SSTI Digest

In a recently revised working paper from the Center for International Development at Harvard University, the contemporary rise of populism is explained in a new light, that of unfair economic outcomes, often in the form of low social mobility. In his paper Social Mobility Explains Populism, Not Inequality or Culture, Harvard Growth Lab’s Eric S. M. Protzer explores the close correlation between areas of low social mobility and those that have experienced a rise in populist thinking. Noting that “the realities of populist movements are threatening long-standing democratic institutions and practices,” Protzer points to Hungary and Turkey as examples of countries that have descended into authoritarianism after electing populists early on. He suggests that populism be confronted to ward off similar trajectories in other nations, and that to do so its roots must be understood.   While other hypotheses have focused on wealth inequality or cultural disparities as reasons behind the rise of populism, Protzer writes that neither are as geographically linked to the growth of populism as the lack of social mobility, and he presents empirical evidence to support the…

Utah and Maryland have climbed the ranks and moved into third and fourth place behind two long-standing leaders in the Information Technology and Information Foundation’s (ITIF) State New Economy Index. The index measures states’ structural capacity for successfully navigating a global economy that is increasingly driven by technological innovation. ITIF’s recent release of the updated 2020 index and state rankings provides a long-term picture of how several states have been strengthening their economies for the future.

With the continuing development of efficient technologies, energy consumption may drop 60 percent by 2050 while continuing to provide decent living standards, according to a new study. Research by the University of Leeds, published as Providing Decent Living with Minimum Energy: A Global Scenario in Global Environmental Change, developed a roadmap for lowering worldwide energy usage. The study found that global energy usage could fall over 60 percent from today’s levels through a combination of “the most efficient technologies available and radical demand-side transformations that reduce excess consumption to sufficiency-levels.” In the report, the Leeds researchers modeled four possible futures of global energy use: Decent Living Energy (DLE) where energy consumption trends and advancing technologies have lowered global consumption while maintaining decent living standards; Higher Demand (HD) where goals of lowering consumption have been replaced by higher energy demand; Less Advanced Technologies (LAT) where technological innovations have not been supported; and, finally, a combination of the HD and LAT scenarios. In the Less Advanced Technology model, global…

The venture capital (VC) market appears to be another part of the American economy experiencing a "K-shaped" recovery, with some participants achieving new highs as others are ignored altogether. The PitchBook-NVCA Venture Monitor Q3 2020 shows that the number of VC investments is on track to meet last year’s total (when estimated deals are included, as the report for the first time acknowledges the tendency to systematically miss more recent deals), while deal value is on track for the highest total ever recorded. Similarly, VC firms in total have raised more through Q3 2020 ($56.6 billion) than in all of 2019 ($54.9 billion). This overall success is accruing predominantly to existing VC participants. Startups receiving their first investments have dropped to a historic low at less than a quarter of all deals, and firms raising their first funds account for just 3.3 percent of all capital raised (half of the previous record, set in 2008). Black entrepreneurs may again be among those left out of the market’s success, as a recent analysis of Crunchbase’s Q3 2020 data found that just 37 black entrepreneurs closed VC deals in the quarter (out of more than 1,300 VC…

The Economic Development Administration’s Office of Innovation and Entrepreneurship (OIE) has announced $25 million for the Scaling Pandemic Resilience through Innovation and Technology (SPRINT) Challenge utilizing funding from the CARES Act. EDA is seeking applications from organizations working to address the economic, health and safety risks caused by the coronavirus pandemic through entrepreneurship and innovation. This national competition is designed to support the development, creation, or expansion of programs that accelerate technology-based economic development (TBED) in pursuit of vibrant, innovative economies and economic growth, and respond to the challenges caused by the coronavirus pandemic.  A total of $25 million will be available and applications should focus on activities that will increase regional competitiveness through new product innovation or new technology adoption, improve the commercialization of research, enhance the overall innovation capacity and resilience of a region, and/or leverage regional competitive strengths to overcome challenges inhibiting innovation and job creation due to the coronavirus pandemic. Applicant…

As the National Nanotechnology Initiative (NNI) prepares to enter its third decade, it is seeking public input on what that future should look like. NNI is drafting its 2021 strategic plan and has several big changes under consideration, including a reorganization and shifts in research and commercialization priorities. For instance, as nanotechnology matures and reaches broader applications, so too do questions around “responsible development,” including environmental, health and safety considerations, according to NNI.  Workforce and education needs grow as well as nanotechnology moves from lab to market. The request for public input is available from the Federal Register; additional background information regarding the strategic plan is accessible on the NNI website.  Responses are requested by Nov. 11, 2020.

