SSTI Digest

Vice President Joe Biden announced that the Research Foundation for the State University of New York will receive a $110 million federal grant from the U.S. Air Force Research Laboratory to lead the American Institute for Manufacturing Integrated Photonics (AIM-Photonics). The Department of Defense-funded grant will be supplemented by a $250 million investment from the state of New York with additional funding commitments from public and private partners expected to exceed $245 million over the next five years. Headquartered in Rochester, NY, AIM-Photonics is intended to develop the next generation of integrated photonics while helping to  create and support thousands of advanced research and manufacturing jobs in New York state and across the nation. According to a fact sheet released by the White House, the winning team includes 75 key partners and 49 additional consortia members from 20 states including: 55 companies; 20 universities and laboratories; 33 community colleges and other schools; and, 16 nonprofit organizations.

Between 1998 and 2010, impact investment funds outperformed funds of the same size, according to the Wall Street Journal. Impact-focused funds of $100 million or less posted a 9.5 percent pooled net internal rate of return, outperforming the 4.5 percent delivered by funds of the same size that were not focused on impact investments. The industry, however, is still in its nascent stage and data remains somewhat scarce. In an article for Quartz, William Burckart contends that wealth management professionals are hesitant to propose impact investment funds to their clients for several reasons, including:

Located just a 20-minutes from New York City, Newark has long existed in the shadow of its much larger neighbor. Despite this, Newark’s downtown received an important boost to its innovation ecosystem this week with the announcement of Newark Venture Partners, a venture capital fund and accelerator. Seeded with funding from Audible.com and Prudential Financial and backed by city and state officials, Newark Venture Partners announced its intention to raise $50 million to form an investment fund dedicated to supporting local tech startups.

Total venture capital investment rose 95 percent in 20 of the world’s top startup ecosystems from 2013-2014, according to The Global Startup Ecosystem Ranking 2015 – a 160-report from Compass, formerly Startup Genome. Compass researchers also found that the global startup ecosystem landscape is maturing rapidly with non-Silicon Valley ecosystems capturing 14 percent more of the exit value pie in three years (2012-2014). In 2014, non-Silicon Valley startup ecosystems captured 59 percent of the value of all startup exits, up from approximately 45 percent in 2012. The report includes several recommendations for policymakers and investors to support or grow their region’s startup ecosystem including:

In FY 2013, the federal government obligated $25.9 billion for science and engineering research and development (S&E R&D) at colleges and universities, a decrease of $1.6 billion from FY 2012 (5.7 percent). Eight states (California, New York, Maryland, Pennsylvania, Massachusetts, Texas, North Carolina, and Illinois) each received more than $1 billion in funding during FY 2013, though each state also experienced a decrease from their FY 2012 total. In total, these eight states received $14.1 billion from the federal government for S&E R&D at their colleges and universities, representing 54 percent of the government’s total. This share has remained relatively constant since 2008.

Just 14 states experienced an increase in federal obligations for S&E R&D at universities and colleges from FY 2012 to FY 2013. Four states experienced increases larger than 10 percent over the course of the year: Vermont (19.7 percent), Alaska (13.9 percent), Maine (13.1 percent) and Nevada (11.59 percent). None of these states had a university or college, however, which was in the top 100 for total obligations.

On Wednesday, President Obama launched a new National Strategic Computing Initiative (NSCI) by executive order. The multi-agency effort will seek partnerships with academia and industry to build high-performance computing systems capable of exascale processing and more than 10 times as fast as existing supercomputers. NSCI will support the design of systems that are not only fast, but also capable of manipulating the large and dynamic datasets typically characterized as "big data." Partner agencies will invest in efforts to make exascale processing less energy-intensive, more available and simpler to use. Read the announcement...

Now that many governors have signed spending bills and legislative sessions are drawing to a close, the SSTI Digest will check on the status of proposals related to the innovation economy, and examine the state of technology-based economic development funding in the states. This week, we review spending bills in California, Iowa, Ohio and New Jersey.

California
On June 24, Gov. Jerry Brown signed a FY16 budget package that includes $115.4 billion in general fund spending. The final budget includes $49.4 billion in general funds for K-12 education, $14.2 for higher education and $214 million for labor and workforce development. Within the higher education allocation, there is $29.1 million in new funding for community college apprenticeship programs, including $14.1 million to expand current programs and $15 million for apprenticeship-demonstration projects in emerging industries.

Women as business owners may be an underutilized resource for economic development and growth in the state of Wisconsin, according to a recent study from researchers at the University of Wisconsin-Madison (UW-Madison) – Women Business Leaders Across Wisconsin, 1990-2011. The researchers found that women-owned or managed more than 80,000 Wisconsin-based businesses (nearly 19 percent of all businesses) in 2011. Those businesses employed over 550,000 workers and earned $45 billion in sales. The authors found that the number of women-owned or managed businesses more than tripled between 1990 and 2011, growing significantly during the 1990s and then stabilizing between 2000 and 2011.The study also cites research that women-led businesses are more effectively led, financially honest, have more customers, increased sales and greater profits.

The National Science Foundation (NSF) announced the winning teams of its first Community College Innovation Challenge (CCIC) – a competition that challenged teams of community college students to propose innovative science, technology, engineering and mathematics (STEM)-based solutions to real-world problems. The Red Foxes, from Red Rocks Community College (CO), placed first in the challenge with its innovative Mobile Medical Disaster Relief Dispensation Unit. Ivy Tech Biotech from Ivy Tech Community College of Indiana placed second with the Betadataquantadata – a hand-held, lay person-operated biosensor for coliphage. The top-ranked teams were decided after 10 finalist teams participated in a rigorous, week-long innovation boot camp held in Washington, D.C., during June. Other finalists proposed solutions in areas such as big data, infrastructure security, sustainability and broadening participation in STEM. Read the announcement…

Although immigrants account for approximately one-fourth of U.S. science and engineering (S&E) employment, there have been relatively few academic studies published that discuss the link between these immigrants, who represent an increasing share of the U.S. workforce, and innovation in the United States. Through a broad investment from the Alfred P. Sloan Foundation, guest editors William Kerr and Sarah Turner curated a special volume of the Journal of Labor Economics to highlight recent research specifically focused on the impacts of high-skilled immigration.

Venture capital (VC) firms invested more than $17 billion in 1,189 deals in the second quarter of 2015, the highest level of activity since 2000, according to the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PWC). Megadeals (deals greater than $100 million) in the software sector drove much of the growth, with 26 deals such deals, including one that exceeded $1 billion. With $7.3 billion in investments, software deals in the second quarter exceeded total investment across all sectors in 51 of the last 82 quarters. The industry is on track to surpass the $50 million invested last year. Read the NVCA/PWC release…

Challenge.gov, an online portal that facilitates public-sector prize competitions, is celebrating its fifth anniversary later this year. Numerous federal agencies have used prize competitions to spur innovation around areas ranging from water desalination to lung cancer, according to a White House blog post. Those agencies have found that this incentive-laden approach increases cost-effectiveness, encourages risk-taking, and reaches participants beyond a typical scope.