SSTI Digest

The Canadian Securities Administrators (CSA) announced that securities regulators in five Canadian Provinces have agreed to CSA Notice 45-316 – a common set of rules that will allow startups to raise up to $500,000 CD (approximately $401,600 USD) per year from unaccredited investors via authorized Canadian-based funding portals. With the passage of the new rules, the provinces of British Columbia, Manitoba, Québec, New Brunswick and Nova Scotia join Saskatchewan as provinces that allow non-accredited investors to make equity investments in startups and other small businesses, according to techvibes.com.

Innovation in the United States, once a hallmark of economic success, finds itself resting on an increasingly weak foundation, according to an article in The New York Times. The author, Eduardo Porter, suggests that two trends – increased international competition and a stagnant R&D-to-GDP ratio – pose key challenges for the U.S. First, government funding for basic research continues to fall and is politically vulnerable. Second, evidence suggests that American corporations are walking away from basic science as well. Each of these challenges, Porter notes, bodes poorly for American progress. Using a variety of data sources, this Digest series provides a long-term analysis to assess how basic research has changed over time within the larger context of research and development in the United States.

Yesterday, the U.S. House Appropriations Committee approved a Commerce, Justice and Science appropriations bill that includes $11 million in funding for the Regional Innovation Program.  This action marks the first time the House bill has included funding for the program. The Regional Innovation Program is SSTI’s top legislative priority. SSTI thanks all who have expressed support for the program. The Digest will report more when the full House acts and the Senate proposal is released.

Massachusetts needs an advanced manufacturing strategy, preferably one based on regional public-private consortia, according to a new report from the MIT Industrial Performance Center. In Strengthening the Innovation Ecosystem for Advanced Manufacturing: Pathways & Opportunities for Massachusetts, the group recommends that the state look to the federal Institutes of Manufacturing Innovation to develop its own manufacturing infrastructure. The state could also benefit from a systematic effort to inform startups about the early stage prototyping and piloting capabilities of small manufacturers. Read the report...

Business owners felt overwhelmingly optimistic about the future, as over 80 percent of them predicted their revenues would increase over the next three months and that financial conditions would be better as well, according to a new survey from Thumbtack.com and Bloomberg  Professional Service.  The Thumbtack Small Business Sentiment Survey captures the economic sentiment of more than 10,000 small businesses nationwide on a monthly basis by surveying both owners and employees of those businesses.  Other findings include:

While there has been a significant amount of focus on identifying and cultivating academic entrepreneurs, two recent studies indicate that the environmental factors are equally important in the commercialization of academic research. These studies find that the commercialization approach of the tech transfer offices (TTOs) and institutional characteristics were vital in the success of academic research commercialization.

In a recent study from the University of Sussex (UK), Dagmar Weckowska examines most common types of tech transfer approaches used by UK TTOs. Weckowska found that most UK tech transfer offices employ two common approaches to commercialization: transactions-focused practice and relations-focused practice. Weckowska characterized transactions-focused commercialization practice as the treatment of outputs of scientific research as tradable products and is focused on completing IP transactions, such as sales and licenses. In contrast, relations-focused commercialization practice is focused on building relations among academics, commercial organizations, and university TT managers.

U.S consumers are subject to a high degree of income volatility and have insufficient savings to overcome shortfalls in their budgets, according to the inaugural report of the JPMorgan Chase Institute. Because of the mismatch between income volatility and consumer spending habits, the authors suggest there is ample room for innovation in the market for companies that help consumers with medium-term financial decisionmaking. The Institute plans to use its access to proprietary data in future report to inform policymakers on topics related to the economy and business. Learn more...

The Federal Laboratory Consortium for Technology Transfer (FLC) is looking for stories about successful technology partnerships between federal labs and state or local governments. FLC will select examples from all six FLC regions to be featured on its website and at SSTI's 2015 Annual Conference. In 2013, winners were featured in a publication on state and local partnerships. Read submission requirements...

Acceleration in angel activity, as described in the most recent Halo Report, is a continuation of a general trend of increased valuations, deal sizes, and activity by angel groups since the start of 2011. Despite this, relatively little attention has been paid to the impacts of these angel groups on the firms in which they invest. Research by Harvard Business School Professors William Kerr and Josh Lerner, alongside MIT Professor Antoinette Schoar, expands on the entrepreneurial finance literature by drawing empirical evidence on the impacts of angel investments. Using a variety of econometric techniques, the authors find consistent evidence that investments by angel groups are associated with improved likelihood of survival for four or more years, higher levels of employment, and more traffic on firm websites. The authors also find limited evidence that financing by angel groups helps firms achieve successful exits and reach high employment levels.

Through the Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative, an effort among multiple federal agencies led by the Department of Commerce’s Economic Development Administration (EDA), up to $35.5 million in funding is now available to provide investments in communities and workers negatively impacted by changes in the coal industry and power sector. As the ways in which electricity is generated and used continue to change, workers in coal-reliant communities are heavily impacted by market, technological, and regulatory forces such as booming natural gas production, declining costs for renewable energy, increases in energy efficiency, flattening electricity demand, and updated clean air standards.

The National Institute of Standards and Technology’s Hollings Manufacturing Extension Partnership (MEP) released a notice of intent to issue two future Federal Funding Opportunities (FFOs) in 2016 for the recompetition of state MEP centers in 22 states. Each state MEP center provides manufacturing extension services to primarily small- and medium-sized manufacturers in their respective state. The first FFO will be released in January to support the recompetition of state MEP centers in Alabama, Arkansas, California, Georgia, Louisiana, Massachusetts, Missouri, Montana, Pennsylvania, Puerto Rico, and Vermont. The second FFO will be released in July 2016 for the recompetition of state MEP centers in an additional 11 states including Delaware, Hawaii, Iowa, Kansas, Maine, Mississippi, New Mexico, Nevada, North Dakota, South Carolina, and Wyoming.  Prior to or in conjunction with each FFO, NIST intends to host regional forums to help organizations through the application process. Read the announcement…

Many promising technologies created by Oregon startups wither on the vine due to a shortage of high-risk angel capital and many other startups leave the state in search of funding, according to a new report from the Technology Association of Oregon (TAO) – Oregon Angel Investment: The Economic Impact of High-Risk Investment in Oregon's Entrepreneurial Enterprises. The authors highlight the rapidly growing entrepreneurial ecosystem that includes a growing number of willing, talented entrepreneurs and entrepreneurial support organizations (e.g., incubators, accelerators). However, the state still lags significantly behind other areas of the country in terms of actual dollars invested, as well as the number of high-risk investment deals that are made.