SSTI Digest

Three pieces of federal legislation enacted in 2021 and 2022—the Infrastructure Investment and Jobs Act (IIJA), CHIPS and Science Act (CHIPS Act), and Inflation Reduction Act (IRA)—collectively authorize nearly $1.5 trillion to reshape America’s industrial landscape. But will this money help the 107 Black-owned and 151 Hispanic-owned companies in the manufacturing supply chains that the legislation is designed to support? 

In the paper, Racial Equity in America’s New Industrial Transformation, Miles Chandler, Peter Eberhardt, and Howard Wial of the Initiative for a Competitive Inner City (ICIC) analyze original equipment manufacturers (OEMs) and first-tier suppliers in 13 key supply chains to understand how the money from the above-mentioned federal legislation could, via their policy recommendations, lead to a racially and ethnically inclusive industrial future.

In a recent ruling, a U.S. Federal Court of Appeals panel upheld the preliminary injunction against the Fearless Fund, preventing the organization from resuming operations of its Fearless Strivers Grant Contest, which awards winners with a cash prize and access to mentorship and business support services. Following on the heels of the U.S. Supreme Court decision ending Affirmative Action in college admissions (previously covered by SSTI here), this legal challenge tests whether private entities, like the Fearless Fund, can operate race-conscious funding programs without violating federal anti-discrimination laws.

Led by increases in retail trade and professional, scientific, and technical services, the number of annual business applications nationwide has increased 119%, or nearly three million, from 2005 to 2023. However, the share of applications classified as high-propensity, or those more likely to result in businesses with a payroll, has decreased in all but the health care and social assistance sector, leading to a 26-percent point drop (58% to 32%) over the same period.

This article builds upon a prior SSTI article covering the same data, but examines which two-digit North American Industry Classification System (NAICS) industry sectors are generating more new business applications and which are declining. For a list of all NAICS sectors and their codes, refer to the NAICS Association website.

Two weeks ago, I let the SSTI Board of Trustees know that I wanted to step down as President & CEO and that a search for a successor be launched. After leading the organization since its inception in 1996, I had come to the conclusion now was the right time for a new chapter both for SSTI and for me. The job posting for the new President & CEO can be found at https://ssti.applytojob.com/apply/OSDVL6j7zk/President-CEO with a pdf of the full description at: https://ssti.org/sites/default/files/SSTI%20President%20CEO%20Job%20Des…

I won’t be going away entirely and more on that later.

I have been involved in this field that has become known as tech-based economic development (TBED) for almost four decades, both speaking for and to the field as the head of SSTI for the last 28 years. TBED was largely a new field when I started in it in 1985, but even then the hallmarks of the field were evident:

We were learning from each other, happily sharing information across state lines to make our work better; We worked to evaluate our programs and the impacts they were having, so we could improve our outcomes; The beneficiaries of the work were at the table designing the programs and putting their money into the efforts as well; and, As economic and societal conditions changed and program evaluations were conducted, we changed our approaches to respond.

SSTI, a national nonprofit organization focused on strengthening initiatives to create a better future through science, technology, innovation and entrepreneurship, seeks a President & CEO, who will work with the SSTI Board of Trustees and staff to set the vision and direction for the organization. The President & CEO serves as both the voice for and to the technology-based economic development (TBED) field, advocating for the field, and encouraging effective action by TBED organizations and personnel.

The President & CEO has the ability to shape the nation’s economic competitiveness, work closely with states and regions as they plan for our innovation-focused economy, and guide the field to operating with maximum impact and efficiency. This opening comes as there is increasing interest at the federal, state and local level in the U.S.’s technological competitiveness and ensuring the benefits of the technology economy reach all regions and people.

In SSTI’s recent TBED Community of Practice webinar, representatives from SourceLink and EcoMap Technologies shared practical insights on how ecosystem mapping supports both entrepreneurship and regional economic development.

