SSTI Digest

The U.S. Department of Commerce’s Economic Development Administration (EDA) recently announced the 11 recipients of the 2023 STEM Talent Challenge. The challenge supports programs to train science, technology, engineering, and math (STEM) talent and fuel regional innovation economies across the nation. The $4.5 million competition provides up to $500,000 in funding for programs that complement their region’s innovation economy, create pathways to good-paying STEM careers, and build talent pipelines for businesses to fill in-demand jobs in emerging and transformative sectors.

Those who gather data know that the results collected in 2020 during pandemic shutdowns do not reveal actual trends. This phenomenon was the case for a recent survey by Babson College researchers for the Global Entrepreneurship Monitor Adult Population Survey (GEM APS). They found that rates of entrepreneurship, which had been on the rise since 2015, dropped in 2020. However, their newest research shows an upward trend in 2021 and 2022, when the U.S. had the highest levels of entrepreneurial activity since their first survey in 1999. In 2022, 19% of working-age adults were in the process of running a business or were running a company less than 42 months old.

The current U.S. survey found such trends a rise in manufacturing and logistics companies since the pandemic, an increasing focus among entrepreneurs on their businesses' social and environmental impacts, and a rising rate of companies bringing innovative new products to market.

The rise of manufacturing and logistics since the pandemic

Commerce Secretary Gina M. Raimondo testified Tuesday to the House Committee on Science, Space, and Technology on the implementation of the CHIPS and Science Act. During the hearing, Raimondo spoke about the importance of the Regional Innovation and Technology Hubs and CHIPS manufacturing programs for national and economic security and emphasized the need for additional funding to make Congress’s vision for these programs successful. The focus of the hearing was the Department of Commerce’s implementation of incentives for semiconductor and related manufacturing, but a wide range of topics was covered. Committee members asked Secretary Raimondo to comment on skilled workforce, national security, reliance on other nations, and guardrails on funding, among other issues.

Less than half of one percent of Americans attend Ivy-Plus colleges, according to the National Bureau of Economic Research (NBER). Yet these twelve colleges account for more than 10% of Fortune 500 CEOs, a quarter of U.S. Senators, half of all Rhodes scholars, and three-fourths of Supreme Court justices appointed in the last half-century.

With the above information in mind, Raj Chetty, David J. Deming, and John N. Friedman concluded from their research for NBER that the eight Ivy League colleges plus Chicago, Duke, MIT, and Stanford could diversify the socioeconomic backgrounds of America’s leaders by changing pieces of their admissions practices. They shared their conclusions in a July 2023 study that found that highly selective private colleges currently amplify the persistence of privilege across generations.

SSTI’s 2023 Annual Conference was Sept. 6-8 in Atlanta, and nearly 400 practitioners and policymakers working on tech-based economic development attended to discuss their latest activities, challenges, and successes in strengthening their regional innovation economies. Conference highlights include U.S. Economic Development Administration director Alejandra Y. Castillo confirming the agency’s commitment to spurring globally competitive regions through Tech Hubs; SSTI president and CEO Dan Berglund discussing what has changed—and what hasn’t—over 25 years of observing trends in TBED; workshops on advancing equity, strategic communications, and new approaches to TBED; and, a new format for engaging with federal funding agencies that included nearly 90 one-on-one meetings between attendees and program staff. Thank you to our speakers, facilitators, partners, and attendees for helping to make this event a success!

The Internal Revenue Service recently published new interim guidance for companies to use when amortizing research or experimental expenditures — a new requirement for tax year 2022 created in the Tax Cuts and Jobs Act. The law’s changeover from allowing deductions to requiring amortization was expected to create significant tax burdens for small businesses, which could prove particularly destructive to newer companies funded primarily through nonfungible grants or contracts.

SBA's Office of Investment and Innovation has launched an Investment Capital Advisory Committee (ICAC) to serve as an independent source of advice and recommendations to SBA on institutional investment market trends, innovation, and policy impacting small businesses’ ability to access patient investment capital.

Committee members will examine the challenges facing capital markets, investment managers, small business entrepreneurs, and the stakeholders supporting them in these subject areas and recommend policy and programmatic changes to help strengthen and refine SBA’s programs and services to facilitate better the flow of investment capital to undercapitalized small businesses.

The committee will provide information and recommendations on how SBA can:

Promote greater awareness of SBA investment and innovation division programs and services.

Cultivate greater public-private engagement, cooperation, and collaboration.

A group of technology-related organizations, including SSTI, is asking Congress to support the U.S. Economic Development Administration’s Regional Technology and Innovation Hubs program with additional, substantial appropriations in FY 2024. This new letter is a follow-up to one sent by SSTI and a broader group of organizations earlier in the year. So far, the appropriations committees in each chamber have proposed $41 million for Tech Hubs in FY 2024. While this amount is consistent with the level funded by last year’s regular appropriations bills, it is much less than the $500 million in total provided in FY 2023—and well short of the $3 billion authorized by the CHIPS and Science Act.

The United States' 42 federally funded research and development centers (FFRDCs) received a record $26 billion in federal government funding in fiscal year 2022 — a nearly 6% increase compared to the previous year. FFRDCs expended $26.5 billion on R&D in FY 2022, marking the ninth consecutive year of nominal growth. On average, FFRDCs have increased R&D expenditures by 1.3% per annum since 2012. Yet when looking at only the three most recent years of available data, from FY 2020-2022, this average drops to just 0.4%.

FFRDCs are independent, non-governmental, entities — typically universities or nonprofits — that federal agencies contract with to conduct R&D. FFRDCs provide their supporting federal agencies with R&D capabilities that could not otherwise be effectively completed by the federal government or private sector alone, according to the Congressional Research Service.

The U.S. Department of Commerce’s Economic Development Administration (EDA) has received 378 applications from 48 states for Phase 1 of the Regional Technology and Innovation Hubs (Tech Hubs) competition. In total, 48 states and three territories submitted 378 Tech Hubs Phase 1 applications.

The competition is divided into two parts. The first part will designate Tech Hubs in regions across the country that bring together industry, higher education institutions, state and local governments, economic development organizations, and labor and workforce partners to supercharge ecosystems of innovation for technologies that are essential to our economic and national security. The second part will separately award approximately $15 million in strategy development grants to accelerate the development of future Tech Hubs.

There were 378 applications from 247 unique lead consortia members:

Additive manufacturing, also known as 3D printing, has so far been used for simple construction. In this process, a computer creates three-dimensional objects by depositing materials, usually in layers. But now, the National Institute for Standards in Technology (NIST) is working to unlock additive manufacturing’s potential. For example, earlier this year, NIST researchers worked with polyelectrolyte complexes (PECs), resins with properties useful in fire protection, food packaging, drug delivery, insulation, and more. The scientists incorporated a technique that uses light to solidify a liquid resin, layer by layer, into a three-dimensional design.

The U.S. Department of Energy (DOE) has released three 2023 annual reports showing that wind power is one of the fastest growing and lowest cost sources of electricity in America and is poised for rapid growth. DOE reports that wind energy provided 10% of total electricity nationwide with wind making up more than 60% of Iowa’s power and over 40% in Kansas, Oklahoma, and South Dakota. New utility-scale land-based wind generation capacity added in 2022 was the equivalent of powering 2.5 million American homes. Offshore wind energy projects under development and currently operating could power over 18 million American homes.

The Land-Based Wind Market Report, prepared by DOE’s Lawrence Berkeley National Laboratory, details the 8,511 MW of new utility-scale land-based wind generation capacity added in 2022. This is the equivalent of powering 2.5 million American homes. Key findings from the report include: