SSTI Digest

In the February 3 Federal Digest, the U.S. Small Business Administration (SBA) issued proposed rules affecting Impact Small Business Investment Corporations (SBICs) and is accepting comments. In addition to codifying the existing, temporary guidelines, the proposal would add new investment certifications, change the expedited processing benefit for reduced fees and replace the branding penalty for non-compliant SBICs with the threat of imposed default. The SBIC program enables the SBA to license funds that invest in small businesses to issue debentures that effectively leverage two public dollars[*] for every dollar of private investment. Standard SBICs are comparable to private equity or mezzanine finance funds and achieve similar returns. At various times, the SBA has been authorized to license special types of SBICs in order to achieve targeted investment goals. In 2011, as part of the White House's Startup America initiative, the SBA dedicated the Impact Investment Fund and authorized the Impact SBIC as a new license type. The designation recognizes that the fund is committing to make at least 50 percent of its…

As long-term trends continue to impact the U.S. economy and its recovery from the Great Recession, more must be done to develop diversely skilled and adaptable workers, according to a new report by the U.S. Council on Competitiveness. In addition to describing the radical changes facing the landscape for America’s workforce, WORK: Thriving in a Turbulent, Technological and Transformed Global Economy provides numerous recommendations on how to best respond to these challenges. Ultimately, the WORK report views itself as a roadmap to align education and training to 21st century skills needs, effectively leverage intellectual capital, and supply businesses with the talent needed to compete globally. Although American workers have struggled in the years following the Great Recession, the U.S. labor force is also heavily impacted by several long-term trends. For example, while agriculture, mineral extraction, and manufacturing drove the U.S. economy in the 19th and 20th centuries, it is driven by knowledge, technology, and innovation (KTI) in the 21st century. While the U.S. has the highest concentration of KTI industries among major economies this has also led to a…

At his State of the State address last week, Gov. Bruce Rauner announced that Illinois’ principal economic development organization, the Illinois Department of Commerce & Economic Opportunity, as well as some of the state’s business leaders will collaborate to organize a newly formed private, nonprofit organization exclusively focused on increasing Illinois’ competitiveness for job creation and investment. A key recommendation of the governor's bipartisan transition committee last year, the Illinois Business and Economic Development Corporation (ILBEDC) is modeled from other successful state and local economic development organizations and will focus on sales, marketing and customer service. According to the press release announcing the group’s formation, ILBEDC will maintain strict standards of transparency and accountability, including robust conflict of interest policies, public disclosure of donors, and application of other transparency laws. A 2013 report by the nonprofit think tank Good Jobs First found that a lack of transparency at privatized state economic development agencies, among other things, has led to a misuse of taxpayer…

Although universities are often pitted against each other in athletic events or competitions for state funding, one area in which they have increasingly been able to collaborate is in research and development. Modeled after the hugely successful Research Triangle in North Carolina, the University Research Corridor (URC), an alliance of Michigan’s three largest higher education institutions – Michigan State University, the University of Michigan, and Wayne State University – was established by the state in 2007 with the goal of accelerating statewide economic development. Employing several facets of analysis not typically seen in higher-ed economic impact reports, the URC’s ninth annual assessment by independent evaluator Anderson Consulting Group is able to: quantify total degrees awarded, R&D expenditures, and technology transfer activities to estimate the cumulative impact of the corridor; analyze how the URC leads to jobs and income for residents and state revenue in each of Michigan’s counties; and, compare the URC’s performance to peer university innovation clusters nationwide. They find that the URC generated approximately $17.5…

When General Electric (GE) announced earlier this month that it was moving to downtown Boston’s Seaport District, significant attention was paid to the generous incentive package handed to the company by Massachusetts. Ultimately, however, it was the human capital and innovative talent in the city that lured GE, according to the Chairman and CEO Jeff Immelt’s comments announcing the move. While conventional thinking suggests that attracting new businesses is a path to population and economic growth, new research suggests that this may not be the case.  In What Comes First, People or Jobs: Evidence and Lessons for Indiana, Michael Hicks and Dagney Faulk, two economists from Ball State University’s Center for Business and Economic Research, seek to understand the long-term differences between whether or not people followed jobs or jobs followed people. To do so, the authors use data from the Census and Bureau of Labor Statistics to examine population and employment growth in Indiana’s 92 counties in the decades of the 1970s and the 2000s, controlling for variables such as educational attainment, initial population, urban and rural influences,…

This week, leaders in Illinois and New Mexico announced new investments to help seed and early stage technology startups access equity capital. The Illinois Treasurer will launch the Illinois Growth and Innovation Fund, which would invest $220 million over the next three years in 15-20 funds across the state. No more than 15 percent of the money will be placed with any particular fund. The state’s investment will target emerging tech companies, beginning later this quarter. New Mexico plans to launch a $40 million fund-of-funds, dubbed the Catalyst Fund. The state will target micro-funds in New Mexico, which must be able to match the state’s investment. The State Investment Council hopes the effort will double the amount of seed and early stage funding available in the state, according to the Albuquerque Journal.    

