SSTI Digest

Innovations are often born from small businesses, operating with few employees, if any at all, to bring new technologies and processes to market. However, new small businesses frequently fail and are not the only source of innovation. Understanding the regional dynamics of business creation can help leaders better support their regional innovation economies, and this edition of Useful Stats builds on our previous analyses of net establishment creation and net job creation by state and by industry to explore establishment creation by state and by establishment size (as measured by the number of employees) for 2019.

The emerging innovation-intensive sector of urban farming is seeing heightened interest by venture capitalists, investments are growing faster than the crops: $2.4 billion so far this year at last count by PitchBook. That reflects a year over year (YoY) investment growth rate of 214 percent.  The number of individual deals also is rising 14 percent YoY. The sector is expected by many market analysts to capture an increasing share of the nation’s food supply for a number of reasons. Most notably, the historic drought in the western half of the U.S. is likely to have significant impact on the region’s agricultural industry, which currently accounts for up to 70 percent of the region’s water use.  Additionally, consumption of fresh vegetables tracks closely to income inequality and access to full service grocery stores and farmers’ markets, resulting in “food deserts” for many lower income neighborhoods. Thirdly, an ever increasing share of the world’s population is living in urban areas. A fourth reason for the rapid growth in urban farming innovation is purely economic. There is a lot of cost and waste in the growing, harvesting, handling, transportation and…

The Federal Communications Commission announced its second round of funding for new broadband investments through the Rural Digital Opportunity Fund (RDOF). It also revealed that it is “continuing its work to refocus the program to ensure that funding goes to unserved areas that need broadband,” and as a result dozens of winning bidders from the previous round have “chosen not to pursue buildout … .” This second round of funding authorizes more than $163 million to 42 providers in 21 states that will bring broadband service to approximately 65,000 locations over the next 10 years. In July, the FCC sent letters to 197 winning bidders offering providers “an opportunity to withdraw their funding requests from places where there was evidence of service or where questions of waste have been raised.” As a result of that process, 85 bidders chose not pursue buildout in areas that had evidence of existing service or questions of potential waste.

Benson Hill, a unicorn (a startup valued over $1 billion) that closed its deal to become a public company last week, was able to leverage several sources of public capital to accelerate its early success. The St. Louis-based agricultural technology company uses machine learning and genome editing to facilitate the production of sustainable and healthy crops. Founded in 2012, Benson Hill has utilized state-sponsored venture capital and federal grants to reach its funding goals. In 2013, Benson Hill received a $225,000 Phase I Small Business Technology Transfer (STTR) from the National Science Foundation (NSF). The company received another $270,000 in STTR Phase I and Ib funding from NSF in 2014, along with a $100,000 Small Business Innovation Research (SBIR) grant from the U.S. Department of Agriculture. Benson Hill also completed multiple rounds of equity investment that included funding from venture development organizations. These include a $1 million seed round in 2013 and a series A round in 2015. BioGenerator and Missouri Technology Corporation (MTC) were active in both of these rounds. BioGenerator, the venture development arm of BioSTL, was one of…

The news that a drug has been developed that appears to significantly reduce the risk of hospitalization or death from COVID-19, understandably garnered international attention. While most of the coverage centered on Merck, dig a bit deeper and one learns that Emory University researchers developed molnupiravir which Merck and Ridgeback Biotherapeutics have licensed. For the TBED community, there is another interesting angle to the story if one goes even further: this work was a result of a non-profit that Emory had set up, Drug Innovation Ventures at Emory (DRIVE), to help bridge the gap between scientific discovery to helping patients. Jonathan S. Lewin, Emory’s executive vice president for health affairs and executive director of Woodruff Health Sciences Center, said in a press release that the news underscores the important role of academic medical research. DRIVE, a non-profit LLC wholly owned by Emory, repurposed a broad-spectrum antiviral drug it had been developing for infectious diseases when the pandemic began. DRIVE’s CEO and co-founder, George Painter, PhD, had invested nearly five years of research with funding from the National Institutes of Health…

Understanding the industry-level dynamics of business and job creation can help pinpoint which industries in regional economies may be hotspots for innovation activity. This edition of Useful Stats builds on previous SSTI analysis of business and job creation by state and examines data from the Census Bureau’s recently updated Business Dynamics Statistics (BDS) on net establishment and job creation in 2019 at the state and industry levels. The data serves as a useful baseline of where the economy stood prior to the pandemic’s start in 2020. While the national data shows that five industries experienced net establishment losses in 2019, industry trends at the state level vary widely with some states seeing losses across many industries while others experienced losses in only a few. There were also similar national- and state-level trends in net job creation in 2019. This analysis also provides additional context by examining the long-term state trends in these metrics from 2005 to 2019.

