SSTI Digest

The U.S. Small Business Administration (SBA) recently announced plans to launch a 7(a) Working Capital Pilot (WCP) Program later this year. The program will offer a lines of credit, made by 7(a) lenders and backed by the SBA. It is designed to give greater flexibility than a traditional term loan. This pilot program, according to an SBA press release, will include both a “transaction-based” and “asset-based” model, allowing borrowers to leverage sales or assets to access working capital. Depending on the details of the capital structure that are revealed when the program launches, these models may enable both newer technology companies that have sales but few assets and legacy companies that have assets but insufficient cashflow to invest in new technologies with the opportunity to access financing through SBA’s popular 7(a) vehicle.

House Committee on Energy and Commerce Chair Cathy McMorris Rodgers recently published Reforming the National Institutes of Health: Framework for Discussion. The blueprint calls for reducing the number of NIH institutes and centers (ICs) from 27 to 15, largely by merging some of them. The reorganization and proposed funding levels are illustrated in Figure 1.

Figure 1: Proposed reorganization and proposed funding levels for NIH restructuring. Click on the solid bar to the left of the current CIs to view the destination of the CIs. Click on the solid bar to the right of the proposed CIs to view the CI(s) that will be consolidated into it. Click in the center of the horizontal bar to see the proposed change in funding after the restructuring.

Note: This brief quasi-book review/book synopsis is the first item in an experimental new section of SSTI’s newsletter, potentially joining other regular sections such as Useful Stats, Fed/Leg News, State News, Member Updates, and Recent Research. Its periodic continuation after the contributions we present over the summer will depend on feedback from our members and Digest readers. Comments may be shared with skinner @ ssti.org

Ethan Mollick, a Wharton professor specializing in entrepreneurship and innovation, knows people are thinking a lot about generative artificial intelligence (AI). He recognizes many are worried, as his introductory chapter “Three Sleepless Nights” of his book, Co-Intelligence: Living and Working with AI, reveals. Mollick’s opening sentence tells readers those 72 hours are the minimum price he thinks anyone will pay for “really getting to know AI.”

Yet another doom and gloom book about the everything-changing platform technology? Not at all.

The Economic Development Administration today announced $504 million in funding across 12 Tech Hubs, the culmination of a 14-month selection process to choose the first regions funded for implementation projects under the program. The 12 Hubs receiving implementation awards are listed in the graphic below.

EDA originally projected making 5-10 implementation awards $50-75 million each. The agency is instead making 12 awards at $19-51 million.

The Tech Hubs program was authorized by Congress to bolster America’s national security and economic competitiveness in 2022’s CHIPS and Science Act. While authorized at $10 billion, the program received its initial funding of $500 million with the FY 2023 omnibus, and Congress provided an additional $41 million in FY 2024. 
Today’s announcement, which builds upon EDA’s award in October 2023 of strategy development grants, therefore accounts for nearly all the agency’s appropriated funds, pending further congressional action. 

The Small Business Administration recently released a new solicitation for the Regional Innovation Clusters initiative. Unlike what SBA has done in recent years, and returning to the program’s roots, all nonprofit organizations are eligible to apply alongside for-profit firms. In a change from prior solicitations, proposals must include whether the work will support an emerging or mature cluster. The timeline is relatively tight: submissions are due July 26.

In recent years, SBA has only allowed for-profit firms to compete for the awards, despite universities and regional nonprofits having successfully managed cluster organizations since the initiative first launched. This solicitation marks a return to allowing nonprofit and for-profit entities to compete. Restoring the program eligibility has been a priority for the SSTI Innovation Advocacy Council, which also had advocated for growing the program from just $5 million in FY 2020.

Editor's Note: This article was updated on July 1 to reflect an amendment during the full House's consideration of the FY 2025 defense appropriations bill that restored the APEX accelerators program to its FY 2024 funding level.

Nearly one out of every four workers in the United States is now involved in a STEM occupation, and 41 percent of those STEM workers do not have an associate’s degree or higher, according to data presented in the latest NSF Science & Engineering Indicator report, The STEM Labor Force: Scientists, Engineers, and Skilled Technical Workers.  

The NSF S&E indicator report provides policy-relevant details about the representation of demographic groups in STEM, the STEM labor market's earnings, occupations, and industries, the geographic distribution of the STEM workforce, the degree attainment and training of workers in STEM, and foreign-born workers.

The CHIPS Research & Development Office (CHIPS R&D), part of the U.S. Department of Commerce, is tasked by the CHIPS and Science Act to invest $11 billion to ensure the U.S. develops and maintains a robust semiconductor workforce. Accordingly, CHIPS R&D anticipates that its Notice of Funding Opportunities (NOFOs) will require applicants to submit an Education and Workforce Plan (EWD). CHIPS R&D recently issued a guidebook for creating an EWD.

As described in the guidebook, there are five key elements recommended for an EWD plan:

The recently released annual impact report from JumpStart, a Northeast Ohio-based venture development organization celebrating its 20th anniversary this year provides one of the latest examples of the out-sized economic and social benefits states and regions receive by making sustained investments in well-designed nonprofit, public-private TBED initiatives supporting innovation-driven entrepreneurs.

The Jumpstart 2023 Economic Impact Report  documents tech startups served by JumpStart and its network of 13 entrepreneurial support providers directly generated $682 million of economic activity in Ohio in 2023 alone. The figure is 35% higher than reported in 2022. The report also notes that those same tech startups created and maintained 4,698 direct jobs supporting 3,175 households across the state last year

Coming out of the COVID-19 pandemic, the median net worth of Americans jumped an inflation-adjusted 37%, from approximately $141,000 to $192,000, representing the largest increase reported across available data from the Federal Reserve’s Survey of Consumer Finances (SCF). Breaking net worth down into its two main components, assets and debts, shows that while debts have increased, the sharp rise in assets—both financial and nonfinancial—has driven these numbers. When separating Americans into the self-employed and those employed by another person or company, interesting trends are revealed; self-employed individuals have higher median and average net worths, and, in 2022, for the first time ever, lower median debts. The old adage, it pays to be your own boss, seems to hold.

This article uses data from the 2022 SCF, the most recent release. New editions of the SCF are published triennially and include information on families’ balance sheets, pensions, income, and demographic characteristics. All dollar values are inflation-adjusted to 2022 USD.

July 25 at 3pm ET | Free

Immigrant talent is a key driver of innovation in technology and entrepreneurship. However, navigating and understanding the many legal options available can be challenging. Join this TBED Community of Practice webinar to learn about pathways for TBED immigration, including lesser-known tools and under-utilized features of common immigration paths.

Speakers:
Sophie Alcorn, Founder & CEO of Alcorn Law
Doug Rand, Senior Advisor to the Director of USCIS

Register here to attend.

During a recent webinar presented by the National Semiconductor Technology Center (NSTC), center representatives announced details of its initial round of R&D funding opportunities, as outlined in its vision for 2024 document. The projects to be funded, which NSTC refers to as Jump Start Projects, are (1) AI-based Radio Frequency (RF) Design and (2) Test Vehicles. ​ During the webinar, Jay Lewis, director of the CHIPS for America NSTC Program, noted that “the aim is to deliver impactful results through early investments in projects with a near-term time horizon.” ​He also announced that approximately $100 million will be available to fund the first set of external teams. ​ Further announcements regarding the NSTC facilities model and selection process, as well as the launch of a workforce center of excellence, are expected in the summer of 2024.