SSTI Digest

A bipartisan report from the House Select Committee on the Chinese Communist Party says the People’s Republic of China (PRC) has failed to live up to the foundational principles of the World Trade Organization—open, market-oriented, non-discriminatory treatment. In its report, "Reset, Prevent, Build: A Strategy to Win America's Economic Competition with the Chinese Communist Party," the committee calls for resetting the U.S.'s economic relationship with China. They propose to do so, in part, through new research security measures and controls on technology exports. The report is organized under three pillars: Reset the terms of our economic relationship with the PRC. Stem the flow of U.S. capital and technology fueling the PRC's military modernization and human rights abuses, and Invest in technological leadership and build collective economic resilience in concert with allies. The report authors note that the first two pillars focus on defensive actions against the CCP’s economic warfare campaign.But the final pillar goes on the offensive, calling for the U.S. to invest in technological leadership and build economic resilience. Reset our economic…

The U.S. Department of Energy (DOE) recently announced the Office of Critical and Emerging Technology launch. A DOE press release explains that the office has been created “to ensure U.S. investments in areas such as artificial intelligence (AI), biotechnology, quantum computing, and semiconductors leverage the department’s wide range of assets and expertise to accelerate progress in these critical sectors.” Critical and emerging technologies, such as clean energy, national defense, and pandemic preparedness, have broad applications throughout DOE. According to the press release, “(m)ajor advances in critical and emerging technologies hold extraordinary potential for the economy and national security but also pose significant risks, and DOE’s new office will focus the department’s efforts ensuring that its capabilities are helping to solve critical science, energy, and security challenges.” Helena Fu, who was senior advisor to the undersecretary for science and innovation after serving as director for technology and national security at the National Security Council, was named director of the new office. Fu will also serve as DOE’s chief artificial intelligence…

The National Defense Authorization Act for FY 2024, signed in late December, ultimately contained fewer provisions related to research, technology, and entrepreneurship than the draft versions of the legislation initially proposed. Nonetheless, the final bill made some changes that could stabilize some of the department’s innovation activities in recent years and add some flexibility for companies and organizations engaging in technology transfer activities with defense institutions. Specifically, four sections worth noting in the FY 2024 NDAA are the following: Codification of the Office of Strategic Capital, which was launched in 2022, and a loan program to support emerging technology needs. Formalization of the Defense Innovation Unit (DIU), which includes making the director a principal staff assistant to the Secretary of Defense, allowing DIU to use federal “other transaction authority” (OTA) agreements, and requiring DIU to provide support to multi-stakeholder research and commercialization partnerships. Requirement that each military department designate a principal technology transition advisor to advise on technology transfer and acquisition opportunities.…

Activity to build the U.S. semiconductor industry picked up steam on Monday, December 11. On that day, New York State, Gov. Kathy Hochul announced the state was committing $1 billion to what her office described as “a $10 billion partnership with leaders from the semiconductor industry such as IBM, Micron, Applied Materials, Tokyo Electron, and others to establish a next-generation semiconductor research and development center at NY CREATES’ Albany NanoTech Complex.” Also on that day, the U.S. Department of Commerce announced the U.S. Department of Commerce and BAE Systems Electronic Systems, a business unit of BAE Systems, Inc., have signed a non-binding preliminary memorandum of terms (PMT) to provide approximately $35 million in federal incentives under the CHIPS and Science Act to support the modernization of the company’s Microelectronics Center in Nashua, New Hampshire. The newly announced partnership in New York State will, according to a statement from the governor’s office, “fund the construction of a cutting-edge High NA Extreme Ultraviolet Lithography Center … that will support the research and development of the world’s most complex and powerful…

Research and Development (R&D) is an essential component of innovation and economic growth, where higher education institutions play a key role. However, with these institutions being responsible for funding just a quarter of all HERD expenditures, it is important to see the influence of outside funding sources on the fields of R&D. For example, Health and Human Services (HHS) has long been the largest contributor of funding into higher education R&D, which is reflected in life sciences being the R&D field with the most significant funding levels. This edition of Useful Stats uses higher education research and development (HERD) survey data at the R&D field level to explore where the nearly $100 billion in R&D expenditures is going.   HERD expenditures in science, engineering, and non-S&E by source of funds Science and engineering (S&E) fields have historically accounted for most higher education R&D expenditures and continue to do so with a 94% share of HERD expenditures in FY 2022. However, the proportion of science, engineering, and non-S&E fields differs depending on the source of funds; federally…

The Biden-Harris administration recently announced new actions to lower health care and prescription drug costs by promoting competition. These actions include a proposed framework that encourages agencies to use march-in rights to lower the price of prescription medicines. The proposed framework encourages agencies to consider price as a factor in determining whether a drug is genuinely accessible to the public. Prescription drugs cost more in the U.S. than elsewhere, even though taxpayers' dollars support federal research. Each year, U.S. taxpayers contribute more than $40 billion to the National Institutes of Health, according to the NIH budget webpage, while, as the White House fact sheet announcing the new actions points out, nearly three in ten individuals struggle to pay for the drugs they need. The fact sheet notes, “(w)hen an invention is made using taxpayer funds, under certain circumstances march-in authority under the Bayh-Dole Act enables the federal government to license the invention to another party.” The directive refutes a proposed rule change by the previous administration, which the Biden administration decided not to finalize earlier this…

