SSTI Digest

The U.S. Department of the Treasury announced nine additional states whose SSBCI plans have been approved: Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota, and Vermont. This is in addition to the five states approved earlier this year: Hawaii, Kansas, Maryland, Michigan and West Virginia. The state plans for the awards will support underserved businesses, innovation programs, investing for startups and more, detailed below.

Arizona has been approved for $111 million across three different state programs. Two venture capital programs, Arizona Venture Co-Invest and Arizona Multi-Fund Venture, will split $87 million of the total approved funds. The rest of the allocated funds will go towards the Arizona Loan Guarantee Program. The three programs will all aim to support underserved businesses by creating greater access to capital. 

Amid a public market slowdown, inflation concerns and tightening monetary environment, the PitchBook-NVCA Venture Monitor Q2 2022 indicates that most investors continued their COVID-era levels of activity through the second quarter of the year. While observed investment deal counts are down, PitchBook has already identified a total investment value of more than $144 billion across angel, seed and VC deals for the first half of 2022 — an amount that would have represented a strong annual total prior to 2021.

This interpretation of the data depends on PitchBook’s estimates of deal activity, which report what the platform believes occurred during the quarter but will only appear in the data once more deals are disclosed. PitchBook typically experiences under-counts in recent quarters due to limited disclosure requirements for private investments.

The National Science Foundation (NSF) is breaking with tradition this week and for the first time released application data before it formally accepts applications for the NSF Engines program, which will provide up to $160 million of funding for up to 10+ years to establish each regional-scale innovation ecosystem Engine. The nearly 700 concept outlines have been published to help submitters in preparing successful proposals, with the belief that the applications and subsequent Engines will be strengthened if applicants are able to find one another and collaborate. NSF has also announced the Type-2 award deadlines for the Regional Innovation Engines program.

This week, Congress approved a new version of legislation to incentivize semiconductor manufacturing facilities, create a Regional Technology Hubs program, and reauthorize many science-related agencies. The Senate passed the bill on the 27th, and the House passed the legislation a day later.

The bill’s latest nickname is “Chips and Science,” a reference to the presence of appropriations for semiconductor manufacturing incentives and R&D (previously authorized when the “CHIPS” act was added to the FY 2021 defense authorization bill), as well as many authorization provisions for other innovation and research activities that have previously been included in USICA and COMPETES. 

CHIPS funding

The CHIPS portion of the bill is the only part that would be funded at the time of its passage. These provisions include the following:

Entrepreneurs learned more about small business funding opportunities from federal agencies with Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs during America’s Seed Fund Week last week. The $4 billion funding program, which is currently up for reauthorization, is celebrating 40 years of providing funding to small businesses each year in a variety of technology areas. Videos, including advice from program managers, and resources from each participating federal agency are available online.

The week included America’s Seed Fund rebranding initiative, including the beta launch of their new website, which has been redesigned to be more informative and user friendly, along with a new Lab2Market Hub, which will connect users to sources of funding. 

U.S. Secretary of Commerce Gina M. Raimondo led the National Advisory Council on Innovation and Entrepreneurship’s (NACIE) first meeting since being re-established, where she charged the council with identifying and developing roadmaps for three “transformative achievements” that will “serve as the core of an American National Entrepreneurship Strategy” to “improve our prosperity and strengthen our economic and national security.” Once the moonshots are decided upon, Raimondo said the council will recommend how the country can develop the technologies to achieve the goals.

More specifically, the council has been tasked with providing recommendations on how to broadly support innovation and entrepreneurship, ranging from growing STEM workforces to removing barriers faced by entrepreneurs, reflective of NACIE’s goal of providing policy and legislative recommendations to further the innovation economy across the U.S.  

In fiscal year 2021, the nationwide success rate of applicants for National Institutes of Health (NIH) Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Phase I awards decreased slightly from FY 2020. This continued a downward trend over recent years. The success rate for NIH SBIR/STTR Phase I was nearly 13 percent (647 of 5,132 approved) in FY 2021, a decrease from nearly 14 percent (636 of 4,684 approved) in FY 2020 and from nearly 16 percent for all proposals submitted over the past decade.

SSTI’s analysis for this article is based on SBIR/STTR application and award data recently released by NIH.

With the return of congressionally-directed spending — more commonly known as “earmarks” — for the FY 2022 budget, nearly 5,000 projects received more than $9.6 billion in such funding. The return of the earmarks followed a 10-year absence after the practice was banned in 2011. SSTI’s review of the spending data, which was collected by the Bipartisan Policy Center (BPC) from the congressional appropriations committees, showed that projects related to technology-based economic development (TBED) were included in the funding.

Since the inception of cryptocurrency mining over a decade ago, the state of New York has become a hotspot for the digital coins, encompassing 19.9 percent of the total U.S. hashrate, or the collective computing power of miners. However, concerns over the environmental impacts of, and high electricity demands for, these mining operations have been increasingly thrust into the spotlight. With the goal of addressing the above, two highly contested bills have been making their way through the legislative system in New York.

With a $1 billion investment over the next three years, Advanced Research Projects Agency for Health (ARPA-H) will be a standalone agency within the National Institutes of Health (NIH) and is designed to produce quicker research outcomes.

In November 2021, the seasonally adjusted quit rate reached a record of 3.0 percent, a significant increase from the previous highest rate of 2.4 percent. This phenomenon of rising quit rates is currently referred to as the “Great Resignation.” Investigating the existing data on labor turnover, the historical quit rate data, and the reasons for the rise of quit rates in 2021 are the focus of a recent article from the U.S. Bureau of Labor Statistics Monthly Labor Review.

With the end of the current fiscal year just three months away, the House Committee on Appropriations is set to finish marking up all of its FY 2023 funding bills by the end of this week. Similar to last year. the committee’s actions come before Congress has agreed to an overall spending level. Due to the potential for substantial changes when the final FY 2023 budget is passed, this article only covers specific funding levels that are a high priority for the tech-based economic development (TBED) field.