An aging, more diverse workforce is what the Bureau of Labor Statistics foresees in the coming decade, with a declining participation rate, which may in turn restrict economic growth. The new projections released this week echo the downward trend in the rate of labor force participation since the peak of 67.3 percent in early 2000. While recent trends show an increasing level of participation among the 55+ crowd, there has been a decreasing level of participation among 16 to 24-year-olds as school enrollment has increased, as well as a continuing decline among the prime working-age cohort of 25 to 54-year-olds.

One of the hottest topics at SSTI’s 2017 Annual Conference centered on helping communities build the investment system necessary for local entrepreneurs and startups to thrive. Led by several panels of experts, the conversations led to sharing many great ideas, thoughtful solutions, and tough realities. This week, we conclude our series of stories on how TBED organizations can help communities ensure a vibrant investment system.  In our first installment, we discussed the necessity of creating a strong deal flow to stimulate the growth and success of the system. The second installment focuses on effective strategies and ideas for building your organization’s investment team. This final installment will cover developing a fund that matches your region.

At least three dozen states offer reductions in tax obligations to companies for some portion of the costs of the businesses conducting research and development within their particular state. During the 2017 session, one fewer could be included among the ranks. With little documented opposition, the Oregon legislature decided to get out of the R&D tax credit business altogether (p. 41, source).  Why? Are there lessons for other states’ advocates for innovation?

The Small Business Administration (SBA) announced that is withdrawing a December 28, 2016, final rule concerning Small Business Investment Company (SBIC) investments in passive businesses – a small entity that does not engage in regular and continuous business activity. Set to take effect on August 18, the final rule would have placed several restrictions on the eligibility of passive companies to receive SBIC investments. The new decision will maintain the current SBA rule that allows passive companies to remain eligible for SBIC investments. The SBIC, however, must receive SBA written approval before making the investment.

The National Science Foundation (NSF) has announced the recipients of 27 Design and Development Launch Pilots as part of its INCLUDES initiative. The initiative is aimed at enhancing U.S. leadership in science, technology, engineering and mathematics (STEM) discoveries and innovations through a commitment to diversity and inclusion. The 27 pilots feature public-private partnerships that will develop blueprints for broadening STEM participation and are funded through two-year, $300,000 grants. Although the vast majority of awardees are based at universities, the program attempts to engage partners from private and corporate philanthropy, industry, non-profits, K-12 school systems, federal agencies and scientific professional societies, and any other organizations affiliated with STEM. A key feature of NSF INCLUDES is its focus on uniting a wide variety of collaborators to generate pioneering solutions to persistent problems. These pilot projects will create an infrastructure that enables large-scale coordination and wider STEM participation.

For 32 years, the Engineering Research Centers (ERC) program of the National Science Foundation has provided long-term funding for university-industry-government collaborations focused on addressing specific, complex engineering challenges. The program can be an integral part of a state’s strategy to encourage stronger partnerships among universities and private industry. On September 12, NSF announced $80 million in funding for four more multidisciplinary centers, bringing the total number of ERCs funded since 1985 to 74.

On September 20, the Economic Development Administration (EDA) announced $17 million in awards to the 2017 Regional Innovation Strategies (RIS) program awards. SSTI’s Innovation Advocacy Council has worked with members to encourage Congress to support this program, which makes awards to support the creation and expansion of tech transformation networks (i6 Challenge) and early-stage seed capital funds (the Seed Fund Support). In total, EDA made 42 investments that leveraged over $22 million in private, state and local matching funds, including to eight SSTI members:

The Innovation Advocacy Council (IAC), an initiative of SSTI to better communicate with and educate Congress on innovation issues, has named Ben Johnson its new chairperson. Johnson, BioSTL’s vice president of programs, will take over the position from Michael Cassidy, president and CEO of the Georgia Research Alliance.

Recognizing that the former steel city was at tipping point in its development, Pittsburgh’s city leaders decided to tip the scale toward continued growth. Whether the city is able to rise to the level of a serious global competitor may hinge on the implementation of initiatives that will guide the city in capitalizing on their innovation, research and business assets, according to a new report from the Brookings Institution. Pittsburgh leaders received a call to action as a result of a collaborative effort initiated by two city foundations and the Brookings Institution.

