SSTI Digest

Business applications have greatly increased over the last two decades, jumping 119% from 2005 to 2023. However, the rate of high-propensity business applications—applications identified by the Census Bureau as having higher likelihoods of turning into businesses with payroll—have decreased as a share of all applications every year since 2005, despite having grown 22% over the same period. Breaking these numbers down by states shows uneven trends, with the difference in shares of high-propensity business applications in 2005 and 2023 decreasing by over 20 percentage points in most states. This article uses monthly data on seasonally adjusted business applications downloaded from Business Formation Statistics (BFS). These data were developed at the Center for Economic Studies in research collaboration with economists affiliated with the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of Atlanta, the University of Maryland, and the University of Notre Dame. For this article, these data were annualized by taking the sum of each month in a given year. Data for both total business applications and the subset of those defined as high-…

Ben Franklin Technology Partners, a technology-based economic development program serving all 67 Pennsylvania counties, reported in its 2023 Annual Statewide Impact Report that, since its inception more than 40 years ago, it has boosted Pennsylvania’s economy by more than $30 billion, generating more than 58,000 jobs in client firms plus an additional 101,000 spinoff positions, for a total of 159,000 new jobs that otherwise would never have existed. In 2023 alone, Ben Franklin’s clients generated $2.8 billion in revenue and secured $1.2 billion in post-Ben Franklin financing, according to the report. The program also supported 1,827 companies and helped clients create 2,493 jobs while retaining 10,588 more positions. The report also announced that Ben Franklin’s clients developed 189 patents and software copyrights, commercialized 257 new products, and launched 103 new processes. The report highlights success stories from each of its four regions: PSNERGY, an industrial machinery manufacturing company in Erie, Pennsylvania, has achieved a 27% year-over-year revenue growth. Noble Biomaterials, an intelligent materials company focused on selling…

The Rural Partners Network, an all-of-government program that helps rural communities find resources and funding to create jobs, build infrastructure, and support long-term economic stability, is asking the public to nominate rural innovators who are positively impacting their rural communities. Individuals of all ages, including youth, are eligible. According to an announcement on their website, nominated individuals could be engaged in either the public or private sectors, including local, state, Tribal, and territory governments; nonprofits; businesses; philanthropy; or academia. The nomination form is here and will close on Friday, June 14, at midnight EST. The White House will recognize selected individuals later this year.

Registration is now open for the SSTI 2024 Annual Conference in Phoenix, December 10-12, at the Sheraton Grand at Wild Horse Pass, located in the Gila River Indian Community. Join us to experience thought-provoking keynotes, open forums, and ample discussion so that you can share your perspective with peers and have your questions answered by policymakers and practitioners—all looking to exchange ideas on creating a better future through science, technology, innovation, and entrepreneurship. We can’t wait to “connect, discover, and refresh” with you in Phoenix this December! Register today!

On Wednesday, a bipartisan group of senators published Driving U.S. Innovation in Artificial Intelligence: A Roadmap for Artificial Intelligence Policy in the United States Senate. The roadmap encourages the executive branch and the Senate Appropriations Committee to reach the $32 billion per year non-defense AI innovation spending level proposed by the National Security Commission on Artificial Intelligence. It also includes a list of recommendations for legislation to regulate artificial intelligence. The recommendations include prioritizing funding for a cross-government AI R&D effort at all relevant government agencies and departments. The recommendation mentions explicitly an all-of-government AI-ready data initiative. It also directs research priorities in “responsible innovation, including but not limited to fundamental and applied sciences, such as biotechnology, advanced computing, robotics, and materials science.” The recommendations point to “funding the outstanding CHIPS and Science Act accounts not yet fully funded, particularly those related to AI, including but not limited to: NSF Directorate for Technology, Innovation, and Partnerships; DOC…

Accelerators are practically everywhere in the U.S., and a look at Pitchbook data on May 13, 2024, seems to confirm that. For the five years of 2019-2023, Pitchbook tagged 18,808 different companies as having received “accelerator/incubator funding.” Conceptually, they were all startups when they received that funding and will be at widely varying degrees of evolution today (the status for 1,730 of them, for instance, was listed as “out of business”). Only 765 were classified as being one of four statuses that might be most easily considered as positive exits:  1. publicly held; 2. in IPO registration; 3. an operating subsidiary of another firm through a merger or acquisition; or 4.  integrated into another firm through a merger or acquisition and no longer tracked separately.  Additionally, only 619 of those 765 successes are headquartered in the U.S. presently—meaning one in five are international firms with a U.S. presence. Figure 1 shows the state-by-state distribution of the U.S. accelerator/incubator-funded successes from the past five years. Clicking on a state’s record in the circle shows the data may be broken down by city for those…

