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A two-page proposal for a $40,000 Phase IA award? Phase II performance ratios required for companies receiving 10 and 25 Phase I awards over their lifetime? Halving the budget for STTR and shrinking university partner share? Creating a 0.25% carve-out of DOD SBIR funds for phase III awards up to $30M each? Limiting all federal technical assistance and outreach to 25 states with the fewest SBIR/STTR awards? Stronger, broader, tougher foreign risk requirements for the companies and agency due diligence? 

By automating routine tasks, improving data analysis, and enhancing marketing efforts, AI can revolutionize how small firms conduct business—and that should impact the type of assistance technology-based economic developers offer their innovation-driven entrepreneurs. Understanding how small business owners perceive and utilize AI is crucial for developing strategies that support their growth and competitiveness. 

Overall U.S. gross domestic product (GDP) has steadily increased over the past decade. However, the growth in the sectors which drive it has been uneven. Data from 2014 through 2023 reveals that sectoral contributions to private industry GDP have shifted from manufacturing (down 1.57 percentage points since 2014) and mining, quarrying, and oil and gas extraction (down 1.05), to professional and business services (up 0.85) and construction (up 0.72).

NOTE: The nation's community of technology-based economic development organizations has entered annual report season, and we've already seen several releases from SSTI members. All document the impact TBED can have on advancing research, moving it to market, and helping businesses improve their profitability and competitiveness.

NOTE: The nation’s community of technology-based economic development organizations has entered annual report season, and already we've seen several released from SSTI members. All document the impact TBED can have for advancing research, moving it to market, and helping businesses improve their profitability and competitiveness.

As this week’s recent research article mentions, R&D tax credits work, so it isn’t surprising several states have either proposed, amended, or enacted research and development (R&D) tax credits for both the current fiscal (2025) and new (2026) fiscal year in efforts to encourage innovation and economic growth. Some specifically target life sciences or biotechnology sectors while others focus on attracting new or existing companies and startups or to further develop life sciences and/or biotech sectors and hubs.

Research and development (R&D) tax credits are a common cornerstone of federal and state innovation policies and are offered to companies in hopes of spurring economic growth. But do R&D tax credits deliver the economic boost policymakers expect? Previous studies addressing this question often focused exclusively on either firm-level data or aggregate economic data. Firm-level studies typically found that R&D tax incentives significantly boost companies' investment in research and development.

On Feb. 10, Tennessee Gov. Bill Lee presented his 2025 State of the State address along with his FY 2025-2026 budget proposal and legislative agenda.

Higher education R&D (HERD) expenditures have steadily increased over time. They’ve soared past $100 billion in the most recent data year, fiscal year (FY) 2023, growing in every state. However, the gains are not shared equally in all fields of research.

The U.S. Senate confirmed Kelly Loeffler to run the Small Business Administration by a vote of 52-46 on Wednesday, Feb. 19. Spending more than two decades in technology and financial service businesses, Loeffler is a former owner of the WNBA team, the Atlanta Dream and served in the U.S. Senate by appointment from 2019-2021.

In this week’s continuing coverage of gubernatorial addresses as they discuss the innovation economy, the following highlights have been selected from the State of the States or budget addresses given between Feb. 5 and Feb. 13, 2025, by the governors from Connecticut, Maryland, New Hampshire, and West Virginia.

SSTI is following personnel and policy changes across the federal government that will likely affect programs of importance for innovation-driven businesses and for growing stronger regional innovation systems across the country. There have been several announcements in the past week alone, so this week’s federal news column is fairly lengthy.

The Senate confirmed Howard Lutnick as the Secretary for the Department of Commerce on Tuesday, Feb. 18, by a vote of 51-45. Trade talks and tariff negotiations are expected to be top priorities for the secretary as the agency is expected to undergo several structural changes during the coming months.

The National Science Foundation issued a brief statement to invited NSF Engines proposers last week indicating its decision to delay the Feb. 11 deadline for the current competition for Regional Innovation Engines to a new date yet to be determined. The explanation states, “NSF anticipates a revision to the NSF Regional Innovation Engines program solicitation (NSF-24-565).

As the federal R&D budget has grown, peer review committee compositions changed, and federal research awards have grown in size, the threshold to obtain the designation as a Carnegie R1 university of $50 million in total research spending to earn the designation was met by 42 additional universities for the first time, bringing the total to 187 nationwide.

The National Science Foundation, on behalf of the White House Office of Science & Technology Policy (OSTP), is providing the opportunity for public input toward the development of a national Artificial Intelligence (AI) Action Plan, as directed by President Trump’s Executive Order 14179.

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In a recent executive order, The White House is calling for the federal government to establish a Sovereign Wealth Fund (SWF) that will "promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish economic security for future generations, and promote United States economic and strategic leadership internationally.”

Answering the question of what impact a flat 15% F&A reimbursement rate would have on the nation’s SBIR startups requires real data. The data doesn’t currently exist that we are aware of.

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