SSTI Digest

In an effort to help rural citizens retain their resources and wealth, the U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced the investment of $981 million to help create new and better market opportunities  expanding essential services for rural people, businesses and entrepreneurs in 47 states, Guam and the Virgin Islands.  USDA is making 242 awards through eight programs specifically designed to create economic opportunity; the Biofuel Producer Relief Payments Program , Business and Industry (B&I) Loan Guarantees, Community Facilities Guaranteed Loan Program, Rural Cooperative Development Grant Program, the Rural Economic Development Loan and Grant Program, Rural Innovation Stronger Economy Grants program, the Rural Microentrepreneur Assistance Program and the Water and Waste Disposal Loan Guarantees. Two awards were made under the RISE Program, which offers a 4-year grant, awarded competitively with a minimum of $500,000 and maximum of $2,000,000. It offers grant assistance to create and augment high-wage jobs, accelerate the formation of new businesses, support industry…

In addition to last week’s Digest story on all state expenditures, the National Association of State Budget Officers’ (NASBO) 2022 State Expenditures Report detailed information on higher education expenditures, finding a 9.4% increase (from $225 to $247 billion) in total higher education expenditures over the past fiscal year, a sizable increase from the 1.7% increase experienced from FY 2020 to 2021. State funds for higher education increased 9.3% and federal funds saw an increase of 12.1%. This represents a large growth in state fund spending (from -0.3% in FY 2021), yet a decrease in momentum for federal fund spending (from 15% in FY 2022). Federal funds do not typically make up a large portion of a given state’s overall expenditures for higher education (15.2% in FY 2022, compared to 10.1% in FY 2019); however, NASBO attributes FY 2022’s continued growth to higher education-specific COVID-19 relief funding, totaling $3.3 billion in FY 2020, $9.9 billion in FY 2021 and $10.4 billion in FY 2022. Much of this funding comes from programs like the Higher Education Emergency Relief Fund (HEERF), CARES Act, Coronavirus Response and Relief Supplemental Appropriations Act…

Recognizing that innovation ecosystems require broad networks of partners working together and knowing that many institutions of higher education (IHEs) lack the research capacity to be able to participate in external partnerships, the NSF Directorate for Technology, Innovation and Partnerships invites proposals from Minority-Serving Institutions (MSIs), Predominantly Undergraduate Institutions (PUIs), and two-year institutions with limited or no research capacity to apply for the support necessary to become equitable partners with teams competing under the current and subsequent NSF Engines program funding opportunities. The recently announced solicitation, Enabling Partnerships to Increase Innovation Capacity (EPIIC), anticipates awards of up to $400,000 per awardee institution from a pool of $20 million, to provide the opportunities for these institutions to participate in one or more aspects of an emerging innovation ecosystem, spanning workforce development, use-inspired research, and the translation of research to practice through the creation of new or expanded partnerships. The goals of awards made under this solicitation are to enable awardees to:…

Since the widespread usage of the internet in the 1990s, the question of who has access to broadband and the definition of high-speed internet has bedeviled federal, state and local officials.  Attempts to map which addresses have access to high-speed service date back at least 20 years. The latest iteration, a new national broadband map released by the Federal Communications Commission (FCC) will be used to ensure that the $42.45 billion federal investment from the Bipartisan Infrastructure Law’s Broadband Equity, Access, and Deployment (BEAD) Program makes its way to the areas most in need of broadband service when it is allocated to states on June 30. With challenges to the map due by Jan. 13, SSTI urges state and local policymakers to take a close look at the map and encourage your residents to provide feedback on the map. Six SSTI staff members living in California, Georgia, Maryland and Ohio had varying experiences on the real-life accuracy of the information contained in the map. Staff that identified problems with the map found that it tended to have errors in addresses (e.g., incorrect numbers or missing entirely) and overstating providers that could or…

