SSTI Digest

After a down year for both the number of venture capital (VC) deals and the total dollars invested in U.S.-based startups, analysts remain split on whether 2017 will be a continuation of the downward trend or a rebound year. Those bullish on the market point toward strong fundraising totals in 2015-2016 and a likely uptick in the number of initial public offering (IPO) market. Whereas, those bearish on the VC market are concerned about a congested industry. 2016 by the Numbers PitchBook reports that VC firms invested just $68.3 billion via 7,966 deals with U.S-based startups in 2016 – a nearly 14 percent decrease from the previous year’s record high of $79.2 billion. This significant decline in VC activity returns total capital invested to levels comparable with 2014, while deal count will likely be at its lowest point since 2012. In PitchBook’s 2016 Year in Review, the authors highlight another concerning trend for the VC industry and VC-backed startups. While VC investment saw a sharp decline, the number of VC-backed exits saw an even more precipitous decline of nearly 25 percent from 935 exits in 2015 to just 719 in 2016.…

This week, we take a look at the top SSTI Weekly Digest stories from 2016 and give you an idea of what to look for in the coming months. Venture capital market stories are always popular with our readers, and this year you found the January story VC Trends to Look for in 2016 particularly interesting. If you liked that one, you may have also read one of the follow ups that ran later in the year, when Companies Receiving VC Funding Declined for 5th Straight Quarter, or you may have turned to the picture of the global VC market in the story that ran the following week. And you’ll want to check back for more information on what is happening with VC in 2017 in the forthcoming January and February issues. Those interested in news regarding universities, startups and accelerators checked out the University Pre-Accelerators the New Hot Trend, story that ran in February. We’ll be reaching out to some of those pre-accelerators to find out what sort of success they’ve had and get back to you on their stories in 2017. Graduates and other professionals may have checked out our Recent Research: Do Jobs Follow People, or People Follow Jobs?, or perhaps a…

The National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL) becomes the eleventh institute in the Manufacturing USA network, U.S. Secretary of Commerce Penny Pritzker announced last week. The $70 million award marks the first institute with a focus area proposed by industry and the first funded by the U.S. Department of Commerce (DOC). The institute will focus on the complex manufacturing process used to produce treatments for conditions such as cancer, autoimmune disorders and infectious diseases and also seeks to develop manufacturing capabilities for a quick response to pandemics and other biological threats. Each of the institutes has a unique technological concentration and is designed to accelerate U.S. advanced manufacturing as a whole. The University of Delaware will coordinate the institute in partnership with DOC’s National Institute of Standards and Technology (NIST). In addition to the newly awarded $70 million in federal funding, at least $129 million has been pledged to support the institute by a consortium of 150 companies, educational institutions, research centers, coordinating bodies, non-profits and Manufacturing Extension…

Last week, Congress passed the American Innovation and Competitiveness Act (S. 3084), which reauthorizes the America COMPETES Act. The Act does not include any funding levels for any of the programs or agencies reauthorized in the bill but does reinforce Congress’s support for research and makes adjustments to some programs. One crucial component of the bill adjusts the cost share requirement for NIST’s Hollings Manufacturing Extension Partnership to 1:1 throughout the new authorization period. In a press release, Senator Cory Gardner (R-CO) emphasized that the act will also provide agencies more leeway to adjust EPSCoR solicitations and encourage NSF to expand I-Corps through agreements with other federal agencies, state and local governments, and follow-on grants.

The National Institute of Standards and Technology (NIST) is requesting feedback on a 2017 funding opportunity that will allow the Hollings Manufacturing Extension Partnership (MEP) Centers and their partners to add capabilities to the MEP program, including projects to solve new or emerging manufacturing problems.  Small and medium-sized U.S. manufacturers are encouraged to send information about their needs in four areas: critical manufacturing technologies; supply chain; potential business services, including information services; and other technologies or services that would enhance global competition. NIST also requests recommendations for other critical issues that it should consider in strategic planning for future investments. More information can be found here. Responses will be accepted through Jan. 13, 2017.

Gov. Andrew Cuomo proposed a new initiative this week to grow the life science research cluster throughout the state, pledging $550 million through a variety of programs including tax incentives, state capital grants, and investment capital with an expected match of $100 million from private sector partnerships for operating support. The life science initiative includes $250 million in tax incentives for new and existing life sciences companies that are expanding research and development.  Under this program: Existing life science businesses would be eligible for an annual allocation of $10 million in Excelsior tax credits;  New life science businesses would receive a 15 percent refundable tax credit on all new qualifying research and development expenditures. Small businesses in the life sciences industry could be eligible for a 20 percent credit; and,  Angel investors would receive a credit of 25 percent of their investment, with a maximum of $250,000 per investor. Another $200 million in state capital grants will be invested over 10 years to support the capital needs of life science entities, and innovation space and developable land will be…

Congress approved the National Defense Authorization Act for FY 2017, which now awaits the President’s signature. The bill includes several significant provisions for the innovation community, including: SBIR is reauthorized through FY 2022 but without the administrative funds pilot program provision included in the 2012 reauthorization; The Rapid Innovation Program, which enables the Department of Defense to work with small businesses and defense laboratories to deploy new technologies through contracts of up to $3 million, is made permanent; The National Defense University and Defense Acquisition University are permitted to enter into cooperative R&D agreements; A Manufacturing Engineering Education Grant Program is authorized (but not funded) to support a wide array of educational, networking and research activities between universities, nonprofits and industry; and, A $250 million pilot within the Rapid Prototyping Fund is authorized (subject to the availability of funds) to work with nontraditional and small contractors.

