SSTI Digest

SSTI is excited to announce Salt Lake City as the site for the 2018 Annual Conference, which will be held Dec. 3 through 5, with the Utah Science Technology and Research Initiative (USTAR) as the host partner.

“We are excited to bring the conference to Salt Lake City, and we think attendees will have a lot to learn from the growing technology hub,” said Dan Berglund, president and CEO of SSTI. “Many places are struggling with ways to grow their innovation economies and Salt Lake City has been able to turn those struggles into positive growth that people will be able to learn from during the conference.”

USTAR has been a vital link in building the innovation ecosystem within the state of Utah. The Salt Lake City region has seen the growth of at least five unicorns, companies that are valued at more than $1 billion. Conference attendees will learn the story of how that success was achieved and USTAR’s role in helping build Utah’s innovation economy.

Financial incentives for company recruitment and retention still dominate state and local economic development expenditures, but recent research estimates that extension programs and customized job training can accomplish development goals in a more cost-effective manner. Despite this, customized services get, on average, five cents of public investment for every dollar that traditional financial incentive strategies receive.

In Shared Prosperity in America’s Communities, a chapter by economist Tim Bartik of the Upjohn Institute explores “labor-demand-side” economic development policies, those that target specific types of firms. Bartik differentiates between financial incentives and customized services, as well as how each works to broaden urban economic opportunity.

SSTI’s Tech Talkin’ Govs feature returns 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 second installment, we present excerpts from governors in Alabama, Colorado, Georgia, Indiana, Kansas, Nebraska, South Dakota and Washington.

Workforce development and/or apprenticeship programs receive attention in all of the below excerpts. The Alabama governor said she is seeking an additional $50 million for higher education, while the Georgia governor talked about reorganizing their technical college system. In Indiana the governor is challenging the state economic development department to create thousands of new jobs and said in the first quarter the state will begin to make strategic investments to build and support more innovation and entrepreneurship through the already established $250 million Next Level Indiana Trust Fund.

Can banks meet Community Reinvestment Act (CRA) obligations by helping address high-speed broadband gaps and the digital divide? Participants in a recent Federal Reserve webinar said yes and provided tips on how.

CRA is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods and the webinar explained how financing broadband initiatives would qualify as an economic development tool that meets the CRA service tests. Our communities would benefit on a number of fronts.

SSTI’s Tech Talkin’ Govs feature returns 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 first installment, we present excerpts from governors in Arizona, Florida, Indiana, Iowa, Mississippi, New York and Vermont.

States are beginning their next round of budget proposals, following last year’s cautious approach to budgeting. SSTI begins its review of the proposals this week, presenting findings on how states are funding elements of the innovation economy with a review of Alaska, Colorado, Florida and Wyoming state budgets. While Alaska and Wyoming continue to recover from budget shortfalls exacerbated by their dependence on the energy industry, Colorado and Florida both include initiatives to increase funding to higher education and Mississippi looks to join those state offering free tuition with a proposal for free community college through the creation of a Mississippi Works Scholars Program.

Alaska, Wyoming budgets highlight realities of dependence on the energy industry

The American Institute of Physics reports that National Institute of Standards and Technology Director Walter Copan expressed interest in reviewing the Bayh-Dole and Stevenson-Wydler acts for possible revisions. Both pieces of legislation were passed in 1980 to facilitate the transfer of discoveries from the public to the private sector. Copan did not indicate specific changes but mentioned conflicts between federal and state law as a problem.

Last week, the Department of Defense (DoD) released a public announcement on the launch of a new pilot program that supports university-industry basic research collaborations focused on the discovery of novel solutions to challenging defense and national security problems. SSTI members, however, were alerted to the release of the Federal Funding Opportunity (FFO) for the pilot program in a December edition of the SSTI Funding Supplement. Each week, the Funding Supplement provides SSTI members with an expansive list of FFOs and other founding opportunities for their client companies, researchers, and own organizations! Learn more about the SSTI Funding Supplement and the other benefits that SSTI members receive by visting: https://ssti.org/membership-benefits.

Mentoring programs may be celebrated across the nation as January marks National Mentoring Month, a movement started in 2002 to raise awareness of mentoring in all its forms. But more could be done to make programs more effective in both university and non-university settings, according to a recent working paper from the Ross School of Business at the University of Michigan. Mentoring in Startup Ecosystems, by Jeffrey Sanchez-Burks, et al, found that mentoring is fundamental to founder education, but that such programs could be improved, especially at universities.

The growth and intensity of higher education R&D (HERD) expenditures varies considerably across metropolitan areas, a recent SSTI analysis of National Science Foundation data finds. New York ($4.3 billion), Boston ($3.2 billion), and Baltimore ($2.9 billion) had the highest overall levels of HERD expenditures in 2016. In that same year, Ithaca, New York (19.1 percent), State College, Pennsylvania (9.5 percent), and College Station, Texas (9.4 percent) had the highest levels of HERD intensity – measured as the share of HERD expenditures to gross metropolitan product. While overall HERD expenditures increased by nearly $7.5 billion nationwide from 2011 to 2016, more than half of this total (50.6 percent) went to the 10 metro areas with the most HERD expenditures in 2016.

In 2016, a study – Skill Demands and Mismatch in U.S. Manufacturing – found that approximately 75 percent of manufacturers showed no signs of hiring difficulties.  This study and others (including a 2015 study from Iowa State University) are reigniting a long held economic development debate over the ‘skills gap’ – a contention that there is a mismatch between the abilities employers seek in candidates and the capabilities of workers developed by the educational/workforce development systems. Challenging the conventional wisdom put forth by employers, pundits, and policymakers, these studies seem to indicate that the problem does not lie with the U.S. workforce development and educational system. Instead, the problem stems from two primary issues at the firm level:

One year from now, at least one-third of the states will have a new person sitting in the governor’s chair due to the retirement or term-limit of 17 current governors. The number of new governors could be higher than the guaranteed 17 new governors because there are 36 gubernatorial seats up for grabs. For those questioning the import of a large new class of governors, one does not need to look beyond the last two major waves of new governors — 2010 when 26 new governors came into office and 2002 when 20 new governors did — to see the impact that large classes of governors can have not just on their individual states, but the field as a whole.