SSTI Digest

This week, the House science committee met to discuss the Small Business Innovation Research (SBIR) Program and Small Business Technology Transfer (STTR) program. The hearing comes as SBIR/STTR is both about to celebrate its 40th anniversary and is set to expire in less than six months without reauthorizing legislation. Members and witnesses focused the conversation on SBIR/STTR’s role in generating economic growth and on recommendations for improvements. In her opening remarks, Rep. Haley Stevens, chairwoman of the Subcommittee on Research and Technology, highlighted the role of SBIR and STTR programs in taking discoveries from a lab and transforming them into a product. Focusing on her home state, Stevens noted that the SBIR program awarded over $348 million for research and development to small businesses in Michigan. She shared her co-sponsorship of H.R. 4033, The Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2021, which aims to encourage more manufacturer participation and reporting for the programs. The witness panel included: Dr. J. Stephen Binkley, acting director of the Office of Science in the U.S…

The U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) recently awarded nearly $1.2 million to four institutions through its Advanced Manufacturing Technology Roadmap Program (MfgTech). Awards through this program will fund projects in industries and technologies such as microelectronics and biotechnology for up to 18 months to address national priorities for improving competitiveness and vaccine manufacturing capabilities.  The Regents of the University of California in Los Angeles, the Semiconductor Research Corporation in Durham, North Carolina, and the Commonwealth Center for Advanced Manufacturing in Disputanta, Virginia, each received $300,000 while Purdue University in West Lafayette, Indiana, received $296,155. NIST reported the following projects are being funded: The Regents of the University of California – Producing a roadmap for advancing the nation’s competitiveness and competency in microelectronic supply chains, especially in areas such as heterogenous integration and advanced packing technologies. Semiconductor Research Corporation – Develop the nation’s position in semiconductor production by developing a…

The White House has released its proposed budget for FY 2023. While funding levels will ultimately be determined by Congress (see SSTI’s previous commentary putting the proposal in context), the president’s budget identifies administration priorities that can indicate future agency actions — for example, last year’s proposal for the National Science Foundation (NSF) included the Technology, Innovation and Partnerships (TIP) Directorate, and the agency moved forward with the directorate despite receiving no formal authorization or funding level. The FY 2023 budget proposal contains many helpful priorities for regional innovation economies.

Although no Funding Opportunity Announcement (FOA) has yet been issued, interested parties have submitted responses to the U.S. Department of Energy’s (DOE) Request for Information from stakeholders on issues related to the Regional Clean Hydrogen Hub FOA strategy. The Bipartisan Infrastructure Law included $8 billion for four regional clean hydrogen hubs that will be designed to create jobs to expand the use of clean hydrogen in the industrial sector and beyond. While the information collected through the RFI will not be published and is not a binding commitment to develop or pursue the project or ideas discussed, partnerships are already being announced in anticipation of the funding. Among states that have announced interest are: Connecticut, New York, New Jersey and Massachusetts have announced their partnership to develop a proposal, Utah, New Mexico, Colorado and Wyoming signed a memorandum of understanding to develop a hub, Louisiana, Arkansas and Oklahoma have joined together, and West Virginia has announced its interest as has a group in Ohio. Press reports indicate interest from other regions as well, including Houston and North Dakota. …

A recent study found that merit aid awards increased four-year bachelor’s degree completion rates for students – especially among students that were unlikely to pursue the four-year program in the absence of financial aid. A team of researchers from the National Bureau of Economic Research assessed the marginal effects that merit aid from the Susan Thompson Buffett Foundation (STBF) has on students attending public colleges in Nebraska. The research also showed that the projected lifetime earnings of the students outweighed the costs of funding merit aid for low-income, people of color, urban, and first-generation college students in Nebraska. The researchers assessed scholarships of 3,700 Nebraska high school seniors that graduated between 2012 and 2016. These scholarships were made through STBF awards, which are grant aids that fund more than 11 percent of Nebraska high-school graduates attending public colleges in Nebraska. SBTF scholarships tend to be generous in terms of allocation and are comprehensive in terms of application criteria and selections (accounts for financial need, high school GPA, and individual experience). Many scholarship recipients are required…

Continuing a streak lasting at least 10 years, the federal government was again the top funder of Higher Education R&D (HERD) in 2020. However, new SSTI analysis shows that the federal share of HERD funding has continued to decline nationally and in most states over the 10-year period from 2011 to 2020. This edition of SSTI’s Useful Stats provides an analysis of HERD funders by state in 2020, and an examination of 10-year trends for the period from 2011 to 2020 in HERD funding by source.

