SSTI Digest

A thriving innovation economy requires a robust R&D enterprise — with participation by academia, government, and the private sector. 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 bringing innovative technologies to market. Using data from the recent release of the National Science Foundation’s 2018 Business Enterprise R&D Survey, this SSTI analysis shows that while total R&D performed domestically by private companies in 2018 increased over 2017, as did the share of the R&D that was paid for by companies, this was not the case for all states.

The relief bill passed last night falls short of assisting states that face strains on their budgets and increasing demand for assistance from their constituents. However, the bill does provide $900 billion for the first broad COVID-19 relief package to pass since the CARES Act was signed into law on March 27th. The major items in this legislation are the extension of unemployment insurance benefits, direct payments to individuals, and a new round of loans through a modified Paycheck Protection Program. No broad funding for state and local funding is included, but there are several provisions that will support specific activities. Small Business Assistance The legislation provides $284 billion for a new round of forgivable PPP loans (including the $137.5 billion remaining in the program). Even companies that have already received one loan can be eligible. Business size is limited to 300 employees, and the business must have experienced at least a 25 percent reduction in revenues between the same quarters in 2020 and 2019. Several new types of businesses are now eligible, including 501(c)(6) nonprofits. There are several changes to the forgiveness process…

The final FY 2021 budget provides $1.4 trillion in total federal funding, including increases in some programs affecting the innovation economy. Among SSTI’s Innovation Advocacy Council priorities: EDA’s Build to Scale received an appropriation of $38 million, SBA’s Regional Innovation Clusters received $6 million, and SBA’s Federal and State Technology (FAST) program received $4 million. These are just a few of the federally-funded initiatives that support regional innovation economies and a wide range of federal R&D activities. Department of Commerce EDA: Build to Scale – $38 million (+$5 million from FY 2020) – At least $30 million for the Venture Challenge and $6 million for the Capital Challenge EDA: STEM Apprenticeships – $2 million (no change) EDA total funding – $346 million (+$13 million) NIST: Manufacturing Extension Partnership – $150 million (+$4 million) NIST: Manufacturing USA – $16.5 million (+$0.5 million) NIST: Scientific & Technical Research & Services – $788 million (+$38 million) Minority Business Development Agency – $48 million (+$6 million) – Designates $9 million for broad agency announcements with a focus on innovation…

In a year that has seen the economy drop off a cliff, unemployment skyrocket and racial discrimination shock the consciousness of a nation, one might think all hope is lost. But there are those who are working to take this moment in time and re-emerge on the other side a stronger, more inclusive nation. As many workers face the prospect of a job that may never return, Americans in a more comfortable position who have been able to shift their work to remote locations have applauded the work of those left on the front lines during the current pandemic. And a realization that the economy wasn’t always working for all, and the American dream was becoming more of a nightmare for large segments of the population, is coalescing into action for better jobs and greater inclusion. This week, an alliance of workforce partners has begun to release a suite of tools designed to help those who have worked to build their skills through experience, but lack a four-year degree. A recent report reveals how those who have worked to build their skill set have nonetheless experienced stagnant or downward wage trajectories. Turning that tide to a more positive outcome is the driving force behind many in the workforce development field. In this story we look at the efforts of Opportunity@Work and the Center for Workforce and Economic Opportunity at the Federal Reserve Bank of Atlanta, both of which are part of Markle’s initiative known as Rework America Alliance.

The clean energy sector has continued to feel the economic strain brought on by the COVID-19 pandemic, with many businesses citing the need for additional federal assistance to prevent future employee layoffs and furloughs. Third Way, working together with the Clean Energy Business Network, recently released their second survey of clean energy firms and the impacts that the COVID-19 pandemic has caused to their business. The survey found that over 70 percent of clean energy businesses have continued to be negatively affected by the pandemic, mirroring the results of Third Way’s initial survey of clean tech firms that was conducted in July. In contrast, the United States Census’ most recent Small Business Pulse Survey found 20.7 percent of businesses classified as professional, scientific, and technical services have been impacted. The recent Third Way report also noted that 55 percent of the survey respondents received Paycheck Protection Program (PPP) loans, with 48 percent of participating businesses reporting that they would apply for additional PPP funding if the program were to return. Beyond the need for immediate federal COVID relief, the participating…

The incoming Biden administration continues to outline its priorities for the Federal Communications Commission. According to the Brookings Institution, net neutrality, broadband access and 5G security will be among the next administration’s top policies. Executing on these priorities will require both a new FCC chair and legislative action.   Repealing 2018’s Restoring Internet Freedom Order appears to be a primary goal for the Biden administration, allowing for the reestablishment of net neutrality through a return to 2015’s Open Internet Order. Brookings notes that because of Americans’ increased reliance on the internet due to the COVID-19 pandemic, a Biden FCC “could go further and explicitly prohibit data caps, zero-rating, and interconnection fees within a net neutrality rulemaking.” Beyond net neutrality goals, the incoming administration has expressed a desire to continue the FCC’s work toward bridging the digital divide and increasing the availability of broadband internet access to rural areas throughout the country. In addition to the commission’s current Rural Digital Opportunity Fund, which recently awarded over $9 billion in Phase I funding…

