SSTI Digest

In a recent economic brief, Why Are Startups Important for the Economy?, the Federal Reserve Bank of Richmond provides a comprehensive review of the current literature around startups, their impact on productivity and job creation rates, and their significance in the U.S. economy.  

The U.S. Department of Treasury has announced its approval of $801.4 million in SSBCI funding for eleven U.S. states and territories: Arkansas, Delaware, Guam, Kentucky, New Jersey, Puerto Rico, Rhode Island, Tennessee, the U.S. Virgin Islands, Wisconsin, and Wyoming. The addition of these states and territories means 46 states and three territories have been approved for State Small Business Credit Initiative (SSBCI) funding. Treasury has now approved over $7 billion in SSBCI funding. This news comes alongside the upcoming two-year anniversary of the passage of the American Rescue Plan Act on March 11, 2021. Arkansas Arkansas has been approved for up to $81.6 million to operate seven programs: a capital access program, two loan participation programs, two loan guarantee programs and two equity/venture capital programs. The state allocated $15 million to the loan guarantee program and $7.5 million to the loan participation program, with a focus on reaching underserved businesses. The equity/venture capital programs have been allocated a combined $46 million to invest in high growth companies across the state. Delaware …

Differences in per capita innovation capacity between urban and rural regions are not as large as previously believed according to a recent working paper from the National Center for Science and Engineering Statistics (NCSES). The study’s conclusions reduce the difference by a factor of three. The researchers made modifications to earlier definitions of the “inventive class” to better distinguish occupations that are likely to contribute to innovation as measured by patent production. This new definition of the inventive class includes core occupations of science, engineering, and technology as identified by NSF, and also includes other occupations that have been shown in earlier work to be associated with patenting. The authors assert that most prior studies comparing regional invention capacity fail to consider differences in the composition of inventive populations in different regions. They make the case that the set of occupations associated with patenting in rural regions is different from the set of occupations associated with patenting in urban regions. Using data from the 2000 U.S. census, the authors then examine the relationship between the…

Fiscal Year (FY) 2021 saw higher education research and development (R&D) spending increase by a total of $3.43 billion (3.97%) over the prior year — a higher rate of growth than the 10-year average of +3.53% per year — and $23.99 billion (36.51%) over the past 10-years. Using data from the most recent release of the Higher Education Research and Development (HERD) survey, this article will analyze state-level trends on higher education R&D expenditures, revealing the aforementioned increased expenditures, although strong, are barely keeping pace with the nation’s overall economic growth.

This week, Rep. David Cicilline (RI) announced that he will resign his seat in the U.S. House, effective June 1, 2023, to become the president and CEO of the Rhode Island Foundation. Cicilline was a strong supporter of the Economic Development Administration’s Build to Scale program, speaking about the program on the floor of the House and co-leading "Dear Colleague" letters (with Rep. Randy Hultgren) requesting appropriations. He also spoke about the importance of Build to Scale specifically and regional innovation economies generally at SSTI’s 2017 Annual Conference. The Rhode Island Foundation is a community foundation that, according to its website, has been in existence for more than 100 years, focusing on economic security, educational success and healthy lives.

On average, Black households engaged in entrepreneurial activity have a higher rate of return on their business in comparison to Hispanic and white households, according to an Economic Commentary from the Federal Reserve Bank of Cleveland. Public policy encouraging and supporting minority entrepreneurship and innovation pays profits as well as social dividends, the study reveals. The average yield of equity invested in a business, regardless of the household’s involvement in the business, is 5.6% for Black households, 4.6% for white households and 2.5% for Hispanic households.  However, white households tend to have higher percentages of business ownership and entrepreneurship than their Black and Hispanic counterparts. About 15.4% of white households invest in private business in some form and the entrepreneurship rate is 12.4%. This rate is significantly higher than Black households, of which 5% are entrepreneurs and 0.9% are passive investors, and Hispanic households where business ownership rates are 6.4% and entrepreneurship rates are 5.6%.  The authors note that the rates of entrepreneurship and business ownership among white…

