This week we take a look at the Trump administration's proposed $54 billion increase in defense spending, NDD United's letter to Congress (which SSTI signed), and testimony in favor of TBED funding.

The Senate confirmed Wilbur Ross as Commerce secretary Monday night by a vote of 72 to 27 and he was sworn into office by Vice President Mike Pence on Tuesday. The 79-year-old billionaire investor becomes the 39th head of the office, which oversees several key economic development organizations including the National Institute of Standards and Technology, the Economic Development Administration, the U.S. Patent and Trademark Office, and the Economic and Statistics Administration. In his address to commerce department employees on Wednesday, Ross said the president has given the department “more responsibility than ever before.” In addition to being more involved with “rebalancing a trade system that has gutted American manufacturing,” Ross said that Commerce will “play a key role in his historic effort to relieve the crushing burden of regulation that has shifted American economic growth overseas and made us uncompetitive on the world stage.”

State and local governments invested $3.8 billion in R&D at institutions of higher education in FY 2015, with the top ten states accounting for $2.3 billion – roughly 59.4 percent of overall spending, according to an SSTI analysis of NSF data. From FY 2011 to FY 2015, total spending remained relatively unchanged (0.1 percent decrease). Over that same period, colleges and universities in 25 states reported increased expenditures from state governments, while 25 and the District of Columbia reported declines.

Private funders invested more than $2.3 billion in basic research at 34 universities and eight research institutions in 2016, with more than 84 percent of funds going to research in the life sciences, according to the Survey of Private Funding for Basic Research.

Last month, SSTI highlighted a recent research paper on the debate regarding university-industry collaboration’s impact on the academic ideal of open sciences and reduced academic productivity. In a new working paper from National Bureau of Economic Research (NBER), MIT researcher Heidi Williams examines another controversial Intellectual Property (IP) topic – whether patent systems, in practice, improve the alignment between private returns and social contributions.

In Part 1 of this two-part series, SSTI examined NIH’s proposed changes that will place limits on individual researcher funding. In Part 2, impacts of the limits are explored.

In the May 18th Digest, proposed changes to the National Institutes of Health (NIH) grants funding process were highlighted. The changes – tilted the Grant Support Index (GSI) – would impose a general limit of three major grants per researcher. Since the article was published, the NIH’s director, Francis Collins, announced during a U.S. House appropriations subcommittee that NIH intends to proceed with the GSI proposal. In this second part of the series,SSTI reveals areas within the field of tech-based economic development that could see the benefits and/or the negative unintended consequences of these changes.

The Kauffman Foundation’s recently updated Index of Startup Activity finds that startup activity has increased for the third consecutive year and has now reached pre-recession levels. Nationally, the index, which measures business startup activity from 1997 to 2016, increased moderately after two years of sharp growth.

In an effort to incentivize large-scale industry partnerships, Innovation, Science and Economic Development (ISED) Canada will invest up to C$950 million (US$708.5 million) between 2017 and 2022 in superclusters as part of the nation’s Innovation and Skills Plan.

If it takes a village to raise a child, it may take an entire educational support system as well as public policy reform and funding to get that child into a skilled technical job. A two-year study coordinated by the National Academies of Sciences, Engineering, and Medicine found that the disjointed method of workforce development approaches in the U.S. may be hampering the economic competitiveness of the country.

While U.S. Secretary of Agriculture Sonny Perdue has announced that the Rural Development agency would be elevated under a reorganization plan because it would be placed under the direct oversight of the Secretary, not everyone is viewing the consolidation as an elevation.

More than 46 million Americans, nearly 15 percent of the population, lived in poverty in 2015, according to the U.S. Census Bureau’s Small Area Income and Poverty Estimates. Compared against census data for 1999, more than 2,500 of the country’s 3,100-plus counties saw their rate increase. In 2015, 753 counties had a poverty rate of at least 20 percent — and 415 of these counties have been above this threshold in census data dating back to at least 1989.

Two recent U.S. Supreme Court decisions will greatly shape patent holder rights by limiting where patent lawsuits can be filed and restricting patent rights after a product is sold. These rulings are considered by many analysts to be beneficial for startups, small businesses, and consumers. The biggest losers will be patent trolls – patent owners who collect IP rights only to seek infringement damages – who likely will face more pushback against their patent lawsuits and may see fewer settlements.

