SSTI Digest

The Appalachian Regional Commission (ARC) recently awarded new grants totaling over $16.4 million to boost green energy manufacturing and workforce development through its Appalachian Regional Initiative for Stronger Economies (ARISE) funding opportunity.  ARC’s Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative recently awarded nearly $54 million to projects that will leverage entrepreneurship, workforce development, and infrastructure to bolster re-employment opportunities, create jobs in existing or new industries, and attract new sources of investment in communities and regions that have been affected by job losses in coal mining, coal power plant operations, and coal-related supply chain industries due to the changing economics of America’s energy production. Projects funded through ARISE include: A $10 million ARISE grant to Catalyst Connection of Pittsburgh, PA, will help 1,000+ small to medium manufacturers expand or enter green technology and clean energy sectors in 156 counties across Appalachian Pennsylvania, Maryland, New York, Ohio, and West Virginia. Funds will be used to provide training,…

As the U.S. does not have a “skilled worker” visa like many other countries, the H-1B program is one of the only accessible ways for domestic employers to hire foreign, nonimmigrant labor in specialty occupations. The current statutory limit on new H-1B visas is 65,000 per fiscal year, with an additional 20,000 available for foreign individuals who have graduated with a master’s or doctoral degree from an institution of higher education within the U.S. This limit has led to a much higher demand than can be supplied, leaving some industries with less H-1B workers than they may have hoped. Since 2009, the industry with the most approved H-1B visas has been the Professional, Scientific, and Technical Services industry (NAICS 54), accounting for half of the total initial approvals each year on average. Educational Services (NAICS 61) and Manufacturing (NAICS 31-33) historically follow behind at an average share of 10% each per year. This article explores the H-1B visa program’s purpose and importance, and examines its use by industry, top employers, and by states. U.S. Citizenship and Immigration Services (USCIS) H-1B Employer Data Hub data is used to examine trends…

Manufacturing in the U.S. accounts for 90% of private-sector R&D, employs 80% of the nation’s engineers, and contributes trillions to the economy—according to Deloitte—with every dollar spent in manufacturing leading to an additional $1.81 added to the economy. However, despite its key importance, the U.S. lags behind much of the world in its proportion of manufacturing value added—the difference between the price of a product or service and any associated production costs—to the economy, seeing less value added each year as a percentage of GDP. Manufacturing value added as percentage of the GDP has remained virtually stagnant worldwide. Japan’s and India’s have stayed fairly consistent, while China, Germany, and the U.S. experienced regular declines. In 1997, the U.S. figure for value added by manufacturing to its GDP was 16%, while in 2021 this share had dropped to just under 11%. China saw nearly 28% value added in 2022—a drop from 32% in 2004. Figure 1: Comparison of the proportion of added value to GDP among the top five countries by GDP. The proportion of value added to GDP has decreased in these countries because the GDPs of nearly all of…

The CHIPS and Science Act (Act) established guardrails to prevent funding recipients from using the money to support the development of semiconductor manufacturing and technology in foreign countries of concern, including North Korea, China, Russia, and Iran. On September 25, 2023, the CHIPS Program Office CPO published the final rules for preventing improper use of CHIPS Act funding. The guardrails in the legislation include the Expansion Clawback and the Technology Clawback. The Expansion Clawback restricts recipients from using CHIPS funding for material expansion of manufacturing capacity in a foreign country of concern; the Technology Clawback limits recipients from engaging in joint research or technology licensing with a foreign entity of concern. The final rules clarify some points that were raised during the comments period about the clawbacks. Changes in the final rule The final rule defines terms and further explains and clarifies Expansion and Technology Clawbacks, including: Removal of the term Affiliates as a defined term: CPO removed the defined term “affiliate” from the final rule to avoid inconsistencies. They articulate the…

A proposed Department of Homeland Security (DHS) rule could herald significant changes to the H-1B specialty occupation worker program. These proposed changes would bring about a revised definition of “specialty occupation,” install what DHS says would be a more equitable selection process, allow entrepreneurs to sponsor themselves for an H-1B Visa, and open more non-lottery options for nonprofits. The H-1B nonimmigrant visa program allows U.S. employers to hire international workers temporarily. These positions must require a bachelor's degree plus specialization or their equivalent. Sixty-five thousand of these visas are awarded each year. Congress has described the program's purpose as "filling shortages and creating opportunities for innovation and expansion.” Criteria for specialty occupation positions would be revised to clarify that a position may allow a range of degrees, but that the required degree field and the position's duties must have a direct relationship. The proposed rules also clarify that general degrees, such as business administration or liberal arts, are insufficient to qualify someone for a specialty occupation position; further…

The National Institutes of Health (NIH) announced last week that it is adopting modified criteria in its grant review process beginning on January 25, 2024. The new system will continue to focus on the scientific merit of proposals (i.e., importance, rigor, and feasibility), while de-emphasizing criteria that may introduce bias into the review. New grant applications will be evaluated for whether the applicant demonstrates sufficient expertise and resources, but without considering the reputation of the institution or the investigator. In its press release, NIH says the changes will help reviewers focus on the potential for the proposed research to advance scientific knowledge and improve human health. Reviewers will be able to focus on a proposal’s scientific merit because administrative responsibilities will be handled by NIH personnel. The possibility of reputational bias is something NIH has grappled with for many years due to concerns over fairness and fears of new investigators dropping out of a system that favors established scientists at prestigious institutions. As SSTI previously reported, various approaches to reducing reputational bias have been…