Megatrends like ageing societies and digitization are expected to shape future research and development agendas across the globe, according to a recent report by the Organisation for Economic Co-operation and Development (OECD).  A broader distribution of science, technology and innovation are expected around the world due to the fast pace of economic development in emerging economies, and global competition for talent and resources will most likely intensify according to the OECD Science, Technology and Innovation Outlook 2016. Such megatrends, and others highlighted in the report, require policy responses that will likely face major constraints, including high public debt, international security threats, a possible erosion of social cohesion and the rise of influential non-state actors, the report maintains. While developments in science, technology and innovation may offer solutions to challenges in fields like communications, transportation and health, such developments and emerging technologies also carry risks.  Advances in artificial intelligence and robotics raise concern over future jobs; big data around privacy; 3D printing around piracy of…

To ensure economic growth and the success of the industries of tomorrow, the U.S. government needs to expand federal support for research and improve the efficiency of the process of federally funded knowledge leading to U.S. innovation and jobs, according to a recently released study by the Information Technology and Innovation Foundation (ITIF) and the Brookings Institution’s Bass Initiative on Innovation and Placemaking. In Localizing the economic impact of research and development: Policy proposals for the Trump administration and Congress, ITIF and Brookings suggest 50 policy proposals that the new administration and Congress can undertake to bolster tech transfer, commercialization, and innovation.  Competition among countries to lead in the innovation field have intensified and the increasing complexity of technological innovation means the federal government must “step up its game when it comes to technology commercialization policies and programs,” the study’s authors assert. The report’s 50 action items align with five major policy imperatives: ·        Strengthen…

Despite the economic recovery since the Great Recession, the U.S. remains in a long-term decline in productivity, according to a pro bono study by Gallup commissioned by the U.S. Council on Competitiveness for the council’s 30th anniversary.  The study, No Recovery An Analysis of Long-Term U.S. Productivity Decline, finds that since 2007, U.S. GDP per capita growth has been one percent, and Gallup Chairman and CEO Jim Clifton warns that “America is dangerously running on empty.” Problems with the economy did not start with the Great Recession, but have been prevalent for decades, the report contends.  While the tech sector, professional services and top universities are “world class,” the rest of the economy – especially the healthcare, education and housing sectors – act as drags and expenses with little value in return. The deterioration in large sectors of the economy are reversible and can be linked to specific policies, rules and regulations that have resulted from decades of “weak political leadership – often at the state and local levels – and lobbying by interest groups,” according to the…

The 21st Century Cures Act was signed by President Obama on Tuesday and is broadly intended to facilitate the research, development and transfer of medical discoveries in order to better-address diseases affecting American people. While the bill has received mainstream coverage for its bipartisanship – the core authors were two Democrats and two Republicans – and billions in new research spending – more than $5 billion in authorizations – the text also contains potentially significant changes for federally-supported medical research policy. Funding The bill is achieving significant attention for its appropriation of new research dollars. The National Institutes of Health will receive $4.8 billion over 10 years, distributed through four innovation projects: precision medicine, brain research, cancer research and adult stem cells. The Food and Drug Administration is appropriated an additional $500 million of funding over 10 years, primarily to accelerate drug and device access. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["lBrHP"]={},window.datawrapper["lBrHP"].embedDeltas={"100":892,"200":701,"300":642,"…

Nearly half of the U.S. states and the District of Columbia saw a 10 percent or greater increase in higher education R&D expenditures from FY 2010 to FY 2015 with five of those states (Connecticut, Georgia, Massachusetts, Nebraska, and Utah) seeing at least a 20 percent change, according to the National Science Foundation’s (NSF) Higher Education Research and Development (HERD) survey for 2015. Between FY10-15 overall U.S. research and development (R&D) spending at U.S. universities grew 12.1 percent, from about $61.2 billion to $68.7 billion.  California remained the leader in university R&D spending, but spending in the state grew at a slightly lower rate over the five years (10.5 percent) than the national average. More than half of the other top 20 states experienced gains that exceeded the national average of 12.1 percent. While the majority of states saw significant (greater than national average) to moderate (5 to 10 percent growth) increase in higher education R&D expenditures from FY10 to FY15, 11 states reported a decrease in higher education R&D expenditures – all of which are eligible for Experimental Program to…