SSTI Digest

For those readers who have seen their 53rd birthday, it was probably not a remarkable occasion. Perhaps it passed by without notice, and why should it? It isn’t regarded as a major milestone like 21, 50, 60 or 75.  What good is 53? It is often overlooked because we rarely run into it. We put 52 cards in a deck, but 53? We can’t deal with that. Earth Day probably felt that way this year as Saturday, April 22, went by with fewer people marking its 53rd birthday than in previous years. Collectively, the gifts in its honor seem smaller, less meaningful.

The U.S. Small Business Administration finalized new rules that provide more opportunities to leverage the agency’s flagship lending programs to support economic development strategies. The most significant changes in the rules would allow more non-depository lenders (e.g., loan funds) to participate in SBA’s lending programs, make employee ownership transitions an eligible use of loan proceeds, and remove many of the existing underwriting criteria. These changes mean tech-based economic development organizations should consider becoming approved SBA lenders. SBA’s “Affiliation and Lending Criteria for the SBA Business Loan Programs” rule affects the lending criteria and use of proceeds for many SBA lending programs and goes into effect May 11. Both the 7(a) loan program and 504 loan program provide participating lenders with guarantees that encourage the provision of loans to small businesses. A 7(a) loan can be for up to $5 million with proceeds used for fixed assets, working capital or business acquisition and startup costs, while the 504 program is focused on fixed assets. Notable changes in this rule include the following: Small businesses will be…

The vision and strategy for a National Semiconductor Technology Center (NSTC), a key part of the R&D program set out in the CHIPS and Science Act, was released this week by the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST). The paper, A Vision and Strategy for the National Semiconductor Technology Center, describes the center’s mission, core programs, and other features. While the paper refers to it as a center, it is expected to consist of a headquarters facility and an integrated network of NSTC-affiliated technical centers with locations geographically distributed to leverage existing capabilities. It will also start an investment fund that enables future innovations in early-stage companies and will create programs that strengthen and expand the semiconductor workforce.  A release from CHIPS for America outlining the strategy notes that “the NSTC will work with academic and industry partners to create affiliated technical centers around the country, fostering a network of research and innovation that is unprecedented in scale, breadth, and focus.” The NSTC…

Late last week, the Economic Development Administration (EDA) released “Tech Hubs Program Fact Sheet,” which provides some information on where the Tech Hubs program is headed. However, the sheet leaves many questions unanswered and raises new questions about how the program will be administered. The program, authorized in the CHIPS and Science Act at $10 billion, received $500 million in funding to date. EDA indicates it will use $15 million for strategy development grants and the remaining funding for at least five implementation awards. Questions about the sequencing of applications, rural eligibility and timeline were not addressed in the information EDA put out, and SSTI’s request for clarification on these points went unanswered as of press time. The fact sheet indicates that a two-month application window for the strategy development awards and the designation for at least 20 Tech Hubs will open in late April/early May. The announcement of the designation of Tech Hubs and the opening of the application period for the implementation awards will be by the end of this summer. EDA underscores the importance of increasing the “equity, accessibility and…

Venture capital (VC) activity continued to decline in the first quarter of 2023, according to data from Pitchbook-NVCA Venture Monitor Q1 2023. Total deal count declined, with exit count and venture-growth also slowing, and angel and seed activity hitting a 10-quarter low. The difficulties facing the market grew with tensions from the continuation of the Russian-Ukrainian war, the collapse of Silicon Valley Bank, and high inflation rates. Pitchbook reports a total observed deal count of 2,856 across angel, seed, and VC with a total deal value of $37 billion, the second lowest quarter deal value since Q3 2018, which was $35.1 billion, and lowest deal count since Q1 2013, which was 2,460.  Of the 2,856 total observed deals, 971 were angel and seed deals, 825 early-stage VC, 894 late-stage VC and 166 venture growth deals. This is a decline in deal counts across all equity investing stages, with an all-time high reached in Q1 2022. The decline may in part be due to more recent deals being less likely to have been made public and the decline may become less significant once more data is collected. Further, Pitchbook notes that estimated Q1 deal counts remain…

The European Council and the European Parliament have reached a provisional agreement to strengthen Europe’s semiconductor ecosystem, a deal designed to double the EU’s global market share in semiconductors from 10% to 20% by 2030. The agreement is projected to mobilize more than $47 billion (€43 billion) in public and private investments, with $3.6 billion (€3.3 billion) coming from the EU budget. The agreement — which still needs to be finalized, endorsed and formally adopted — contains three main lines of action: The “Chips for Europe Initiative”, to support large-scale technological capacity building; A framework to ensure security of supply and resilience by attracting investment; and, A Monitoring and Crisis Response system to anticipate supply shortages and provide responses in case of crisis. The European Commission’s proposed framework for its Chips Act was first published in February 2022 and is available here.

