SSTI Digest

The House Appropriations Committee began releasing FY 2018 “markup” budget bills this week, and the proposals would cut billions in non-defense spending. EDA would lose $100 million* in funding, SBA’s entrepreneurial development programs would lose $34 million, NIST’s Manufacturing Extension Partnership would lose $30 million, and Energy’s ARPA-E would be eliminated, among other cuts. As SSTI noted for both the administration’s proposed FY 2017 and FY 2018 budgets, congressional statements rejecting the president’s total budget package did not necessarily make innovation safe.

Since President Trump has taken office, the U.S. has seen several dramatic shifts in science and technology (S&T) policy from the previous administration—changes that several foreign leaders believe will create economic growth opportunities for their countries. As the Trump administration continues to roll out its S&T policy directives, these nations seem committed to growing their economies while chipping away at U.S. dominance in S&T. The most recent efforts by foreign governments fall into policy areas focused on supporting climate change and attracting talented immigrants.

Climate change activities

The state budget process is winding down across the country and SSTI continues to review the final budgets for funding for innovation-based programs. This week, we found level funding for South Carolina programs including MEP and regional-based economic development efforts, while university programs in Texas are taking a hit, and in West Virginia Gov. Jim Justice refused to sign the state budget although he will allow the legislatively approved measure to become law. Unless otherwise noted, the figures below represent level funding from the previous budgets.

South Carolina

South Carolina Gov. Henry McMaster signed the state’s 2018 budget (HB 3720) that would support several tech-based economic development programs that are funded through the Department of Commerce including:

Earlier this month, the White House released an executive order to expand apprenticeship programs and to study other federal workforce initiatives. The administration will attempt to reduce regulations for “effective” efforts while reducing funding for other programs. The Washington Post reports that the administration seeks to increase apprenticeship funding to $200 million through reallocation of workforce spending.

The executive order emphasizes the disconnect between higher education costs and employment, stating: “Far too many individuals today find themselves with crushing student debt and no direct connection to jobs… Federal programs must do a better job matching unemployed American workers with open jobs.”

To expand apprenticeships, the order cites specific actions for the secretary of labor, including the following:

Massachusetts Gov. Charlie Baker announced a legislative proposal that would provide $500 million over five years for the life sciences sector, extending the state’s commitment to the biotech and medical technology industry. The money would be used for strategic investments in public infrastructure, research and development, workforce training and education. The proposal includes a $295 million bond authorization to provide capital funding,  up to $150 million in job-creating tax incentives, and $55 million for the Investment Fund, which would be provided through the annual consolidated net surplus, the same funding mechanism as the current initiative. The funding will continue to be managed by the Massachusetts Life Sciences Center (MLSC) and build on earlier investments. MLSC was charged with implementing the $1 billion, 10-year state-funded initiative that was signed into law by former Massachusetts Gov. Deval Patrick in 2008 and expires next year.

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.

The Economic Development Administration (EDA) announced approximately $30 million in funding for the Assistance to Coal Communities (ACC). As part of the FY 2017 appropriation for the Public Works and Economic Adjustment Assistance (EAA) programs, the ACC will assist communities severely impacted by the declining use of coal through activities and programs that support economic diversification, job creation, capital investment, workforce development, and re-employment opportunities. The program was created pursuant with the Consolidated Appropriations Act, 2017.

Building Bridges for a Better Future serves as the theme of this year’s conference, taking place Sept. 13-15 in Washington, D.C. “We chose the theme after hearing from our members and others in the field about the importance of reaching outside of our traditional networks and imagining what the future may hold for those in the innovation economy,” said Dan Berglund, SSTI president and CEO. “We’re excited to hold the conference in the nation’s capital, and share the stories of successes, along with the challenges, that stakeholders in science, technology, innovation and entrepreneurship are facing.”

As more state legislatures are coming to the close of their sessions, more state budgets are being finalized. This week SSTI takes a look at the final appropriations for Alabama, which is decreasing its innovation funding in higher ed; Florida, whose governor signed a budget after vetoing more than $20 million in STEM, higher ed, R&D and other innovation funding; Nevada, with positive news in technology-based economic development funding; and Tennessee, where the Department of Economic and Community Development’s state funding is down by more than 27 percent compared to FY 2017.

Alabama

The angel investor market in 2016 experienced a decrease in investment dollars and deal size, according to a new report from the Center for Venture Research (CVR) at the University of New Hampshire. CVR researchers found that total investments were $21.3 billion in 2016, a decrease of 13.5 percent from 2015. In 2016, a total of 64,380 startups and other entrepreneurial ventures received angel funding – a decline of 9.5 percent from 2016.  The report also includes sections on sector analysis, stage of investment, job growth, valuation, yield rates, and inclusion.

Over the past four years, 1,668 deals involving university spinout companies from across the globe attracted approximately $35.6 billion from 2013 to 2016, according to a new report from Global University Venturing. The report, however, highlights that global deals peaked in 2014 with 529 deals and total investments dollars peaked in 2015 with nearly $14 billion invested. As the authors highlighted, these global numbers were unsustainable and 2016 saw significant declines in both deals and dollars. In 2016, the total deals reported were 407 (21.6 percent decrease from 2015) and dollars invested was $6.4 billion (a 54.3 percent decrease from 2015).

After much criticism, the National Institutes of Health (NIH) announced that it will abandon the Grant Support Index (GSI) plan – a strategy to bolster NIH funding support for the next generation of researchers by placing limits on individual research funding which SSTI previously covered.. Instead, NIH will launch the Next Generation Researchers Initiative (NGRI) that will allocate $1.1 billion over the next five years to support nearly 2,400 new grants for early and mid-career researchers whose grant proposals receive high scores, but fall short of receiving funds. At this time, however, there was no immediate promise of where that money would be found, according to an article in the The Chronicle of Higher Education.