SSTI’s 2017 Annual Conference held last week in Washington, D.C., helped build bridges to the future through its gathering of more than 250 participants working to create a better future through science, technology, innovation and entrepreneurship. Congressman David Cicilline addressed the gathering and stressed the importance of the Regional Innovation Strategies program in his keynote address. Thought leaders revealed insights on the current political climate, social and demographic trends across the nation, and the importance of building an inclusive effort to create sustainable and meaningful change.

Washington, D.C. – From teaching high school students in rural western Kentucky how to become entrepreneurs to connecting entrepreneurs with a worldwide network of partners in a virtual hub, organizations are finding innovative ways to build regional prosperity. Four outstanding examples were recognized today by SSTI, a national organization working to strengthen initiatives to create a better future through science, technology, innovation and entrepreneurship. SSTI’s Creating a Better Future Awards celebrates outstanding economic development initiatives from across the country in a variety of categories.

“It’s important that we recognize the good work that is being done throughout the country and showcase the successful programs that others can emulate,” said SSTI’s president and CEO, Dan Berglund. “These initiatives are creating the environments that make it possible for innovation and entrepreneurship to thrive.”

Creating a Better Future through Economic Opportunity

The Kentucky Innovation Network in west Kentucky was seeking a culture change and wanted its youth to think about creating jobs as opposed to finding them and knew the importance of teaching entrepreneurship to the rural youth. With support from the Kentucky Cabinet for Economic Development, the Kentucky Innovation Network office at Murray State University created “The Next Big Thing” to develop young entrepreneurs in its rural school districts.

Working with teachers throughout a 20-county area, the program involves community partners and incorporates innovation and entrepreneurship through project-based learning. Students who participate identify a problem and develop their solution, prototype and business model. They attend an accelerator day, receive mentoring in the classroom and present to faculty, entrepreneurs, investors and community leaders. ln the five years since The NBT launched, 876 high school students have participated and many are developing businesses. In 2016-2017, two of the top three teams were already in the marketplace and interest in the program has spread to investors and across the state.

The Kentucky Innovation Network office at Murray State won the Creating a Better future through Economic Opportunity award and demonstrates how any area can influence long-term culture through its youth. One of the judges noted that the program was “addressing a culture change and making a difference.”

Creating a Better Future through Entrepreneurship and Capital

In another award-winning effort to increase entrepreneurship, Larta Institute’s Commercialization Accelerator Program Initiative (CAP) won in the category of Creating a Better Future through Entrepreneurship and Capital. The CAPs are six-to nine-month virtual enterprise development programs for small, earlier-stage businesses with innovations in the hard sciences. Each participant gets a customized experience, working one-on-one with a network of industry experts, who guide their commercialization strategy, and later potential buyers, investors and partners, who help advance their path to market. The CAPs provide a partnering emphasis, introducing peer-to-peer learning and strategic introductions to potential collaborators, partners and investors, drawn from Larta Institute’s global network. The program makes more than 700 “strategic introductions” to the CAP companies yearly. Since 1993, more than $2.7 billion has been raised by Larta CAP companies in non-dilutive funding and more than $4 billion of private investment has been raised.

Judges were struck by the level of experts that the program draws upon, with one judge calling it a good model for the future. “This is difficult enough to do on a local level, even harder on a national level,” the judge commented. The ability to reach out to a virtual network is a factor that other regions who do not have ample local resources could replicate, another judge commented.

Creating a Better Future through Competitive Industries


The New Jersey Innovation Institute (an NJIT corporation), Health IT Connections program took home the Creating a Better Future through Competitive Industries award, through its work to grow the state’s regional health IT ecosystem. A hallmark of the program is the development of connections among the entrepreneurs, service providers, hospitals, patients, government agencies and anchor institutions. The Health IT Connections program addresses market access challenges for both entrepreneurs and small to medium enterprises that have difficulty reaching the larger healthcare players.