The discussion focused on ecosystem mapping as a fundamental first step in understanding and strengthening entrepreneurs. Maria Meyers, founder of SourceLink, explained that ecosystem mapping does more than create a directory of resources—it activates a network. “If you build that network, you will build the ecosystem to create what you want in your community,” she said.

Business applications have greatly increased over the last two decades, jumping 119% from 2005 to 2023. However, the rate of high-propensity business applications—applications identified by the Census Bureau as having higher likelihoods of turning into businesses with payroll—have decreased as a share of all applications every year since 2005, despite having grown 22% over the same period. Breaking these numbers down by states shows uneven trends, with the difference in shares of high-propensity business applications in 2005 and 2023 decreasing by over 20 percentage points in most states.

Ben Franklin Technology Partners, a technology-based economic development program serving all 67 Pennsylvania counties, reported in its 2023 Annual Statewide Impact Report that, since its inception more than 40 years ago, it has boosted Pennsylvania’s economy by more than $30 billion, generating more than 58,000 jobs in client firms plus an additional 101,000 spinoff positions, for a total of 159,000 new jobs that otherwise would never have existed.

In 2023 alone, Ben Franklin’s clients generated $2.8 billion in revenue and secured $1.2 billion in post-Ben Franklin financing, according to the report. The program also supported 1,827 companies and helped clients create 2,493 jobs while retaining 10,588 more positions.

The report also announced that Ben Franklin’s clients developed 189 patents and software copyrights, commercialized 257 new products, and launched 103 new processes.

The report highlights success stories from each of its four regions:

The Rural Partners Network, an all-of-government program that helps rural communities find resources and funding to create jobs, build infrastructure, and support long-term economic stability, is asking the public to nominate rural innovators who are positively impacting their rural communities. Individuals of all ages, including youth, are eligible. According to an announcement on their website, nominated individuals could be engaged in either the public or private sectors, including local, state, Tribal, and territory governments; nonprofits; businesses; philanthropy; or academia.

The nomination form is here and will close on Friday, June 14, at midnight EST. The White House will recognize selected individuals later this year.

Registration is now open for the SSTI 2024 Annual Conference in Phoenix, December 10-12, at the Sheraton Grand at Wild Horse Pass, located in the Gila River Indian Community.

Join us to experience thought-provoking keynotes, open forums, and ample discussion so that you can share your perspective with peers and have your questions answered by policymakers and practitioners—all looking to exchange ideas on creating a better future through science, technology, innovation, and entrepreneurship.

We can’t wait to “connect, discover, and refresh” with you in Phoenix this December!

Register today!

On Wednesday, a bipartisan group of senators published Driving U.S. Innovation in Artificial Intelligence: A Roadmap for Artificial Intelligence Policy in the United States Senate. The roadmap encourages the executive branch and the Senate Appropriations Committee to reach the $32 billion per year non-defense AI innovation spending level proposed by the National Security Commission on Artificial Intelligence. It also includes a list of recommendations for legislation to regulate artificial intelligence. The recommendations include prioritizing funding for a cross-government AI R&D effort at all relevant government agencies and departments. The recommendation mentions explicitly an all-of-government AI-ready data initiative. It also directs research priorities in “responsible innovation, including but not limited to fundamental and applied sciences, such as biotechnology, advanced computing, robotics, and materials science.”

Accelerators are practically everywhere in the U.S., and a look at Pitchbook data on May 13, 2024, seems to confirm that. For the five years of 2019-2023, Pitchbook tagged 18,808 different companies as having received “accelerator/incubator funding.” Conceptually, they were all startups when they received that funding and will be at widely varying degrees of evolution today (the status for 1,730 of them, for instance, was listed as “out of business”). Only 765 were classified as being one of four statuses that might be most easily considered as positive exits:  1. publicly held; 2. in IPO registration; 3. an operating subsidiary of another firm through a merger or acquisition; or 4.  integrated into another firm through a merger or acquisition and no longer tracked separately. 

Additionally, only 619 of those 765 successes are headquartered in the U.S. presently—meaning one in five are international firms with a U.S. presence.