Many governors around the country have begun laying out priorities for the next legislative session. In the coming weeks, SSTI will review gubernatorial addresses and budget proposals related to economic development. This week, we highlight developments in Delaware, Kentucky and Massachusetts. DelawareOn Thursday, Gov. Jack Markell offered a $4.1 billion budget plan for fiscal year 2017 a week after delivering his final State of the State address. At last year’s address, Gov. Markell introduced the Delaware Promise Initiative, a decade-long initiative to ensure that 65 percent of all Delaware residents had a college degree or professional certificate by 2025. This year, he reviewed the steps already taken to accomplish that goal, including the launch of Delaware’s TechHire IT training initiative, the Accelerated Career Pathways program for high school-level manufacturing training and his $1 million commitment to the Pathways to Prosperity program. He pledged to continue those efforts, as well as to invest in the entrepreneurship support programs and reforming the corporate tax code. The Delaware Competes Act, which would reduce corporate income tax for…

As globalization transforms national R&D funding priorities and increase the demand for top S&T, nations are shifting their national R&D strategies toward initiatives intended to attract top scientists from other countries. These attraction efforts have a specific focus on repatriating top researchers by offering them access to the funds necessary to build world class facilities. In addition to large national commitments, foundations also have announced efforts to attract researchers by providing grant funding to support R&D projects and build facilities. In countries such as Singapore, these efforts have started to yield results as top expatriates have returned home to launch large-scale research projects to find transformational solutions to some of the globe’s most pressing issues. SingaporeOn January 8, the government of Singapore announced that it will commit up to $19 SGD (approximately $13.2 billion USD) on R&D from 2016 to 2020 that will continue its longstanding efforts to lure foreign researchers and expatriate Singaporean scientists to relocate to the island nation. The Research Innovation Enterprise 2020 Plan is an 18 percent…

The National Institute of Standards and Technology (NIST) announced a recompetition of Hollings Manufacturing Extension Partnership (MEP) centers in 12 states and Puerto Rico including: Alabama, Arkansas, California, Georgia, Louisiana, Massachusetts, Missouri, Montana, Ohio, Pennsylvania, Puerto Rico, Utah, and Vermont. The objective of the MEP Center program is to provide business and technical services to small- and medium-sized manufacturers within the state of operation. These cooperative agreement awards will provide half of each center's first-year operating funds, which the centers must match with funding from nonfederal sources. MEP anticipates awarding a total of nearly $39 million for up to 13 centers in these locations. For interested parties, NIST will host information webinars some time in February with dates for those webinars are still to be determined. Applications are due April 25, 2016. More information is available at: https://www.federalregister.gov/agencies/national-institute-of-standards-and-technology. MEP announced it will host another round of cooperative agreements for the recompetition of MEP Centers in 11 states in July of 2016.…

In September 2010, the Obama administration launched Challenge.gov– an online portal for federal agencies to engage the public to offer solutions that address issues of national priority in return for monetary and non-monetary prizes. Since its launch in 2010, more than 80 federal agencies have run nearly 500 competitions and awarded upwards of $150 million in prizes. Challenge.gov is one of the most well-known examples of this growing trend in government and foundation funding. In addition to Challenge.gov, U.S. states, local governments, and foundations have announced similar prize competitions to help address important societal and S&T issues. While innovation prize competitions have become a popular funding mechanism, proponents and critics remain split on the success of these competitions in spurring innovation. In an attempt to understand the impacts of prize competitions on innovation, several recent academic research articles have been released to provide empirical evidence about these prize competitions. From a policy perspective, the implementation of state-subsidized innovation contests in addition to the existing intellectual property rights…

Through a partnership with the Ontario Chamber of Commerce, the government of Ontario is launching the Cluster Development Seed Fund, offering grants of up to $100,000 to support cluster initiatives. The funds are part of the Partnerships for Jobs and Growth Act, passed in 2014 by the Ontario government. According to the act, clusters – geographically concentrated groups of interconnected businesses and related entities – perform an important function in regional economic development by increasing productivity, innovation and competitiveness. To help support the development of these clusters, Ontario is offering funding through two streams: supporting cluster consortium building and networking, as well as research and feasibility studies. Cluster organizations applying for funding must demonstrate a clear business case for requiring the funds, explain how the activities undertaken would contribute to Ontario’s cluster development, and provide evidence of 1:1 matching funds from industry and other partners for the amount of grant funding requested. Applications are due March 1, 2016. A more detailed application guide is available here: http://www.…

While considerable attention has been paid to the growing role of cleantech jobs in the American economy, there has been less of a focus on the skills it takes to pursue these careers. Greenprint: A Plan to Prepare Community College Students for Careers in the Clean Economy, a new report released by The Greenforce Initiative, a partnership between the National Wildlife Federation (NWF) and Jobs for the Future, provides recommendations on how education can help students can gain better access to clean economy jobs, strengthen communities, and address environmental impacts. The Greenprint uses definitions from the Brookings report Sizing the Clean Economy: A National and Regional Green Jobs Assessment for both the clean economy and sustainability skills. The clean economy is defined as “economic activity – measured in terms of establishments and the jobs associated with them – that produces goods and services with an environmental benefit or adds value to such products using skills or technologies that are uniquely applied to those products.” Sustainability skills are defined as “the enhanced or new tasks, competencies, knowledge, or worker…