While new business starts this year are outpacing last year’s rate, those numbers may not signal an increase in entrepreneurship as some press coverage is implying. Business formation statistics from the U.S. Census Bureau released yesterday showed a dramatic 77 percent increase in business applications for the third quarter of the year over the second, but a closer look at those applications reveals that many may not survive.

In the largest single gift in the history of Missouri higher education, $300 million has been donated to support Missouri S&T that will enable the university to establish a new school of innovation and entrepreneurship, among other things. The benefactors are St. Louis businessman Fred Kummer, a graduate of the school who credited the education he received there with his success, and his wife. The Kummers’ gift will be channeled into a new not-for-profit foundation that will support several new initiatives at Missouri S&T including: The Kummer School of Innovation, Entrepreneurship and Economic Development, a new school within the university that will combine business-related academic programs with new programs related to innovation and entrepreneurship at the bachelor’s, master’s and Ph.D. levels.  A new, independent, university-affiliated R&D entity that will include four new research centers focused on infrastructure, advanced manufacturing, artificial intelligence and autonomous systems, and environmental and resource sustainability. This new entity will serve as the university’s node for partnerships with industry, public and private…

"Finders," those who connect potential investors with issuers (e.g., startups seeking funding) within private markets, would not be required to register as brokers under recently proposed Securities and Exchange Commission (SEC) exemptions. Currently, individuals who work to connect investors and issuers — including simply providing issuers with a contact list and regardless of whether any advice is provided or whether the connection is made on behalf of one of the parties to any investment — may be required to register with the SEC as a broker. The proposed rule, announced Oct. 7, defines two tiers of "finders": Tier I being limited to “providing contact information of potential investors in connection with only a single capital raising transaction by a single issuer in a 12 month period” with no investor contact; Tier II is more expansive, allowing ‘finders’ to communicate with investors on behalf of issuers, provided that they do not give “advice as to the valuation or advisability of the investment.” Following the publication within the Federal Register on Oct. 13, the SEC will remain open to public comments regarding these potential exemptions for 30 days…

The depth of the recession is coming into clearer view with the recent release of Gross Domestic Product (GDP) data for the second quarter of 2020. A press release from the Bureau of Economic Analysis (BEA) shows that real GDP decreased by double digits in all 50 states and Washington, D.C.; ranging from a 42.2 percent drop in Hawaii and Nevada to a 20.4 percent drop in the District of Columbia. The release also details the industry contributions to state GDP declines in the second quarter. The accommodation and food services industry GDP decreased by 88.4 percent nationally, decreased in every state, and was the leading contributor to GDP loss in 17 states. The healthcare and social assistance industry decreased by 48.1 percent nationally, decreased in every state, and was the leading contributor to GDP loss in 18 states. As seen in the interactive map below, many states experienced minor quarterly declines in GDP over the five previous quarters. Starting in the first quarter of 2020, as the impacts of the pandemic were beginning to be felt, GDP declined by single digits in every state except Delaware (-11.4 percent), Louisiana (-11.9 percent), and Wyoming (-10.5…

With the general election less than one month away, SSTI has reviewed the 120 state ballot initiatives throughout the country for innovation-related issues. Education, gig workers, redistricting and issues surrounding elections and state budgets are scattered across the country and can affect the future of innovation through funding, talent and political will. Read below for coverage on the initiatives that could have an impact on different segments of the economy and the future of innovation. Education and research Question 1 on the Nevada ballot would remove the constitutional status of the Board of Regents governing higher education in the state if it wins voter approval. It would give the Legislature the power to govern, control and manage the state university system of higher education. Proposition 14 in California would issue $5.5 billion in general obligation bonds for the California Institute for Regenerative Medicine (CIRM), which was created to fund stem cell research after voters approved Proposition 71 in 2004. Last year, CIRM suspended applications for new projects due to depleted funds, according to Ballotpedia. Issue 14 would dedicate $1.5…

As the pandemic turned workplaces upside down, women in particular have been negatively impacted. Women, especially women of color, are more likely to have been laid off or furloughed and the supports that working women relied on, namely school and child care, have been upended. As a result, more than a quarter of women are contemplating downshifting their careers or leaving the workforce, according to Women in the Workplace, the sixth in the series from McKinsey and LeanIn.Org, which calls the current situation “an emergency for corporate America.” And, a recent New York Times story this week detailed how alarm bells are also ringing for women in academia, who already faced obstacles in advancing their research and careers. The study’s findings of women considering leaving the workforce were reflected in data released last week by the U.S. Bureau of Labor Statistics. The data showed that women over the age of 20 left the labor force at four times the rate of men between August and September (using seasonally adjusted data). The McKinsey study also details how Black women already face more barriers to advancement than most other employees, and notes that today they…