SSTI Digest

Regional cooperation economic development is believed to stimulate growth in various ways, including increased trade, enhanced movement of technologies from lab to market, and improved resource allocation. Federal support for innovation-driven growth has increasingly forced applicants to take integrated regional approaches. However, empirical evidence on the specific impacts of such cooperation is scant. New research from the IZA Institute of Labor Economics seeks to address this gap by investigating the interplay between regional cooperation and integration (RCI) and two key economic outcomes: labor productivity and firm-level innovation. 

Recent headlines have been full of discussion on cryptocurrencies and speculation on significant changes in federal policy related to the technology. Anticipating federal action, leaders of several states are exploring ways to get their own jurisdictions involved in the space. Here are some recent examples, drawing from proposed legislation to implemented policies and structures for acceptance of the financial innovation:

States Considering Bitcoin Reserves

Fewer of the youngest and later stage innovation-driven companies are receiving private venture capital at a time when the country needs more of both to retain our global economic leadership, according to data released in the latest report from PitchBook and NVCA. Across 2024, United States VC has seen an increase in overall deal value (+$47 billion) despite a decrease in deal count (-936) since the prior year, reveals the Q4 2024 Venture Monitor report. Values for each metric still sit below the pandemic-induced highs in 2021 and 2022. By stage, 2024 has, to date, a larger proportion of early-stage and venture growth deals, balanced by a lower proportion of pre-seed/seed and late-stage deals.

This edition of Useful Stats will explore 10-year trends, from 2015 through 2024, in venture activity by stage and state using the Q4 2024 Venture Monitor report’s data.

With the start of the new year, most governors deliver State of the State addresses or Budget addresses laying out their priorities for the coming year. With revenues for many states relatively consistent with forecasters expectations, lawmakers, with a few exceptions, continue to maintain cautious or constrained views of their funding priorities and proposed initiatives. As a result, many governors in SSTI’s analysis of addresses delivered so far this season, are speaking more about previously implemented programs and their continued successes rather than rolling out many new programs. However, new priorities for growing stronger innovation economies have not been completely overlooked.

The following highlights have been selected excerpted from eight of the 20 State of the States or Budget addresses given between Dec. 2024 and Jan. 16, 2025, by governors from Arkansas, Colorado, Connecticut, Iowa, Kansas, Massachusetts, New Jersey, and New York.  

The Future of Jobs Report 2025 by the World Economic Forum (WEF) explores how labor markets are being shaped by emerging technologies, demographic shifts, and environmental pressures. The report analyzes the evolving trends in employment, identifying both the risks of job displacement and the opportunities for job creation in a rapidly changing global economy. It also discusses the need for workers to adapt their skills to remain competitive in an increasingly automated and digital job market. The report primarily focuses on the impact of automation, artificial intelligence (AI), and energy-related technologies on future industry employment patterns.

The report suggests that emerging technologies will lead to both job creation and job displacement, but the scale and nature of these shifts will vary across sectors.

The most recent TBED Community of Practice webinar, “SBA’s Growth Accelerator Fund Competition in Action,” featured two previous winners of the GAFC who provided tips on how to prepare for and what to expect from the competition. A representative from SBA was also on hand to give the agency’s perspective.

Jack Henkel from the Florida High Tech Corridor, which received a State II GAFC award in 2023, outlined that program’s overall plan for the award, describing their planning and processes for bringing their Cenfluence initiative to central Florida, particularly rural areas. He also talked about the companies that benefitted from their program, highlighting a few as top success stories.

Rick Lloyd from FuzeHub talked about their more recent 2024 award. He described how the project is reaching out to people in New York State who do not have access to universities to develop entrepreneurship, explaining that the project’s first task was to identify organizations in the state that lack such access.

The U.S. Department of Commerce’s Economic Development Administration (EDA) announced awards totaling approximately $210 million in implementation grants, ranging between approximately $22 million and $48 million, to six Tech Hub designees from recently passed appropriations from Congress.

President Biden signed legislation that reauthorized the Economic Development Administration (EDA) on Jan. 4. With the Heritage Foundation, among others, consistently calling for EDA’s elimination, EDA’s reauthorization is no small feat on its own. The strong bipartisan support for the bill, which included provisions related to water resources development, is perhaps even more remarkable. The House approved it 339-18 on December 10, and the Senate passed it 97-1 on December 18. As authorizing legislation, it does not include funding, but it does contain provisions that are of importance to the technology-based economic development field. Among the provisions are modifications to cost share, new responsibilities and offices for EDA, and investment priorities that for the first time are approved by Congress.

January 22, 2025, at 2:00 PM ET | Zoom

Considering applying for the SBA’s Growth Accelerator Fund Competition? Join our TBED Community of Practice webinar as three past winners walk us through their projects from initial concept to current status. Learn what motivated them to apply, see how they put the funding to work and hear their advice for future applicants. Whether you’re planning to apply for the 2025 competition or exploring funding opportunities to support your TBED projects, come learn how these organizations transformed their initial ideas into lasting community impacts.

Featured organizations:

• The Florida High Tech Corridor
• FuzeHub
• Startup Tucson

Register now 

The new Tech Hub awards from EDA and the National Science Foundation’s (NSF) Regional Innovation Engines (Engines) program support regions advancing a critical technology area with existing traction in their region but for proposers, identifying such areas is often challenging. Recognizing this, SSTI has recently updated a data tool comprised of two interactive visuals and a downloadable data file that can aid in identifying the critical technologies in an applicant’s geographic location to assist applicants with the upcoming full proposal deadline for Engines on February 11, 2025.

The United States’ global competitiveness rank, as calculated by the International Institute of for Management Development, fell three points from 9th in 2023 to 12th in 2024. The nation’s ranking for government efficiency had an even sharper drop of nine points, from 25th in 2023 to 34th in 2024. In timely response to these trends, two federal advisory committees recently submitted reports outlining ways for the U.S. Small Business Administration to sharpen its ability to assist companies in becoming more globally competitive while also improving the productivity of the agency’s work.

In its report, Enhancing U.S. Economic Competitiveness Through Support for Small Businesses and Innovators, the Invention, Innovation, and Entrepreneurship Advisory Committee (IIEAC) offers recommendations around three themes:

Higher education R&D expenditures, while continuing to steadily increase, have not grown evenly across state lines. This matters to successful TBED policymakers because a strong R&D enterprise within a state’s public and private institutions of higher education can and should provide a consistent source of skilled workers, new technology, and sources for innovation-driven business growth. So where is R&D growing?