SSTI Digest

As part of the CHIPS & Science Act, Congress created the Tech Hubs program to help more regions become leaders in key technology sectors through substantial investments into regional consortia. It authorized spending $10 billion on the program from FY2023 through FY2027. But appropriations for the program are not keeping up with the vision that was embraced by strong bipartisan majorities in both chambers. For FY2023, Congress appropriated $500 million for the program, and it followed that up with only $41 million for FY2024. The need for the program has not changed. If you believe the program should receive funding in line with the vision Congress laid out in the CHIPS & Science Act, we invite you to join us and let Congress know by signing a letter that will strongly voice support for the program. Read the full letter and sign on today.

Earlier this week, the White House announced a series of actions being undertaken by federal agencies to focus on women’s health.  Both NIH and ARPA-H announced new funding opportunities centered around women’s health, while the White House and other agencies took action without indicating any funding associated with that funding.

ARPA-H’s Sprint for Women’s Health, launched in February 2024, commits $100 million to transformative research and development in women's health. ARPA-H is soliciting ideas for novel, groundbreaking research and development to address women's health and opportunities to accelerate and scale tools, products, and platforms.

Many federal funding programs have the potential to support technology-based economic development (TBED) initiatives, even when technology and innovation aren’t their explicit focus. This is the case with the Appalachian Regional Commission (ARC). SSTI recently sat down with Christy Johnson, ARC program analyst, to learn how three of ARC’s funding opportunities can support TBED activities in the Appalachian region.

The Office of Advanced Manufacturing at the National Institute of Standards and Technology (NIST), an agency of the U.S. Department of Commerce, intends to announce an open competition for a new Manufacturing USA institute. The expected competition, according to the notice of intent (NOI), will seek to establish a Manufacturing USA institute “focused on the use of artificial intelligence to improve resilience of U.S. manufacturing.”

The U.S. Government intends to enter into a five-year agreement with the winning institute, with the possibility of a non-competitive extension for up to an additional two years and provide federal funding of up to $70 million. This funding is to be matched or exceeded by funding from private industry and other non-federal sources, with a minimum 1:1 cost share.

Editor’s note (April 4, 2024): This article has been updated to reflect relevant programs included in the second of two FY 2024 omnibus appropriations bills.

Many tech-based economic development (TBED) programs are seeing level funding in FY 2024, with some of the most high-profile programs experiencing decreases. Politically, this situation is less about disapproval than broader budgetary circumstances, as Congress agreed that spending would revert to FY 2022 levels. Practically, however, this means even the continued programs will not be keeping pace with increased demand or costs. The good news for organizations seeking federal support is that, despite the topline setback, there are multiple programs that can fund regional TBED initiatives.

A note about supplemental funding

From the Securities and Exchange Commission (SEC) to the Department of the Treasury, the White House budget, and Congress, various stakeholders across the federal government have proposed multiple regulations in the past several weeks that would affect the venture capital industry in general and, in some cases, venture development organizations. We offer a brief roundup of these issues.

House passes bill to facilitate private investment

The House passed a bill last week that would modify multiple regulations affecting venture capital and crowdfunding rules, as well as several company assistance activities that are common for venture development organizations.

A summary of changes in the law, as amended, includes the following:

The White House published its FY 2025 budget this week. As Congress will ultimately produce its preferred budget, the president’s release like those of previous Administrations serves as more of a messaging document outlining a vision and priorities. For tech-based economic development (TBED), the message is that Congress has provided ample tools but needs to continue to fund them.

Among the federal TBED programs included in the (188-page) budget summary perhaps the biggest ask among these programs is EDA’s Tech Hubs, which the administration recommends at $4 billion in mandatory funding. The program was authorized at $10 billion, but Congress so far has appropriated just $500 million.

The real gross domestic product (GDP) of private industries has steadily increased nationwide from 2018-2022, with an average percentage increase of 2% each year, or 9% total, despite a drop from 2019-2020 due to the pandemic. However, the same cannot be said across all private industries; of the 14 broad industries captured by U.S. Bureau of Economic Analysis (BEA) data,[1] eight have grown while six decreased over the five-year period from 2018-2022.

While a prior SSTI Useful Stats article went in depth about overall state-level industry GDP profiles using BEA data, this edition of Useful Stats explores all U.S. counties, identifying trends and clustering across the nation’s private industries through a more granular lens.

By a bipartisan vote on Tuesday, the U.S. Senate Committee on Environment and Public Works approved legislation that would reauthorize the Economic Development Administration for the first time since 2004. The bill amends the Public Works and Economic Development Act of 1965 and does not affect the technology-based economic development programs authorized through separate legislation that are administered by EDA.

The National Science Board released the biennial Science and Engineering Indicators report on Wednesday. This report compiles data about the composition of the U.S. research enterprise and its trajectory relative to that of other nations. It covers data collected through 2021.

The 2024 Indicators report shows that the U.S. remains the most prominent performer of R&D, with $806 billion in gross domestic expenditures in 2021. China, at $668 billion, is the next largest performer. The U.S. spends 3.5% of U.S. GDP on R&D, the highest percentage the nation has ever spent. Most of the R&D spending increases have come from private businesses, particularly in the information technology and pharmaceutical industries, while federal spending has remained roughly flat. The report also shows that several high-tech business sectors fund almost as much basic research as the federal government.

On March 1, Massachusetts Gov. Maura Healey introduced and filed her administration’s anticipated economic development measure, AN Act Relative to Strengthening Massachusetts’ Economic Leadership, or the Mass Leads Act. The measure seeks to reauthorize the state’s life sciences investments at $1 billion for the next decade, launch a separate $1 billion, 10-year climatetech initiative, and build on the momentum of the state's CHIPS + Science wins by proposing targeted investments in advanced manufacturing and robotics. It also includes $100 million to create an Applied AI Hub in Massachusetts.

A federal judge in Texas has ruled that the U.S. Department of Commerce’s Minority Business Development Agency’s presumption that businesses owned by Blacks, Latinos and other minorities are disadvantaged violates the Constitution’s guarantee of equal protection. Unless it appeals, the Department of Commerce, which oversees MBDA, will be forced to immediately cease using an applicant’s race or ethnicity in determining eligibility for the program. An appeal seems likely, but, according to an article in the Washington Post, it would go to the U.S. Court of Appeals for the 5th Circuit, which has a conservative majority.