Tuesday, July 1 | 3:00 p.m. EST

Whether your region is just beginning to address market failures in risk capital availability and performance for innovation-centered companies or your current efforts could use a refreshing check-in among peers, please plan to join us for the kick-off of our Innovation Finance Community of Practice Series. 

In 1978, Massachusetts took a risk and made an $8.5 million investment into one of the earliest technology-based economic development (TBED) initiatives in the world. The commonwealth, among the states hard-hit by the global manufacturing restructuring underway at the time, which led to the deep recession of the early 80s, knew it needed to try something different to restore its economy and its long-term competitiveness.

The U.S. Department of Commerce recently announced that the agency formerly known as the U.S. AI Safety Institute has been renamed the Center for AI Standards and Innovation (CAISI). The center’s priority focus areas also have been adjusted so that CAISI can serve as industry’s primary point of contact within the U.S. Government to facilitate testing and collaborative research. According to the Commerce announcement, CAISI will:

The U.S. Small Business Administration posted a notice in the June 9, 2025, Federal Register of SBA’s intent to establish a Manufacturing in America Advisory Committee to “provide strategic guidance, advice, and recommendations to the U.S. government and relevant stakeholders on matters related to growth, supply chain resilience, and innovation of small manufacturing businesses across the country. The committee will act as the collaborative body to ensure the sector's needs, challenges, and opportunities are addressed.

With Q1 2025 venture capital (VC) data stabilized and reports coming out on investment activity, it is a good time to review 2025 VC investment from a TBED perspective. Many published reports on VC activity include deals at the top end of the size range that—with individual transactions now reaching- billions of dollars—can swing some of the metrics and mask the underlying nuances facing smaller companies and markets. While investment levels are trending up, the totals are driven by mega deals and AI companies.

Many SSTI members will attend the annual BIO International Convention, which will be held this year in Boston from June 16 to 19. There, they join a cohort of organizations with various connections to the life sciences, including contract research and manufacturing companies, academic centers, "big" pharma, "little" pharma, and foreign nations representing their life sciences efforts. 

In fiscal year (FY) 2023, federal obligations for science and engineering (S&E) to universities and colleges totaled $49 billion—$29 billion more than FY 2000, and a 10% increase from the prior year. The growth is less rapid when adjusted for inflation (2017 USD), with just over $40 billion in real obligations in FY 2023, a 5% increase over the year prior and $12.6 billion (or 46%) increase over the FY 2000 value.

The Australian Strategic Policy Institute’s (ASPI) report, ASPI’s two-decade Critical
Technology Tracker: The rewards of long-term research investment, aims to identify
which countries and institutions are leading in high-impact research across 64 critical
technological domains, including defense, space, energy, environment, artificial

To grow their local populations and STEM workforce, communities across the country are experimenting with resident/worker attraction programs, as we have previously covered. But how effective are these programs? A recent study from the W.E. Upjohn Institute for Employment Research offers new insights by analyzing Tulsa Remote’s track record from its inception in 2018 to 2023.  

The White House Fiscal Year 2026 discretionary budget proposal outlines a significant shift in federal spending priorities, proposing substantial reductions in non-defense discretionary funding, which, if enacted by Congress, would impact scientific research and regional economic development support across numerous federal agencies. 

SSTI recently examined the investment histories of 31 Venture Development Organizations (VDOs) across 20 states to quantify their impact and help to characterize how the broader technology-based economic development (TBED) community supports long-term innovation-driven economic and financial returns. Our top-level findings showed that

Long concentrated geographically, venture capital also is growing more concentrated in a small number of larger deals, as SSTI has reported in recent Digest issues. In fact, deals under $100 million—not a small figure in itself—have fallen by 71% according to SSTI’s analysis of PitchBook data. Even more troubling is evidence showing deals under $100 million are moving to later-stage investment and away from early-stage companies.

Commercializing patented inventions is a common goal of innovation policy, as it drives company revenues and regional economic growth. However, tracking the commercialization of inventions stemming from R&D is challenging. While programs like the Small Business Innovation Research (SBIR) program are explicitly designed to encourage commercialization, most evaluation tools rely on approaches that may be anecdotal or incomplete, such as surveys, case studies, or patent counts.

From 2022 to 2023, domestic R&D expenditures increased 4%, or $29 billion, but remained nearly unchanged when adjusted for inflation. This apparent slowdown follows a streak averaging nearly 12% ($59 billion) year-over-year growth from 2018 to 2022, and 8% over the past decade from 2014 to 2023. Adjusting for inflation paints a different picture of the growth trends, with a more modest annual average of 8% from 2018 to 2022 and 6% over the past decade.

The U.S. National Science Foundation (NSF) is requesting information from the public to help shape potential future updates to its Key Technology Focus Areas (KTFAs). NSF’s KTFAs directly influence and shape innovation- and economic development-related programs.

SSTI has updated its Key Technology Area Investment Data Tool with new and refreshed data spanning January 1, 2013, through June 30, 2025. The tool comprises two interactive visuals and uses Pitchbook technology verticals selected to align with many of the key technology focus areas (KTFAs) defined in the CHIPS and Science Act of 2022 (CHIPS).

Over the past 40 years, many people involved in SBIR and empirical analysts in the research, finance, and technology sectors have said SBIR awardees, as a group, are uniquely important for America’s innovation goals.

Please note: this article is not intended as a comprehensive review of Public Law No. 119-21, nor should our reading of the law be treated as tax or legal advice.

The overlap between applicants and recipients of the three large regional innovation approaches attempted by the federal government so far continues with the July 9, 2025, NSF narrowing of the field for the second NSF Regional Innovation Engines competition to 29 semifinalists across the country.