SSTI Digest

Eleven states are holding gubernatorial elections this year with nine incumbents seeking reelection, two of which are facing off against their lieutenant governor. Only one governor, Steve Bullock in Montana, is term-limited and unable to seek reelection. In Utah, Gov. Gary Herbert is stepping down from the position he has held for 10 years. While many of the races this year will reflect referendums on the current governor’s response to the COVID-19 pandemic, many of the candidates have announced their innovation and economic development initiatives. In the final stretch of the gubernatorial race, here are some of the candidates’ innovation-related policies, positions and prior accomplishments. Delaware In Delaware, Republican Julianne Murray is running against incumbent Democrat John Carney. According to her campaign site, Murray will spur entrepreneurship by cutting taxes, streamlining regulations, and adopting a uniform permitting code to help reopen and grow small businesses. She created the “Small Business Bill of Rights”, a document that outlines the rights and privileges of small businesses in Delaware.   Carney, with help from his Division…

A recent report by PitchBook indicates that angel investing is seeing fewer unique participants and a greater share of activity from groups than individuals. The same report provides an analysis of startup outcomes based on whether the company began with an angel or venture capital (VC) round and finds companies with angel backing initially look stronger but have a more mixed record over the long-term. Angel investing has been robust the past decade, with about $3 billion invested each year since 2014. While angel participation by deal value has been static, the total VC market has doubled, bringing angels’ share of the market down from four percent in 2014 to two percent last year. From 2014-2019, participation in investment deals by angels appears to have declined overall,[1] but more sharply among individual angels (from a peak of 2,615 deals with individual angel participation in 2014 to 1,078 in 2019) than for angel groups (from a peak of 1,034 deals with group participation in 2014 to 615 in 2019). Paralleling this decline in deal activity is a decrease in the number of different angels (individuals or groups) participating in deals in any given…

The Central Intelligence Agency is launching CIA Labs, a federal lab and in-house research and development arm intended to drive science and technology breakthroughs surrounding intelligence challenges. It establishes the CIA as a research partner for other federal labs, academia and industry in disciplines including artificial intelligence and biotechnology, quantum computing, advanced materials and manufacturing. Its research areas include: advanced materials and manufacturing; artificial intelligence, machine learning, and data analytics; bioscience and biotechnology; distributed ledger/blockchain-enabled technologies; virtual and augmented reality; high performance and quantum computing; future wireless and telecommunications technologies; and, robotic, autonomous, and human interface systems. As a federal lab, it will enable officers to obtain patents and licenses for intellectual property, as well as provide internship and externship opportunities. CIA Labs is asking for interested partners to reach out about general research projects and Cooperative Research and Development Arrangements (CRADAs). Organizations interested in partnership…

This week, the U.S. Economic Development Administration (EDA) announced the 2020 Build-to-Scale awards. In this round, nearly $35 million was awarded to 52 organizations to support regional strategies advancing entrepreneurship and innovation. Through the end of 2019, funded organizations had worked with more than 6,200 startups, facilitating $1.6 billion in investment and the launch of more than 9,000 products, according to EDA. SSTI has been a proponent of the Build-to-Scale program, which had not received any federal appropriations prior to the creation of SSTI’s Innovation Advocacy Council. Please join us in congratulating the member organizations receiving or participating in funded projects this award cycle, including: BioSTL, Emory University, Invest Nebraska, Iowa Innovation Corporation, MassVentures, New Orleans BioInnovation Center, University of South Dakota, University of Utah, and Valleys Innovation Council. The full list of 2020 awardees is available, below. 2020 Venture Challenge Baton Rouge Health District, Baton Rouge, Louisiana, $599,385 Baylor University, Waco, Texas, $1.5 million BioSTL, St. Louis, Missouri, $1.5 million Boise State…

Many of the most successful technology, life science and advanced companies in the country received financing in the form of an equity investment during their rapid growth and scaling stages of development.  Whether viewed as valiant, villains or vultures, the presence of individuals and firms willing to provide capital to companies when they have few physical assets or revenues is strongly associated with healthy regional innovation economies. As a result, considerable policy attention has been focused by states on increasing the amount of risk capital flowing to local startups. The objective is simple: high wage, innovation-driven economic development. State policy makers want those entrepreneurial companies to grow jobs and wealth within their boundaries. Approaches vary – and achieve considerable variation in their degrees of success – but one of the most widely implemented are angel investment tax credits, found in 31 states in the study discussed below. Findings published in a new academic working paper included in a recent National Bureau of Economic Researchers newsletter suggest state policymakers should have considered alternate uses of the…

