federal agency

A Securities Exchange Commission (SEC) report contains over 20 recommendations for the SEC to consider that would improve small business capital formation. The report, released in April, stems from the 36th annual Government-Business Forum on Small Business Capital Formation – a daylong event held late last year. Its recommendations include issues related to the definition of accredited investors; rules changes that would increase the number of Regulation A+ and Regulation Crowdfunding offerings; and, a revised regulatory regime (based upon the European regulatory regime) to improve peer-to-peer lending.

The U.S. Department of Health and Human Services (HHS) and the EPA have each released new four-year strategic plans, continuing to reflect agencies’ adoption of the Trump administration’s policy directions. HHS has a streamlined science agenda that limits explicit connections to regulation while aiming to expand its overall capacity for research. EPA’s new plan is emphasizing science solely in support of legislative requirements and state requests.

The U.S. Small Business Administration and Department of Treasury have released strategic plans through FY 2022. Similar to the new Department of Commerce plan, these documents do not mention programs and offices that the administration has marked for elimination, creating a lack of clear strategic direction for millions of dollars in entrepreneurship and innovation funding that Congress continues to appropriate and direct. Specific areas of concern at these agencies are the SBA’s Regional Innovation Clusters and Growth Accelerator programs and the Community Development Financial Institutions Fund.

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.

The National Science Foundation’s new strategic plan argues that the U.S. must continue investing in world-class research, develop a globally competitive scientific and engineering workforce, and foster greater understanding of science and technology among the American public. However, the pressure of new priorities and level funding proposed for FY 2019 have yielded some surprising directions for the agency’s planned investments.

In the October 24 edition of the Federal Register, the U.S. Census Bureau released a request for comment (RFI) on a proposed Annual Business Survey (ABS). The ABS is a new survey designed to combine Census Bureau firm-level collections that replaces the five-year Survey of Business Owners (SBO) for employer businesses, the Annual Survey of Entrepreneurs (ASE), and the Business Research and Development (R&D) and Innovation for Microbusinesses (BRDI-M) surveys.  The ABS will provide the only comprehensive data on business owner demographics and business characteristics, including financing, research and development (for microbusinesses), and innovation. These data are not publicly available from nongovernment or other governmental sources.

The U.S. Department of Treasury released its final annual report for the State Small Business Credit Initiative (SSBCI), which provided funding to states for lending and investment programs. “Venture capital” programs, often structured for pre-seed (13 percent of funds), seed (27 percent) or early stage (45 percent) investments, attracted $4.2 billion in immediate private financing against $327 million in federal dollars. This leverage of $12.76 of private investment for every public dollar was further improved by more than $2 billion in subsequent private financing to date. Perhaps more significant than the program’s ability to attract private investors has been its success in generating investments outside of the nation’s most concentrated markets.

In a recent paper from the National Bureau of Economic Research (NBER), the authors contend the U.S. Patent Office (USPTO) has created a lottery-type system that creates great economic benefit for startups and other patent-seekers that drew lenient patent examiners. In What Is A Patent Worth? Evidence from The U.S. Patent “Lottery,” the authors found that patent applications by startups that were reviewed by lenient USPTO examiners had, on average, 55 percent higher employment growth and 80 percent higher sales growth five years later. Those startups also pursue more and higher quality, follow-on innovation. These results are, in large part, due to increased access of funding from VCs, banks, and public investors.

On June 14, the Appalachian Regional Commission (ARC) announced $15.7 million in funding to support 18 projects (including those of two SSTI members – LaunchTN and Ohio University) that will help grow the economies in coal-impacted communities in seven states.   With this latest announcement, ARC has invested over $92 million (leveraging an additional $206 million in investments) to diversify the economies in 250 coal-impacted counties across 11 Appalachian states through its POWER (Partnerships for Opportunity and Workforce and Economic Revitalization) Initiative. The new round of investments are intended to create and retain hundreds of jobs in advanced manufacturing and tech industries; support entrepreneurial development efforts, and, build workforce pipelines through institutions of higher education.

U.S. Senators Cory Gardner (R-CO) and Gary Peters (D-MI) sent a letter requesting a 4 percent increase in appropriations for the National Science Foundation and National Institute of Standards and Technology to the Senate Appropriations Committee.