SSTI Digest

On the heels of a recent memo from the President’s Council of Advisors on Science and Technology (PCAST) highlighting the difficulty middle-skill workers are having finding a route into the modern economy, reports from two tech hotspots suggest that local action is needed to ensure that tech success translates into widespread economic prosperity. San Francisco and Austin are leaders in the nation’s innovation economy and fared better than most of their peer cities through the Great Recession. However, rising housing prices and a lack of resources for middle- and low- wage workers have led to rising inequality and less robust economies in both cities.

Purdue University, the University City Science Center, and Washington State University announced the creation of new investment funds to support the growth of university-affiliated startups in their respective communities. These three recently announced commercialization funds all share a common trend – they will be managed or assisted in the management process via public-private partnerships. In Baton Rouge, LA, the Research Park Corporation also announced the creation of a fund to assist Louisiana State University researchers compete for commercialization funding from the university.

Purdue University
In partnership with the Indiana Economic Development Corporation, the Purdue Foundry announced the creation of the Elevate Purdue Foundry Fund, a three-year, $2 million fund to support qualified Purdue-affiliated startups. The funds are intended to support a startup venture that will commercialize licensed Purdue University intellectual property or that will leverage other Purdue assets such as research collaborations. It will offer two levels of support:

Commercial knowledge and technology-intensive (KTI) industries produced nearly one-fourth of the U.S. gross domestic product (GDP) in 2012 ($3.8 trillion), according to a recently released National Science Foundation (NSF) Infobrief using Bureau of Economic Analysis and Bureau of Labor Statistics data. Nearly 90 percent of KTI GDP came from knowledge-intensive (KI) services industries that employed 18 million workers in the United States, while the high-technology (HT) manufacturing industries employed 2 million workers and produced 2 percent of the nation’s GDP in 2012, with both industries paying more than $20,000 higher than the private sector average. Although a considerably smaller portion of KTI, HT manufacturing industries have a greater concentration of workers in science and engineering occupations and perform a larger proportion of the nation’s research and development – the six HT manufacturing industries performed nearly one-half of U.S. business R&D.

As part of Next Century Cities, a new bipartisan, city-to-city initiative, 32 cities and their elected leaders from across the United States are uniting to recognize the importance of leveraging gigabit-level Internet for economic development. The initiative enables participating cities to work together to learn about best practices in engaging and assisting communities in developing and deploying next-generation broadband Internet so that every community has the resources needed to succeed. Next Century Cities was launched at a co-working space in Santa Monica, CA, featuring remarks from the chairman of the Federal Communications Commission and the mayors of Santa Monica, Chattanooga, and Lafayette, LA, and panels featuring leading civic technology and innovation officials. The first group of cities features large municipalities such as Boston, Kansas City, Portland, and San Antonio, in addition to a variety of smaller cities across 19 states. 

Read more here…

With Gov. Pat Quinn, Mayor Rahm Emanuel, Sen. Mark Kirk, and University of Chicago President Robert Zimmer in attendance, the Chicago Innovation Exchange (CIE), a new startup incubator in Chicago’s Hyde Park neighborhood, had its grand opening last Thursday. The CIE is comprised of 32,000 square feet divided among three buildings across the city’s South Side: the central hub, with incubation and event space, the “CIE Skydeck” an 11^th floor conference space, and a third location, set to open in 2015, with fabrication and prototyping lab space and equipment such as 3-D printers, mini-mills, and laser cutters. At the event, Gov. Quinn announced that the state would invest $1 million into the new center to support infrastructure and build-out of the space.  

In Q3 2014, venture capital (VC) investments in the U.S. dropped by 30 percent from Q2 totals, according a new report from CB Insights. Q3 VC deal levels also dropped by 10 percent from Q2 totals. The severe drop, however, can be attributed to Q2 being the most successful VC quarter since Q1 2001. The good news is that the first three quarters of 2014 saw the U.S. VC investment total reach $33.75 billion – an increase of 59 percent compared to the first nine months of last year.