The Lab-to-Market (L2M) subcommittee of the National Science and Technology Council’s Committee on the Science and Technology Enterprise is launching a $325,000 prize competition to highlight successful examples of innovation ecosystems, particularly existing resources that support underserved communities or remarkable responses to the pandemic environment. There are three categories for applicants with an informational webinar scheduled for Sept. 25, before the portal opens on Sept. 30. The prize competition will also recognize impactful ideas for using prize funds to develop strong connections and support within the R&D innovation ecosystem. The three categories in the competition are: •    “Super Connector” – Prizes of $10,000 for current efforts successfully including networks of underrepresented communities in the R&D innovation ecosystem.  •    “Ecosystem Responder” – Prizes of $10,000 for timely and effective responses to the pandemic environment.  •    “Visionary” – Prizes of $25,000 for the most creative and actionable ideas to build an inclusive R&D innovation ecosystem.…

For the first time, individuals with defined measures of professional knowledge, will be allowed to participate in private capital markets without having to meet the traditionally required income or net worth levels. The U.S. Securities and Exchange Commission (SEC) has broadened the definition for who the commission views as an ‘accredited investor’ and a ‘qualified institutional buyer’. The amendments to the definition also expand and update the list of entities that may qualify to participate in certain private offerings to include tribal governments and other organizations. With these amendments to the accredited investor definition, the SEC aims to expand investment opportunities in private markets. Prior to these changes, any individual, regardless of professional knowledge, was required to maintain a net worth of $1 million or an annual income of $200,000 ($300,000 if combining with a spouse), to be considered an accredited investor. With the expanded definition, outlined in detail below, the SEC believes that it can maintain investor protections while opening the door to broader participation within the private capital markets. The definition of…

A recent brief shows the troubled relationship between student loan debt and entrepreneurship. The report, Student Loans and Entrepreneurship: An Overview from the Ewing Marion Kauffman Foundation, found that of those student borrowers who currently own or plan to own a business, nearly half reported that their student loans affected their ability to start a business. Additionally, among those who did start businesses, higher levels of student loan debt were negatively related to business income and employment.

The United States Patent and Trademark Office (USPTO) has launched the National Council for Expanding American Innovation (NCEAI), an initiative aimed at expanding innovation and entrepreneurship in America. The council consists of leaders in industry, government, and academia. The USPTO created the council to develop a comprehensive national strategy to build a more diverse and inclusive innovation economy. “Through the National Council for Expanding American Innovation, we plan to develop a national strategy for promoting and increasing the participation of underrepresented groups as inventor-patentees, entrepreneurs, and innovation leaders,” said U.S. Secretary of Commerce Wilbur Ross. In particular, the council plans to focus on increasing the involvement of women and underrepresented groups in STEM and the innovation economy. The USPTO will publish ongoing reports as the council progresses towards their goals. Additional information on the NCEAI can be found here.

Consideration of a state’s trends in the distribution of SBIR awards by federal agency may help program leaders and policy makers optimize the design and performance for state and regional support of innovation-based startups. For instance, knowing which federal agencies provide the dominant share of awards in a state can inform a program’s marketing and outreach efforts, and, more importantly for the startups being assisted, it can guide recruiting the right mix of mentors and knowledge assets to a program’s technical assistance capabilities. The data also can inform efforts to attract investors and potential customers with similar alignment of interests with companies in a state’s SBIR portfolio. SSTI’s focus this week on the agency distribution of SBIR awards by state over the past decade reveals some interesting insights. Next week we will take a deeper dive into the data and examine awardee distribution trends at the regional level. An exclusive SSTI analysis reveals that for the 10-year period from 2009 to 2018, two federal agencies were the top contributors to SBIR/STTR spending in every state and the District of Columbia. The Department of Defense (DoD) accounted for the greatest SBIR/STTR spending in 29 states while the Department of Health and Human Services (HHS) was the greatest funder in 22 states. This trend remains the same when including 2019 award data, although it is important to note that as of the writing of this article, DoD’s complete 2019 SBIR/STTR data was not available.

[Update Oct. 1] Editor’s note: On Sept. 25, the Trump campaign released a new document, “The Platinum Plan,” containing proposals described as “President Trump’s promise to Black America.” Our original story has been updated to reflect new proposals stated in this plan. In advance of the Republican National Convention, the Donald Trump reelection campaign released a second term agenda. This plan contains 50 items, most of which are goals (e.g., “Create one million new small businesses”), but some provide insight to more specific policy actions that the administration could pursue. Combining the relevant items from this plan with the White House’s actions over the past term, we can identify possible implications of a second Trump administration for science and innovation. If the Trump campaign releases more detailed plans for a second term, SSTI will provide updates. As organized in SSTI’s coverage of Joe Biden’s plan, this overview of Trump’s proposals is broken down into the following topics: higher education, immigration, infrastructure, Opportunity Zones, research and development, small business, and workforce development.   Higher…

This year marks the 30th anniversary of the Georgia Research Alliance (GRA), a public-private partnership that works with both the University System of Georgia and the Georgia Department of Economic Development to expand the research capacity at the state’s universities and seed and shape startup companies. When it was formed in 1990, GRA was a new kind of enterprise. Leaders in state government, private industry and academia all came to the table to strengthen cohesion among Georgia’s public and private research universities – and, ultimately, to bring more research dollars and discoveries to the state. Today it is recognized as a key player in building the state’s reputation as a center of discovery and invention.