dept of commerce

The May jobs report that was released last Friday contained better news than the disappointing numbers from April, with May figures showing 559,000 jobs added and unemployment declining by 0.3 percentage point to 5.8 percent. But the jobs picture remains complicated. This week, the Bureau of Labor Statistics (BLS) reported that there were 9.3 million vacant job openings across the country in April, a series high from its start in 2000. With employers reporting that they are facing unprecedented challenges trying to find workers to fill jobs, efforts on several fronts are aimed at returning workers to jobs, and helping them find the skills they need to fill in-demand openings.

The Department of Defense is seeking comments and information on President Biden’s Executive Order, “America’s Supply Chains,” which directs several federal agency actions to secure and strengthen the country’s supply chains. The U.S. Department of Commerce is also seeking public input on a licensing or other pre-clearance process for entities engaging in certain information and communications technology and services transactions (ICTS Transactions).

The U.S. Census Bureau seeks comments on all aspects of the Business Research and Development Survey for the 2018-2022 releases. Collected in partnership with the National Science Foundation (NSF), the survey provides comprehensive data on Research and Development (R&D) costs and detailed expenses by type and industry. The U.S. Census Bureau also announced that it would start collecting data about R&D on artificial intelligence and geographic detail of companies' R&D workforce in 2018.  For those interested in providing feedback, comments are due by October 23.

In a shift from its past economic development efforts, the U.S. Department of Commerce FY2018-2023 strategic plan would move the department to focus almost exclusively on being a commercial services entity. The plan’s points of emphasis are on streamlined permitting and regulations, with direct government activity primarily reserved for common good services — e.g., economic data, cybersecurity and IP protection. References to activities providing direct support for businesses and regional economies are ranked as lower priorities or nonexistent. EDA is left out of not only the descriptions of how the department’s bureaus will contribute to strategic objectives, but also out of the list of offices comprising the department.

Over the past week, the U.S. Senate Committee on Appropriations has passed bills to fund commerce and science, transportation, energy and water and agriculture. Regional Innovation Strategies would be funded at $21 million, an increase of $4 million over FY 2017. Other innovation proposals received mixed support, as the Senate cut $3.2 billion from commerce, justice and science funding and another $400 million from agriculture.

The House Appropriations Committee began releasing FY 2018 “markup” budget bills this week, and the proposals would cut billions in non-defense spending. EDA would lose $100 million* in funding, SBA’s entrepreneurial development programs would lose $34 million, NIST’s Manufacturing Extension Partnership would lose $30 million, and Energy’s ARPA-E would be eliminated, among other cuts. As SSTI noted for both the administration’s proposed FY 2017 and FY 2018 budgets, congressional statements rejecting the president’s total budget package did not necessarily make innovation safe.

Unless otherwise noted, all FY 2018 figures are from the department’s budget justification, and all FY 2017 figures are from committee reports for the Consolidated Appropriations Act of 2017.

Congress has passed a budget for FY 2017 that largely continues support for federal innovation programs and R&D investments. Among the highlights are $17 million for Regional Innovation Strategies (a $2 million increase over FY 2016), level funding of $130 million for the Hollings Manufacturing Extension Partnership and $5 million for SBA’s clusters program. In reviewing dozens of line items, offices that had received significant cuts in the White House’s skinny budget appear to receive some of the largest funding increases (such as the Appalachian Regional Commission, Community Development Block Grant and ARPA-E). However, with the exception of multi-billion dollar increases for Department of Defense R&D, many increases are rather small in terms of overall dollars. This is, at least in part, a reflection of non-defense spending caps rising by only $40 million for FY 2017, limiting the availability of new funds. In this context, science and innovation gains are particularly impressive, with a five percent overall increase for federal R&D that particularly benefits NASA and NIH.

A recent study by the W.E. Upjohn Institute finds that the National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP) Program generates a substantial economic and financial return on investment for the federal government. The $130 million invested in MEP during FY2016 by the federal government generated more than $1.1 billion in increased federal personal income tax, a ROI of roughly 8.7:1, according to Upjohn. The study’s authors also find evidence that total employment in the U.S. was more than 142,000 jobs higher than it would have been without the program, based on direct, indirect, and induced jobs generated by projects at MEP centers. Additional economic impacts of the program identified by Upjohn include personal income that is $8.4 billion higher and overall GDP is $15.4 billion greater.

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 39^th 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.”