SSTI Digest

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!   Assistant Secretary Alejandra Y. Castillo speaks with conference attendees. Attendees tour Tech Square in Atlanta. SSTI president and CEO Dan Berglund speaks before a full house.

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. According to an initial analysis by Grant Thorton, the proposed rules provide additional direction to help companies identify the appropriate costs for amortization but also could require further accounting method changes. A notable clarification in the rules seems to state that companies providing research services must amortize only those research expenditures that either entail financial risk to the company or would allow the company to use any resulting product for its business. Congress has proposed legislation allowing companies to return to deducting their research expenses, but these rules have not moved forward despite widespread support.

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. Develop or evolve SBA programs and services to address long-term capital access gaps faced by small businesses and the investment managers that seek to support them. The committee members are: Arjun Gupta (…

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. SSTI’s Innovation Advocacy Council and organizations signing onto both letters continue to urge Congress to fund the program at its authorized level so that EDA can implement Tech Hubs at a scale that can achieve its mission of catalyzing globally competitive regional economies throughout the country.

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 Department of Energy (DOE) historically accounts for most of FFRDC funding. DOE provided about 51% of FFRDC funding in 2019 ($11.4 billion). By 2022, the funding rose to nearly 56%, or $14.5 billion. The Department of Defense (DOD) accounts for the next largest…

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: 68 (28%) submitted only applications for a Tech Hubs Designation; 124 (50%) submitted applications for both Designation and Strategy Development Grants; and 55 (22%) submitted only applications for Strategy Development Grants. Applicants requested more than $75 million in…

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. Advocates for 3D printing say with 3D printing, U.S. manufacturing could forge better products while establishing independence from foreign suppliers and reducing its carbon footprint. And in areas like medicine, additive manufacturing could eventually help Americans get the vital organs they need more quickly, reducing the chance of rejection and ultimately saving lives, all while dramatically cutting the cost of surgeries. The transportation of finished products from one place to another currently accounts for…

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: Wind energy provided 10% of total electricity nationwide, more than 60% of power in Iowa, and over 40% of power in South Dakota, Kansas, and Oklahoma. 14 states installed new utility-scale land-based wind turbines in 2022. Texas installed the most capacity…

On August 14, 2023, OMB issued final guidance on requirements for all infrastructure projects using federal financial assistance. The final guidance requires preferences for American-made steel and iron products, manufactured products, and construction materials. The release of the final guidance follows the signing in November 2021 of the Bipartisan Infrastructure Law (BIL), which includes the Build America, Buy America Act (BABA). The guidance is directed toward heads of federal agencies, who must ensure that no federal funds be awarded for infrastructure projects unless “all of the iron, steel, manufactured products, and construction materials incorporated into the project are produced in the United States.” The guidance is specific about what “produced in the United States” means. Regarding iron or steel products, “all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.” In the case of manufactured products, “the product was manufactured in the United States, and the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is…

A memo sent out last week by the Office of Management and Budget and the Office of Science and Technology Policy outlines this year’s R&D priorities. Federal science agencies will use this memo to design their budget requests for the fiscal year 2025. For the first time, this annual memo references regional innovation as an important element of R&D. The memo mentions regional innovation under the priority, “Reduce barriers and inequalities.” This priority directs agencies to “undertake R&D and apply technology advances to ameliorate inequities and create opportunity in ways that strengthen our values.” A bullet point in this section advises agencies to “[su]pport regional innovation and workforce development in science, technology, engineering, mathematics, and medicine all across America with an emphasis on emerging research institutions and historically underserved communities.” The following priority, “Bolster the R&D and industrial innovation that will build the Nation’s future economic competitiveness from the bottom up and middle out,” directs agencies to “[p]ursue regional innovation and resilience by invigorating communities and…

The inaugural Manufacturing Momentum Summit is an opportunity for federal, state, regional, and local leaders to share their efforts to prepare the workforce required for the advanced defense manufacturing supply chain. Held in conjunction with several partners, including the DoD Manufacturing Technology Program, the Center for Regional Economic Competitiveness, and the American Manufacturing Communities Collaborative, the Summit will be held from September 12 - 14, 2023, in Arlington, VA. Featured topics include a focus on AI’s impact on the manufacturing workforce, practical strategies for engaging employers, and an overview of the 2024 Defense budget. The program can be found here.

The dynamics of population growth in the U.S. changed during the pandemic. As people migrated away to avoid the limitations of the pandemic, one region’s population loss was another region’s gain. Now, economists are analyzing the impact of migration on local economies.