By its very nature, economic dynamism can unsettle local economies. As businesses dissolve, jobs are lost. Technological shifts can drastically alter – or even replace – companies, occupations and entire industries. As these ripple effects move throughout communities, it is easy to focus on the negative impacts, but this loses sight of the importance dynamism has on national economic health.

While much recent attention has been given to the Cancer Moonshot research effort, the National Cancer Institute established a network of publicly funded cancer cooperative research groups more than 50 years ago to evaluate new treatments for efficacy and safety. JAMA Oncology details an investigation that examined the extent to which positive NCI-sponsored cancer treatment trials have benefitted patients with cancer. The study estimated that 3.34 million life-years were gained in the population of U.S. patients with cancer through 2015, at a cost of $125 per life-year gained.

The Blackstone Charitable Foundation has announced its first cohort of eight organizations in the Chicago-area entrepreneurship challenge. Named the BX Challenge, up to $3 million in grant funding will be provided over three years to innovative organizations that effectively recruit and support diverse entrepreneurs and scale startups in the Chicago area. The selected programs will serve underserved populations, including communities of color, women, veterans, and immigrants.

Among the $410 million in items Gov. Rick Scott struck from Florida’s 2018 budget were more than 100 appropriations totaling more than $20 million that would support STEM education, higher ed, R&D and innovation. Instead, the governor wants the state to spend more money promoting tourism. Scott vetoed more than $20 million for innovation-oriented economic development items.

The SBIR program has been a legislated requirement of the Department of Defense, an agency responsible for roughly 40 percent of all federal extramural R&D spending, for more than three decades. One might expect that over that amount of time, the Department of Defense would have developed a system to become compliant with SBIR’s fundamental provision that a minimum threshold of innovation research spending be directed toward small businesses. Yet, a new report from the Government Accountability Office concludes DOD couldn’t say if it was meeting the threshold because, DoD did not submit the required obligations data. The report states “DOD officials told [the GAO] that obtaining obligations data would require requesting information from more than 10 individual program offices that, in turn, would have to request the information from various DOD comptrollers, which would be a major effort.”

As governors and state legislatures continue their negotiations over state budgets, SSTI has reviewed the latest to be signed. The process has proved difficult in more than a few states, with New Mexico having to overcome several stalemates and still facing shortages while in Oklahoma three-fourths of the state agencies are seeing decreased funding due to the state’s $900 million shortfall.

The administration’s FY 2018 budget would eliminate several programs providing support to entrepreneurs and small businesses, including FAST, a grant program that targets improved participation in SBIR/STTR, particularly for women and minorities, and the Regional Innovation Clusters and Growth Accelerators programs. SBA’s Entrepreneurial Development Programs would be cut by $52.6 million to $192.5 million (21.5 percent decrease), while Business Loan Programs would hold nearly steady at $156.2 million ($1.5 million, 1.0 percent decrease).

Interior includes several bureaus and offices that fund R&D and conduct tech transfer activities, all of which would receive less funding under the FY 2018 budget proposal. The majority of R&D funding within Interior is provided to the U.S. Geological Survey’s Surveys, Investigations and Research initiatives, which would be funded at $922.2 million in FY 2018, a decrease of $163.0 million (15.0 percent).

Notably, the president’s proposed FY 2018 budget would eliminate funding for Community Development Block Grants. These grants received $3.0 billion in the FY 2017 budget. The proposed FY 2018 budget would provide $85.0 million for research and technology at the Department of Housing and Urban Development, a $4.0 million (4.5 percent) decrease from FY 2017.

Research and development activities in the Department of Transportation’s (DOT) would face a considerable decrease under the president’s proposed FY 2018 budget.

The president’s proposed FY 2018 budget would provide $976.9 million in total funding for Career and Technical Education (CTE) within the U.S. Department of Education, a $148.1 million (13.2 percent) decrease. National CTE programs would receive $27.4 million in the proposed budget, a $20 million (270.3 percent) increase. State grant-based CTE programs would receive $949.5 million in FY 2018, a $168.1 million (15 percent) decrease.

The Science Mission Directorate within the National Aeronautics and Space Administration (NASA) would receive $5.7 billion in the president’s proposed FY 2018 budget, a $53.1 million (0.9 percent) decrease from FY 2017.

The president’s FY 2018 budget proposal includes requests for four regional commissions with the funds appropriated only for the purposes of closure of these commissions, including: $31 million for the Appalachian Regional Commission (ARC); $7.3 million for the Denali Commission; $2.5 million for the Delta Regional Authority (DRA); and, $850,000 for the Northern Border Regional Commission.