SSTI Digest

Last week, the basics of the blockchain platform as well as the potential that it presents as an emerging industry were presented in the Digest. In this week’s post, the use of blockchain platforms and applications for the fintech industry as well as other industries that could see disruption due the introduction of the blockchain are explored. In addition, several efforts to spur the development of blockchain technologies and associated applications made by industry, government, and nonprofit organizations will be highlighted.

Blockchain and Fintech

Over the last two months, the Economic Development Administration (EDA) has made nearly $35 million in investments intended to spur economic prosperity across the country including nearly $28 million for communities impacted by transformations in the energy industry. These efforts are intended to unlock the potential of regional assets including community members, local institutions of higher education, and regional industies by funding entrepreneurship, innovation, research and development (R&D) activities, and other capacity-building efforts. Among these investments, the EDA announced the winners of the University Center Economic Development Program Competition; and, Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative.

Regional activities supporting innovation and entrepreneurship are reaching across U.S. borders, forming new partnerships with organizations from neighboring countries to broaden their impact and leverage their strengths. Beyond traditional trade relationships, these activities are promoting new opportunities for longer term collaborations with potential to benefit the U.S. and its neighbors. In these cases, a recent trend is that regional technology-based economic development activities are beginning to expand to border nations as a way to maximize impacts.

Through September 2016, the United States has traded nearly $800 billion in goods with Canada and Mexico – 29.6 percent of the nation’s total trade and a rate nearly double that of with China (15.4 percent), according to year-to-date data from the U.S. Census Bureau.  This trade is especially pronounced in metro areas along the federal border, where regional economic development is beginning to take on a broader meaning.

Twelve gubernatorial seats were up for election Tuesday, five of which were held by incumbents seeking reelection. Four of those – Montana Gov. Steve Bullock (D), Oregon Gov. Kate Brown (D), Utah Gov. Gary Herbert (R) and Washington Gov. Jay Inslee (D) – were reelected for second terms. In North Carolina, Democratic candidate and State Attorney General Roy Cooper has a lead of less than one percent over incumbent Gov. Pat McCrory. Gov. McCrory has not conceded and the result is pending a canvass of votes, which may not be complete until November 18.

As of this publication, there are seven new governors taking office:

·         Democratic Congressman John Carney won the seat in Delaware.

·         Republican Lt. Gov. Eric Holcomb won in Indiana.

·         Republican and former Navy Seal Eric Greitens won in Missouri.

·         Republican Chris Sununu won in New Hampshire.

President-elect Donald Trump made strong appeals during his campaign to restore economic opportunity for workers, particularly those displaced by changes in the manufacturing and energy sectors. An economy driven by transforming America’s scientific research into good-paying jobs and high-growth businesses would deliver on the promises Trump made to voters. SSTI has a policy agenda to provide entrepreneurs and investors with the support they need to make this transition to an innovation economy.

Currently, this policy agenda is available to the Trump transition team through SSTI’s Executive Memorandum for Presidential Candidates. The memorandum documents broad public support for the platform, including backing from 86 percent of Republicans and 82 percent of people who believe the American economy is getting worse. Notably, citizens across the political spectrum are willing to pay for this initiative – even through new taxes on cigarettes (76 percent) or by closing corporate loopholes (75 percent).

Bond issues supporting higher education goals got mixed results in Tuesday’s election. A bond issue in Rhode Island to be used for the renovation and construction of the University of Rhode Island’s College of Engineering buildings was a winner in this year’s election, receiving 59.3 percent approval. The bond issue that would have created the Montana Biomedical Research Authority was not as lucky, with 56.9 percent of voters there rejecting the measure. Two other economic development measures fared well with Arkansas voters approving (65.22 percent) a referendum removing caps on state-issued bonds to help finance economic development projects and services. Alabama voters also approved (59.22 percent) an amendment giving communities the power to create zones to attract industry to the state.

In a special feature this week, SSTI will examine a developing technology advancement that has been increasingly drawing public attention. This is the first of a two-part series examining blockchain and its implications for business and industry, with today’s story focusing on the technology, while next week will focus on its applications and challenges.

Blockchain, a newly emerging technology that stands as the web-based database platform behind bitcoin, is receiving more attention for the economic benefits it promises. While bitcoin has gobbled up headlines, blockchain has slowly developed a strong group of proponents that include leaders from Wall Street, big banks and investment firms that view the technology as a possible transformative advancement within finance and other tech-influenced industries such as government, supply chain, crowdfunding, telecommunications, gig economy and higher education. Blockchain is the technology that provides the possible secure, efficient pathway for billions of devices to transact and share information across diverse platforms.

As the United States undergoes a political transition, much remains to be seen in how the Trump Administration will approach the economy. One way to support economic development on both a federal and regional level is by leveraging research and development. Building capacity for scientific research is an underlying principle of the Innovative Science and Technology for Economic Prosperity (iSTEP) model – a comprehensive policy platform for converting the United States’ strength in R&D into greater economic prosperity – which has received bipartisan support from an overwhelming majority of voters.

The National Science Foundation (NSF) estimates that U.S. research and development (R&D) funding reached an all-time high of $499.3 billion in 2015 – an increase of approximately $21.6 billion over 2014 levels ($477.7 billion). The $21.6 billion increase marks the third time in three years that overall U.S. R&D funding grew by more than $20 billion – $20.4 billion in 2013 and $21.1 billion in 2014.

While overall R&D funding increased from 2014 to 2015, federally sponsored R&D fell to a record-low of 23 percent or $113 billion in 2015 – the lowest percentage share since 1953. The growth was mostly driven by the business sector reaching a record high 69 percent share of R&D funding ($355 billion). The $355 billion invested in R&D by businesses continues a long-term trend of private industry financing the majority of R&D activities in the U.S.

As you are likely aware, SSTI’s 2016 Annual Conference took place last week in Columbus, OH. The theme of Innovation with Purpose: Shaping Future Opportunities was addressed throughout the agenda, and people were particularly struck by the need to better-orient programs and services to address “Innovation’s Blindspot,” as defined during the keynote talk delivered by Ross Baird of Village Capital. During other moments in the conference, such as policy-focused discussion groups and sessions on improving metrics and communications, attendees were directly called to take actions that would benefit their programs and customers, as well as the innovation community as a whole.

Columbus, OH – Celebrating the 10th anniversary of its Excellence in Technology Based Economic Development awards, SSTI today announced four winners driving prosperity in their states and regions through innovative approaches to growing their economies and creating high-paying jobs.

“As we reach this 10-year milestone of recognizing excellence in initiatives that are happening throughout the U.S., it is a good measure of the dedication and entrepreneurial spirit that exists in a dynamic economy,” said Dan Berglund, president and CEO of SSTI. “This year’s award winners are examples of strong initiatives that have been recognized by their peers as successful programs. They, in conjunction with past winners, serve as models for those working to encourage prosperity through science, technology, innovation and entrepreneurship.”

In less than a week, about 300 professionals, stakeholders, policymakers, and others working to encourage economic prosperity through science, technology, innovation and entrepreneurship will gather in Columbus to hear and share the latest news, trends and advancements at the SSTI Annual Conference. It is fitting that the conference is being held in Columbus this year, as the city itself is being recognized for its activity and growth. Columbus recently was named by Money magazine as the Best in the Midwest in their Best Big Cities ranking.