The initial public offering (IPO) market fell off significantly in Q3 with just 18 U.S.-based, VC-backed companies going public. In comparison, 59 companies went public in Q1 and Q2 combined. CB Insight researchers also found while late-stage deal share remained consistent at about 16 percent with Q1 and Q2, the size of those investments in share of venture capital dollars by series dropped from 35 percent in Q1 to only 22 percent in Q3. Read the report…

Over the past decade, two ideas have become more and more popular among innovation and economic development leaders. First, that maximizing collaboration between institutions, interest groups, stakeholders and communities is pivotal in building an innovation ecosystem that can succeed and grow over time. Second, that proximity matters, and by focusing on innovation networks at the regional or metro scale, rather than at the national or state level, initiatives can have a real, measurable economic impact. Though they seem complementary, these ideas are frequently in tension. The first suggests that increasing the number of partners leads to more successful initiatives. The second suggests that, at least in terms of geography, there should be some kind of limit on the scope of innovation initiatives in order to tailor them to the needs of a specific region.

James A. Anderson, the founder and CEO of Detroit-based retail consulting firm Urban Science, and his wife donated $25 million last week to support the entrepreneurial efforts of Wayne State University’s engineering and computer science faculty and students. The donation will establish The James and Patricia Anderson Engineering Ventures Institute, embedded within the university’s College of Engineering, a center to encourage faculty to commercialize new technologies, secure patents, and establish startup companies, while also providing mentors to young entrepreneurs and teaching best practices in innovation, tech transfer, and commercialization. Crain’s Detroit Business also reports the grant will fund five endowed chairs and several graduate scholarships, with an office set to be open and staffed by the end of the year. The family’s gift is part of Wayne State University’s Pivotal Moments fundraising campaign, which has now received more than half of its $750 million goal amount.

Earlier this summer, President Obama announced that his administration would be taking executive action to reform immigration policy, working to improve the entirety of the immigration system by tweaking individual components. This week, at a startup incubator in Los Angeles, the President revealed at least one of those components: the H1B system. As part of his remarks at a town hall meeting on innovation, the president declared his intentions to make the H1B system more efficient so that it encourages more people to stay in the United States. Capped at 65,000 visas for private-sector workers each year, the H1B (H-1B) visa program is the main visa used to bring high-skilled, foreign-born, talent into the United States.

Australian Minster Tony Abbott announced a $400 million AUD (approximately $352M USD) national Industry Innovation and Competitiveness Agenda focused on building the country’s innovation economy, supporting apprenticeship and workforce programs that address the needs of industry, and promoting science, technology, engineering and mathematics (STEM) education.  The centerpiece of the agenda is a $188 million AUD (approximately $165.5M USD) initiative to create industry growth centers in five sectors: food and agribusiness; mining equipment, technology and services; oil, gas and energy resources; medical technologies and pharmaceuticals and advanced manufacturing services. These industry-led centers would provide funding and technical assistance to support the commercialization of products developed via university-industry partnerships. The government also calls for immigration reforms that ease English language and skills requirements to attract more skilled workers.

Mayor Rahm Emanuel and a coalition of Chicago organizations and private businesses have announced plans to place at least 1,000 workers in manufacturing jobs. The mayor’s 2015 budget proposal, presented this week, includes $200,000 for the effort, with another $750,000 in funds and in-kind contributions from partners. Recent growth in the region’s manufacturing sector has created an urgent need for workers with specific training and apprenticeships, according to the mayor’s announcement. Existing training programs would be leveraged to train participating workers and six local organizations have been tapped to aid in jobs placements. Learn more…

The U.S. Department of Commerce has released the names of the 27 individuals who will serve as the initial members of the National Advisory Council on Innovation and Entrepreneurship (NACIE). NACIE, which will begin work in December, will advise the secretary of Commerce on transformational policies to help communities, businesses and the American workforce become more globally competitive. Subcommittees will explore the council’s three main focus areas: entrepreneurship, innovation and job-driven skills training. The list of council members includes representatives from the private, nonprofit and academic sectors, including several organizations involved in state and regional technology-based economic development. Read the announcement…