SSTI Digest

Action toward improving the availability and speed of broadband in rural areas is emerging as an early theme in 2019, continuing activity from 2018. Oregon, Washington and the USDA all announced new initiatives last month. In mid-December, the USDA announced the availability of $600 million in grants and loans to support improvement of broadband accessibility across rural America. Funding is split into three equal pools. Up to $200 million may be awarded as grants (deadline for proposals is April 29); $200 million may be awarded as low-interest loans (applications due June 28); and $200 million may be distributed in a mix of grants and loans (proposals are due May 29).  Projects funded through this initiative must serve communities with fewer than 20,000 people with no broadband service or where service is slower than 10 megabits per second (mbps) download and 1 mbps upload.

Faced with one of the largest drawdowns in defense spending in American history, the Defense Manufacturing Assistance Program (DMAP) targeted affected companies and communities across Michigan, Ohio and Indiana for assistance. The program aimed to support economic stabilization and diversification across the region during the five-year period from 2013 to 2018. After five years of projects, an evaluation of DMAP found that for every one dollar that went into the program, companies obtained an average of $18 new dollars in additional revenue.

The effort was funded primarily by the Department of Defense’s Office of Economic Adjustment and led by the University of Michigan in partnership with Ohio State and Purdue. DMAP practitioners worked with more than 300 companies over this time, which led to approximately 20,000 jobs created and retained – including 662 new jobs – and $183 million in new sales. The program also helped drive innovation in these companies, resulting in 139 new products and 26 commercialized technologies.

While job openings surpassed 7.1 million in August, companies across the country still are struggling to attract staff with relevant skills. To address this issue, states are developing new workforce development efforts to address the increased demand. These efforts have taken many different approaches including grants to communities, free online resources, mentorship programs, or stronger partnerships with industry. While these efforts may be diverse in their processes, they share commonalities, such as bringing together all stakeholders (e.g., industry, academia, government, nonprofits, and local workforce development boards) and providing those services locally across the state, or by leveraging online platforms.  Such efforts are reflected in new programs described below in Indiana, North Carolina and South Carolina.

The ability of states to deliver the services promised to its residents relies on their fiscal soundness. With most states beginning their fiscal year in July, SSTI has reviewed the current fiscal standing for each state and here presents a snapshot of our findings.

Most states ended their fiscal year with a surplus and continue to recover from the Great Recession, with a growing economy and job gains. However, they face continuing demands on their budgets, with expanded Medicaid payments and the growing opioid crisis confronting nearly every state. Such decisions affect the state’s ability to fund innovation efforts, from the amount of support available for higher education and STEM programs, to funding for entrepreneurship, and forging public private partnerships to strengthen innovation programming that the private sector cannot fully support.

Our analysis found that some states that rely on the energy sector to fund their spending priorities continue to struggle, while others are already factoring in anticipated revenues as a result of new Supreme Court rulings involving gaming and online sales tax collections.

SSTI’s Tech Talkin’ Govs feature returns as governors across the country roll out their state of the state addresses. We review each speech for comments relevant to the innovation economy, and bring you their words directly from their addresses. In this second installment, we present excerpts from governors in Alabama, Colorado, Georgia, Indiana, Kansas, Nebraska, South Dakota and Washington.

Workforce development and/or apprenticeship programs receive attention in all of the below excerpts. The Alabama governor said she is seeking an additional $50 million for higher education, while the Georgia governor talked about reorganizing their technical college system. In Indiana the governor is challenging the state economic development department to create thousands of new jobs and said in the first quarter the state will begin to make strategic investments to build and support more innovation and entrepreneurship through the already established $250 million Next Level Indiana Trust Fund.

Indiana Gov. Gary Holcomb announced two new workforce development grants program as part of the state’s Next Level Jobs initiative. Through this new initiative, the state will commit more than $20 million over the next two years to help state residents find careers in high-demand, high-wage jobs as quickly as possible.

