SSTI Digest

As governors continue to roll out their State-of-the State addresses in the month of February, we continue to see a heavy focus on recovering from the pandemic. Given most state’s fiscal condition, governors have been generally hesitant to roll out new initiatives during this time, although broadband continues to receive attention, especially with the renewed attention surrounding its importance during the pandemic. Some states, like Maryland and West Virginia, who are emerging from the pandemic on a better footing than they perhaps anticipated, are ready to forge ahead with tax cuts in an effort to attract business and new residents. Other states, like Illinois, are grappling with projected deficits while trying to maintain services. And a new bond proposal in Maine could help connect workers to jobs in high-growth industries while also spurring development in the state’s industries. This week we catch up with those governors who gave their addresses during these first weeks of February and review each of them for news or initiatives relating to their state’s innovation economy. Alabama Gov. Kay Ivey, Feb. 2, said she wants to renew the state’s economic development…

Discussions surrounding automation’s power and the effect it could have on jobs have only increased over time. The current pandemic adds to the debate of whether automation and robotics, which are unaffected by viruses and have the potential for cost savings, could offer a safer bet for industries than human labor. Such are the debates the authors of a new working paper considered in their research examining jobs that were identified in the past as being at risk of elimination through automation. While building on previous studies from the Organisation for Economic Cooperation and Development (OECD) of the impact of automation on jobs, OECD authors Alexandre Georgieff and Anna Milanez seek to expand that knowledge to a cross-country context and the paper claims to be the first to evaluate employment outcomes using the task-based measure of automation risk developed by the OECD. The researchers found no support for net job destruction at the broad country level. However, they did find evidence that automation has worsened employment prospects for some workers including skilled agricultural workers, clerical support workers, and metal and machinery workers.   …

Metropolitan areas in the U.S. with fewer than 370,000 residents are more likely to be more economically reliant on R&D performed by colleges and universities than larger metros, according to new SSTI analysis. Three data points are used to consider how R&D at institutions of higher education is impacting a region’s economy: NSF’s Higher Education R&D (HERD) data on expenditures at individual institutions; metro area Gross Domestic Product (GDP) data from the Bureau of Economic Analysis; and population estimates from the Census Bureau. The resulting analysis shows that despite larger metro areas producing a greater total amount of HERD, they are typically less reliant on these expenditures directly powering their economies.

This week, the U.S. Economic Development Administration announced that the Build to Scale program has opened for applications. The Build to Scale program provides operating funding for tech-based economic development initiatives in regional economies. This program has long been a top priority for SSTI’s Innovation Advocacy Council, and we are happy that our continued success in raising the program’s appropriation means this year’s funding opportunity will award $38 million in grants. The FY 2021 program is comprised of two competitions, the Venture Challenge grants with two funding levels: one at $750,000 to build programs and another up to $1.5 million to scale programs; and the Capital Challenge, which has increased its level of funding and offers grants up to $400,000 to increase access to capital in communities where risk capital is in short supply. Eligible applicants for EDA financial assistance under this Notice of Funding Opportunity include: states; Indian tribes; cities or other political subdivisions of a state; an entity whose application is supported by a state or a political subdivision of a state and that is a nonprofit organization, an…

The Government Accountability Office (GAO) has updated its Technology Assessment Design Handbook, a program evaluation tool designed to assist in the development of robust technology assessments. First released to the public in December 2019, the handbook now includes additions based on the experiences of GAO teams, a review of relevant literature, and comments submitted by external experts. It also provides a high-level process for developing policy options. While the tool is designed for use by GAO staff, its methods and strategies are useful to any organization conducting a technology assessment. Broadly, the goal of a technology assessment is to determine the effects of a certain technology. To reach this goal, the GAO tool identifies three general design stages during the technology assessment process: determining the scope, developing an initial design, and implementing the design. The handbook also provides users with seven different considerations when designing a technology assessment. These include the iterative nature of technology assessment design, congressional and policymakers' interests, resources available, independence, engagement with internal and…

Ohio unveiled the Columbus Innovation District this week, marking the third such announcement in less than a year, with a $100 million commitment from JobsOhio, the state’s nonprofit economic development corporation. Other partners in the Columbus initiative include Ohio State University, which will contribute $650 million, and Nationwide Children’s Hospital, with a $350 million commitment. The district is intended to bring together globally recognized education and healthcare research institutions to help create in-demand jobs and fuel $3 billion in economic impact for Columbus and Ohio over the next 10 years. The announcement follows closely on the heels of a similar district in Cleveland that saw a combined commitment of $565 million between the state, JobsOhio, the Cleveland Clinic and other partners, and a Cincinnati Innovation District announced last March. Gov. Mike DeWine said the Columbus district “will be a hub for innovation and growth in Ohio, expanding science, technology, engineering and math (STEM) educational opportunities, positioning Ohio to compete nationally for growing tech and healthcare employers.” The new Columbus initiative will include…