The U.S. Department of Commerce’s Economic Development Administration (EDA) announced the designation of 31 Tech Hubs in regions across the country and 29 Strategy Development Grants. This announcement marks the first phase of the new Tech Hubs program, an economic development initiative authorized in the CHIPS and Science Act and designed to drive regional innovation and job creation by strengthening a region’s capacity to manufacture, commercialize, and deploy technology that will advance American competitiveness. These Tech Hubs are located across 32 states and Puerto Rico and represent a cross-section of urban and rural regions. According to an EDA press release, the designation is an endorsement of the region’s plans to supercharge their respective technological industries to create jobs, strengthen U.S. competitiveness, and protect national security. The Tech Hubs announced today focus on industries ranging from autonomous systems, quantum computing, biotechnology, precision medicine, clean energy advancement, semiconductor manufacturing, and more. The 31 designees will now be eligible to compete for Strategy Implementation Grants. The Phase 2 notice of…

The administration recently announced that seven regional clean hydrogen hubs have been selected to receive $7 billion in Bipartisan Infrastructure Law funding. The hubs are located in California, Delaware, Illinois, Indiana, Michigan, Minnesota, Montana, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Washington and West Virginia. The hubs aim to produce more than three million metric tons of clean hydrogen per year, achieving nearly one-third of the 2030 U.S. clean hydrogen production goal. The seven Hydrogen Hubs are expected to eliminate 25 million metric tons of carbon dioxide emissions from end uses each year—roughly equivalent to the combined annual emissions of over 5.5 million gasoline-powered cars. The seven selected regional clean hydrogen hubs are expected to catalyze more than $40 billion in private investment and create tens of thousands of well-paying jobs, bringing the total public and private investment in hydrogen hubs to nearly $50 billion. Roughly two-thirds of the project investment is associated with green (electrolysis-based) production within the hubs. Several hubs were developed in close partnerships with…

This week’s announcement of seven regional hydrogen hubs and $7 billion in federal money significantly increases spending in a technology that has seen modest private sector investment in hydrogen-related companies. Since 2013, investors—including angel, seed, and early- and later-stage VCs—have invested across $7,849.59 million across 366 deals with 340 companies related to the hydrogen industry sector, according to an SSTI analysis of Pitchbook data. Figure 1 below shows deal counts and capital invested by investment stage, 2000-2023 Q3. Figure 1: Deal counts and capital invested, by investment stage, 2000-2023 Q3 So far this year, investors have made 46 deals with hydrogen companies. Also this year, as reported by PitchBook, the U.S. saw its first hydrogen unicorn: Electric Hydrogen became the first green hydrogen electrolyzer startup to reach unicorn status, closing a $380 million Series C with backing from investors including BP, United Airlines, and Microsoft. The number of companies receiving investments has gradually increased since 2000. The number of companies nationwide was in the single digits until 2012, when 15 startups…

SBA has recently announced four contract awards to small businesses and entrepreneur support organization (ESO) partners, expanding the SBA’s Regional Innovation Clusters (RIC) to 16 hubs nationwide. Two contract awardees are new to the program in 2023, while two others are returning awardees, positioned with new contracts to continue and expand work in their respective regions. SBA’s RIC Initiative launched in September 2010 to promote and support clusters, which are geographically concentrated groups of interconnected businesses, suppliers, service providers, and associated institutions in a particular industry or field across the U.S. The RICs act as a networking hub to convene several resources to help navigate the funding, procurement, and supply-chain opportunities in a specific industry.   New awardees: NTouch-BCT Strategies and the New Jersey Cybersecurity Regional Cluster. NTouch-BCT Strategies will grow the New Jersey Cybersecurity Regional Cluster. The cluster focuses on providing cybersecurity assessments and supporting the growth of small businesses building cybersecurity technologies and services across five counties in…

NIH recently announced awards for five Research Evaluation and Commercialization Hubs (REACH) to accelerate the creation of small businesses and the transition of academic research discoveries into products that improve patient care and enhance health. These new REACH hubs will support innovators from diverse personal, educational, and professional backgrounds across 76 non-profit research institutions spanning 12 states. The new hubs are: Chicago Biomedical Consortium Hub of Innovative Technologies for Entrepreneurship and Science (CBC-HITES) led by Northwestern University University of Maryland, Baltimore Life Science Discovery Accelerator (UM-BILD) University of Montana’s L.S. Skaggs Institute for Health Innovation (SIHI-REACH) Gulf Coast Consortia led by Texas A&M Health Mid-South REACH Hub led by Vanderbilt University

The third quarter of 2023 continues the venture capital market’s recent two-year decline in investments, investors, and initial public offerings. This puts a squeeze on startups. How helpful investment funding will be to startups in the rest of 2023 and beyond likely depends on whether the downward trends settle in alignment with pre-pandemic activity or continue into a VC-specific recession. Regardless, there could be dire consequences for many companies. According to the 2023 Q3 PitchBook-NVCA Venture Monitor, the total observed investments in the U.S. through Sept. 30 were 9,962. Due to more recent deals being harder to observe (particularly true of smaller deals), PitchBook estimates that nearly 12,000 investments have taken place this year, putting the country on track for nearly 16,000 investments in 2023. This expected level of almost 16,000 deals is below the approximately 17,500 observed in 2022 and 19,000 in 2021 but still well above the roughly 13,600 deals in each of 2019 and 2020. 2023 is on pace to be only slightly below the 16,500 deals that a linear trendline of the past decade’s activity would suggest for 2023 (and exactly on pace if 2021 were removed…