SSTI Digest

Breaking a two-year impasse, legislators in Illinois were able to pass a state budget that reinstitutes an R&D tax credit and implements workforce development programs. In California, the Governor’s Office of Business and Economic Development (Go-Biz) will see a 28 percent increase in funding, while other innovation initiative are receiving level funding. In other states whose budgets SSTI analyzed this week for TBED-related funding, we found that Innovate Mississippi was able to maintain state funding and new funding was appropriated for workforce development at the state’s community and junior colleges; a variety of programs were cut in North Carolina; and, Ohio will not get funding for a state office focused on commercializing research across key industries that the governor had proposed. More findings from California, Illinois, Mississippi, North Carolina and Ohio are detailed below.   California Go-Biz, the Governor’s Office of Business & Economic Development, received a 28 percent increase for the new fiscal year, growing to $6.531 million. The agency’s staff will grow from 22.0 full time equivalent positions to 33…

In a recent post, the Brookings Institution’s Mark Muro raises concerns about the U.S. manufacturing sector’s health due to the leading indicators of slowed growth in both auto sector output and auto manufacturing employment. Muro contends that these slowdowns are driven by plateaued consumer demand and automakers investing billions in developing technologies necessary for electric and self-driving cars. Muro reports that the manufacturing sector is already seeing a slowdown in nearly 40 percent of the U.S. largest metros. Of the top 100 metros, Muro reports 39 have seen manufacturing growth turn negative from January of 2016 to March 2017. In an article for the Financial Times, Jessica Cheek and Federica Cocco provide several charts that highlight similar red flags from the U.S. car industry including stagnating demand for passenger cars due to ride-sharing companies and changing consumer preferences. The areas most impacted by these trends include both metros and small towns in the Midwestern and Southern states. The city with the most jobs lost in auto manufacturing is Charlotte, NC, with a loss of 2,712 jobs (a 6.4 percent decrease). In his post,…

Startup innovators from around the country have the opportunity to exhibit their ideas and win $10,000 during the Catalysts of the Climate Economy national innovation summit in Burlington, Vermont, Sept. 6-8. Innovators in the climate economy are encouraged to enter a contest that will result in five competitors pitching their ideas to a panel of judges, with the winning idea garnering the top prize. Entries for Round 1 of the competition – where innovators tweet their formula/idea on improving the climate economy – must be received by July 30th. A select number of entries will be invited to present their ideas during the conference, where all attendees will vote on the top five startup ideas. Produced by the Vermont Council on Rural Development, the conference will bring together participants in the climate economy to explore the next stage of economic development in a low-carbon future.

One week before implementation, the Department of Homeland Security (DHS) announced that the International Entrepreneur Rule would be delayed until March 2018 and that a new proposal to rescind the rule will be made. The rule would have provided immigrants who have founded a high-potential startup with equity investment to remain in the country up to five years to scale the company. The National Venture Capital Association took the lead on a letter to the president championing the proposal, which SSTI — joined by 12 member organizations — signed [pdf] with investors, entrepreneurs and organizations from 25 states earlier this year to support the rule. Organizations interested in commenting on the forthcoming proposal to rescind the rule are encouraged to contact SSTI. 

The U.S. House and Senate Armed Services Committees recently passed their versions of the FY 2018 National Defense Authorization Act (NDAA). The legislation includes provisions for federal labs, SBIR and SBA technical assistance programs. These portions of the bills are currently very different between the chambers, and, if passed in their current forms, the final bill could address a wide range of policies affecting small business and innovation. The Senate NDAA has three provisions particularly of interest for small business and innovation advocates: Pilot Program for Streamlined Technology Transition from the SBIR and STTR Programs —directs the Defense secretary to establish a program enabling the department to sign multiple award contracts with businesses that have completed a Phase I with Defense and gives the secretary the option of waiving competition requirements for these contracts; Pilot Program on Strengthening Manufacturing in Defense Industrial Base —  directs the Defense secretary to implement a program boosting production of emerging technologies through small- and mid-sized manufacturers by conducting activities…

Maine voters approved a special referendum on June 13 that will issue $50 million in bonds to fund investment in research, development and commercialization in the state’s seven targeted technology sectors. The Maine Technology Institute will distribute $45 million of the funds for infrastructure, equipment and technology upgrades. The remaining $5 million will be used to recapitalize the Small Enterprise Growth Fund to create jobs and economic growth by lending to or investing in qualifying small businesses. The issue passed with 61 percent (63,468) voting in favor and 38 percent (39,549) voting against it (the remaining 1 percent were blank) and passed in every county in Maine. It is the latest in a string of referendum wins in Maine and a reminder to all of us of the political appeal that investing in technology has. Over the last 12 years, Maine voters have approved three ballot issues to support funding for investments in research and entrepreneurs. Each of those ballot issues received at least 58% of the vote and in the three elections, voters in all Maine counties — rural and urban — approved the issues every time with the exception of one county…

