SSTI Digest

As a reminder, the closing date for applications to the Regional Innovation Strategies (RIS) program is Monday, October 5. A program of the EDA’s Office of Innovation and Entrepreneurship, the 2015 RIS Program Competition includes $10 million to support two unique grant opportunities:

As the Federal Aviation Administration continues to propose regulations around the fledging unmanned aircraft system (UAS) industry in order to ensure that it integrates into the current system as well as possible, states are beginning to act in order to improve their own competitiveness. The FAA Modernization and Reform Act of 2012 directed the FAA to establish a test sites program for the UAS, taking into account geographic and climatic diversity, location of ground infrastructure, and research needs in choosing the sites.

The Department of Energy (DOE) released the 2015 Quadrennial Technology Review (QTR), a more than 500-page report examining the status of foundational energy science and technology (S&T). The QTR also highlights the research, development, demonstration, and deployment (RDD&D) opportunities with a focus on technologies with commercialization potential in the mid-term and beyond. DOE intends to use the QTR in assisting decision makers as they set priorities, within budget constraints, to fund RDD&D and commercialization efforts that will develop more secure, affordable, and sustainable energy services.

In the QTR, DOE outlines three enduring strategic objectives of the agency’s efforts related to creating a national energy system:

Researchers from the Federal Reserve Banks of Kansas City and Atlanta, along with the John J Heldrich Center for Workforce Development at Rutgers University, recently published a comprehensive examination of the state of contemporary workforce initiatives. Editors Carl Van Horn, Tammy Edwards and Todd Green have assembled chapters and case studies from more than 70 authors that depict challenges, long-term structural changes and policy opportunities in national, state and local workforce efforts in the current economy. Of particular interest to the TBED community are King and Prince’s article on scaling sectoral and career pathway programs, an examination of the success of the Wired65 initiative in Kentucky and Indiana, and several articles on building data-driven intelligent workforce systems.

Undergraduate alumni from the top 10 universities for venture capital-backed (VC-backed) entrepreneurs launched over 3,000 companies that were able to attract $33.5 billion in VC funding from 2010 to 2015, according to the third edition of PitchBook’s Universities Report 2015-2016 Edition. Four public research institutions, UC-Berkeley, University of Michigan, University of Texas, and University of Illinois, finished in the top 10. The authors conclude that public research institutions that ranked among the 50 top VC-backed undergraduate entrepreneurs represent the intersection of emerging or maturing startup ecosystems and academia. In addition to ranking the top 50 universities for VC-backed undergraduate entrepreneurs, PitchBook also ranks the top schools for M.B.A. students and female entrepreneurs in regard to their alumni’s ability to attract VC-backing. With regard to female entrepreneurs, the top 10 is driven mostly by private universities with only UC-Berkeley and the University of Texas cracking the top 10.

The Department of Energy (DOE) announced that it is accepting applications for the first round of its Small Business Vouchers Pilot (SBV) program. Under the SBV program, the DOE will commit up to $20 million in technical and research assistance awards to help small businesses bring next-generation clean energy technologies. Companies may apply for and receive up to $300,000 in assistance from U.S. Department of Energy national laboratories nationwide. Assistance will be offered in nine topical areas and can range from materials development to modeling to prototyping and scale-up, and much more. 

Seed stage valuations have risen steadily over the last five years to an all-time high of 3.95 million (Median), a 30% increase over 2014, according to the recently released 2015 Q2 ARI HALO Report from the Angel Resource Institute at Willamette University (ARI). The authors found that all U.S. geographical regions have seen increases in round size in the last six quarters with the largest increases in round sizes in the Great Plains ($0.2 million to $1.1 million), Mid-Atlantic ($0.3 million to $1.5 million), and Northwest ($0.3 million to $1.5 million) regions. While New England and the Southeast maintain a relatively balanced portfolio across sectors, the authors found several regional industry concentrations exist including: mobile and Internet in California and New York; food & beverage in Texas; and, Industrial and Healthcare in the Great Lakes. ARI researchers also found that angel investing activity is equally distributed across the country (50%/50%) when parsed either East and West or North and South.

Economic conditions across the country continue to improve, according to the Bureau of Economic Analysis’ (BEA) latest release of gross state product (GSP) data. GSP is derived as the sum of the gross domestic product originating in all the industries in a state. The period between 2008 and 2009, where the U.S. GDP decreased by 2 percent, marked a transition for many states, where their gross state product either decreased from the year before or where their growth rate was subdued. Since then, however, every state has experienced at least a 10 percent increase in gross state product from 2009 to 2014. During this time, the U.S. GDP has increased by 20.8 percent, roughly 3.8 percent per year.

While speaking in Detroit last week, Vice President Joe Biden announced the creation of an Institute for Advanced Composites Manufacturing Innovation (IAMCI)  location in Detroit, aimed at creating better composite materials for wind turbines, compressed gas storage, and in particular, the automotive industry. Funded by the U.S. Department of Energy and the Michigan Economic Development Corporation, Michigan State University will serve as the primary academic partner for the IAMCI consortium, which consists of 122 members across six states: Colorado, Illinois, Indiana, Kentucky, Michigan and Tennessee. According to a press release from Michigan Gov. Rick Snyder, the IACMI’s open-access pilot manufacturing test facility and technology development and demonstration programs will be driven by major industry participation.

While most state legislative sessions ended over the summer, a number of states only recently approved spending for FY16. Governors in Alabama, North Carolina and New Hampshire have approved budgets in the past few weeks, each after months of tense negotiations. SSTI reviews budgets in each of these states for spending related to technology-based economic development. For past articles in this series, visit ssti.org/tags/state-budget.

Alabama
Last week, Gov. Robert Bentley signed Alabama FY 2016 General Fund Appropriations bill (HB1, Second Special Session 2015) following a second special session of the legislature. Funding for many state agencies was reduced by 5.5 percent, and $80 million in use tax revenue from the state’s Education Trust Fund was moved to the General Fund.

Last week, the Treasury Department released guidance recognizing foundations may make investments with a wider range of return and risk expectations so long as they are not jeopardizing or compromising their charitable missions.  Proponents for the change expect the guidance to open the doors to more mission-related investments (MRIs), impact investing and innovative finance approaches to dealing with the growing array of societal and environmental issues confronting the globe. This should also create opportunities for new partnerships with forward-thinking venture development organizations and tech-based economic development initiatives. 

On the heels of the IRS guidance release, the Kresge Foundation, which has already supported a number of Michigan-based economic development initiatives, announced it expects to increase its impact investing portfolio to $350 million by 2020.  

New Mexico Gov. Susana Martinez has released the state’s first comprehensive energy plan since 1991. Her administration characterizes the plan as an “all of the above” approach with an emphasis on improving infrastructure, creating new incentives and streamlining regulations. Though the plan does not feature support for energy technology R&D, it prioritizes reducing fresh water consumption and improving workforce training for energy jobs.  In Vermont, a recent report notes that the state has grown clean energy employment by more than 6 percent in the last year.

The New Mexico plan outlines a strategy to leverage the state’s position as the fourth highest net-energy supplier to the United States into new jobs and energy independence. Pillars of the plan include funding for infrastructure projects, such as rail lines and electric transmission, incentives for natural gas, a low-carbon energy portfolio standard and the removal of regulatory barriers.