SSTI Digest

SSTI’s analysis of approved FY2018 state budgets continues with a review of action by the Georgia and Utah legislatures. Stability is the word for both states with level funding for the Georgia Research Alliance, Georgia Tech’s Enterprise Innovation Institute, and Utah’s USTAR program. The Georgia legislature did approve the governor’s proposal to increase funding for scholarship programs by $50 million.

Georgia

Georgia’s FY 2018 budget includes a significant increase for the state’s HOPE Scholarship program and stable funding for the Georgia Research Alliance and Georgia Tech’s Enterprise Innovation Institute. The HOPE Scholarship and Zell Miller Scholarship program budgets increase $50 million from $715 million in FY 2017 to $766 million in FY 2018 in keeping with the governor’s recommended budget; the HOPE Scholarship program provides tuition assistance for students that graduated from high school with at least a 3.0 GPA, while Zell Miller recipients must graduate with a minimum 3.7 GPA and a minimum 1200 SAT score on the math and reading portions or a minimum 26 on the ACT.

More can be done at the state level to encourage growth in U.S. manufacturing, according to a recent presentation by Robert Atkinson, president of the Information Technology and Innovation Foundation (ITIF). In the presentation, held earlier this month at the National Conference of State Legislatures’ (NCSL) summer meeting, Atkinson suggested that there is a role for state policymakers to address each of the four T’s related to sound manufacturing policy: trade, tax, technology, and talent.

The Federal Reserve Bank of New York reported that startup firms (small businesses that were five-years-old or younger and had full- or part-time employees in 2016) were twice as likely to be adding jobs and growing revenues but more likely to be higher credit risk than mature firms. The 2016 Small Business Credit Survey: Report on Startup Firms provides an in-depth look at the financing and credit experiences of the startups. The report notes that startups account for 34 percent of all small employer firms and “play an outsized role in U.S. innovation and productivity.” Despite their role in innovation and job creation, the rate of startup creation has been decreasing for years and the rate of failure for those that do launch is high, the report states. Noting that access to capital is critical for startups, the report offers a detailed look at startups financing needs and challenges.

Cybersecurity efforts have been increasing across the country. In July, Virginia Gov. Terry McAuliffe, who also serves as chair of the National Governors Association (NGA), announced that 38 governors signed A Compact to Improve State Cybersecurity – a multi-state, coordinated cybersecurity effort focused in three areas that will

• Enhance state cybersecurity governance;
• Prepare and defend their states from cybersecurity events; and,
• Grow the nation’s cybersecurity workforce.

The compact was the culmination of McAuliffe’s Meet the Threat: States Confront the Cyber Challenge. In addition to the compact, new cybersecurity-focused economic development efforts have been launched in several states including Delaware, Kentucky, and Wyoming. Meanwhile, NIST has released a cybersecurity workforce framework intended for use by all sectors in the states.

Delaware

A House bill that would allow manufacturers to sell up to 100,000 self-driving cars each and bar states from restricting their operation passed both its subcommittee and the Energy and Commerce Committee unanimously last month. Concerned about potential job loss, unions representing truck drivers successfully lobbied the House to exempt commercial trucks from the “highly automated vehicle” definition the law affects for the time being.

The bill enables automakers to produce and deploy self-driving cars by allowing exemptions from federal safety standards for vehicles, although the vehicles must still achieve a comparable overall level of safety. Deployment of the autonomous vehicles would be scaled nationwide from 25,000 in year one, to 50,000 in year two and 100,000 for each of years three and four. There are currently four types of safety exemptions in the law, and this bill would add a fifth for autonomous vehicles.[1]

Over the last several months, economic development organizations, universities, and their partners have announced new efforts to create the building blocks for entrepreneurial development in rural communities. Examples include i2e announcing new efforts to expand entrepreneurial support services to rural communities in Oklahoma and three Indiana universities partnering to support startup growth in rural regions across the state. These efforts are intended to leverage the existing skills and resources of these organizations and reformulate them for regions typically left behind by the field.