A team of researchers recently assessed the relationship between angel investing and venture capital (VC) for startups. Although they found some variation in the performance of companies based on their share of angel and VC financing, there was no clear indication that angel investing provides any unique value for a startup. The research addressed three questions. First, the research analyzed if there are notable differences in the added value to startups when they utilize angel versus VC financing. Second, the research assessed if angel financing and VC financing are substitutes or complements to each other. The last question that the research sought to answer was if the order of angel and VC financing across deal rounds for a startup, referred to as the financing sequence, is related to the probability of a successful exit for the startup. The research team was comprised of Thomas J. Chemmanur, professor of finance at the Carroll School of Management at Boston College; Harshit Rajaiya, assistant professor of finance at the Tefler School of Management at the University of Ottawa and an alumni of Boston College; and Jiajie Xu, a PhD student in finance at Boston…

Workforce development efforts in Maryland gained national attention this month as Gov. Larry Hogan announced the launch of a new initiative to formally eliminate the four-year college degree requirement from thousands of state jobs, substituting relevant experience, training, and/or community college education for the degree. “Through these efforts we are launching today, we are ensuring that qualified, non-degree candidates are regularly being considered for these career-changing opportunities,” the governor said in a press release accompanying the announcement. “This is exactly the kind of bold, bipartisan solution we need to continue leading the nation by giving even more Marylanders the opportunities they need to be successful.” The governor’s office indicated there are more than 300 currently open state government jobs that no longer require a four-year degree, all of which are now listed on “Stellarworx,” Opportunity@Work’s innovative STARs talent marketplace for those it calls STARs, or Skilled Through Alternative Routes. Opportunity@Work Chief Customer Officer Bridgette Gray, in an email exchange with SSTI about the program, said…

There is an opportunity to turbocharge U.S. innovation by addressing barriers to collaboration between research universities and industry, according to Sheila Martin, vice president of economic development and community engagement at the Association of Public and Land-grant Universities (APLU). Details on the value universities can provide to industry in partnership are explained in APLU’s report, Driving U.S. Competitiveness Through Improved University-Industry Partnerships. It also includes policies lawmakers can take to foster stronger university-industry partnerships. The report notes that although industry R&D spending has risen, just 1 percent of total industry R&D is spent on formal research collaborations with universities and only 6 percent of university research funding comes from industry. After conducting a series of key informant interviews with individuals from universities and industry, APLU set out to identify ways to “recouple university and industry research with the twin goals of solving important societal problems and generating renewed competitiveness for the U.S. economy.” Universities can provide access to cutting-edge labs and…

A recent analysis by PitchBook attempts to assess whether venture capital funds that specialize in a specific technology sector outperform generalist VCs or VCs that are targeted but not quite “specialized.” In short, the answer is no, at least as measured by financial return. PitchBook’s assessment of funds created in 1996-2015 shows that the returns (both in the form of ROI and total value relative to investment) are largely similar and with no long-term trend toward one investment strategy or the other. This result prompts additional questions that could help advance the field. One area of research that SSTI hopes PitchBook will address in the future is: if not across the board, do specialist funds at least outperform generalists within their advertised area of expertise? Targeted and specialized investors may want to conduct their own assessments to consider whether their strategy is critical to how they are able to achieve parity with other strategies, or if they could do better without a self-imposed sectoral limitation. From an economic development perspective, there can still be compelling reasons to create specialized funds, such as ensuring…

The last of the governors have delivered their State of the State addresses. With 36 gubernatorial elections this fall, many governors appeared to be more conservative in their addresses this year, speaking more about past accomplishments rather than rolling out new programs. This week features comments from California, Louisiana, Nevada and Ohio’s governors as their addresses related to the innovation economy. California Gov. Gavin Newsom (March 8) Gov. Gavin Newsom talked about transformation in the state’s public education system, including free community college. “Infrastructure, research and development, investing in our conveyor belt for talent, the finest system of higher education anywhere in the world: our CSUs, UCs and community colleges. And ensuring society provides a hand up when people need help, maintaining, maintaining our pro-immigrant policies and welcoming refugees from around the world.” Louisiana Gov. John Bel Edwards (March 14) Noting that the state has “hundreds of millions in surplus, even more in current year excess, and billions in federal funding through the American Rescue Plan and the Infrastructure Investment…

This month, President Joe Biden announced the final rule of his Buy American initiative, which includes increasing the mandated U.S.-made content for federal contractors from 55 percent to 75 percent over seven years and strengthening domestic supply chains for critical goods. This final rule follows Executive Order 14005, which Biden signed during his first week in office that launched a review of existing Buy American policies and created the first Made in America Office within the Office of Management and Budget. The final rule raises the domestic content percentage from 55 to 60 percent in October 2022, 65 percent by January 2024, and 75 percent by January 2029. This gives automakers and other federal contractors seven years to jump from 55 to 75 percent. The new rule will also allow the government to track the manufacturing trail to ensure compliance with these updated standards. These are the most expansive updates to the Buy American Act in almost 70 years. According to a fact sheet released by The White House, the federal government spends over $600 billion annually on goods and services. The Buy American initiative supports Made in America laws that…