SSTI Digest

The semiconductor industry's workforce is expected to grow from approximately 345,000 jobs today to about 460,000 by the decade's end, and of these new jobs, roughly 67,000 are at risk of being unfilled, according to a report from the Semiconductor Industry Association and Oxford Economics (SIA-OE report).

The SIA-OE report makes three recommendations for addressing this shortage:

Strengthen support for regional partnerships and programs to grow the pipeline for skilled technicians. Grow the domestic STEM pipeline for engineers and computer scientists. Retain and attract more international advanced degree students.

Regional partnerships and programs

The U.S. Economic Development Administration’s (EDA’s) annual Build to Scale (B2S) program (previously Regional Innovation Strategies) completed its tenth award cycle this year, with over $270 million in grants across 437 awards since inception in Fiscal Year (FY) 2014. FY 2023 was the largest award cycle, totaling $53 million in federal awards across the Venture and Capital Challenges.

Led by the Office of Innovation and Entrepreneurship, Build to Scale is designed to increase regional capacity, strengthening ecosystems that equitably and inclusively support technology-based economic development (TBED) practices. Applicants propose projects designed to support entrepreneurs and/or technology acceleration in the program’s Venture Challenge or to develop and support risk capital initiatives in the Capital Challenge (originally Seed Fund Support). More information on the Challenges and their structures can be found here.

 

The Kentucky and Mississippi gubernatorial elections were held on Nov. 7, with both incumbents, Andy Beshear (D) and Tate Reeves (R), winning re-election. Legislative elections were also held in Mississippi (where simple majorities were guaranteed for Republicans in both chambers), New Jersey, and Virginia. With all 40-person Senate and 80-person Assembly seats in the New Jersey Legislature up for election, the Democrats not only retained their legislative majority, which they have held since 2004, but expanded it. Meanwhile, Virginia Gov.

In Mississippi, the state auditor released a report  in September 2023 that rated academic degrees by whether the degree would lead to a well-paying job. He suggests that Mississippi invest more in programs in the subject areas leading to those high-paying, in-state jobs. Basing appropriations on immediate wage outcomes implies that near-term economic return is the only benefit that matters, and it is a theme that is recurring frequently. In contrast, liberal arts advocates take a more holistic view of the value of higher education.

Frederick M. Lawrence, secretary and CEO of the Phi Beta Kappa Society, recently spoke with SSTI about the value of a liberal arts education. He maintained that “education prepares students for the lifelong learning for meaningful lives, for productive lives, and for engaged lives as citizens.”

The Economic Development Administration (EDA) announced 60 organizations receiving $53 million from the Build to Scale program today. This is the program’s 10th and largest award cycle, following years of consistent appropriations growth from Congress. The Build to Scale program, which includes the Venture Challenge and Capital Challenge, funds the launch or expansion of programs that address regional needs to achieve a more robust innovation economy. SSTI has been a staunch supporter of Build to Scale and participating organizations since it was first formed.

EDA's map of the 2023 Build to Scale awardees.

While there has been increasing public questioning of the value of a college degree, statistics on net worth by educational attainment paint a clear picture. In 2022, the median net worth of those without a high school diploma was approximately $38,000, while those with a college education sat at around $464,000. When looking at averages instead, the difference becomes even more pronounced, with non-high school graduates averaging a net worth of approximately $176,000 compared to college graduates’ $1.92 million.

This edition of Useful Stats explores Survey of Consumer Finances (SCF) data from the Federal Reserve, breaking down American’s finances by their educational attainment through a deep dive into the makeup of their assets and debts.

Startup Genome and the Global Entrepreneurship Network recently released a new report offering a fresh perspective on what it takes for a startup to scale. The report draws on an eleven-year study involving 100,000 startups to provide a nuanced look at the factors contributing to startup scalability, offering actionable insights that underscore the importance of networks for entrepreneur support organizations, entrepreneurs, and policymakers. 

The report reevaluates the conventional definition of ‘scaleup,’ arguing it falls short when discussing tech startups. It proposes a more straightforward and objective metric: a valuation of $50 million or more, suggesting that such VC investment can be a reliable indicator of a startup’s readiness to scale. 

Incorporating systems thinking into economic development planning could lead to better solutions to potential and pressing problems, says a Quarterly Research Brief from the National Economic Research and Resilience Center (NERRC). The paper emphasizes that systems, or integrated planning, is essential when writing a Comprehensive Economic Development Strategy (CEDS).

The authors mention that the Economic Development Administration CEDS Content Guidelines require that the strategies ensure the economies are resilient, and cite EDA’s definition of resilience, saying, “In the face of challenges that global uncertainties, natural disasters, climate change, socio-economic disparities, and technological disruptions pose, resilience strategies are essential tools to equitably and sustainably build prosperity over time. In the economic development context, resilience aims to better prepare regions to anticipate, withstand, and bounce back from any type of shock, disruption, or stress it may experience."

The Biden Administration issued an executive order earlier this week that provides guidance on the safe, secure, and trustworthy development and use of Artificial Intelligence (AI) in the U.S. The EO includes guidance for agencies to work to provide new opportunities for small businesses and entrepreneurs in AI and other directives.

NSF is directed in section 5.2 (iii) (b) to launch a pilot program implementing the National AI Research Resource (NAIRR). The program is intended to "pursue the infrastructure, governance mechanisms, and user interfaces to pilot an initial integration of distributed computational, data, model, and training resources to be made available to the research community in support of AI-related research and development.”

The EO also calls for NSF to “fund and launch at least one NSF Regional Innovation Engine that prioritizes AI-related work, such as AI-related research, societal, or workforce needs.”

Despite a $4.1 trillion increase in annual output since 1987, manufacturing industries in the United States have been declining in both their labor productivity and share of output. The Bureau of Labor Statistics’ labor productivity (output per hour) index, tied to 2012 values, for manufacturing industries has dropped by nearly five points since its all-time high of over 101 in Q2 2013.

This edition of Useful Stats explores the Bureau of Labor Statistics’ (BLS) Office of Productivity and Technology (OPT) data on industry productivity, focusing on manufacturing industries. First, the total industry output in millions of USD is examined, then a labor productivity (output per hour) index breakdown of manufacturing industries.

 

Not all publicly traded companies use savings from tax cuts the same way, NBER researchers James Cloyne, Ezgi Kurt, and Paolo Surico report in “Who gains from Corporate Tax Cuts?  While changes in marginal tax rates and investment tax credits (ITC) can have significant effects on the behavior of publicly traded C-corporations, manufacturers and goods producers are much more likely to recirculate the savings into additional capital expenditure and employment than firms in the service sector.  Publicly traded service sector companies typically use the proceeds from a tax cut to increase dividends to current investors in the firms.

By April of 2023, state legislatures had filed 99 anti-ESG bills, according to Reuters. Many of these bills are motivated by the perception that investors who prioritize environmental, social, and governance (ESG) compliance by companies in which they are investing are imposing their political beliefs on others. Furthermore, some believe that ESG considerations inhibit investors and thus hurt returns. On the other hand, some critics of these bills argue the opposite: that it is restricting ESG investing that jeopardizes investment returns. In fact, Research from Pitchbook found ESG investing can have as big a return as investing in non-ESG-driven investments.