Earlier this week, the U.S. Department of the Treasury announced the approval of seven additional states’ programs for State Small Business Credit Initiative (SSBCI) funding, totaling over $1.6 billion: Florida, Georgia, Illinois, Louisiana, North Dakota, Oklahoma and Virginia. A short summary of these states’ plans, all of which include investment capital, are available below: Florida has been approved for up to $488.4 million to operate a total of five programs. Enterprise Florida, Inc., with the First Florida Capital Finance Corporation, will administer a collateral support program, loan participation program, and loan guarantee program. Florida has allocated the bulk of their total funding, $250 million, to the collateral support program. The Florida Department of Economic Opportunity will run a capital access program. Lastly, Enterprise Florida, Inc., with the Florida Opportunity Fund, have been allocated $100 million to administer the Florida Venture Capital Program with the goal of making equity co-investments in new and emerging Florida companies Georgia has been approved for up to $199.6 million, and will also operate five programs. The Georgia…

The National Association of State Budget Officers’ (NASBO) 2022 State Expenditures Report found total state spending to have grown an estimated 7.3% between fiscal years (FY) 2021 and 2022 ($2.66 to $2.86 trillion), 1.5 percentage points higher than the 36-year average growth of 5.8% per annum. This increase in state spending can be largely attributed to an 18.1% surge in general fund spending from FY 2021 to 2022 (following an increase of just 2.2% from FY 2020 to 2021) — the highest rate in the 36-year history of NASBO’s State Expenditure Report history. State spending from outside of the general fund (including bonds) also increased by 5.2% (to $725 billion), while state expenditures from federal funds declined by 0.2% (to $1.08 trillion). State general fund spending increased in all program areas, ranging from a 0.1% growth in public assistance to a 245.8% growth in transportation. Federal funding is estimated to have declined by 0.2% in FY 2022, mainly due to FY 2021’s elevated funding levels from aid-based programs such as the American Rescue Plan Act (ARPA) and Coronavirus State and Local Fiscal Recovery Fund (CSLFRF). However, NASBO reports that federal…

State government agencies’ expenditures for research and development totaled nearly $2.5 billion in FY 2021, an increase of 1.1% from FY 2020, but far below the year-over-year inflation of 6.4% when measured in February 2022. The findings on state R&D were recently reported by the National Center for Science and Engineering Statistics (NCSES). The sluggish state spending was exacerbated by real decline in extramural share of federal R&D spending in FY 2021. Intramural R&D by feds grew from 30.7% of total in FY 2020 to 35.8 percent in FY 2021 (see https://ncses.nsf.gov/pubs/nsf22323). While the report finds that state R&D spending remains largely focused on applied R&D, it continues to shift toward experimental development (+23.7%) and away from basic R&D (-8.1%).  While  health-related R&D remained the largest category of state agency R&D in FY 2021 with over $1.0 billion in expenditures, increasing just 0.3% from FY 2020, R&D on environmental and natural resources declined from $448 million in FY 2020 to $429 million in FY 2021, but remains the second-largest functional area. Energy-related R&D increased 5.1% in FY…

A working paper published in the National Bureau of Economic Research asked the question, “Do large firms produce more valuable inventions, and if so, why?” An excerpt of an analysis of the paper that appeared in the November 2022 issue of the NBER Digest follows with additional consideration from SSTI Vice President Mark Skinner on its implications for technology-based economic development. Larger firms tend to profit more from their inventions than do their smaller counterparts. In Invention Value, Inventive Capability, and the Large Firm Advantage (NBER Working Paper 30354), Ashish Arora, Wesley M. Cohen, Honggi Lee, and Divya Sebastian find that this does not occur because large firms produce inventions of higher technical quality. Rather, it is because they extract more value from their inventions, likely through more effective commercialization, which includes product development, marketing, distribution channels, and manufacturing. The researchers estimate that doubling a firm's size is associated with an increase of between 5 and 16 percent in the value of a given invention, depending on whether one controls for the firm's capitalization. Invention…