The Workforce Ready Grant program will support tuition costs for adults to earn career certificates in high-growth sectors including: advanced manufacturing; construction; health; life sciences; logistics; and, information technology. The grants will be made to adult learners for industry-focused certificate programs at Ivy Tech Community College and Vincennes University campuses throughout the state.

Over the last several months, economic development organizations, universities, and their partners have announced new efforts to create the building blocks for entrepreneurial development in rural communities. Examples include i2e announcing new efforts to expand entrepreneurial support services to rural communities in Oklahoma and three Indiana universities partnering to support startup growth in rural regions across the state. These efforts are intended to leverage the existing skills and resources of these organizations and reformulate them for regions typically left behind by the field.

Oklahoma

As the state budgeting process comes to a close, SSTI will report over the coming weeks on actions taken by state legislatures to invest in economic growth through science, technology, innovation and entrepreneurship. This week, we look at the budgets passed and signed by governors in Indiana, which includes new funding for an institute focused on health and life-sciences research and commercialization, and Maryland, which includes funding for the Maryland Technology Development Corporation.

Indiana

Appropriations bills approved by the Indiana legislature and signed by Gov. Eric Holcomb include funding for technology-based economic development initiatives: 

Traditional economic development efforts at the state level are undergoing increasing scrutiny as budgets are being constrained. Two new studies show a shift in focus away from traditional approaches of tax incentives and reliance on major employers, to broader strategies relying more on the private sector and human capital. A report released by the Delaware Economic Development Working Group recommends shifting many of the core responsibilities of the Delaware Economic Development Office (DEDO) to a new nonprofit. And a report focused on Indiana details the decline in footloose jobs in the state despite local government investments in business attraction, indicating a reevaluation of public policy is needed, the authors contend.

The Midwest and the Greater Philadelphia region have found pathways to build strong life sciences industries and create environments that provide the necessary risk capital for healthcare startups. These life sciences clusters are driven by leading healthcare companies, high quality health systems, and top notch research institutions as well as strong entrepreneurial support ecosystems. The region’s startup ecosystem saw 375 life startups attract over $1.7 billion in investments in 2016, according to the Midwest Healthcare Growth Capital Report from BioEnterprise, a Cleveland-based biomedical accelerator. 

SSTI’s latest Tech Talkin’ Govs installment excerpts TBED highlights from governors’ speeches in Alaska, Indiana, Michigan, New Mexico, Nevada and Rhode Island. Education and workforce are focal points in this latest round of the state of the state addresses, as they have been in the two previous posts. Varying issues are factored into the speeches, from the $3 billion fiscal gap in Alaska to the proposed free college tuition in Rhode Island.

Alaska

Gov. Bill Walker, facing a $3 billion fiscal gap, delivered his third state of the state address to the State Legislature on Jan. 18 in Juneau:

“Here is the hard truth. Denial doesn't make the problem go away. Hope doesn't pay the bills. We need to pass a plan to stabilize our fiscal future. And we need it now.

“We must do a better job of preparing our youth for the challenges of the future. To meet this challenge, we need to rethink our entire system of public education. Alaskans must be at the heart of this effort.

SSTI has analyzed more recently released state budgets for TBED-related initiatives, and this week we present findings from our review of AZ, GA, IA, IN, UT and VA.   

Arizona

Arizona Gov. Doug Ducey’s proposed $9.8 billion FY 2018 budget would support R&D infrastructure at the state’s three public universities (University of Arizona, Arizona State University, and Northern Arizona University) through the newly-announced University Capital Investment Program. This program would enable universities to use the transaction privilege tax revenues that they generate for as much as $1 billion in bonding for new research and development infrastructure, including deferred maintenance projects.

Education is a major emphasis of the governor’s proposed budget, and while the majority of funds go toward teachers and schools more broadly, Ducey also proposes $5 million in new investments to help connect rural schools to high-speed internet, as well as $200,000 to support a new statewide computer science and coding initiative.