small businesses and large corporationsand has issued a guide detailing the ways partners can work with the agency.Industry Guide: R&D Investment Priorities and Business Opportunities 2017 includes a table providing an overview of the R&D investment outlook for the types of technologies and capabilities DHS anticipates will address current homeland security needs.

The directorate plans to invest portions of the R&D and innovation funds during fiscal years 2018-20121 in the following technical categories:

The U.S. Small Business Administration (SBA) has announced the 20 recipients of the fourth Growth Accelerator Fund competition. The winners, which represent a broad set of industries and a diversified range of demographic groups, will each receive a cash prize of $50,000 to address gaps in regional entrepreneurial ecosystems as part of the award. Awardees will be required to submit quarterly reports for a year, and must report or provide their metrics, including jobs created, funds raised, startups launched and corporate sponsors obtained. 

The 2017 recipients of the Growth Accelerator Fund competition are:

The U.S. International Trade Commission (ITC) this week recommended imposing tariffs on U.S. imports of crystalline silicon photovoltaic cells (CSPV) after finding last month the imports were causing serious injury to the domestic production of the cells. Tuesday’s action was the latest in a closely watched case that many, including solar’s trade group — the Solar Energy Industries Association — are saying could impede the growth of the solar industry in this country. While the ITC can make the recommendations, it is now up to the president to pursue them — or not — and to determine the type and amount of relief. The finding comes at a time when the Solar Foundation reports there are more than 260,000 people employed in the solar industry in the U.S (the entire solar manufacturing spectrum comprises less than 15 percent of those jobs).

In the October 24 edition of the Federal Register, the U.S. Census Bureau released a request for comment (RFI) on a proposed Annual Business Survey (ABS). The ABS is a new survey designed to combine Census Bureau firm-level collections that replaces the five-year Survey of Business Owners (SBO) for employer businesses, the Annual Survey of Entrepreneurs (ASE), and the Business Research and Development (R&D) and Innovation for Microbusinesses (BRDI-M) surveys.  The ABS will provide the only comprehensive data on business owner demographics and business characteristics, including financing, research and development (for microbusinesses), and innovation. These data are not publicly available from nongovernment or other governmental sources.

The intent of the RFI is to gather recommendations and other information from the public to help facilitate the collection process of data for the survey. It also provides information about the data that bureau intends to collect as well as brief details about how the data will be collected. Comments are due on or before November 24. 

At least three dozen states offer reductions in tax obligations to companies for some portion of the costs of the businesses conducting research and development within their particular state. During the 2017 session, one fewer could be included among the ranks. With little documented opposition, the Oregon legislature decided to get out of the R&D tax credit business altogether (p. 41, source).  Why? Are there lessons for other states’ advocates for innovation?

From SSTI’s research, the Oregon decision appears unprompted by financial necessity. The cost to the state to extend the R&D tax credit couldn’t be a serious issue ($40 million over six years in a state budget surpassing $38 billion annually). It also appears not to have been because of any disagreement on the merits of increasing R&D activity in the state. Yet House Bill 2078 to extend the existing credit through 2024 was allowed to die in committee with the session’s adjournment in July.