SSTI Digest

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.

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.

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.

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

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.”

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 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.

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.

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.

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.

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

Throughout the past decade, the Latino entrepreneurial landscape has experienced both a growth in average annual revenue and an increase in the establishment of new employer businesses. However, Latino business owners remain significantly less likely than white business owners to receive loan approvals from major banks, resorting instead to financing options that expose the business owners to more personal financial risk including personal and business lines of credit and personal home equity loans. The strengths and weaknesses of the Latino entrepreneurial environment are explored in the recently released 2020 State of Latino Entrepreneurship Research by the Stanford Latino Entrepreneurship Initiative. The initiative gathered information from over 3,500 surveyed Latino owned employer businesses, alongside 3,500 white owned businesses, to examine the similarities and differences between the white and Latino entrepreneurial experience.