SSTI Digest

SSTI’s Tech Talkin’ Govs feature continues as governors across the country roll out their state of the state addresses. We review each speech for comments relevant to the innovation economy, and bring you their words directly from their addresses. In this fourth installment, we present excerpts from governors in California, Hawaii, Massachusetts, Michigan, North Dakota, South Carolina and Wisconsin.

This week’s review includes states like California with its goal for lower carbon output to Hawaii and Massachusetts who are looking to increase their use of renewable energy sources. Meanwhile, energy-dependent North Dakota is looking to diversify its economy and Wisconsin seeks ways to build its workforce.

California Gov. Jerry Brown, who is term limited delivered his final state of the state address.

Governors continue to be cautious in their budget proposals, with many TBED programs seeing level funding or modest increases and cuts in some states while few new programs are being introduced. Kentucky is transferring one program to economic development, while at the same time reducing its funding. Missouri is proposing short-term benefits that may impact longer-term growth, while New York is looking to fund its life sciences initiative announced last year and Vermont is proposing an increase for its growth and innovation pilot project.

Kentucky

The National Institute of Standards and Technology (NIST) released a new 59-page draft report – NIST Interagency Report (NISTIR) 8202: Blockchain Technology Overview – that attempts to move beyond the recent hype surrounding Bitcoin and other digital currencies (or cryptocurrencies) to help businesses and others understand what the blockchain is and decide whether it would be an asset to their products. Dylan Yaga, a NIST computer scientist and one of the report’s authors, also hopes that the report will provide readers with a picture of blockchain that is not skewed to any players’ interests and is easily understood from an unbiased front.

Addressing what it believes is a global skills gap in IT and job displacement resulting from automation, the World Economic Forum (WEF) launched an initiative that is seeking to reach 1 million people with resources and training opportunities by January 2021. The SkillSET portal is intended to help users acquire the skills and education to adapt to an increasingly digital workplace. The initiative was conceived by the WEF’s IT community and the founding partners are Accenture, CA Technologies, Cisco, Cognizant, Hewlett Packard Enterprise (HPE), Infosys, Pegasystems, PwC, Salesforce, SAP and Tata Consultancy Services. The coalition has created a free platform of online tools with partner companies opening elements of their individual training libraries into one centralized portal, which is scheduled to be available in April.  

In this week’s review of state budget proposals, Alabama and Arizona’s governors are proposing funding increases for higher education, while Louisiana is facing cuts due to a budget shortfall. In Hawaii, the governor is seeking supplemental funding for the Hawaii Technology Development Corp to expand its grant making capacity, while Idaho and South Carolina’s governors are seeking more money for workforce programs.

Alabama

Gov. Kay Ivey’s FY 2018-2019 proposed budget increases funding for The Alabama Innovation Fund, which supports and leverages R&D at the state’s universities. The fund would receive $2.9 million in FY 2019, a 20.7 percent increase from the previous fiscal year.

Arizona

With the 2017 data in the books (see our analysis of MoneyTree and useful stats from the Venture Monitor), we can take a more informed look at the prospects for the industry in 2018. We identify four trends — increasing exits, massive deals, accumulating capital and improved diversity — that may shape the overall VC industry in 2018 and why they could make a difference for regional innovation initiatives.

Increase in the number of startups exiting

The number of exits has decreased for 11 straight quarters, according to the Venture Monitor, but 2018 is likely to see increases in both initial public offerings (IPOs) and merger and acquisition (M&A) activity.

California’s efforts to grow the role of its community colleges (CCs) was reinforced with the governor’s recent budget request to establish a fully online public community college, while a report reviewing the state’s established pilot program to offer baccalaureate degrees at some CCs presented some serious questions.

California online community college proposed

Gov. Jerry Brown included $120 million in his FY 2018-2019 budget request to establish a fully online public community college to provide sub-associate degree credentials and training across the state. Already serving approximately one fourth of all community college students across the nation through a network of 114 community colleges, the state sees an online institution as a way of reaching and educating more of the 2.5 million Californians between the ages of 25-34 who have earned only a high school diploma.

Over the five-year period from 2012 to 2017, as total venture capital investments more than doubled, growing from $41.2 billion to $84.0 billion, the number of deals increased by just 2.7 percent according to new data from the NVCA-Pitchbook Venture Capital Monitor. In 2017, more than half of all venture capital deals and three-quarters of all venture capital dollars went to companies in California, New York, and Massachusetts in 2017. However, the share of deals going to these three states decreased slightly from 2007 to 2017 (from 56.1 to 52.4 percent), while the share of dollars increased from 62.3 percent to 75.7 percent.

Based on the NVCA-Pitchbook Venture Capital Monitor data, SSTI has prepared information on VC investment by state and changes over time. That data, along with state-by-state totals for 2007-2017 are available in Excel format below.

SSTI’s Tech Talkin’ Govs feature continues as governors across the country roll out their state of the state addresses. We review each speech for comments relevant to the innovation economy, and bring you their words directly from their addresses. In this third installment, we present excerpts from governors in Delaware, New Mexico, Rhode Island, Virginia and West Virginia.

The latest Science and Engineering Indicators from NSF’s National Science Board shows the U.S. share of S&T activities declining as other nations like China continue to rise. The report presents a wealth of data on how science and engineering R&D are tied to economic and workforce development, including indicators in education; workforce; R&D; industry, technology and the global marketplace; invention, knowledge transfer, and innovation; and public attitudes and understanding. The report includes an interactive data tool presenting U.S. state-specific trends in S&E.

The Department of Energy’s annual portfolio of federal funding opportunities (FFOs) — an announcement for the solicitation of research applications on a specific technical area — published on grants.gov declined by more than 45 percent between 2012 and 2017 from 81 FFOs in 2012 to 44 FFOs during the last calendar year. The decline had the most significant impact on the number of FFOs published in technical areas related to renewable energy, energy efficiency, and storage/other energy-related systems. 

DOE’s portfolio of FFOs has also become more concentrated in three technical areas over that time period. In 2017, more than 60 percent (27 FFOs) of the 44 FFOs were categorized by SSTI as focused on one of  three areas: fossil fuel, nuclear energy or fusion/physics related research projects. In 2012, those areas only accounted for approximately 30 percent of DOE’s FFOs. This significant increase in concentration is directly attributable to a significant decline in the number of FFOs published in the other 10 technical areas of DOE interest. 

In this first part of a two-part series, SSTI will look at the common themes and trends of 2017 that were highlighted in the 2017 MoneyTree Report. In part two, SSTI will provide insights on some potential new trends observed last year that may continue to affect the investment of venture capital in 2018.

The U.S. venture capital industry’s annual funding topped $70 billion in 2017 for the second time ever, according to PricewaterhouseCoopers (PWC) and CB Insights' 2017 MoneyTree Report. The $71.9 billion invested marked a 6.8 percent increase from 2016 — the record high-water mark of $76.8 billion was achieved in 2015.