SSTI Digest

The National Science Foundation has announced the establishment of 11 new NSF National Artificial Intelligence Research Institutes, reaching a combined investment of $220 million and including a total of 40 states when adding the original seven institutes announced last year. The institutes are expected to act as connections in a broader nationwide network and will be led by NSF in partnership with the U.S. Department of Agriculture National Institute of Food and Agriculture, U.S. Department of Homeland Security, Google, Amazon, Intel and Accenture. All but one of the 11 new institutes will be led by universities. The exception is the NSF AI Institute for Adult Learning and Online Education (ALOE), which will be led by SSTI member, the Georgia Research Alliance (GRA). The new ALOE Institute will be headquartered at Georgia Tech. Led by GRA, the effort is expected to unite experts in computer science, AI, cognitive science, learning science and education from a consortium of several universities (Arizona State, Drexel, Georgia Tech, Georgia State, Harvard, UNC-Greensboro); technical colleges in the Technical College System of Georgia (TCSG); major industrial partners (…

Editor’s note: The Senate passed the Infrastructure and Investment Jobs Act on Aug. 10, 2021. This article has been updated to reflect the final amendments and new information on next steps for the legislation. This week, the Senate passed the bipartisan infrastructure agreement, formally, the Infrastructure and Investment Jobs Act. While small as a percentage of the trillion-dollar total, there are a number of proposed items that can support regional innovation economies, with broadband being the highest funded. Other proposals of interest include funding that will stimulate demand for clean energy innovations, further cybersecurity development and reauthorizing the Minority Business Development Agency (MBDA). Note that this analysis is based on the text of amendments available through congress.gov as of Aug. 11, 2021 and may be subject to change once the final bill text is made available. Technology and innovation highlights from the bill include the following: $65 billion for a variety of broadband deployment initiatives, as well as funding and policies to improve affordability. Investments that are intended to increase demand for…

The American Rescue Plan Act provides $10 billion for the State Small Business Credit Initiative (SSBCI) as part of the national response to the coronavirus pandemic-induced recession. This funding is unlike other small business assistance programs funded during the emergency so far in that SSBCI specifically provides funds to states — at least $56 million per state — to use for their own capital access initiatives, including programs that make investments in small businesses. SSTI has made our brief, Addressing Capital Access in 2021, available for you to download. The paper is focused on helping states and their partners make the most of the opportunity presented by the newly-refunded State Small Business Credit Initiative (SSBCI 2.0), which provides $10 billion to states to support capital access. Topics covered include a review of SSBCI 1.0, the current landscape for debt and investment access, and recommendations for states developing programs in 2021. Access your copy here.

The PitchBook-NVCA Venture Capital Monitor for the first half of 2021 reveals that the market is set to break a number of investing records, but strikingly, the record levels of investment activity are all being set by the later stages of investment. At the other end of the funnel, activity is increasing, but not at the same pace as the overall market. Through June, the market is on pace for $300 billion invested (nearly doubling 2020’s level) across more than 16,000 investments (a 25 percent increase on the previous record), leading to median venture capital (VC) deal sizes that are roughly 50 percent larger than in 2020 (the increases for angel and seed deals are much smaller). This explosion of investing activity is supported by what is sure to be a record year for exits — at $372 billion, the exit value through the first six months has already surpassed 2020’s record of $287 billion. First financings of startups in 2021 may approach 2019’s record of nearly 3,500 but has fallen to just 25 percent of all deals (from 40 percent 10 years ago). Angel and seed activity has fallen by more than 10 percentage points since 2015 to just 39 percent of all…

Earlier this week, the House science committee advanced a series of technology-focused bills, including a $7 billion authorization of regional technology hubs. This legislation completes the committee’s work to produce a companion to the Senate’s U.S. Innovation and Competition Act. The House and Senate legislation are not identical, however, and so the chambers will need to bring their versions into alignment. Among the key differences are that the House authorizes less funding for the program but also creates a new regional clean energy innovation program.

Vulnerabilities in the international networks that supply goods and services needed for finished products used by the Department of Defense were exposed to a higher degree during the pandemic, and became the subject of a congressional Armed Services task force. The bipartisan Defense Critical Supply Chain Task Force was established to make the security of the U.S. supply chain a legislative priority, and their recent report details actionable legislative proposals to mitigate risks that could be considered for the FY 2022 National Defense Authorization Act (NDAA). The task force held a series of roundtables that solicited input from former and current DOD officials as well as leading experts representing major industry associations, think tanks, academia, and non-traditional industry and found that DOD lacked visibility on the supply chain and, thus, cannot build resilience and mitigate risk without a firm understanding of where its materials and supplies are sourced and manufactured. However, the task force reports that the information is within reach and that DOD must use the available tools, scale efforts, and partner with industry to achieve supply chain…

The U.S. Department of Energy (DOE) announced $60 million in funding for its largest-ever cohort of university-based Industrial Assessment Centers (IACs) to assist small- and medium-sized manufacturers in reducing their carbon emissions and lowering energy costs. The new cohort of IACs at 32 universities will focus on improving productivity, enhancing cybersecurity, promoting resiliency planning, and providing trainings to entities located in disadvantaged communities. As part of a new pilot project, some of the IACs will expand to the commercial building market and partner with community colleges and technical programs to train diverse students and professionals to conduct energy-efficiency assessments of small to medium-sized buildings, including those located in disadvantaged communities.   The IAC program is one of DOE’s longest-running programs managed by the Advanced Manufacturing Office (AMO) and has provided nearly 20,000 no-cost assessments for small- and medium-sized manufacturers and more than 147,000 recommendations for improvement measures. Assessments typically identify more than $130,000 in potential annual savings opportunities. …

Falling demand for office real estate and public transit, greater need for flexible child care and requirements for reskilling are some of the insights gained into the future of Massachusetts’ workforce. A recent report released by the Massachusetts Governor’s Office which draws extensively on material prepared by McKinsey and Company shines a light on a post-pandemic outlook for a state that has been heralded as one of the most attractive states for citizens to live, enjoying the third-highest per-capita income, a thriving venture capital market and a growing concentration of entrepreneurial start-ups. Yet, as the report notes, “Despite these competitive advantages, the effects of COVID-19 have profoundly challenged the Commonwealth.” The report explores what work could look like in Massachusetts in both the near term (2025) and five years beyond that, including implications for economic sectors, commercial centers, local downtowns, and more. It anchors its findings in four overall themes: Changing ways of working, such as remote and hybrid arrangements, may shift urban core activities with far-reaching implications on transit, urban vitality, housing, local…

Today, the Economic Development Administration (EDA) announced funding opportunities for the $3 billion Congress provided the agency in the American Rescue Plan Act. Funds are available through six distinct challenges, with separate goals and application processes/deadlines for each. The Build Back Better Regional Challenge, funded at $1 billion, may be the most substantial opportunity for tech-based economic development (TBED) organizations, but each of the six can support innovation economies — particularly now that TBED is an explicit component of EDA’s investment priorities. EDA is making the $3 billion available across six funding streams: Build Back Better Regional Challenge ($1 billion) – to support “transformational” investment to 20-30 regions by catalyzing or scaling regional industry clusters (read the full notice of funding opportunity [NOFO]). Good Jobs Challenge ($500 million) –  to strengthen workforce programs through system development, program design and program implementation (NOFO). Economic Adjustment Assistance ($500 million) – to make flexible investments in local economic development needs from planning to public works (NOFO).…

The House Committee on Appropriations advanced an FY 2022 funding bill that provides for substantial increases to many science and innovation programs. The Commerce-Justice-Science (CJS) bill includes $50 million for the Build to Scale program — a top priority for SSTI’s Innovation Advocacy Council, $275 million for the Manufacturing Extension Partnership, $9.6 billion for the National Science Foundation and more. Highlights from the bill for regional innovation economies follows: Economic Development Administration Build to Scale – $50 million (+ $12 million from FY 2021) STEM Talent Challenge – $10 million (+ $8 million) National Institute of Standards and Technology Manufacturing Extension Partnership – $275 million (+ $125 million) Manufacturing USA – $56.5 million (+ $40 million, to fund two new institutes) Minority Business Development Agency – $70 million (+ $22 million) National Science Foundation – $9.6 billion (+ $1.1 billion) White House Office of Science and Technology Policy – $7 million (+ $2 million) The next step for this bill is to pass the full House. However, it is not known when the House will take it up for consideration…

Last week, SSTI’s Innovation Advocacy Council chair Ben Johnson (also of BioSTL) testified before a subcommittee of the House Committee on Small Business about the role that innovation plays in job creation and how the U.S. Small Business Administration’s (SBA) Regional Innovation Clusters (RIC) and Growth Accelerators Fund Competition (GAFC) support these efforts. In his testimony, Johnson spoke to how the needs of innovation-based companies differ from those of Main Street businesses: “The types of support needed to mature a technology from idea to market readiness are different than the supports needed to manufacture or market a widget. … The types of capital raised by innovation-based businesses are different as these companies take longer to mature to revenues. … And, the networks of industry-specific expertise … need to be deeper in defined expertise, than broad networks of business, finance, or marketing mentorship that is generally applicable across all types of business.” Johnson also spoke to the value of SBA’s innovation programs, with a particular emphasis on RIC as a tool to provide businesses within a specific…

Editor's note: SSTI discovered that NASA updated their data which was used in this article after its publication. Specifically, the update included previously omitted 2020 application and awards data for Kentucky, Maine, Mississippi, and Nevada; and 2014 data for Iowa. While the changes to the data were minute, we strive to provide the most accurate and reliable data available. As such, the article and the interactive graphic below have been updated to reflect these changes. A helpful metric used by organizations dedicated to supporting technology startups and bolstering local innovation economies is the success rate of companies applying to the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Understanding how successful local companies are at submitting quality applications and winning SBIR/STTR awards can better assist in designing outreach, education, technical assistance, mentorship, and other entrepreneurial support programs. This edition of Useful Stats examines recently updated NASA data on the agency’s SBIR/STTR application success rates by state from 2019 to 2020. Nationally, NASA’s…