The National Science and Technology Council (NSTC) has released a new request for information (RFI) related to a national strategic plan for advanced manufacturing, and the National Institutes of Health (NIH) are seeking information on how the scientific community uses public data tools. Both RFIs provide an opportunity for the tech-based economic development field to shape the future of federal innovation policy.  On behalf of the NSTC, the Office of Science and Technology Policy (OSTP) is seeking input from the public on ways to improve government coordination, and on long-term guidance for federal programs and activities in support of U.S. manufacturing competitiveness, including advanced manufacturing R&D that will create jobs, grow the economy across multiple industrial sectors, strengthen national security, enhance sustainability, contribute to climate change challenges, and improve health care. This input will inform OSTP and NSTC as they work with federal agencies and other stakeholders to develop the strategic plan. A series of public events has been organized at various technical conferences (in-person and virtual) from October to December to directly…

A new strategic plan for the Appalachian region reaffirms the Appalachian Regional Commission’s (ARC) primary investment goals emphasizing economic development. It benefits from insights gathered from more than 1,800 stakeholders and is built on multistate and regional collaboration. Federal co-chair Gayle Manchin said in a press release that the while the investment goals (building Appalachian businesses, workforce ecosystem and infrastructure; building regional culture and tourism; and building community leaders and capacity) reaffirm the core mission, they are “reflected through a modern lens of promoting equity, innovation, sustainability and resilience into our work.” Manchin also noted that the success of the plan “is completely dependent on how well all 13 states and 420 counties in Appalachia can work collaboratively to build upon our past work to bring the region to the next level.” The five-year plan also lists a set of objectives for each of the goals, and includes: providing financing, technical assistance, and other support for entrepreneurship and small business development in the region; investing in workforce development…

The U.S. Economic Development Administration today announced the 50 organizations that will share in grants totaling $36.5 million to support programs that fuel innovation and tech-based economic development as part of the Build to Scale program. The 2021 awardees will leverage an additional $40 million in matching funds from a variety of private and public sector sources. SSTI has been a proponent of the Build to Scale program, which had not received any federal appropriations prior to the creation of SSTI’s Innovation Advocacy Council.

This week marks the 10th anniversary celebration of National Manufacturing Week. National Manufacturing Week celebrates the role of the manufacturing sector within the United States. With roughly 12.1 million employees, the manufacturing sector is the fifth largest employer relative to other industries, according to the U.S. Census Bureau. The manufacturing sector continues to evolve with the adoption of advanced manufacturing technologies and improvements in workforce development. Manufacturing Day will be held on Friday, Oct. 1, to show the public the role that modern manufacturing has in today’s world. Manufacturers across the country will be hosting and sponsoring webinars and in-person events on Oct. 1 and throughout October and November. These events will highlight the importance of the manufacturing industry, while providing insight on advanced manufacturing technologies and strategies for workforce development. Additionally, there will be opportunities for students to gain exposure to the manufacturing industry. More information of Manufacturing Day and how to register for these events can be found here. Origins of Manufacturing Day and its connection to…

Implementing innovative policies is necessary for driving the manufacturing industry forward in Illinois, according to a recent report from the Illinois Manufacturing Excellence Center (IMEC). Nearly 600,000 Illinoisans are employed directly in manufacturing, and the manufacturing industry accounts for 12 percent of Illinois’s annual GDP. The findings of the state report, however, are adaptable and can be utilized across the United States in regions that seek to encourage innovation in manufacturing and promote job growth in an increasingly competitive globalized economy. IMEC partnered with the Illinois Manufacturer’s Association, the Technology and Manufacturing Association, the Valley Industrial Association, and the W.E. Upjohn Institute for Employment Research for a study highlighting the status of advanced technology adoption for small and mid-sized manufacturers in Illinois. The resulting report covers the challenges that manufacturers in Illinois face and how they have been implementing advanced technology to overcome them. The report also covers the benefits and opportunities that come with adopting advanced manufacturing technologies. The report…

Pew Charitable Trusts recently published data demonstrating that Q1 2021 experienced the largest year-over-year personal income growth rate since 1948. All states recorded increases in total personal income, and 27 experienced their strongest year-over-year growth on record. This sharp uptick is largely attributed to an “unprecedented” increase in government aid and pandemic-related federal economic relief packages, primarily received through Social Security, Medicare and Medicaid, safety-net programs, and state unemployment insurance, according to the report. Their findings suggest that federal aid in Q1 addressed and counteracted some of the recession outcomes experienced after the 2007 financial crisis. According to Pew, the Great Recession saw a decline in personal income by roughly 15 percent before recovering, with little difference made by government assistance. The report authors estimate the pandemic-driven recession would have resulted in around a 6 percent decline in personal income had there not been any government assistance. Congress has taken a different strategy to spending through the pandemic recession than during the previous two…