SSTI Digest

To compete in the global world market, regions must continue to evolve and better understand how best practices support their regional industries, including defining the benchmarks of a successful industry cluster. In a recent academic article from Harvard researchers, Mercedes Delgado, Michael Porter, and Scott Stern unveiled a new algorithm tool that generates and assesses sets of cluster definitions. The new algorithm will be integrated into the U.S. Cluster Mapping Project to help researchers and policymakers cultivate more successful regional clusters.

Funded by a grant from the Economic Development Administration, authors announced the tool – a new clustering algorithm that generates and assesses sets of cluster definitions – in a new research study that includes details on the tool, the findings of study, and recommendations for the tools use.

In one of his first appearances at a national economic development conference, Assistant Secretary of Commerce for Economic Development Jay Williams will address SSTI's Annual Conference on September 15 in Chicago.

As the Administrator of the U.S. Department of Commerce's Economic Development Administration (EDA), Williams is charged with leading the federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the global economy.

Prior to joining the Department of Commerce, he served as the Executive Director of the Office of Recovery for Auto Communities and Workers and served as the Mayor of Youngstown, Ohio, from 2006 to August 1, 2011.

Global investors are more confident investing in the U.S. than anywhere else in the world, according to a recent survey from Deloitte and the National Venture Capital Association (NVCA).  Confidence in the U.S. macroeconomy and U.S. investments has now grown for the third straight year and continues to lead among the 12 countries included in the study. Respondents, however, indicated that they had a negative opinion of the country’s investment policy environment. U.S. investors have the lowest confidence of any country in their government’s ability to enact policies favorable to domestic investment.

The 2014 Deloitte/NVCA survey incorporated data from 331 venture capital, private equity and growth equity general partners in 17 countries, polled in May and June 2014. About one quarter of participating investors were based in the U.S. Respondents were asked to assign a one-to-five rating to their confidence level on a number of investment-related topics, including global economic trends, national economic prospects, and industry sectors.

The National Governor’s Association (NGA) announced that it will provide grants, technical assistance and opportunities to align education and training systems with private sector needs in 14 states. Colorado, Illinois, Indiana, Iowa, Kentucky, Louisiana, Minnesota, Montana, New Jersey, North Carolina, Oklahoma, Virginia, Washington and West Virginia have been selected to receive support to build industry and education partnerships and optimize their workforce-oriented incentives. Example uses of the support include the launch of the Washington STEM Education Innovation Alliance and continued support for Iowa’s workforce development programs.

Learn the details…

To revitalize the U.S. manufacturing base, states and private organizations are turning their attention to support university-led, manufacturing Research and Development (R&D) partnerships that reduce the cost of manufacturing domestically and equip U.S. manufacturers with cutting-edge technologies. Responsive to the needs of industry, these partnerships are intended to not only spur innovation, but also support economic prosperity in regions across the country. The Walmart Foundation and Pennsylvania Gov. Tom Corbett announced new funding for university-led manufacturing partnerships. In Arizona, the Arizona Commerce Authority (ACA) recently ended its 2014 application period for a program that provides small grants to fund university-industry partnerships that develop innovative manufacturing-related, tools and technologies for use aerospace and defense manufacturing industries.

Within the past few months, several indices have been released that attempt to rank states based on their entrepreneurial activity. From the perspective of economic development agencies, these indices are particularly helpful in assessing where each state stands according to the numerous ways to measure entrepreneurship. These indices, however, should be taken with a grain of salt; issues can arise when too much importance is placed on these lists for the sake of competition or the need for press. According to a report in the Journal of Applied Research in Economic Development, “the connection between these indexes and actual economic growth and performance has been found to be ambiguous.”

The Federal Communications Commission (FCC) announced a round of funding for rural broadband experiments in price cap areas that will deploy new, robust broadband to consumers. The FCC intends for these grants to be the next step for the Connect American Fund program. Grants will be made to support rural broadband experiments to explore how to structure the Phase II of the Connect American Fund’s competitive bidding process in price cap areas and to gather information about interest in deploying next generation networks in high-cost areas.

Via the announcement, the FCC intends to commit $100 million in proposed funding to support projects across the country. Applicant eligibility is unrestricted domestically for projects that have the feasibility to meet the requirements outlined in the announcement. However, the proposed effort must be in a price capped rural area. Applications are due on or before November 4. Read the announcement…

As summer internships come to a close, dorm room furniture begins to go on sale, and the smell of football season permeates the air, one thing is for certain – a new college school year is fast approaching. Over 22 million students are expected to attend American colleges and universities this fall, according to the National Center for Education Statistics, which is sure to shake up many college towns throughout the country where summers fare on the quiet side. In honor of the upcoming semester, this Digest article examines the college town and its impact on regional economic development.

The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights released the Halo Report for the first quarter (Q1) of 2014. The national survey of angel group investment activity reported encouraging results as both investments and valuations climbed in Q1— median round sizes increased to $980K per deal up from 2013 averages, and pre-money valuations rose to $2.7 million from $2.5 million in Q4 of 2013. The climb was driven mostly by investments in Internet-related companies that jumped significantly. In Q1, angel groups in the Great Lakes invested more dollars than any other U.S. region, including California, and closed 17% of all the deals, tying California for the lead. Read the report…

The Manufacturing Institute announced that it is accepting applications for the 2015 STEP Awards program, a national awards program to honor women who have demonstrated excellence and leadership in manufacturing. Part of the Science, Technology, Engineering and Production (STEP) Ahead initiative, STEP Awards aim to recognize women at all levels of manufacturing. These awards illustrate the widespread impact women have on shaping the industry, whether they are running the company, designing the next big product, or testing innovations on the shop floor. In 2014, the STEP Awards program honored 160 women from over 110 companies for their achievements. To nominate a peer or colleague for this national honor, go to https://mi.onlineapplications.net/applications/.

On August 1, the Massachusetts lawmakers enacted a comprehensive economic development bill (H.4377). The bill currently awaits Gov. Deval Patrick’s approval. Per state law, Gov. Patrick has until August 14 to sign the bill, 10 days after he received it. The approved bill that received unanimous approval by the Massachusetts state Senate was passed as a comprise package between two bills proposed in the Senate and House. Through the bill, Massachusetts policymakers intend to invest more than $80 million to spur economic growth with a significant emphasis on strengthening Massachusetts’ innovation industries. Tech-based economic development efforts will focus on emerging industries, investments in workforce development and education, and promoting targeted regional growth. A major point of contention, language dealing with non-compete agreements, did not survive in the final bill.

In an SSTI Digest article last month, SSTI detailed the most recent MoneyTree reports from National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PWC). Halfway through FY 2014, U.S. venture capital investments reached $22.7 billion, the highest first-half total since 2001. Using halves of fiscal years as the unit of analysis, this Digest article examines each state’s share of venture capital dollars and deals since 2010. Since Q1 2010, nearly $109 billion has been allocated to companies across 17,292 deals.