In three years, the program has engaged six cohorts consisting of 75 companies, with 15 female founders (20 percent) and 24 minority founders (32 percent). After the second year, companies that participated in the cohort saw a revenue increase of 46 percent and job increase of 44 percent. Judges liked the concentration on the health care industry, noting that “industry-focused TBED programs can work.”

Most Promising Initiative

Part of Rhode Island’s economic development strategy is attracting and retaining talent, especially in crucial STEM and design fields. The Rhode Island Commerce Corporation’s Wavemaker Fellowship program was recognized by SSTI as the Most Promising Initiative category winner. The program is intended to attract and retain STEM and design workers by defraying the cost of student loan payments for graduates who have incurred student loan debt while completing an associate, bachelor’s or master’s degree. Fellows are selected through a competitive, merit-based application process and receive an annual tax credit that may be awarded for up to four years.

In addition to a financial benefit, the initiative includes an engagement element that is designed to add a “stickiness” factor intended to deepen the Fellows’ connection and investment in the state.

Although still in its early stages, the program has already heard from participants and their employers that the Fellowship award was part of their decision to turn down a job out of state and instead pursue a career in Rhode Island. In its inaugural year, Fellows represented 110 companies in the targeted advanced industries across Rhode Island.

Judges liked that the program is addressing STEM talent, calling it “one of the major issues those of us in the TBED community are facing these days.” Another noted that “talent is ultimately the biggest challenge we have. We can create a lot of programs, but if we can’t find the right people, it makes it a rockier road.” One judge noted that focusing on STEM and the “stickiness factor” may help other states think about potential strategies in talent attraction.

This year’s awards were announced during SSTI’s 2017 Annual Conference, held Sept. 13-15, in Washington, D.C.

The White House Office of Management and Budget released a memorandum on R&D priorities that directs agencies to prioritize basic science and lower costs in their FY 2019 budget requests. R&D investments should be made in military superiority, security, prosperity, energy dominance and health. The memo repeatedly encourages officials to identify, and divest of, research areas where industry is ready to make their own investments toward commercial development.

On Feb. 1, SSTI staff, members and The Sheridan Group participated in a Capitol Hill Day for SSTI’s Innovation Advocacy Council. Groups visited more than two dozen congressional offices, including appropriations committee members and freshman Senate offices, and the White House Office of Management and Budget. The message for these visits was to increase federal funding for the Regional Innovation program and to protect science and innovation spending during any broad budget reform or sequestration that may be forthcoming. The Hill staff was receptive to the message of continuing federal support for innovation and welcomed an ongoing conversation. Members of Congress will be making FY 2018 appropriations requests soon, and SSTI will be contacting members in key states to petition for SSTI’s priorities. To get involved in this process, or to learn about an upcoming Capitol Hill Day, contact Jason Rittenberg (rittenberg@ssti.org | 614-901-1690).

Reviewing another slate of governors’ state of the state and inaugural addresses reveals some recurring themes. With a focus on maintaining gains made since the Great Recession and increasing budgets, many governors are holding off on major new initiatives, but are proposing means to increase broadband access, diversify their economies, build renewable energy efforts, and increase their rainy day funds in case of an economic downturn. SSTI presents part 2 of our Tech Talkin’ Govs series, with coverage of governors in Colorado, Connecticut, Oregon, Virginia, West Virginia and Wyoming.

Last week, U.S. trade representatives traveled to Beijing for a round of trade talks with the hope of coming to an agreement that would end the U.S.-Chinese trade dispute. Alongside large corporations, many U.S. tech startups are watching the results of these talks with a close eye because they face significant concerns over the impact that increased tariffs will have on their business. But while tariffs have garnered most of the press attention, U.S. startups also face reduced access to foreign capital, increased regulatory scrutiny, and potential talent issues. Conversely, China is developing new strategies to ensure that more investment dollars will remain in their domestic startup capital community.

A note from the publisher (aka, Dan Berglund): Two of the most frequent questions SSTI staff is asked are: “What program, initiative, movement has piqued your interest?” and, “Who should we be watching and learning from?” While the answers are somewhat implied in what we cover in The Digest, host webinars on, and feature in conference content, look for occasional pieces in 2019 labeled “SSTI Feature” that offer a sampling of our answers to those questions.

