SSTI Digest

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).

Nearly half of all global deals were spinouts from U.S.-based institutions with 768 deals funded. Driven by the strength of its top universities, the UK finished second with nearly 505 deals completed. In comparison, the countries (Germany, Canada, and Australia) that rounded out the top five had a combined 135 deals.

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.

Although it has been slated for elimination under the president’s proposed budget, the Advanced Research Projects Agency-Energy (ARPA-E) program is making progress toward achieving its statutory mission and goals, and it “cannot reasonably be expected to have completely fulfilled those goals given so few years of operation and the size of its budget.” That is among the findings released this week by the National Academies of Sciences, Engineering and Medicine (NASEM) in its assessment of ARPA-E. The project was overseen by the Board on Science, Technology, and Economic Policy (STEP) and was tasked with assessing ARPA-E’s progress toward achieving its statutory mission and goals, and determining whether it is on a trajectory to achieve them. In short, the answer is that it is.

Michigan’s University Research Corridor, an alliance of Michigan State University, the University of Michigan and Wayne State University, conducted $1.2 billion in academic R&D in the life, medical and health sciences, and served as a stabilizing force to the state’s economy as one of the only sectors that grew during the 2000s. Those are among the findings of the 2017 URC sector report, which was prepared by Public Sector Consultants. The report, Leading Discovery: URC Contributions to the Life, Medical and Health Sciences, notes that employment in the life, medical and health sciences sector, which accounts for one in eight jobs in Michigan, is up 18.9 percent since 2000, compared to overall Michigan employment, which is down 9.3 percent.

The URC also was successful in moving discoveries out of the lab and into the marketplace. From 2012 to 2016, the following results relating to the life, medical and health sciences sector were found:

The SBIR program has been a legislated requirement of the Department of Defense, an agency responsible for roughly 40 percent of all federal extramural R&D spending, for more than three decades. One might expect that over that amount of time, the Department of Defense would have developed a system to become compliant with SBIR’s fundamental provision that a minimum threshold of innovation research spending be directed toward small businesses.  Yet, a new report from the Government Accountability Office concludes DOD couldn’t say if it was meeting the threshold because, DoD did not submit the required obligations data.

As governors and state legislatures continue their negotiations over state budgets, SSTI has reviewed the latest to be signed. The process has proved difficult in more than a few states, with New Mexico having to overcome several stalemates and still facing shortages while in Oklahoma three-fourths of the state agencies are seeing decreased funding due to the state’s $900 million shortfall.

Colorado

Gov. John Hickenlooper signed Colorado’s FY 2018 budget. While the state increased spending by 4 percent overall, few of the state’s investments for innovation were adjusted from the previous year. The Colorado Office of Economic Development and International Trade received a substantial cut of $8 million, leaving the office with $51.0 million for FY 2018. Within the office, the advanced industries incentive programs received approval to spend up to $14 million (reduction of $1.5 million) pending the availability of funds, while small business development centers ($94,144), Leading Edge grants ($75,976) and Rural Jump Start ($80,983) all received level funding.

Among the $410 million in items Gov. Rick Scott struck from Florida’s 2018 budget were more than 100 appropriations totaling more than $20 million that would support STEM education, higher ed, R&D and innovation.  Instead, the governor wants the state to spend more money promoting tourism.

Scott vetoed more than $20 million for innovation-oriented economic development items, including: