SSTI Digest

When the full impact of the COVID-19 virus was just beginning to be realized in spring of 2020, small businesses across the country were faced with nearly insurmountable challenges and emergency orders, shutting down operations in many instances and choking off funding sources. Many in the technology-based economic development (TBED) community stepped in and pivoted their own organizations and plans to help others. We reached out to our SSTI members to hear about how they responded. While we can’t include all of the many success stories, below we feature a sampling of some of the stories that SSTI members shared regarding how they responded to help guide small businesses through the pandemic. And check back next week when we will share more from members who responded about their science and education pivots that helped the country navigate the pandemic. “When the Covid-19 pandemic hit, it disrupted every aspect of life, business, and society in the U.S., sending Americans into quarantine lockdown for weeks and generating anxiety and uncertainty about what the future held. This was particularly prevalent in the investment and capital markets, where traditional funding…

In a field once dominated by government agencies and incumbent organizations, the aerospace and defense (A&D) industry has experienced a rapid landscape change over the past decade as private companies and high-profile organizations launch commercial space programs and advance novel exploration and communications projects. These private companies present new competition to the traditional A&D industry. Increasingly, top talent in the United States has turned away from agencies like NASA and the Department of Defense and opted for what they perceive as more innovative and rewarding work at private companies, according to a new report from McKinsey. The report intends to help the traditional A&D industry attract and retain the premier talent that is often lost to private companies. Seizing the moment: Talent challenges and opportunities in aerospace and defense highlights the prevailing trends and headwinds in the A&D industry affecting talent retention and recruiting, such as an increased demand for technical solutions including cybersecurity, automation, and artificial intelligence; increased demand for top talent; misplaced perceptions about the nature…

The United States solar industry experienced a 6.7 percent drop in total employment during 2020, a reflection of the difficulties that the COVID-19 pandemic caused in some parts of the manufacturing and construction sectors. Despite these challenges, the 2020 National Solar Jobs Census, released by the Solar Energy Industries Association, notes that the industry installed a record level of solar equipment throughout 2020 while also reaching new highs in most measures of diversity. As the sector continues to grow, the Department of Energy’s Solar Energy Technologies Office has issued two requests for information surrounding the solar industry. While the 231,474 employees within the solar industry marked the lowest total employment for the sector since 2015, the report finds that labor productivity within the U.S. solar industry dramatically increased in 2020, leading to the increase in total solar installations for the past year. This rise in productivity was due in part to the changes brought on by the pandemic, such as the shift from in-store to online sales that reduced salesperson labor and homeowners’ increased awareness of their home energy usage that led to an…

The April jobs report, released by the Bureau of Labor Statistics on May 7, generated considerable attention due to the 266,000 jobs added being far less than anticipated. Contributing to this topline number are quite a few trends moving in different directions, including a severe decline in automotive manufacturing employment — likely driven by the global semiconductor shortage — increasing restaurant and R&D employment, and declines in part-time work. Ultimately, the April employment data suggest a far more complex portrait of the economy than what is being covered in many sources. Motor vehicle manufacturing in decline due to chip shortages Employment in motor vehicle manufacturing fell by 27,000 in April from March. The number of seasonally-adjusted employees in the sector is now 868,000 workers, which is well below the February 2020 level of 986,000. Employment in the sector has been stagnant in recent months, and the shortage of semiconductor chips appears to be a leading cause. In early April, GM and Ford announced plans to temporarily shut down production lines, possibly affecting the survey’s reference week (which includes the 12th of the…

As support for efforts to increase diversity, equity, and inclusion (DEI) continue to ramp up at organizations in sectors across the country, policy-makers and program designers must carefully consider the dynamics underlying the persistent disparities faced by women, minorities, and persons with disability in obtaining education and employment in science and engineering (S&E). A recent NSF report begins to explore these dynamics, finding persistent disparities in S&E education and employment for women, minorities, and persons with disability. Education According to NSF, diversity in undergraduate and graduate enrollment has continued to increase over the last decade. However, not every minority group experienced increasing enrollment. Specifically, the share of Black or African American students enrolled in the nation’s colleges and universities decreased despite gains by other racial and ethnic groups. While the share of women enrolled in all academic programs has broadly increased across all racial and ethnicity groups, the report reveals that these gains were not spread evenly across S&E disciplines. Women lost representation in the bachelor…

Armed with new data and new methodology, researchers at the Federal Reserve Bank of St. Louis revisited earlier findings on the generational wealth gap and found that “millennials may not be as ‘lost’ as we once thought.” The researchers analyzed data to calculate an estimated life cycle of wealth, mapping out the general path that wealth accumulation tends to follow, with low levels among young families, accumulated savings as people age, and drawdowns in retirement. While older millennials (defined as those born in the 1980s) were still 11 percent below wealth expectations in 2019, the researchers said this represented “significant progress from a 40 percent deficit in 2016.” A note of pessimism was sounded from the authors who found that despite the gains among older millennials’ median wealth, with the oldest among them entering their 40s, “there is less time to catch up and take advantage of wealth-building avenues.” That cohort also shoulders “more debt as a share of income than we would have expected,” the authors said. They also caution that these findings do not capture the effects of the COVID-19 recession, which could mean more difficulties for millennials,…

