SSTI Digest

More than 48,500 are employed in West Virginia’s STEM-related fields, according to an October survey, A Survey: STEM Jobs in West Virginia in 2015, commissioned by TechConnect WV and the West Virginia Department of Commerce. The survey, which used data from 2015, found that 48,553 people, or 6.7 percent of the state’s workforce, are employed in science, technology, engineering or math (STEM)fields – ranking the state higher than the national average of 6.2 percent (as of May 2015). The reported average hourly wage in West Virginia for a STEM-related job is $28.89. And those STEM jobs support another 190,000 jobs in West Virginia, including 56,600 workers employed in the healthcare sector, and 2,420 employed as post-secondary educators in STEM-related subjects.

Because existing evidence points to the presence of broadband as having a positive connection to the economic health in rural areas, numerous states and the federal government have made increasing broadband in these places a top priority. In particular, many rural areas view broadband as an important tool in attracting entrepreneurs and other creative-class employees. Although this tactic is well intentioned, new research suggests that the association between expanded rural broadband availability and the proliferation of entrepreneurship and creative-class employees may not be as strong as one might think, and that the relationship may actually be negative.

Venture development organizations are reaching into new territory for funding partners and finding success in innovative models. Two new funds, the San Diego Tech & Life Science Investor Syndicate and Rev1 Fund I in Columbus, OH, have recently opened with less traditional funding sources, testing the waters of crowdfunding and heavy corporate backing, respectively. The San Diego fund, launched by CONNECT, allows anyone wanting to invest $1,000 the opportunity to participate alongside more experienced lead investors.

After an extremely strong venture capital market in 2015, the industry seems to show the signs of a decline driven by both cautious and fatigued investors. Three recent studies from Pitchbook and CB Insights indicate that there are several reasons why venture capital firms and other investors have been more cautious so far in 2016 including: mixed economic growth numbers; a volatile political climate; and, more security in private markets.

Students at several California community colleges as well as California State University (CSU) campuses have access to a new incentive to graduate in four years through new state “promise” programs.  Gov. Jerry Brown Jr. signed SB 412 and AB 1741 creating “promise” programs that act in conjunction with a new 2025 Graduation Initiative, aiming to boost the number of students graduating from those institutions in four years to 40 percent. Success in the programs is intended to help address future workforce needs of California and improve achievement gaps.

Millennials internalized the effects of the most recent recession and revealed their beliefs about the economy and jobs future in a recent poll conducted by EY, a professional services company, and the Economic Innovation Group. Nearly one-third believe their community is still in a recession and 78 percent are worried about having good-paying job opportunities, according to the poll. Hard work is an important factor to get ahead in life, say 88 percent of the 18-34 year olds, and two-thirds say having a college education is important, but just 49 percent believe the benefits of a college education will be worth the cost.

The Economic Development Administration (EDA) requests public comment on the overarching regulatory framework for the Regional Innovation Program. Comments should focus on the structure and implementation of the Regional Innovation Program, including Regional Innovation Strategies (RIS) grants. Through the RIS program, EDA awards grants for capacity-building programs that provide proof-of-concept and commercialization assistance to innovators and entrepreneurs, as well as operational support for organizations that provide essential early stage funding to startup companies. Comments should address one or more of several topics including, but not limited to:

• Purpose and scope of the Regional Innovation Program and/or RIS program;
• Program eligibility and matching share requirements; and,
• RIS Application components, evaluation, and selection criteria. 

Comments must be submitted by November 21. 

Over the last several months, the Economic Development Administration (EDA) has announced millions of dollars in grants to support tech-based economic development efforts in communities across the country (see recent Digest articles from August 18 and September 8). The most recent announcements of grant funding will provide targeted funding to expand and build facilities that support entrepreneurial/business development in Oklahoma, Pennsylvania, and Wyoming as well as workforce efforts in South Carolina. Each of the grants also addresses a specific regional need or key industries including growth in advanced manufacturing sectors, attraction of foreign direct investment, and support for key regional tech-focused industries such as agriculture and healthcare.

Oklahoma

U.S. research and development (R&D) performance rose to $477.7 billion in 2014 – an increase of $21.1 billion over 2013, according to a recent National Science Foundation (NSF) InfoBrief. When adjusted for inflation, growth in U.S. total R&D performance (1.2 percent annually between 2008 and 2014) matched the average pace of U.S. gross domestic product (GDP). Of the $477.7 billion in R&D funding, approximately 63 percent ($300.1 billion) went to experimental development with the remaining 37 percent supporting basic research ($84 billion) and applied research ($93.6 billion).

As U.S. cities increasingly focus economic development strategies on technology and innovation to spur economic growth, they should be cognizant that growing these businesses and jobs can also exacerbate local inequities and should, therefore, develop plans to address this issue, according to a newly released report from the Equitable Innovation Economies Initiative (EIE). Prototyping Equity: Local Strategies for Equitable Innovation Economies is a report of the EIE, a multi-year project launched by the Pratt Center for Community Development, PolicyLink, and the Urban Manufacturing Alliance focused on inclusive growth strategies for innovation and manufacturing. In addition to describing the importance of pursuing an equitable innovation economy, the report also documents the initiative’s cross-sector efforts in piloting new approaches across four regions: New York, NY; Indianapolis, IN; Portland, OR; and, San Jose, CA.

The U.S. Department of Commerce has announced that 30 individuals will serve in the third membership cycle of the National Advisory Council on Innovation and Entrepreneurship (NACIE). NACIE, which was established in 2010, advises the secretary of Commerce on transformational policies to help communities, businesses and the American workforce become more globally competitive. With members serving two-year appointments, the newest appointments tothe council include representatives from the private, nonprofit and academic sectors, including several organizations involved in technology-based economic development. Furthermore, five of the NACIE members are returning to provide institutional knowledge that helps bridge the transition to the next presidential administration, according to a blogpost written by Julie Lenzer, director of Innovation and Entrepreneurship at the U.S. Economic Development Administration.

A spate of recent news challenges many common perceptions of venture capital. Academic researchers have identified critical shortcomings with widely used industry data. Major investors have revealed smaller than anticipated returns. An analysis of thousands of investments indicates fund success requires superstar deals of well more than 10x. These articles should drive new evaluations of public policy and programs to support early stage capital.

A NBER working paper authored by Steven Kaplan and Josh Lerner recently described the dearth of credible data and analysis of VC fund investments and VC performance. Kaplan and Lerner argue that available VC data is incomplete and biased and raise concerns with a reliance on the release of proprietary data from self-selected funds. Their arguments raise questions as to whether investors are giving enough thought before investing billions of dollars into VC funds.