The state of America’s foreign policy and the livelihoods of its middle-class are inextricably linked, according to a new report from Ohio State’s John Glenn College of Public Affairs and Carnegie Endowment for International Peace. The report’s authors, using Ohio as a lens for their examination, conduct a thorough quantitative and qualitative analysis on this relationship. They find that the relationship between foreign policy and the middle class is complicated, but that improving outcomes for the middle class will ultimately require a comprehensive foreign policy strategy that is tied to economic development. Notably, unlike the many pieces authored from academics and think-tank researchers on the coasts that focus on “the heartland” or foreign policy more broadly, this report features local perspectives from more than 100 economic development stakeholders across six regions in Ohio. The Carnegie Endowment for International Peace plans to release additional state-level case studies throughout 2019.

The 20 new governors elected last November are filling out their appointments, and SSTI’s analysis of those named as state economic development directors reveals an array of backgrounds leading into their new roles. New Republican governors have shown a greater propensity to choose a leader with an industry background, while new Democratic governors have been more likely to appoint  directors with economic development experience. From a former U.S. representative to the owner of a regional pizza chain, here are the highlights of the 16 state economic development directors appointed since November.

Based upon the finding of two reports – the 4Q Pitchbook-NVCA Venture Monitor and the MoneyTree Report –   SSTI identified three significant trends that impact the startup capital community: geographic concentration, mega-rounds/funds, and strong VC-backed exit activity.

As the partial government shutdown enters its second month, the impacts across America are increasingly disruptive. The agencies that do not have a current budget were appropriated more than $38.9 billion for R&D, technology transfer, entrepreneurship, broadband, science, economic development and other activities related to regional innovation economies in FY 2018. Most of these programs stand to receive at least this amount for FY 2019. While some programs were able to spend funds from remaining 2018 dollars or from the continuing resolution that expired in December, many other activities have been delayed by more than a month — and with no clear endpoint in sight. To help your organization track the shutdown, SSTI has compiled a list of the most significant impacts on regional innovation.

Maryland Governor Larry Hogan’s FY 2020 budget proposal includes $56.5 million in new funding to attract businesses to Opportunity Zones. Other new innovation funding would support manufacturer hiring credits and a seed fund for minority entrepreneurs. Under the governor’s proposal, TEDCO, the state’s primary innovation agency, would see its spending increase from $27 million to $45 million.

From FY 2018 to FY 2019, state fiscal support for higher education grew by 1.6 percent nationwide and increased in 45 states, according to new data from the Grapevine Survey, a project of Illinois State University’s Center for the Study of Education Policy in cooperation with the State Higher Education Executive Officers (SHEEO). Inside Higher Ed has a thorough rundown of the study, including an interview with James Palmer, a professor of higher education at Illinois State University and Grapevine’s editor, who declared it “a marginally better year” for state fiscal support for higher education.  Using data directly from the Grapevine Report, the following map highlights FY 2019 support (point-size) and percent change over the five-year period from FY 2014 to FY 2019, as well as state rankings. Data can be downloaded directly through Grapevine.

This week, we see broadband investment in Indiana; education initiatives that begin with pre-K and extend beyond high school in a number of states; lifelong learning approaches; apprenticeships; climate change and green energy initiatives in Nevada and Washington; and more on governors’ agendas. As governors across the country continue to deliver their state of the state addresses to their legislatures and constituents, SSTI monitors the speeches for news of innovation related initiatives. This week we bring you news of innovation funding from governors in Indiana, Iowa, Kansas, Missouri, Nevada, Rhode Island and Washington.

When it comes to paying off student loan debt, rural individuals who move to metro areas fare better than those who stay, according to new research from PJ Tabit and Josh Winters of the Federal Reserve Board’s Division of Consumer and Community Affairs. Using panel data from Equifax and the New York Fed, the authors explore the relationship between the student loan balances of rural millennials and where they choose to live when they begin repayment. Their analysis offers a deeper understanding of the rural brain drain phenomenon and approaches to addressing the challenge.