In nearly every research institution, there are individuals who achieve oversized impacts. In the academic environment, publications and citations were the traditional standard bearers for advancing science, engineering and discovery — unfortunately, tenure and title are still stubbornly tied to these measures in universities. Patents became the next tier for measuring performance many years ago. Beyond scientific advancement, however, a paper or patent that isn’t applied or put to practical use has little real value from the perspective of national competitiveness or economic development.  Increasingly, researchers who invent and see through the commercialization of their patents and technologies are being celebrated for impacts to both their fields of study and the economy. The National Academy of Inventors (NAI) has recognized more than 1,400 such people since 2010 through its Fellows program, adding 175 of them this year from more than 100 universities and governmental or nonprofit research institutions across the planet.  Collectively all of these high-impact NAI inventors have produced more than 13,000 licensed technologies, helped to create more…

The Census Bureau is requesting public input on the Economic Census. Conducted every five years, the survey serves as the most comprehensive source of information about American businesses. According to the Census, the survey establishes data for nearly 1,000 industries and more than 20,000 regions, including company revenues, and is used to support measures of gross domestic product and standard industry classifications (i.e. NAICS). The starting point for the 2022 survey will be the questions asked in 2017. Comments are requested by Feb. 12, 2021, and should be directed to Kimberly Moore, the Census Bureau’s chief of the economy-wide statistics division at econ.content@census.gov.

Over 5.2 million homes and businesses are now planned to receive broadband internet access through the Federal Communications Commission’s Rural Digital Opportunity Fund. The FCC announced on Monday that 180 service providers, ranging from satellite companies, cable operators, fixed wireless providers, electric cooperatives, and telephone companies, have been awarded funding to begin expanding broadband internet access to rural areas throughout 49 U.S. states and the Commonwealth of the Northern Mariana Islands. The FCC’s news release explains that these providers “must meet periodic buildout requirements that will require them to reach all assigned locations by the end of the sixth year,” while also noting that “they are incentivized to build out to all locations as fast as possible.” This round of funding, $9.2 billion in total, represents Phase I of the FCC’s Rural Digital Opportunity Fund. Phase II will aim to provide broadband access to areas that are currently partially-served by internet providers and will provide up to $11.2 billion in awards (including $6.2 billion of unused Phase I funds). The FCC’s news release and list of awarded service providers can be…

At a critical junction for the American workforce, the U.S. Chamber of Commerce Foundation (USCCF) has launched a new initiative to develop new models for investment in the workforce of the future. Partnering with Federal Reserve Bank of Atlanta, the Talent Finance initiative advances a new public-private approach to talent development that is intended  to address the challenges and requirements of the new economy — one that competes on talent. In the wake of the pandemic’s upheaval of the economy, workers are facing greater uncertainty and the prospect of jobs that may not return.

COVID-19 could affect 3.1 percent of private sector jobs due to business failure among small and medium-size enterprises (SMEs) in 17 different countries (not the U.S.), according to a new working paper from the Federal Reserve Bank of Atlanta. Findings also revealed that the fiscal cost of an intervention that narrowly targets at-risk firms can be modest (0.54 percent of GDP), while non-targeted subsidies can be substantially more expensive (1.82 percent of GDP) to achieve the same level of effectiveness. Without government support, the paper estimates a failure rates of SMEs of nearly 9 percentage points. In COVID-19 and SME Failures, Pierre Olivier Gourinchas et al. attempt to estimate the impact of the COVID-19 shock on SMEs, which are firms with less than 250 employees. In the European Union, those firms account for 99.8 percent of all employer firms, 65 percent of private sector employment and 54 percent of private sector gross output. The authors note that despite the importance of SMEs, they are vulnerable due to their dependency on debt for financing, especially bank loans. During a crisis like that posed by the pandemic, this dependency and an inability to…

Combining the adages “necessity is the mother of invention” and “two heads are better than one,” the best innovations often arise by broadening the community of minds focused toward addressing a particular problem or need. The Obama Administration took the concept of funding open innovation competitions toward specific issues to heart, encouraging federal agencies to use prizes and challenges as much as practical. Going a step further, Congress enacted legislation in 2011 to make it easier for federal agencies to use the cost-effective tool and the practice was maintained during the four years of the Trump Administration. With early signs suggesting the incoming Biden administration will see a return of many key policymakers and themes from his Democratic predecessor, there may also be a renewed focus on using challenges and problem-solving prize competitions to spur innovation and prosperity coming out of the pandemic. A recent Department of Energy press release adds further weight to this hypothesis and provides a good opportunity for prospective grant seekers to begin to familiarize themselves with the concept in anticipation future federal funding rounds.