SSTI has released a new video in our Federal Funding Video Library featuring Trent Thompson, economic development representative with the Economic Development Administration’s Denver Regional Office. In this interview, we discuss how EDA’s Economic Adjustment Assistance (EAA) funds can be leveraged to support technology-based economic development (TBED) activities. The interview provides practical advice on the application process, examples of previously funded TBED projects, and strategies for aligning these funds with your region’s needs. Video: EDA Economic Adjustment Assistance Explore the entire series by visiting our Federal Funding Video Library. Created as part of the TBED Community of Practice, this series is designed to help you understand federal programs and funding sources that can support your region’s TBED strategies. For any questions about the SSTI Federal Funding Video Library or suggestions for future entries, send a message to tbedcop@ssti.org. This video series was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings,…

While the headline above may be one of the most boring written in the SSTI Weekly Digest’s history, any recipient of federal grant funding should be aware that changes are coming to the Uniform Grants Guidance that governs federal grants, effective October 1. The guidance “sets the foundational requirements for agencies in making grants and providing other forms of Federal financial assistance, such as cooperative agreements and loans,” according to the White House. The changes will apply only to awards after October 1. Among the changes the White House is touting are directions to agencies to make grant announcements as “clear and concise as possible,” reduce unnecessary compliance costs, remove barriers to entry, and ensure assistance serves intended communities, including supporting programs for Tribal nations. Some of the specific details will be of interest to grant recipients. Among the details that may be of greatest interest to Digest readers: The equipment threshold is raised to $10,000 (2 CFR 200.1); The single audit threshold is increased to $1 million (2 CFR 200.501); The de minimis indirect cost rate will be raised to 15% (2 CFR 200.414(f)); and…

Why the U.S. Economy Needs More Consolidation, Not Less, a recent paper from the Information Technology & Innovation Foundation (ITIF), explains from an economics perspective the advantages of scale economy for improving an industry’s overall efficiency and productivity. Not all industries see significant economies of scale as firms grow, ITIF research points out. In fact, one in four sectors in the 938 NAICS industries do not, ITIF reports, suggesting—but not discussed, that some public policies designed to improve the performance of these small business-oriented sectors may be beneficial. Policy recommendations included in the report are intended to discourage the federal government from refining regulations governing mergers, acquisitions, and potential monopolizing effects from increased consolidation in those 710 sectors where increased consolidation yields greater efficiency and corporate receipts. Many advocates for innovation-driven entrepreneurship and TBED may wince at the mention of consolidation as a positive, perhaps forgetting that mergers and acquisitions present the dominant exit strategy for startup innovation-focused companies within the portfolios…

The Securities and Exchange Commission is seeking candidates to fill a limited number of vacancies on the agency’s Small Business Capital Formation Advisory Committee, which provides advice and recommendations to the Commission on rules, regulations, and policy matters relating to small businesses. The committee advises and consults with the Commission on rules, regulations, and policies as they relate to: Capital raising by emerging, privately held small businesses and publicly traded companies with less than $250 million in public market capitalization; Trading in the securities of emerging companies and smaller public companies; and Public reporting and corporate governance requirements of emerging companies and smaller public companies. Members of the public interested in serving on the committee should promptly email a letter of interest to smallbusiness@sec.gov with applicable information about their relevant experience. The deadline for submissions is June 14, 2024.

The National Institute of Standards and Technology (NIST) has issued a Notice of Funding Opportunity (NOFO) seeking proposals to establish and operate a CHIPS Manufacturing USA institute focused on digital twins for the semiconductor industry. The CHIPS for America Program anticipates up to approximately $285 million in funding will be awarded to the institute. Digital twins, as defined in a press release from the U.S. Department of Commerce, are “virtual models that mimic the structure, context, and behavior of a physical counterpart.” The institute’s funded activities are expected to include, but not necessarily be limited to operational activities to run the Institute; basic and applied research related to semiconductor digital twin development; establishing and supporting shared physical and digital facilities; industry-relevant demonstration projects; and digital twin-related workforce training, according to the press release. Dr. Eric Forsythe, director, and Dr. Michael McKittrick, deputy director of the CHIPS Manufacturing USA Program, will provide a briefing on details of the NOFO on May 8, 2024, at 4:00 p.m. ET. Webinar participants must register in…

AlphaLab Health, an accelerator program developed by Innovation Works (IW) and Allegheny Health Network (AHN) for life-sciences startups in the Pittsburgh region, has received a $10 million grant from an anonymous donor. The grant establishes the AlphaLab Health Revolving Investment Fund, which will support startups in the accelerator program. According to a press release from AlphaLab Health, the investment returns generated by the fund will create a “permanent, self-sustaining source of revenue that will be reinvested into future AlphaLab startups.”  “AlphaLab Health is central to our ongoing commitment to supporting life sciences companies in Southwestern Pennsylvania,” said Innovation Works’ Chief Executive Officer Ven Raju. “The unique partnership between AHN and IW brings to bear the resources and know-how of a large integrated health system with that of a leading venture development organization to help early-stage life sciences companies in the region. The grant will help to bolster the life sciences cluster, from spawning innovative technologies and therapies that have the potential to save lives to catalyzing significant…