With a July 1 start to the fiscal year in most states, several states that were at an impasse over their budget faced at least partial shutdowns. Last minute negotiations restarted services in both Maine and New Jersey, while Illinois, which has been operating without a budget since 2015, faces threats of a downgrade in their credit rating if a deal cannot be reached. This week we present our findings of innovation funding from seven states, including $2 million in funding for a new public-private economic development organization in Delaware, an increase in funding in Louisiana for the state’s scholarship program for higher ed, and cuts to higher ed funding in Missouri, which also saw a severe drop in its funding to the Missouri Technology Corporation. Efforts in Maine, New Hampshire, Vermont and Washington are also detailed below. Delaware The FY 2018 budget passed by the Delaware legislature and signed by Gov. Jay Carney would allocate up to $2.0 million for the Delaware Prosperity Partnership, a new public-private economic development organization. As described in a April 2017 Digest article, the Delaware Prosperity Partnership is tasked with functions…

In Making it in America, McKinsey Global Institute researchers contend that for the U.S. to see a revitalization of its manufacturing sector (as measured by global market share), the public and private sectors should treat it as a national priority. However, they warn that the revitalization will not produce a return to 1960s-style manufacturing employment. In the 1960s, the manufacturing sector employed approximately 30 percent of all American workers – it is down to approximately 9 percent today (a 70 percent reduction). The authors contend that due to the changing shape of manufacturing, technology, global competition, and other market demands that manufacturing job growth would only be modest. Most of the job growth potential will be found in other sectors that would benefit from increased economic activity. Instead, to regain the lost global market share, the country’s manufacturing renaissance will be driven by advanced manufacturing that leverages a skilled STEM workforce and technological advances such as digital manufacturing, the Internet of Things, analytics, advanced robotics, and 3-D printing. To achieve the potential revitalization of…

The bioscience industry has had a positive impact on states’ economies and continues to be a driver of economic growth according to a new report from Biotechnology Innovation Organization (BIO). State lawmakers have recognized the importance of the industry, the authors state, and have responded to challenges facing the bioscience companies with legislative efforts focused on a supportive business climate, including increasing available funding, particularly for emerging companies in their state, and leveraging academic and medical research facilities to create strategically planned campus extensions such as Smart Zones or Innovation Zones that contain incubator space and incentives for start-up companies. In Bioscience Innovation In The States: Legislation And Job Creation Through Public-Private Partnerships, BIO and its member companies have outlined three phases of bioscience company creation and expansion and identified legislative support mechanisms they say are needed in each phase. For instance, emerging companies in early-stage development benefit from angel investor and/or seed capital tax credits, testing companies benefit from capital and innovation…

Whether or not the drastic changes coming to the future of work go well or poorly for America depends largely on how the country responds, according to a new report from Shift: The Commission on Work, Workers, and Technology. The commission, which is led by Bloomberg and New America and comprised of members from across industry, philanthropy, government, and academia, structures scenarios regarding the future of work around two guiding questions: Will the future have more or less work? Will that work be divided into jobs or into tasks? Based on these questions, the authors developed four scenarios to use as a framework, each with hypothetical driving factors, early signs, challenges, and signature technologies. They also propose examples of machine- and human-occupation within each scenario, as well as some potential educational, social, and geographic implications.  In the “Rock-Paper-Scissors Economy,” the authors predict comprehensive automation and relatively few jobs. Under this scenario, machines would perform the vast majority of work in the United States, while human jobs would mainly consist of caring for the elderly or sick, providing…

The House Appropriations Committee began releasing FY 2018 “markup” budget bills this week, and the proposals would cut billions in non-defense spending. EDA would lose $100 million* in funding, SBA’s entrepreneurial development programs would lose $34 million, NIST’s Manufacturing Extension Partnership would lose $30 million, and Energy’s ARPA-E would be eliminated, among other cuts. As SSTI noted for both the administration’s proposed FY 2017 and FY 2018 budgets, congressional statements rejecting the president’s total budget package did not necessarily make innovation safe. Budget bills are appearing now because the House Republicans agreed to FY 2018 discretionary baseline funding levels of $621.5 billion for defense and $511 billion for non-defense spending. The FY 2018 non-defense figure is $8 billion less than the baseline FY 2017 funding level — and a total of $43 billion less funding when supplemental spending is considered. Appropriations subcommittees are required to fund programs only up to their assigned spending levels. The mandate from House leadership to cut billions in domestic spending, therefore,…

Since President Trump has taken office, the U.S. has seen several dramatic shifts in science and technology (S&T) policy from the previous administration—changes that several foreign leaders believe will create economic growth opportunities for their countries. As the Trump administration continues to roll out its S&T policy directives, these nations seem committed to growing their economies while chipping away at U.S. dominance in S&T. The most recent efforts by foreign governments fall into policy areas focused on supporting climate change and attracting talented immigrants. Climate change activities After Trump announced the U.S. withdrawal from the Paris Climate Accord, French President Emmanuel Macron had a pointed message for U.S. scientists, engineers, and entrepreneurs working on climate change who feel alienated by the decision – “come and work in France on concrete solutions for climate." Macron enhanced the invitation by unveiling a new €30 million ($34 million USD) initiative that is intended to attract climate change researchers to France. The government intends to leverage their initial funding…