According to Governing, if 2020 was the year of the governor, 2021 is shaping up to be its end, as lawmakers across the country begin to curtail the sweeping powers of their state executives, following a pandemic and concurrent economic shutdown that led governors to flex their authority in historic new ways. The National Conference of State Legislatures (NCSL) reports that governors in at least 40 states are facing legislation aimed at limiting their emergency powers; since March 2020, 10 bills in eight states have been signed into law that are aimed at increasing legislative oversight of governors’ emergency powers. These new laws were enacted in Arkansas, Colorado, Kansas, Kentucky, New York, Ohio, Pennsylvania, and Utah. Last month, governors in Idaho, Indiana, and Montana  all faced measures limiting their powers,all of which were vetoed, with only Idaho Gov. Brad Little appearing to be successful in fending off the challenge, while Indiana Gov. Eric Holcomb is suing his state’s legislators over a new measure that gives them more authority to intervene when the state’s chief executive declares an emergency. Bucking the trend, Wyoming legislators…

“The Achilles Heel of Reputable VCs,” a recent paper by Nuri Ersahin et al., finds that the most successful venture capital (VC) funds make fewer and smaller investments in states after investment tax credits go into effect. These VCs also co-invest with fewer firms, are less likely to invest in “serial” entrepreneurs and experience fewer positive exits after the introduction of the tax credit. The paper specifically speaks to the investment activity of VC firms that have previously garnered the top one-third of initial public offering (IPO) shares, which the authors call “reputable VCs.” The authors examine this group because they recognize that many investment tax credit studies have found marginal overall effects on investment activity and are attempting to build on this research. The contribution of this paper is showing that, within static topline numbers, the credits are trading activity from successful VCs for activity from new or previously-unsuccessful investors. While the authors’ decision to study this subset of VC firms makes sense within the context of the existing literature, readers are cautioned that these results do not address the impact of…

Independent contractors notched a win as the U.S. Department of Labor (DoL) this month announced the withdrawal of the “Independent Contractor Rule.” The rule, which was issued two weeks before the change in presidential administrations, would have made it easier for employers to classify workers as independent contractors and would have provided employers more security from challenges by contract workers for minimum wages and overtime pay. In withdrawing the rule, DoL said workers would have lost Fair Labor Standards Act (FLSA) protections.  And while the number of independent contractors rose during the pandemic, a recent story from the Rockefeller Institute of Government sheds light on how little is known about the real number of gig workers. “Legitimate business owners play an important role in our economy but, too often, workers lose important wage and related protections when employers misclassify them as independent contractors,” U.S. Secretary of Labor Marty Walsh said in a DoL press release. “We remain committed to ensuring that employees are recognized clearly and correctly when they are, in fact, employees so that they receive the protections the Fair…

The Department of Homeland Security has recently announced its withdrawal of the previously proposed removal of the International Entrepreneur Parole Program. The program allows for DHS to use its parole authority to grant foreign entrepreneurs a period of authorized stay within the United States with the aim that their start-up business can serve as a public benefit through job creation and economic development. The removal of this program, initially proposed on May 29, 2018, stemmed from the Trump administration’s 2017 “Border Security and Immigration Enforcement Improvements” Executive Order 13767 and followed the Trump administration’s initial attempt to delay the effective date of the International Entrepreneur Program. The National Venture Capital Association sued the DHS over this delay, with the judge overturning the administration’s attempt to postpone the effective date of the program. Following this ruling, the DHS proposed the removal of the program in May 2018, and organizations such as NVCA and SSTI submitted public comments, with 892 responses being submitted in total, the majority of which opposed the elimination of the program. In their recent…

Venture development organizations (VDOs) increasingly serve as the Swiss Army knife of small business growth and innovation throughout the country due to their diverse range of entrepreneurial programs, direct financing options, and commitment to local economic development. Their unique roles in the entrepreneurial ecosystems and regional public-private partnerships have allowed for startup success despite the financial instability brought on by the COVID-19 pandemic. Likewise, annual impact reports and program outcomes reveal many VDOs are serving as well-equipped options for confronting the problems of race and gender inequity that exist within the entrepreneurial and innovation landscape. By providing funding, experience, and resources for those who may be overlooked by the major banks and private investment capital pools, VDOs are widening the investment in innovation and commercialization through broader inclusion while simultaneously growing and diversifying the economy of their surrounding areas. In short, the versatility of the VDO model allows for multiple goals surrounding regional prosperity to be achieved by providing the agility and outcome-focus required…

In a previous article, SSTI detailed the limitations of public funding in solving the country’s rural broadband issue. While increased public funding is certainly part of the equation to bring internet capabilities to the near 14 million people who do not have access, there is potential to leverage new innovative technologies to bridge the broadband gap across America. Telecommunications companies and tech companies have developed many innovative ways to build out broadband capabilities in rural areas. In this article, SSTI analyzes some of the developing broadband innovations and solutions. Telecom innovations Telecommunications companies are perhaps in the best position to deploy practical and scalable broadband solutions across the country. Broadband innovations from national telecom companies tend to center around 5G or fiber optic cables. Not all of the burden to expand rural broadband has fallen to national providers, however. Regional providers have begun to develop initiatives in their respective regions as well, primarily funded by state agencies, federal agencies, or competition awards. National telecom companies have begun building out their…