SSTI Digest

The early days of vaccinating against the coronavirus might not be the most receptive time to raise issues of antitrust in the U.S. pharmaceutical industry, but a November 2020 Barcelona GSW Working Paper raises several concerns about the degree and effect of common ownership within big pharma. Does this explain the resistance of drug prices to fall? Should Congress take on the likes of brand firms Johnson & Johnson, Merck and Pfizer, in addition to already challenging the tech giants, in 2021?

European scholars Albert Banal-Estanol, Melissa Newham and Jo Seldeslachts found the common ownership linkages between the three largest U.S. pharmaceutical companies mentioned above, already dense at the beginning stage of their research in 2004, increased sharply in density by 2014. Generic firms, in contrast, maintained sparse ownership linkages throughout the study period.

Beginning in early March, potential wage levels will play a leading role in the selection process that determines H-1B visa recipients, worrying some that it may result in a decrease in the number of international students wanting to pursue their education in the U.S. The rule modifications, originally introduced in October 2020 and covered by SSTI here, state that the new procedure will focus on “selecting registrations based on the highest Occupational Employment Statistics (OES) prevailing wage level that the proffered wage equals or exceeds for the relevant Standard Occupational Classification (SOC) code and area(s) of intended employment,” deviating from the current lottery-style system for H-1B selection.

The U.S. Department of Energy announced more than $123 million across 46 awards to projects supporting manufacturing innovation. About half of the funds are going to efficiency improvements in manufacturing processes, with the remainder split between improving chemical manufacturing and supporting more efficient facilities and systems. SSTI members included among the project awardees include Argonne National Lab, Sandia National Lab, University of Cincinnati, University of Michigan, and the University of Tennessee. More information on the program and individual awards are available through the department’s Advanced Manufacturing Office.

Department of Energy advanced manufacturing awards (2021) by location 

Nearly 75 years ago, the head of the U.S. Office of Scientific Research and Development, Vannevar Bush, published what became a seminal report in the science community. The report chronicled the necessity of basic scientific research, investment by government in science and innovation, and identified the reasons to push the limits of our own knowledge. Science, The Endless Frontier was Bush’s call for a committed relationship between government and science. In the spirit on Bush’s pioneering report, the National Academies of Science (NAS) and the Council on Competitiveness (the Council) have published reports outlining the ways in which policymakers, the private sector, and researchers can boost American innovation in the years ahead.

Bush’s answer to the uncertainty of the postwar society was government funding for basic scientific research and innovation. Today, NAS argues that to deal with the grim issues facing our world, we too must embrace the endless frontiers of science and retool our institutions to be more responsive and nimble in the face of immense change.

Entrepreneurship in the U.S. has declined significantly over the past four decades, which has contributed to an annual productivity growth of 3 to 4 percent less than it would be if entrepreneurship had remained unchanged since the early 1980s. Those are among the findings a report from the Congressional Budget Office (CBO), which points to three contributing factors for the decline and outlines measures policymakers could put in place to help spur entrepreneurship.

With the current state of the economy, CBO’s assertion that past recessions have been a contributing factor to entrepreneurship’s decline should raise a greater drive to combat those effects. The report notes that the recession of 2007-2009 in particular played a role, when firms faced restricted access to financing and a weaker economy. The burst of the dot-com bubble in the late 1990s seems to have been a significant and negative turning point for productivity gains by new, technology-focused businesses.

This week’s SSTI Weekly Digest contains a full slate of stories, some of which focus on the federal government. To report these stories without commenting on yesterday’s events and not acknowledge what has occurred over the last 24 hours could give the impression that we do not think the assault on the Capitol was significant. Nothing could be further from the truth. 

In my lifetime, September 11, 2001, and yesterday were the two worst days for America. On 9/11, I along with the rest of the country mourned the loss of thousands as a result of an attack of foreign terrorists, and I wanted justice for those lost. Yesterday, I watched symbols of our democracy polluted by an assault of domestic terrorists.

The Senate chamber where the body deliberates and votes; the speaker’s dais where FDR declared December 7, 1941, a date which will live in infamy; and statuary hall with statues of American heroes from Daniel Webster, Henry Clay and Sequoyah stand were overrun by domestic terrorists intent on preventing the House and Senate from fulfilling their constitutional duty to receive the votes from the Electoral College.

As 2020 came to a close, we received word that former Pennsylvania Gov. Dick Thornburgh had passed away on Dec. 31. Obituaries in the New York Times, Washington Post and Pittsburgh Post-Gazette, rightly focused on his tenure as U.S. Attorney General and his two terms as governor, including his handling of Three Mile Island shortly after becoming governor. But I would like to focus on his legacy as it relates to technology-based economic development (TBED) and as a person.

Before America had a pandemic to fight, U.S. governors collectively expected 10.8 percent more revenue to work with in FY 2021 than current estimates projected in the latest National Association of State Budget Officers (NASBO) survey. Thirty-five states reported in the semi-annual survey released Dec. 23 that general funds had not met expectations for FY 2020; 19 states made mid-year cuts as a result.

The United States Patent and Trademark Office (USPTO) has issued a request for comments regarding the development of a national strategy to build a more demographically, geographically and economically inclusive innovation ecosystem. The request is a follow up to the inaugural meeting of the National Council for Expanding American Innovation (NCEAI), which first met virtually in September 2020. The council consists of industry leaders, academics, and scientists and will help guide the development of USPTO’s national strategy.

Near the end of 2020, Congress passed the FY 2021 defense authorization (overriding a presidential veto) and folded multiple policy bills into the joint appropriations and coronavirus relief bill. This legislation includes new authorizations for semiconductor research facilities, clean and renewable energy innovation, and new studies of assets for critical research areas.

Innovation-related policies within the National Defense Authorization Act (NDAA) for FY 2021 include the following:

The National Institute of Standards and Technology (NIST) has continued to follow through on improvements to federal technology transfer proposed through the Return on Investment initiative. In December, the agency revealed legislative text for statutory changes and, on Monday, released a notice of proposed rulemaking related to Bayh-Dole.

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.