SSTI Digest

While the overall U.S. venture capital market has drawn headlines for record-breaking total investment levels in 2021, the story has been far different for smaller deals. Data currently suggests a decline in deals under $1 million, and only modest growth for deals under $5 million. The final data may tell a slightly different story,[1] but the level of activity at the smaller end of the spectrum is clearly quite different than what is driving market coverage. Of the $335 billion in angel, seed and venture capital deals PitchBook has identified for 2021, more than 10 percent went to deals of $1 billion or more and almost 60 percent to deals worth at least $100 million.

Small investments are important for regional economies to track so that they can understand their pipeline of companies that can fuel innovation and job creation, beyond the handful (in most states) that attract headlines.

A “fire breathing economic development initiative” is unfolding at Kansas State University, and if it succeeds, it could add 3,000 jobs and $3 billion in new, outside investment to the state in the next 10 years.

The new initiative is the university’s Economic Prosperity Plan, approved in December by the Kansas Board of Regents, and is in response to the board’s strategic plan that focused on advancing Kansas families, business and the Kansas economy. Each state university was asked to create an economic prosperity program that would align with job creation and direct investment metrics from the regent’s plan. It was in response to that third pillar of the plan that universities were asked to create an intentional economic prosperity program. Kansas State’s plan was approved by the BOR in December.

The United States Department of Agriculture (USDA) recently announced a $1.4 billion investment into rural areas of the U.S. for job training, business development, and technical assistance. These investments are granted through eight different programs to 751 awardees across 49 states, the U.S. Virgin Islands, and Puerto Rico. USDA estimates that the grants and loans provided by these awards will create or save at least 50,000 jobs in the rural United States.

The breakdown of the dollars invested and number of awards by program is as follows:

Women in academia are underrepresented in leadership positions at the 130 universities ranked as R1 (the highest level of research activity by the Carnegie Classification), a recent report done by the Eos Foundation’s Women’s Power Gap (WPG) Initiative found. The report found that women make up 55 percent of all PhD earners, but just 22 percent of all the presidents and 10 percent of system presidents of R1 universities as of September 2021. The study also found that 46 percent of the universities in the study had never had a woman leader.  

The Women’s Power Gap Initiative focuses on increasing the number of women in CEO and C-suite positions around the country. The WPG research is conducted to outline the power and wage gaps in prominent sectors such as higher education with the intentions of increasing representation and inclusion.

Eos Foundation’s report also found that:

More than 40 percent of Indiana’s manufacturing companies successfully implemented Industry 4.0 technologies in 2021, more than doubling the number that had reported that a year earlier, according to a recent Conexus Indiana report. The advanced manufacturing and logistics (AML) industries are considered the backbone of Indiana’s economy. Indiana manufacturers account for more than $100 billion of the state’s economy and employ 17 percent of the state’s workforce. The industry is at a crossroads, the report holds — challenged to adopt smart technologies and methods to increase its competitiveness. In 2020, Conexus Indiana and the Indiana University Kelley School of Business Center for Excellence in Manufacturing launched an annual survey to measure Indiana industries’ readiness and early adoption of Industry 4.0 technologies. That study provided a baseline for the follow-up study in 2021, which found progress on several fronts. For instance:

The U.S. Department of Defense (DoD) National Defense Education Program is seeking to strategically fund science, technology, engineering, and mathematics (STEM) education at 2-year institutions and community colleges through a consortium approach. DoD is planning five awards ranging between $5 million to $11 million with an aim to enhance the STEM workforce through regional consortia that will develop and encourage STEM ecosystems between 2-year institutions and/or community colleges and 4-year institutions, industry, local education agencies, and others in STEM education.

Responses to this funding opportunity are encouraged to focus on either or both of the below goals:

(1) Promote and support the completion of technical training and certificate programs that strengthen the DoD and Defense Industrial Base (DIB) science, technology, and manufacturing workforce.

(2) Develop, support, and increase the transition of students, especially those from underserved and underrepresented populations to include veterans and their spouses, from 2-year institutions and/or community college STEM programs to STEM degrees at 4-year institutions.

The U.S. Economic Development Administration (EDA) announced the eight winners of its STEM Talent Challenge, a national competition to receive funding for programs developed to train talent in science, technology, engineering, and mathematics (STEM). This challenge encourages a resilient workforce to amplify the United States as a competitive force in STEM. Winning programs will receive up to $250,000 in awards and leverage another $2.5 million in matching funds from private and public sources.

The STEM Talent Challenge is administered by the EDA’s Office of Innovation and Entrepreneurship, which also runs the Build to Scale program to boost regional economies by encouraging scalable startups.

STEM Talent Challenge winners are:

The National Institute of Standards and Technology (NIST) is accepting applications to operate Manufacturing Extension Partnership (MEP) centers in Kentucky, Nebraska, Rhode Island and South Dakota. The NIST Hollings Manufacturing Extension Partnership funds 51 centers in all 50 states and Puerto Rico which provide experts who enhance the performance of local manufacturers. Funding awards will include almost $19.8 million to support small and medium-sized manufacturing companies in the four listed states.

Eligible applicants include U.S.-based nonprofit organizations, higher education institutions, states, U.S. territories, and local or tribal governments. Already existing MEP centers in good standing that have received assistance for 10 consecutive years may also apply. Centers must recompete for awards every 10 years, and the MEP centers in each of these states are approaching that point.

NIST anticipates awarding the following amounts to manufacturing centers in each state during an initial five-year performance period:

SSTI and the Small Business Technology Council circulated a letter to Congress calling for reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The letter has been signed by more than 100 organizations, including the U.S. Chamber of Commerce, Angel Capital Association, Association of University Research Parks and dozens of SSTI members. Without congressional action, the programs will expire at the end of the current fiscal year.

Read the letter to congressional leadership.

This week’s edition of Useful Stats examines the contributions to county-level GDP in 2020 by industry group. Specifically, this analysis identifies the industries that contributed the most to the economic output of each county in 2020, as well as examining the annual percent changes in industry contribution to county GDP over the previous year. Most industries experienced declines brought on by the economic recession of 2020, although some experienced growth. In 2020, the real estate and rental and leasing; professional and business services; government and government enterprises; and manufacturing industry groups were vital economic drivers in terms of both their contributions to national GDP as well as the number of counties where they were the top contributor.

Attracting investment to a coal-dependent region with a state-of-the-art AgriTech research and development center is under consideration in Kentucky while Rhode Island is proposing greater investment in developing its blue economy. Kentucky Gov. Andy Beshear and Rhode Island Gov. Daniel J. McKee have both targeted new innovation initiatives to grow their state’s economy in their recently proposed budgets.

Recognizing that the era of total U.S. dominance in the global science and engineering (S&E) enterprise is over, a recent report from the National Science Board (NSB) and the National Science Foundation (NSF) on the State of U.S. Science and Engineering 2022 indicates that the U.S. must focus on strengthening international research and development (R&D) collaboration and developing domestic STEM talent to maintain its leadership on the global S&E stage. As in previous years, the report includes a detailed examination of the statistical indicators of S&E activities, but also updates the definitions used for the S&E workforce and includes an analysis of the role of K-12 STEM education in the domestic STEM talent pipeline.