SSTI Digest

While the debate over how well Opportunity Zones (OZs) have performed and whom they most benefit remains far from settled, two uniting perspectives — a commitment to continuing increased investment in impoverished and vulnerable communities, and the desire for better data collection — may encourage lawmakers to make changes to the program.

Since they were created under the 2017 Tax Cuts and Jobs Act through 2019, more than 6,000 Qualified Opportunity Funds have invested approximately $29 billion in the nation’s OZs, according to a recent report from the Government Accountability Office (GAO). However, this report essentially follows the form of the previous year’s report and only officially recommends that lawmakers enable the Treasury Department to collect additional data to protect against tax fraud.

In an effort to bring together entrepreneurship and innovation leaders from around the country and raise the collective success potential of American small businesses, the U.S. Small Business Administration (SBA) hosted its first innovation ecosystem summit last month. In her welcome message, SBA Administrator Isabel Guzman reinforced the Innovation Ecosystem Summit’s goal of reimagining the economy, leveraging the nation’s diversity, removing inequities, and building an economic future where ideas have a chance to flourish. She said she is committed to making sure "the SBA can revamp and transform its programs and offerings to ensure that we’re connecting all entrepreneurs with the investments, and the resources, and the people, the expertise, the knowledge that they need to succeed."

The Association of University Technology Managers (AUTM) recently reported findings from its 2020 Licensing Activity Survey. The survey collects self-reported technology transfer activity volumes from universities, hospitals and other non-profit research institutions in the United States. The report highlighted a large increase in the number of patents issued in 2020 relative to 2019, with a growth rate of 15.6 percent. There was less clarity about changes in other metrics, however.

The AUTM survey provides some of the best, accessible data on technology transfer activity, but self-reports have limitations. One consideration is that trends can appear due to both changes in behavior and due to which institutions do (or do not) participate in a given year. In 2020, 10 percent more institutions participated in AUTM’s survey than in 2019. We, therefore, consider year-over-year increases of more than 10 percent as more likely to reflect an increase in tech transfer activity than more modest gains.

This week, Congress reached an agreement on the FY 2022 defense authorization bill (i.e. “NDAA”). The legislation includes support for expanding the Defense Innovation Unit’s (DIU) reach, research at minority-serving institutions, and commercialization pilots, as well as a $7 billion increase in research funding. While the NDAA does not provide appropriations, the bill is a strong signal for where the FY 2022 appropriations are likely to land. Procedurally, the House passed the NDAA this week, and the Senate is expected to pass the bill without amendments. Highlights from innovation provisions in the FY 2022 NDAA follow.

With a 20-year history, the Maryland Technology Development Corporation (TEDCO) is reporting an economic impact in 2021 four times greater than what they experienced in 2013. A new independent study found that its six core programs have provided “significant value” to the state’s start-up community, supporting over 10,000 jobs and more than $2 billion in statewide economic activity as of 2021. Meanwhile, BioCrossroads, a non-profit based in Indianapolis, has reported growth in its life sciences initiatives over the past 15 years. BioCrossroads conducts market research and promotes business and technological innovation in life sciences across Indiana. Both TEDCO and BioCrossroads have utilized public capital to develop industry within their respective target states.

While income inequality has increased in many countries over the past 30 years, gathering public support to sustain momentum for reforms that address those inequalities is important, especially in recovering from the pandemic, says a recent report from the Organisation for Economic Cooperation and Development (OECD). To gain wider public support to address inequality, the report finds that governments should work toward a better understanding of public perceptions of inequality and provide better information on inequality and equality of opportunities.

The report looks at how people’s perceptions of inequality and social mobility impact their support for such reforms, concluding that while there is growing consensus that inequality is a problem, divisions about its extent and what to do about it are also increasing.

The National Institute of Standards and Technology (NIST) has released a Request for Information (RFI) to help guide the development of eight emerging technologies. NIST will use the information to inform a study it will provide Congress with a comprehensive analysis of the nation’s emerging technology sector including information on relevant marketplaces; supply chains; future investment, legislative, policy and standards needs; and, strategic public-private partnerships to enhance the nationwide adoption of technology development and utilization.

Private sector investment into research and development (R&D) is a critical component of innovation, new product development, and regional economic vitality. As a substantial performer and funder of R&D in the United States, the strength of private industry’s R&D activity in a region can provide an indication of the region’s capacity for developing and bringing innovative technologies to market. Using data from the recent release of the National Science Foundation’s 2019 Business Enterprise R&D (BERD) Survey, this SSTI analysis shows that while private companies nationally paid for the greatest share of total business R&D expenditures themselves in 2019, this was not the case for all states.

In a move designed to strengthen southwest Pennsylvania’s role in life sciences research, the University of Pittsburgh and Richard King Mellon Foundation last month announced a $100 million gift to help fund a bioresearch and development facility. The grant, which will be disbursed in $10 million increments over 10 years, will help build Pitt BioForge, a biomanufacturing facility that will leverage biomedical research conducted at Pitt and bring “an entirely new commercial manufacturing sector to Pittsburgh and, if all goes according to plan, increase the economic opportunity for residents and families in and around Hazelwood,” according to a Pitt press release.

An inaugural report looking at the landscape of capital resources in Arkansas may be useful to others who are interested in examining the capital access in their state or region. The report will serve as a baseline for trends in public, private and philanthropic investments in entrepreneurship across the state and may be a useful resource as the state plans its State Small Business Credit Initiative strategy.

Topics covered in the report include core economic indicators, angel and venture capital investments, SBIR/STTR awards and small business loans. A team at the University of Arkansas coordinated the 2020 Arkansas Capital Scan, with input from an advisory committee of local stakeholders, and compared their findings to neighboring states Oklahoma, Missouri and Tennessee.

The U.S. Census Bureau has recently announced that data collection has begun for Phase 7 of the Small Business Pulse Survey (SBPS). The SBPS measures the effects of changing conditions for small businesses (businesses that have a single location and under 500 employees) during the COVID-19 pandemic. This phase of the survey also includes new questions on changes in the use of digital technologies and in business, production, and management practices. Aside from surveying strictly business metrics, Phase 7 will also include questions that assess workplace COVID-19 vaccination and testing statistics and the overall well-being of business owners.

The first six phases of the SBPS took place in roughly three-month intervals between April 2020 and October 2021. Initial data from Phase 7 will be posted on Nov. 24 – updated data will be posted every Thursday from Dec. 2 through Jan. 20, 2022. Phase 7 includes questions from the previous phases that ask small businesses how metrics such as revenue, costs, and number of employees have changed relative to what was considered normal for the business before the start of the COVID-19 pandemic.

Last week, Japanese Prime Minister Fumio Kishida’s advisory panel called for an $88 billion university fund to establish the nation as a center of science and technology and distribute wealth to the wider public. The fund and other growth initiatives would likely become part of a larger “new capitalism” stimulus package worth several tens of trillions of yen that Kishida, who replaced Yoshihide Suga as prime minister of Japan on Oct. 4, is expected to unveil later this month.