Over the past four fiscal years, there have been 1,977 initial public offerings (IPOs) completed by companies headquartered in the U.S., according to PitchBook, yielding more than $549 billion in capital invested. These companies are located in 45 states, D.C., and Puerto Rico. Almost 20% of those companies are no longer publicly held, having been returned to private ownership, been acquired, merged or gone out of business. Across the four years, data shows a spike of IPO size and count in 2021, with a total IPO count of 956 and total IPO size of $315.7 billion for the year.  The Pitchbook data used in this analysis shows full transactions on completed IPOs for companies headquartered in the U.S. between October 1, 2018 and September 30, 2022.  The map below shows the total number of companies that held their initial public offering in each state over the past 16 quarters (Q4 2018 to Q3 2022)).  California, Florida, Massachusetts, New York and Texas were the states with the greatest number of successful IPOs in fiscal year 2021, with at least 50 IPOs completed per state. The data shows a sharp increase in 2021 IPO count for New…

NIH just launched the funding opportunity announcement for the third cohort of its regional biomedical proof-of-concept and accelerator program, the Research Evaluation and Commercialization Hubs. On Dec. 12, NIH will be hosting a funding opportunity announcement pre-application webinar which will provide a question and answer opportunity with NIH SEED and NIGMS. In collaboration with SSTI, RTI International’s Alan O’Connor will be providing an overview of the REACH program in a separate webinar on Dec. 8, covering best practices and lessons learned, and summary impacts to date from the first two cohorts of eight sites. This is an excellent opportunity for state science and technology policy teams to hear from the program’s evaluator about return on investment, strategies that have worked well, and other aspects of the REACH program. The REACH 2015 and 2019 cohorts include eight sites with 51 universities and technical colleges from 12 states. The REACH program provides initial product development funding, coaching, and skills development to support academic innovators in the translation of their scientific discoveries into products and services that improve…

Two recent working papers — The Impact of High-Skilled Immigration on Regional Entrepreneurship from Columbia University and Getting Schooled: The Role of Universities in Attracting Immigrant Entrepreneurs from the Philadelphia Federal Reserve Bank — explore the impact of high-skilled immigrants on entrepreneurship and how universities attract immigrant entrepreneurs. Both papers find that high-skilled immigrants have a positive net effect on regional entrepreneurship and are critical to the entrepreneurial ecosystem. In the first working paper, The Impact of High-Skilled Immigration on Regional Entrepreneurship, the authors Jorge Guzman, Inara Tareque, and Dan Wang studied the impact of high-skilled immigration at the metropolitan city level using the Core-based Statistical Areas (CBSA) and neighborhood (zip code) level data. The authors used newly released H-1B data from the U.S. Department of Labor and the U.S. Citizenship and Immigration Services. The H-1B visa program allows 85,000 new high-skilled foreign nationals to work in specialized roles in the U.S. for up to six years. However, under the H-1B visa program, immigrants are only allowed to work for the…

New York became the first state to enact a temporary ban on new cryptocurrency mining permits at fossil fuel plants in a move aimed at addressing the environmental concerns over the energy-intensive activity. The legislation, signed by Gov. Kathy Hochul, will impose a two-year moratorium on crypto-mining companies seeking new permits to retrofit some of the state’s oldest fossil fuel plants into digital mining operations. The measure also requires New York to study the industry’s impact on the state’s efforts to reduce its greenhouse gas emissions. The policy creates a pause on permits for fossil fuel power plants that house proof-of-work cryptocurrency mining, which is used in the transaction of digital money. Hochul states this moratorium is important in stopping the potential increase in emissions that could occur through revamping of old power plants with unused electrical infrastructure. The legislation builds on New York’s Climate Leadership and Community Protection Act and will trigger a study by the state Department of Environmental Conservation to study the impacts of the cryptocurrency mining industry on the environment. Despite concern…