Oklahoma

After arduous processes in both Kansas and Rhode Island, the states have newly-enacted budgets in place that have retained some funding for TBED initiatives. Kansas was able to fund programs that will focus on a skilled workforce and research and development, while Rhode Island will see the creation of a pilot program for free tuition at community colleges through a scaled-back version of the governor’s proposed RI Promise.

Kansas 

With Republican Gov. Sam Brownback’s signature on a $31.4 billion biennial budget for Kansas on June 27, varied national media covered the story as the end of a “failed” experiment revealing the extent of damage supply-side economics can do to a state’s public sector, infrastructure, education system, civic society and economic growth.

In partnership with the National Science Foundation (NSF), the Department of Agriculture (USDA) announced the Innovations in Food and Agricultural Science and Technology (I-FAST) prize competition. I-FAST prizes will provide entrepreneurship training to National Institute of Food and Agriculture (NIFA) supported academic research with the goal of facilitating the technology transfer of valuable food and agricultural related product opportunities. NIFA will commit $400,000 to support up to eight prizes. I-FAST pre-applications are due September 8, 2017.

Learn more at SSTI’s 2017 Annual Conference

During this year’s conference, you will have multiple opportunities to learn more about the federal research agenda as well as how to partner with federal agencies. In addition to USDA, we will be joined by speakers from Commerce, DoD, NIH, NIST, NSF, and many others.

On the heels of delaying the International Entrepreneur Rule (IER), the White House has endorsed a bill that would grade candidates for immigration. A total of 60 organizations, including SSTI and many of our member organizations, stated their opposition to the move in a new letter. It is not clear why the IER’s standard of investible businesses would not fit into the legislation’s merit-based system. The bill’s scoring system sets a threshold of 30 points and rewards certain age groups (max of 10 points for 26 to 30 year olds), STEM degrees (max of 13), Nobel prize winners (25 points), job offers (max of 13), willingness to invest (max of 12) and an Olympic medal within the last eight years (15 points). The Reforming American Immigration for a Strong Economy Act  would also significantly reduce the number of available visas. Time has created a self-scoring quiz for those interested. 

There are numerous opportunities for leaders at community colleges to collaborate with the private sector around combatting the skills gap and making workforce development programs more effective for students, according to a new report by Elizabeth Mann of Brookings’ Brown Center for Education Policy. Although financial and cultural challenges may present initial barriers to collaboration between community colleges and industry, overcoming these differences can make a big impact on local efforts to boost workforce development.

SSTI encourages organizations dedicated to serving entrepreneurs to participate in the creation of a new primary data set on the impacts resulting from your efforts. The deadline for participation is August 16.

The International Business Innovation Association (InBIA), with funding from the U.S. Economic Development Administration, is currently conducting the IMPACT Index Survey to measure the impact of entrepreneurial support organizations in their communities and industry sectors. The dataset helps organizations and policymakers determine best practices, benchmarking, and industry trends. The survey is open to all relevant organizations, such as incubators, accelerator programs, economic development centers, maker spaces, tech transfer offices, venture development organizations, and more.

Participants will receive a personalized report based on their organization's comparative metrics by the end of Q3 this year.

Foreign investors expended $373.4 billion in 2016 to acquire, establish, or expand U.S. businesses — a 15 percent decrease (approximately $66.2 billion) from $439.6 billion in 2015 — according to an infobrief from the Bureau of Economic Analysis (BEA). Of that $373.4 billion, approximately $5.6 billion was deployed to support the creation of new businesses. BEA reports that foreign direct investment (FDI) in newly acquired, established, or expanded foreign-owned businesses was responsible for employing 480,800 individuals. The BEA data also provides information on investments broken out by select industries, state, and type of investment made (e.g., startup capital, expansion capital, or business acquisition).