The 2020 pandemic was unique when it came to changes in the labor market. Unlike in previous recessions, most layoffs from the pandemic were temporary. While employment is back to pre-pandemic levels, the recovery has been uneven across states and industries, leaving some states still with a deficit while others have grown past 2019 levels. Utah, for example, according to an economic commentary by Martin DeLuca and Roberto Pinheiro of the Cleveland Fed, observed employment growth above 6% since 2019, while Vermont remains 6.5 percent below its 2019 average employment. Similarly, while services and sales occupations are down 6% and 7%, respectively, since 2019, the authors found that management and computer and engineering occupations are up 7% and 10%, respectively. This uneven recovery may be due to the differences in regulations between states. The authors found that more stringent COVID-19 containment measures were associated with lower population growth, indicating some out migration from these states. The pandemic did change the distribution of workers with the introduction of more remote work, influencing economic activity all around, but this shift may be…

The NIST (National Institute of Standards and Technology) Manufacturing Extension Partnership (MEP), a national public-private partnership initiative within the US. Department of Commerce dedicated to serving small and medium-sized manufacturers through 51 state centers, including Puerto Rico, recently released its Fiscal Year (FY) 2022 Client Impacts data following a survey of more than 9,000 manufacturing-related clients and businesses.  The MEP network reported assisting U.S. manufacturers in achieving the following: creating or retaining over 116,700 jobs; saving $2.5 billion in costs; generating $18.8 billion in new or retained sales; and, producing $6.4 billion in new client investments. In total, building upon survey results and center metrics, this national network of MEP Centers in FY 2022 interacted with more than 33,500 manufacturers; for every one dollar of federal investment last year, the MEP National Network generated $35.80 in new sales growth and $40.50 in new client investment, which translated into more than $5.6 billion in new sales. During this same time, for every $1,353 of federal investment, the network either created or retained one…

A report many years in the making was released this week by the National Academies of Science, Engineering and Medicine (NASEM) that, for the first time in the organization’s history, confronts racism in its title. After the summer of 2020, following the murder of George Floyd and the Black Lives Matter protests, federal agencies and private foundations prioritized sponsoring a report on antiracism and diversity, equity and inclusion, focused on science, technology, engineering, math and medicine (STEMM). The resulting Advancing Antiracism, Diversity, Equity, and Inclusion in STEMM Organizations: Beyond Broadening Participation aims to move beyond promoting numeric diversity and outlines actions that STEMM leaders and gatekeepers can take to “foster a culture and climate of antiracism, diversity, equity, and inclusion that is genuinely accessible and supportive to all.” NASEM appointed the Committee on Advancing Antiracism, Diversity, Equity and Inclusion in STEM Organizations — what Co-chair Gilda Barabino, president of the Olin College of Engineering, in a webinar announcing the release of the report called one of the most diverse committees the National Academies had…

The U.S. Treasury Department announced that the government will begin taking applications May 31 for the first $4 billion of the $10 billion Qualifying Advanced Energy Project Credit program and tax break for solar-and-wind projects in low-income communities. This credit is part of the Inflation Reduction Act and will be available for projects including manufacturing fuel-cell components, adding carbon-capture equipment to existing facilities or processing critical minerals. The department announced $1.6 billion of the initial funding round will be reserved for places where coal mines or coal-fired power plants have closed. According to the Wall Street Journal, the administration plans to publish a list of Census tracts that qualify for the money. The places must either contain a coal mine closed since 1999 or a coal power plant retired after 2009 or be adjacent to such a Census tract.

The Economic Development Administration (EDA) recently issued a Request for Information (RFI) on the Regional Technology and Innovation Hub (Tech Hubs) program. The RFI will help the agency gather information from stakeholders to inform the design and administration of Tech Hubs designation, planning, and implementation awards.

The U.S. Environmental Protection Agency (EPA) has announced initial guidance on the design of the Greenhouse Gas Reduction Fund (GGRF) program, created under the Inflation Reduction Act. EPA published two Federal Assistance Listings outlining key parameters of the grant competitions that will ultimately award nearly $27 billion to leverage private capital for clean energy and clean air investments across the country. EPA will hold two competitions to distribute the funding — a $20 billion general and low-income assistance competition and a $7 billion zero-emissions technology fund competition.  The $20 billion competition will award competitive grants to eligible nonprofit entities that will collaborate with community financing institutions like green banks, community development financial institutions, credit unions, housing finance agencies and others.  The $7 billion competition will award grants to states, Tribes, municipalities, and eligible nonprofit entities to enable the deployment of residential rooftop solar, community solar and associated storage and upgrades in low-income and disadvantaged communities.  The programs will align with…