Policymakers will need to consider the larger social and economic conditions associated with efforts to decarbonize the U.S. energy system if the nation is to reach net-zero carbon emissions by 2050. These broader considerations of future energy policy play a core role within the National Academies of Sciences, Engineering, and Medicine’s recently released report Accelerating Decarbonization in the United States: Technology, Policy, and Societal Dimensions, which details the varying dimensions of research and policy activities that are needed throughout the next 30 years to reach net-zero emissions by midcentury. While the environmental benefits of decarbonization efforts are apparent, the National Academies report examines how these policies can also serve as drivers for the broader economy and simultaneously stimulate investment in innovation. The report reveals how future policy changes throughout the energy system can address the long-standing inequities throughout the nation’s energy grid, noting that policymakers should consider inclusion a core goal of any future energy sector policy. Equity-based policy recommendations in the report include the establishment of…

While natural gas production has continued to expand throughout the Appalachian region, the surrounding communities have yet to experience the economic and social benefits that were initially seen as surefire byproducts of the natural gas industry’s growing footprint within the area, according to a new report. The newly released study by the Ohio River Valley Institute weighs the impact natural gas production has had on the national economy against the continuing decline of jobs, income, and population levels throughout the Appalachian region. In their report, the Ohio River Valley Institute explores the economic and social impacts that the natural gas industry, and more specifically the industry’s use of hydraulic fracturing, has had on 22 counties within West Virginia, Pennsylvania and Ohio. While these counties experienced an increase in their contribution to the U.S. gross domestic product between 2008 and 2019, local economic prosperity within the region declined. This included a decrease in the counties’ share of the national population, their share of the nation’s personal income, and the area’s share of national jobs. The authors make note of several…

A working paper from the Innovation Growth Lab (IGL) series featuring researchers from the Max Planck Institute for Innovation and Competition provides causal evidence on the effectiveness of innovation vouchers and adds to the argument for implementing small-scale government funding mechanisms like innovation vouchers. Innovation vouchers are designed to link small and medium-sized enterprises (SMEs) with external knowledge resources to promote small-scale innovations. Marco Kleine, Jonas Heite, and Laura Rosendahl Huber conducted a large-scale randomized control trial on a cross-industrial innovation voucher program established by Innovate UK that included all SMEs in the United Kingdom. The treatment group in the study consisted of 1,107 SMEs that received an innovation voucher up to £5,000 (approximately $6,950 US) to conduct an innovation-related project in collaboration with an outside expert or partner of their choosing. Kleine et al. then conducted two surveys on the treatment and control group. The first survey was conducted one year after the award of the voucher and the second survey was conducted two years after the award. According to the…

The Association of Public and Land-grant Universities (APLU) is building a program to create new career pathways for low-income rural students. Through a partnership with the North Central Regional Center for Rural Development at Purdue University, the program will address the needs of rural employers by creating a model to identify rural workforce needs, developing stakeholder partnerships, mapping workforce pathways, recruiting and supporting low-income rural learners, and building entrepreneurship and leadership skills. In a press release, APLU noted that the program will work to help low-income rural students looking for their first career options while helping non-traditional working-learners, such as displaced workers. The Federal Reserve has studied labor market outcomes in rural and urban areas and found that workers with a high school education or less in non-metropolitan areas experience higher unemployment than similar workers in metropolitan areas. Labor force participation, the measure of an economy’s active workforce, is also lower in rural regions of the country. APLU’s program seeks to address these labor concerns.

Already weakened before the pandemic, a new report from the National Defense Industrial Association (NDIA) finds that the health and readiness of the U.S. defense industrial base — composed of manufacturers, technology innovators, and systems integrators, research organizations, and suppliers — faces particularly large obstacles in the areas of innovation and supply chain. Assessed along eight different metrics, NDIA assigns an overall letter grade indicating the health and readiness of the defense industrial base. This year’s report assigned the final grade of a “C,” which is a passing grade, but leaves much room for improvement. The first area NDIA identifies as one of concern is innovation, which it says has declined since 2018. The driving factor for this poor innovation score is a drastic decrease in average annual patent applications in both the manufacturing and scientific R&D services industries. While not enough to outweigh these negative factors, the report also found a few positive areas. One of these positive factors was a rebound in innovation competitiveness, or the U.S. share of global R&D investment, which decreased from 2018 to 2019 but…

Editor’s notes. Feb. 18: We have updated the article to reflect assignments to key subcommittees in both the House and Senate.  Nearly a month into the 117th Congress, formal committee assignments are being announced. The highest-priority committees for tech-based economic development policies are those affecting science and small business issues. The lists, below, provide a description of those committees in the Senate and House for the next two years. Senate Commerce Committee The U.S. Senate Committee on Commerce, Science and Transportation authorizes policies and programs related to trade, manufacturing, science and transportation, including the National Institute of Standards and Technology (NIST), National Science Foundation (NSF), and the Build to Scale program at the Economic Development Administration (EDA), as well as shared responsibility for the Small Business Innovation Research (SBIR) program with the small business committee. Majority   Minority Maria Cantwell (D-WA), Chair Tammy Baldwin (D-WI) Richard Blumenthal (D-CT)…