Mark your calendar for Sept. 6-8 to join us in Atlanta for the 2023 SSTI Annual Conference! Attendees will have the chance to share best practices and problem solve with colleagues who share your passion for innovation. There will be opportunities to explore funding sources to help take your projects to the next level, learn about the latest trends and topics in the innovation economy, and more! Save the date now and stay tuned for additional information on registration and this year’s agenda.

A study titled Incubators, accelerators and urban economic development,[1] published in the Urban Studies Journal last year, found positive impacts on employment and access to capital for participants. The study examines the impacts of accelerators and incubators on urban economic development through a systematic review of Organization for Economic Co-operation and Development (OECD)-wide evaluations, making use of policymaker and academic consultations, finding that both accelerators and incubators raise participant employment while accelerators have the additional benefit of aiding access to finance. The authors define an accelerator as a cohort-based program that provides intensive support to early-stage startups with the aim of helping them rapidly grow and scale their businesses, typically over a short period of time. An incubator, on the other hand, provides a physical workspace along with entrepreneurial development services, business support resources to early-stage companies, with the goal of helping them develop and launch their businesses, often over a longer period of time. Key findings from the review of 14 studies: Both accelerators and…

Technologies developed by West Virginia University and the University of North Dakota in Grand Forks that extract and separate rare elements and critical minerals from acid mine drainage and coal waste, will each receive $8 million in funding from the U.S. Department of Energy. According to West Virginia University Today, the grant is part of the Investing in America agenda under the Biden Administration. Project lead Paul Ziemkiewicz notes that it is meant to lead to the design, construction and operation of a pre-commercial demonstration facility for separating and refining rare earth elements and critical minerals. The funding was announced as part of the Bipartisan Infrastructure Law to bring critical mineral supply chains to the U.S. and reduce reliance on competitors like China. The U.S. imports more than 80% of its rare earth elements and critical minerals. John Kay at the Environmental Research Center at University of North Dakota noted that the greatest motive for initiating this project is national security and independence. Although rare earth mining develops a new industry within the country, Kay alluded to the reality that the U.S. (…

The U.S. Census Bureau in February released a new experimental data product designed to better measure the business dynamics of innovative firms (BDS-IF). The new Business Dynamics Statistics of U.S. High Tech Industries provides measures of business dynamics for what the Census classifies as high-tech and non-high-tech industries, defined by science, technology, engineering and math (STEM) occupation intensity. A Census analysis on the data reveals that high-tech industries are concentrated in five coastal metro areas. The figures show the quantity and proportion of employment in high-tech industries around America. The bigger the dot, the more people are employed in those high-tech industries, quantitatively. The darker the dot, the bigger the proportion of high-tech employment in that area. The Census Bureau released a list of North American Industry Classification System (NAICS) codes used to qualify industries as “high-tech” for the statistics. The Bureau used the concentration of STEM occupation employment as described by Goldschlag and Miranda in their article "Business dynamics statistics of High Tech industries" that appeared in the Spring…

The U.S. Department of Labor (DOL) recently unveiled a new strategy aimed at improving and increasing access to work experiences for young people. Emphasizing the need for a comprehensive vision to address the challenges young people face in accessing education, training, and meaningful work experiences, the Youth Employment Works strategy represents the first national youth employment strategy in over two decades.

A new Bureau of Economic Analysis (BEA) release shows that over the past five years of available data (2018-2022), nationwide per capita personal income increased by 21.64%, rising from $53,786 to $65,423, with an average yearly percentage change of +5.04%. While personal income grew 23.39% during this period, from around $17.67 trillion to $21.80 trillion (+5.41% per year on average), this article will focus solely on per capita personal income, examining both nationwide and interstate trends from 2018-2022 with an emphasis on uncovering the impacts of the pandemic. Personal income refers to the total income of all residents in an area, while per capita personal income measures the average income earned per person in a given area. Although personal income is commonly used as a measure of economic productivity, per capita personal income is more useful for comparisons between regions as it standardizes income by population. Focusing on per capita personal income is particularly important when examining state-level trends, as it mitigates the differences in personal income found in states with exceptionally high or low populations, as well as those with large shifts in…