SSTI Digest

In this week’s continuing coverage of gubernatorial addresses as they impact the innovation economy, the common themes from Hawaii, Massachusetts and North Dakota were addressing the cost of housing. Hawaii and Massachusetts governors discussed addressing climate change, and North Dakota’s governor called for the creation of a new office focused on rural communities. The following highlights have been excerpted from State of the States or budget addresses given between January 17, 2023 and January 23, 2024. Additional addresses and states will be covered in future Digest issues.

The NSF Directorate for Technology, Innovation, and Partnerships (TIP) is accepting EArly-concept Grants for Exploratory Research (EAGER) proposals that will advance the state of the art in assessing place-based innovation's societal and economic impacts. This funding opportunity aims to address gaps in publicly available data and associated knowledge to adequately and appropriately benchmark activities in place-based innovation grounded in integrating research and development, translation, and workforce development. The dear colleague letter  emphasizes the role of cross-sector partnerships in place-based innovation and how to best leverage all of the regional talent to create inclusive and equitable innovation ecosystems.

Please note the following deadlines associated with this funding opportunity:

The U.S. Securities and Exchange Commission (SEC) adopted a final rule last night, by a 3-2 vote that would require prospective special purpose acquisition companies (SPACs) to disclose their sponsors, compensation, target companies, and conflicts of interest and to require SPAC targets to register with the SEC. As SSTI covered during the pandemic SPAC boom, the vehicle provides private companies with a lower-scrutiny, higher-cost path to enter the public markets by merging with a listed SPAC. Interest in and performance of deals involving SPACs have waned since 2022, but this is also true of the more traditional initial public offering path to the public markets. The impact of the SEC's changes, therefore, may be difficult to determine until more investors are ready to drive private companies to the public markets.

Income inequality in the U.S. has increased from 2006 to 2022, according to American Community Survey (ACS) data. While it’s increased in the nation as a whole, it decreased in North Dakota, Washington, Hawaii, Nebraska, and Montana from 2018 to 2022. New York and Washington, D.C. lead the nation in income inequality. This edition of Useful Stats explores state-level Gini index data from the U.S. Census Bureau’s ACS, analyzed by the State Health Access Data Assistance Center (SHADAC) at the University of Minnesota.

A working paper by a team of Harvard-affiliated researchers presents challenging findings for growth equity impact investors. Given the potential alignment between this sector of the market and publicly funded capital access programs (including many venture development organizations and the State Small Business Credit Initiative), this research may find its way into public policy debates. The paper, which has not yet been published in an academic journal, also contains several shortcomings in its approach that should caution any stakeholders from acting on its findings alone.

In this week’s continuing coverage of gubernatorial addresses as they impact the innovation economy, New Mexico Governor calls for $170 million to bolster hydrogen, geothermal and next-generation battery storage. Rhode Island Governor proposes building a new life science school at the University of Rhode Island and cybersecurity bond to grow Rhode Island College’s cybersecurity program. Meanwhile, West Virginia’s governor proposes increasing spending to attract people to move to the state.

The workforce is growing older, and that’s very likely a good thing for U.S. productivity. Various statistics reveal the active workforce over 65 is more likely to have higher education levels than historically, working at a 0.75 full-time equivalent rate on average, and is working for lower wages on average than younger workers.

This growth toward an aging workforce is readily apparent within the 75-and-older age group. Since 1987, the number of 75 and older workers has more than doubled, from 4% to 9%, according to a study from the Pew Research Center. And the ranks of the employed are filling up among those who are a few years younger, too: 19% of the nation's 11 million 65 and older population is employed, nearly twice as many as were employed 35 years ago.

These older workers are delaying retirement due to evolving trends in the work world, such as financial need and changes in education, retirement policy, healthcare, and the knowledge economy.

Artificial intelligence (AI) is already well integrated into the American workforce; in 2022, 19% of American workers were in jobs identified as most exposed to AI, compared to 23% in the least exposed jobs, according to a study by Pew Research. Jobs identified as most exposed are those in which the most critical responsibilities can either be replaced or assisted by AI. In contrast, the least exposed jobs cannot currently be replaced or assisted. A recent study identified U.S. cities at risk of losing jobs to AI, finding more than 10 million jobs at-risk within those cities.

NSF recently released updates on two ways of profiling trends in science and engineering at the state level: Science and Engineering State Profiles and Science & Engineering Indicators.

United States venture capital activity not unexpectedly slowed down in 2023, cooling off after multiple years of record-high deals and values during 2021 and 2022, according to the PitchBook-NVCS Venture Monitor Q4 2023. Pitchbook-NVCS estimates a total deal count of 15,766 (13,608 actual + 2,158 estimated) for 2023– exceeding the values of 2020 and prior years but falling several thousand short of the last two years. Between these deals, just $170.6 billion was invested, a drop of $71.6 billion from 2022 and $177.4 billion from 2021.

It is important to note that PitchBook continuously identifies new deals and updates their datasets, often leading towards an increase in deals and values over time. Thus, older datasets are often more complete, which may cause direct comparisons between more recent and older years to not provide an accurate picture of the venture landscape.

Since 1980, billion-dollar climate disasters in the United States have increased an astonishing 749%, from averaging 3.3 throughout the 1980s to 28 in 2023 alone. These data from the NOAA National Centers for Environmental Information include floods, wildfires, droughts, severe storms, tropical cyclones, and winter storms. The finding is consistent with the Fifth National Climate Assessment, released last year, that concluded the rise is due to a combination of increased exposure (i.e., more assets at risk), vulnerability (i.e., how much damage a hazard of given intensity—wind speed, or flood depth, for example—causes at a location), and the fact that climate change is increasing the frequency of some types of extremes that lead to billion-dollar disasters. Because climate change will only get worse given its current trajectory, it is reasonable to expect the number and severity of disaster events will continue to grow. Research shows TBED, systems-based planning, and conventional economic development have roles to play in mitigating future risk.

Last week (Jan. 3), Maryland’s state comptroller released the state’s first State of the Economy report. The 110-page document uses publicly available data, academic research, and government studies to analyze relevant economic indicators within the state. It compares that data across neighboring states and nationally to better understand the current economic climate and to help Maryland policymakers understand the sources of weakness, as well as identify the strengths and opportunities available, and to leverage those resources for more sustained, long-term economic growth.