SSTI Digest

In addition to last week’s Digest story on all state expenditures, the National Association of State Budget Officers’ (NASBO) 2022 State Expenditures Report detailed information on higher education expenditures, finding a 9.4% increase (from $225 to $247 billion) in total higher education expenditures over the past fiscal year, a sizable increase from the 1.7% increase experienced from FY 2020 to 2021. State funds for higher education increased 9.3% and federal funds saw an increase of 12.1%. This represents a large growth in state fund spending (from -0.3% in FY 2021), yet a decrease in momentum for federal fund spending (from 15% in FY 2022).

Recognizing that innovation ecosystems require broad networks of partners working together and knowing that many institutions of higher education (IHEs) lack the research capacity to be able to participate in external partnerships, the NSF Directorate for Technology, Innovation and Partnerships invites proposals from Minority-Serving Institutions (MSIs), Predominantly Undergraduate Institutions (PUIs), and two-year institutions with limited or no research capacity to apply for the support necessary to become equitable partners with teams competing under the current and subsequent NSF Engines program funding opportunities.

Since the widespread usage of the internet in the 1990s, the question of who has access to broadband and the definition of high-speed internet has bedeviled federal, state and local officials.  Attempts to map which addresses have access to high-speed service date back at least 20 years. The latest iteration, a new national broadband map released by the Federal Communications Commission (FCC) will be used to ensure that the $42.45 billion federal investment from the Bipartisan Infrastructure Law’s Broadband Equity, Access, and Deployment (BEAD) Program makes its way to the areas most in need of broadband service when it is allocated to states on June 30. With challenges to the map due by Jan. 13, SSTI urges state and local policymakers to take a close look at the map and encourage your residents to provide feedback on the map.

Earlier this week, the U.S. Department of the Treasury announced the approval of seven additional states’ programs for State Small Business Credit Initiative (SSBCI) funding, totaling over $1.6 billion: Florida, Georgia, Illinois, Louisiana, North Dakota, Oklahoma and Virginia. A short summary of these states’ plans, all of which include investment capital, are available below:

The National Association of State Budget Officers’ (NASBO) 2022 State Expenditures Report found total state spending to have grown an estimated 7.3% between fiscal years (FY) 2021 and 2022 ($2.66 to $2.86 trillion), 1.5 percentage points higher than the 36-year average growth of 5.8% per annum. This increase in state spending can be largely attributed to an 18.1% surge in general fund spending from FY 2021 to 2022 (following an increase of just 2.2% from FY 2020 to 2021) — the highest rate in the 36-year history of NASBO’s State Expenditure Report history. State spending from outside of the general fund (including bonds) also increased by 5.2% (to $725 billion), while state expenditures from federal funds declined by 0.2% (to $1.08 trillion).

State government agencies’ expenditures for research and development totaled nearly $2.5 billion in FY 2021, an increase of 1.1% from FY 2020, but far below the year-over-year inflation of 6.4% when measured in February 2022. The findings on state R&D were recently reported by the National Center for Science and Engineering Statistics (NCSES). The sluggish state spending was exacerbated by real decline in extramural share of federal R&D spending in FY 2021. Intramural R&D by feds grew from 30.7% of total in FY 2020 to 35.8 percent in FY 2021 (see https://ncses.nsf.gov/pubs/nsf22323).

A working paper published in the National Bureau of Economic Research asked the question, “Do large firms produce more valuable inventions, and if so, why?” An excerpt of an analysis of the paper that appeared in the November 2022 issue of the NBER Digest follows with additional consideration from SSTI Vice President Mark Skinner on its implications for technology-based economic development.

Over the past four fiscal years, there have been 1,977 initial public offerings (IPOs) completed by companies headquartered in the U.S., according to PitchBook, yielding more than $549 billion in capital invested. These companies are located in 45 states, D.C., and Puerto Rico. Almost 20% of those companies are no longer publicly held, having been returned to private ownership, been acquired, merged or gone out of business.

NIH just launched the funding opportunity announcement for the third cohort of its regional biomedical proof-of-concept and accelerator program, the Research Evaluation and Commercialization Hubs. On Dec. 12, NIH will be hosting a funding opportunity announcement pre-application webinar which will provide a question and answer opportunity with NIH SEED and NIGMS.

Two recent working papers — The Impact of High-Skilled Immigration on Regional Entrepreneurship from Columbia University and Getting Schooled: The Role of Universities in Attracting Immigrant Entrepreneurs from the Philadelphia Federal Reserve Bank — explore the impact of high-skilled immigrants on entrepreneurship and how universities attract immigrant entrepreneurs. Both papers find that high-skilled immigrants have a positive net effect on regional entrepreneurship and are critical to the entrepreneurial ecosystem.

New York became the first state to enact a temporary ban on new cryptocurrency mining permits at fossil fuel plants in a move aimed at addressing the environmental concerns over the energy-intensive activity. The legislation, signed by Gov. Kathy Hochul, will impose a two-year moratorium on crypto-mining companies seeking new permits to retrofit some of the state’s oldest fossil fuel plants into digital mining operations. The measure also requires New York to study the industry’s impact on the state’s efforts to reduce its greenhouse gas emissions.

The Federal Communications Commission (FCC) recently released the first draft of a new national broadband map providing a more granular look at broadband service throughout the country. The new broadband map was created to ensure that the $42.45 billion federal investment from the Bipartisan Infrastructure Law’s Broadband Equity, Access, and Deployment (BEAD) Program makes its way to the areas most in need of broadband service when it is allocated to states on June 30. This program provides each state with at least $100 million and additional funds according to the number of unserved or underserved areas.