Countries participating in the COP28 climate summit agreed this week to call for "transitioning away from fossil fuels in energy systems…”  Earlier this year, researchers at Nature Communications said a full transition from fossil fuels could displace 1.7 million fossil fuel workers in the United States and an even greater number on the global scale. In anticipation, employees, unions, and policymakers are seeking a “Just Transition” in which fossil fuel workers receive public support to find new lines of work. Researchers Junghyun Lim, Michaël Aklin and Morgan R. Frank ask whether fossil fuel workers need re-skilling to perform green jobs in America. The authors compare the skill requirements of fossil fuel occupations to the occupations in other industries using Jaccard similarity, a statistic used for gauging the similarity and diversity of sample sets. They found that fossil fuel workers do indeed have significantly more skill similarity to green industry occupations than they would to other industries, as shown in Figure 1. Figure 1: Chart A compares the skills of fossil fuel workers and Chart B…

A new report by the Government Accountability Office (GAO) studies a sample of 198 Phase II Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards from FY 2019 to identify subcontracting activity. SBIR recipients are generally allowed to subcontract up to 50% of their award value, and STTR recipients must contract at least 30% with a nonprofit research institution. GAO found that 30% of Phase II awards included no subcontract, 24% included at least one subcontract with an academic institution, and 23% included at least one subcontract with a large business (including many defense contractors). The study also found marked differences between the Department of Defense, with 55% of Phase II awards including at least one subcontract, and civilian agencies, which saw subcontracts in 82% of awards. The purpose of GAO’s study was to determine the share of SBIR/STTR recipients reporting subcontractors in the Federal Funding Accountability and Transparency Act of 2006 (FFATA) Subaward Reporting System (FSRS). While the agency estimates that only 10% of awards reported subcontracts, GAO notes that compliance is low across all federal programs and…

A new report from NASBO (National Association of State Budget Officers), State Expenditures Report for Fiscal Years 2021-2023, finds while spending remains elevated compared to pre-pandemic levels, it is starting to slow. Spending from states’ funds rose 12.3% in FY2023 as a result of states spending surplus funds. Among the  key findings of the report: Total state spending for FYFY 2023 is projected at $2.96 trillion—an increase from $2.78 trillion in FYFY 2022—and represents a total state spending growth of 6.5% (with a median growth rate of 7.5%).   During this same period (FY 2023), federal funds declined 1.8%, with a median growth rate of 0.2%. The decline is related to states expending their Coronavirus Aid Relief and Economic Security (CARES) Act funding and much of the American Rescue Plan Act or ARPA funding. And although federal funding declined during this time, it remains higher than pre-pandemic levels.   In FY 2022, total state spending grew 4.6% (the median growth rate being 8%), with spending from the state’s funds at 8.8% (6.9% on a median basis). However, when looking solely at the states’ general fund spending (…

Fifty-seven percent of Americans say science has had a mostly positive effect on society, according to a recent report from the Pew Research Center. While the percentage of those with favorable views of science might seem like good news, the number is significantly less than at the beginning of the coronavirus outbreak in January 2019, when 73% of Americans declared positive views. Confidence that scientists will act for society's benefit has also declined. The Pew survey highlights differences in survey responses between Democrats and Republicans. The decline in the number of Republicans who say science has had a mostly positive effect on society is significant. The percentage of Republicans with a positive view of science’s effect on society has dropped from 70% in January 2019 to only 47% in October 2023. (All percentages for Republicans and Democrats in this article include independents who lean towards the respective parties.) In 2023, the number of Democrats who believe science has had a mostly positive effect on society still outnumbers the number of Republicans who have the same opinion: 69% of Democrats expressed this positive view of science on society in the…

The U.S. Department of the Treasury recently approved 20 additional state awards under the State Small Business Credit Initiative (SSBCI) Technical Assistance Grant Program, totaling more than $50.8 million. These awards will provide legal, accounting, and financial advisory services to eligible small businesses applying for the SSBCI capital program and other government small business programs. SSBCI includes funding for technical assistance to help very small businesses—defined as businesses with fewer than ten employees, including independent contractors and sole proprietors—and underserved small businesses apply for the SSBCI Capital Program and other government small business programs. The Treasury Department’s SSBCI Technical Assistance Grant Program and the newly announced SSBCI Investing in America Small Business Opportunity Program are designed to complement the SSBCI Capital Program. Awards were made in AK, AZ, AR, ID, IN, IA, LA, ME, MD, MI, MS, NH, ND, PA, RI, SC, TN, VA, WA, WI. These awards join 12 others that were announced in August 2023. Examples of the technical assistance awards include: Michigan, specifically the Michigan…

A new report finds that state agencies face challenges when working to implement Justice40 goals. Justice40 is an initiative included in President Biden’s Executive Order 14008, signed on January 27, 2021. The initiative laid out the goal that 40% of the overall benefits of certain federal investments flow to disadvantaged communities that are marginalized, underserved, and overburdened by pollution. The order stipulated that government agencies consult with disadvantaged communities to find the best ways to achieve this goal. To determine how states are navigating federal guidelines to date, the Environmental Policy Innovation Center (EPIC), Climate Xchange, and Beech Hill Research interviewed state agency staff nationwide working on Justice40 programs. Their research report highlights state workers' obstacles and provides insights into what needs to be done to meet the Justice40 goals. “State staff underscored that soliciting projects/applications from historically underserved areas is a crucial but difficult piece of delivering on Justice40,” the researchers note. “While state staff have some capacity for outreach and leveraging existing partnerships, they…