SSTI Digest

A new report from the Kansas City Federal Reserve and Opportunity HUB (OHUB) reveals the importance of building an inclusive entrepreneurship ecosystem. Authored by Dell Gines of the Kansas City Federal Reserve and Rodney Sampson, chairman and chief executive officer of Opportunity Hub, the report examines how entrepreneurship ecosystem building has lacked an emphasis on issues of diversity, equity and inclusion. The guide provides an overview of key concepts and gives general recommendations on how to use entrepreneurship ecosystem building to develop high-growth entrepreneurship in communities of color.

The authors note that to date little has been done to ensure that ecosystem building is inclusive for people of color and their communities, yet it has the power to create jobs and decrease the racial wealth gap. The report goes on to develop a framework to help local economic developers and entrepreneurship ecosystem builders understand some of the major processes of building ecosystems in communities of color.

How has the intensity of research and development (R&D) performance changed across states and over time? As a follow up to an article in last week’s Digest that examined changes in total R&D expenditures for each state over the 15-year period from 2002 to 2016, this week’s Useful Stats focuses on R&D intensity. Overall R&D intensity is defined as total R&D expenditures (the sum of all R&D performed by industry, federal labs and agencies, colleges and universities, and other research institutions in a state) as a share of each state’s gross domestic product in a given year.  Notably, five states stand out for exceeding the national average in both R&D intensity and increases in R&D intensity from 2002 to 2016: Oregon, Delaware, California, Maryland, and Massachusetts.

It is extremely rare for SSTI to use those first two words in a Digest headline. We feel that compulsion today because of a unique (using its original OED definition of “first/one of a kind”) monograph prepared by Greg Tassey, an esteemed economist who served for much of his career as Senior Economist for the National Institute of Standards and Technology. Throughout his work, he has focused an economist’s lens on public policy’s role in technology, standards, economic growth, and industrial innovation, among other related topics. In this paper, Tassey turns his critical analysis toward technology-based economic development (TBED).

Innovation districts show promise as an economic development tool, but there are a range of questions policymakers, practitioners and planners should consider prior to and while pursuing the strategy, according to new research from RTI International’s Center for Applied Economics and Strategy. In Planning for an Innovation District: Questions for Practitioners to Consider, authors Sara Lawrence, Michael Hogan and Elizabeth Brown describe the innovation district phenomenon, define key-terms and concepts, and highlight empirical evidence that offers reasons for why they might find success as an economic development tool. For example, research shows that networks matter for fostering innovation, and that these types of networks can be more impactful when they are in close proximity. The authors also propose 20 questions across economic, physical and social dimensions that are worthy of attention.

The U.S. Small Business Administration (SBA) released its FY 2016 annual report for the $2.4 billion obligated by the Small Business Innovation Research (SBIR) program and $313.6 million by the Small Business Technology Transfer (STTR) programs. The report includes the number and dollar amount of SBIR and STTR awards for each state. New Phase I SBIR awards by agency are summarized in the following table.

Despite its limitations, publicly available data on research and development (R&D) expenditures remains one of the best metrics for measuring state progress in the innovation economy. Defined as the sum of multiple National Science Foundation (NSF) measures – including business and industry R&D, higher education R&D, and R&D at federally funded centers – total R&D has skyrocketed nationwide over the past 15 years, though some states have experienced an outsized portion of this growth. Where has total R&D performance increased the most over the past 15 years? How has the composition of total R&D performance changed over this time? Perhaps most importantly, how has the intensity of R&D performance changed? Over the next three weeks, the Digest will explore the answers to these questions and more.

Data on total research and development stems from the NSF’s National Center for Science and Engineering Statistics’ (NCSES) National Patterns of R&D Resources series. In this article, SSTI has analyzed the available data for the most recent 15-years.

Although the national recovery has been positive since 2010 by nearly every aggregate measure, underneath this rosy narrative lies considerable differences at the ZIP code level within and across cities and states, according to new research from Federal Reserve Bank of St. Louis.  In The Unequal Recovery: Measuring Financial Distress by ZIP Code, authors Ryan Mather and Juan Sanchez analyze changes in wealth, debt, and financial distress across the country and over time, specifically looking at the percentage of people within a ZIP code that have reached at least 80 percent of their credit limit. They find that, despite improvements throughout the majority of the country between 2010 and 2015, financial distress accelerated in the period from 2015 to 2018. Importantly, they also find that levels of financial distress have risen fastest in the poorest ZIP codes since 2015, which increases their vulnerability to future economic downturns. 

The National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP) Program generates a sizeable financial return on investment for the federal government, according to a recent study by the Michigan-based W.E. Upjohn Institute. The $140 million invested in MEP during FY 2018 by the federal government generated more than $2.0 billion in increased federal personal income tax, a ROI of roughly 14.4:1 according to Upjohn researchers Jim Robey, Randall Eberts, Brian Pittelko, and Claudette Robey. Based on direct, indirect, and induced jobs generated by projects at MEP centers, the authors also find evidence that total employment in the U.S. was nearly 240,000 jobs higher than it would have been without the program.

Emerging over the past five years, novel approaches to supporting early-stage cleantech development have the potential to ease the transition from invention to marketplace, according to new research from the National Renewable Energy Laboratory’s (NREL) Innovation & Entrepreneurship Center for the Joint Institute for Strategic Energy Analysis. The report provides a comparison of some of the nation’s most notable cleantech incubators and accelerators, finding that each organization fills a unique niche and competition among them is not an issue.

At a time when higher education degrees are both under scrutiny and lauded, one county government in Colorado is experimenting with an initiative that has eliminated degree requirements for more than 80 positions. It wasn’t the value of the degree that prompted the move, but the question of equity and wanting to achieve a more inclusive workforce. While such moves are rare, similar efforts may blaze the way to new workforce requirements and advancements and help inclusion.

In Boulder County, Colorado, Human Resource Director Julia Yager said the county had been focusing on ways to increase equity and inclusion in the workforce for several years before all the resources were in place to effectively tackle the issue.

The change was implemented not to lower standards for the jobs, but to acknowledge that not all the jobs required a degree and that experience could be as great a measure of success in some classifications.

Is your region creating a better future through science, technology, innovation and entrepreneurship? Do you want to share your story and have colleagues from across the country come to your region to see your successes firsthand? SSTI has opened our request for proposals to host SSTI’s 2020 Annual Conference. Hosts receive coverage for their regional innovation economies over the course of a year and are featured on-site through the plenary and breakout sessions, exhibit space and more. Submit a compelling proposal by Sept. 16 to be considered.

As covered in the last Weekly Digest, the U.S. Senate Committee on Small Business and Entrepreneurship held a hearing on reauthorizing SBA’s innovation programs. SSTI was invited to add to the hearing’s record, and our letter supporting SBIR/STTR pilot programs, FAST and entrepreneurial development programs is produced, below.

Dear Chairman Rubio and Ranking Member Cardin:

On behalf of numerous state, local, university and nonprofit organizations around the country, SSTI thanks you for your leadership on reauthorizing the U.S. Small Business Administration’s (SBA) innovation programs. The May 15^th hearing on this issue addressed many important policy implications for American competitiveness, and we appreciate the opportunity to add our perspective for the record.