SSTI Digest

In 2011, U.S.-located companies spent $29.6 billion for extramural (purchased and collaborative) research and development performed by mostly domestic organizations, according to a National Science Foundation (NSF) InfoBrief. Approximately $24 billion in R&D spending was purchased R&D. The additional $5.6 billion was payments to R&D collaborators. Extramural R&D exceeds 10 percent of all R&D expenditures by businesses in 2011, up from an estimated 4 percent in 19991. NSF researchers credit the growth in relative size of domestic extramural R&D by industry to differing rates of growth in total R&D spending among industries and of changes in the importance of external partners within industries. The findings were taken from NSF’s Business R&D and Innovation Survey. Read the brief…

As the Great Recession wanes, an increasing amount of research has been conducted to assess its impact on entrepreneurship in the United States. Authors with the Kauffman Foundation found that firm formation in the United States is remarkably constant over time, although the death rate of companies rises during recessions. Others found that despite the Great Recession causing many businesses to close their doors, the rapid rise of unemployment also drove an increase in entrepreneurs. Still, others argue that increased entrepreneurial activity was found to be related to unemployment only in those states that had already established strong levels of entrepreneurship prior to the recession.

In an increasingly globalized marketplace, the ability to penetrate the ultra-valuable U.S. market is still an end goal for companies throughout the world. Since the early 2000s, foreign governments have opened accelerators as one mechanism to provide funding, mentorship, and additional support for young firms hoping to enter the U.S. market. Although many of these accelerators feature common characteristics, each has its own strategy for best reaching the needs of its young and promising companies.

The White House Rural Council has launched a $10 billion rural economic development fund. This launch was announced last Thursday at the Rural Opportunity Investment Conference held in Washington D.C. CoBank, a Denver-based national cooperative bank, serves as the anchor investor of the fund that will be managed by Capitol Peak Asset Management. Capitol will also recruit additional institutional investors to the fund including pension funds, endowments, and foundations that are interested in investing in rural areas.

The U.S. Department of Agriculture (USDA) and other agencies will assist in the identification of rural projects in need of funding. They are taking particular interest in investing in rural healthcare facilities, educational facilities, water and wastewater systems, energy projects, broadband expansion efforts, and local and regional food systems. These projects can be funded wholly by private sector dollars or can be the result of public-private partnerships.

The Federal Communications Commission (FCC) has released its latest broadband report. The report provides summarized data on Internet access connections in the U.S. (over 200 kilobits per second in at least one direction). Key findings include the number of broadband connections with downstream speeds of at least 10 Mbps increased by 118% in the U.S. between June 2012 and June 2013. Users also may access the data sets presented in the report via tables and maps hosted on the FCC website.

President Barack Obama signed the Workforce Innovation and Opportunity Act (WIOA) into law on July 22 – a federal-wide reform effort designed to help job seekers access employment, education, training, and support services to succeed in the labor market and to match employers with the skilled workers they need to compete in the global economy. WIOA is the first legislative reform in 15 years of the public workforce system. It will take effect July 1, 2015 – key implementation dates for Department of Labor. It supersedes the Workforce Investment Act of 1998 and amends the Adult Education and Family Literacy Act, the Wagner-Peyser Act, and the Rehabilitation Act Amendments of 1998. Highlights of the new act:

JPMorgan Chase & Co. launched Small Business Forward℠ — a five-year, $30 million grant program to help industry cluster initiatives in cities across the country.  Through Small Business Forward, JPMorgan Chase will fund nonprofit organizations that work with small businesses concentrated in a single industry sector. In addition to supporting strategic planning and research, grants will help cluster organizations provide participating small businesses with access to networking opportunities; partnerships with colleges and universities; workforce and management training efforts; supplier networks; and, export promotion initiatives. Awardees include:

Anchored by the largest ever investment since the MoneyTree Report began covering venture capital investment in 1995, the $13 billion total dollars invested in the second quarter of 2014 marks the largest total quarterly investment since $13.1 billion was invested in the first quarter of 2001, according to new data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PWC) MoneyTree survey. Likewise, the $22.7 billion invested in the first half of 2014 is the highest first half total since 2001.

Between Q1 and Q2 of 2014, investment activity rose 34 percent in dollar terms and 13 percent in number of deals. First half investments in 2014 were 71 percent greater in dollars and 9 percent greater in number of deals than the first half of 2013.

Several scholarly articles published within the past few months highlight the role that entrepreneurship, high-tech employment, and place play in both economic growth and economic development. In a landscape where seemingly every place desires the successes found in the Silicon Valley model, new frameworks that support the economic efficacy of human capital, entrepreneurship, and place are needed to encourage innovation and prosperity.

As the world becomes more globally connected, both public and private entities have turned their attention to foreign markets in the hopes of spurring innovation, capital creation, and economic prosperity. Whether their effort is developing international business partnerships, attempting to attract foreign direct investment (FDI), investing in startups, or taking advantage of international demand, the entities establishing these initiatives view long-term economic success for both firms and regions as dependent upon entering the global market place. Initiatives in Massachusetts, Pennsylvania, and Rhode Island are examples of public sector efforts that are looking for opportunities abroad to support economic growth.

New York Gov. Andrew Cuomo announced the creation of the Power Electronics Manufacturing Consortium, a 100-member public-private partnership between public research universities, private sector companies, and other research partners to develop next generation of materials and processes used in the manufacturing of wide band gap semiconductors. According to the Rochester Democrat & Chronicle, the state will commit up to $135 million to help establish the new consortium and private sector partners will commit the remaining $365 million over five years. The partnership also is supported by the START-UP NY tax free initiative.

As Congress continues negotiations over the FY15 federal budget, SSTI is hard at work trying to secure additional funding for the Regional Innovation program. The Regional Innovation Program was authorized under the American COMPETES Act and is designed to provide funding to support regional innovation activities. The Senate has approved $20 million for the program for FY2015, while the House did not provide any funding for the program. SSTI has prepared a support letter to Congressional leaders and is seeking organizations to sign on to the letter. The more organizations that sign will increase our chances to secure funding. The deadline for signatures to this letter is Thursday, July 31.

To add your organization to the list, please email Caroline Wagner at cwagner at sheridangroupdc dot com. The letter follows: