SSTI Digest

In the 1970s, the U.S. government took antitrust actions against IBM and AT&T, causing considerable controversy. Walter Wriston, the then-president of Citibank and a key leader on Wall Street, questioned the value of doing this, apparently (according to Lina M. Khan, Federal Trade Commission Chair), likening the move to breaking up the Yankees, because they were so successful. In a presentation she delivered at the Carnegie Endowment for International Peace on March 13, Lina M. Khan, chair of the Federal Trade Commission, disagreed with Wriston’s perspective. In her comments, Khan contended that breaking up monopolies is essential for promoting innovation, that by breaking up companies like AT&T and IBM, the U.S. opened a path to “waves of innovation, including the personal computer, the telecommunications revolution, and the logic chip.” Khan gave several examples of how consolidation and monopolization have discouraged innovation. She mentioned Boeing, which in 1997 became the only commercial aerospace maker in the U.S. after merging with McDonnell Douglas. Among other issues, Khan cited United Airlines CEO Scott Kirby as saying, "The merger allowed Boeing to…

Two senior leaders of state programs designed to help commercialize new intellectual property joined a TBED CoP webinar last week to discuss how they determine whether those initiatives are successful. John Hardin, executive director of the Office of Science, Technology & Innovation at the NC Department of Commerce, described the One NC Small Business Program and the evaluation process the office performs each year. They use surveys of award recipients and econometric analysis to demonstrate the program’s effectiveness. Vinit Nijhawan, managing director, MassVentures, discussed the START program targeted at deep tech companies and Catalyst grants, which support clean tech startup companies. Both programs have been shown to assist companies with commercialization activities. More than 100 attendees participated in the webinar, which generated many practical questions (and thoughtful answers) about how methods used in North Carolina and Massachusetts may be transferable to other states. The presentation and recording are available here. SSTI’s TBED Community of Practice is always looking for new webinar topics and speakers.  To share your ideas, volunteer…

High-growth firms are often conflated with all other firms. Unfortunately, this tendency makes it extremely difficult to differentiate those with a higher likelihood of significantly impacting the economy and innovation. While reports like the Global Entrepreneurship Monitor (GEM) have found increasing rates of entrepreneurship over the past decade, barring a drop at the onset of the pandemic, new U.S. Census Bureau data on high-growth firms reveals the opposite for the number of high-growth firms, with steady, significant decreases in the number and share of high-growth firms across the nation. This edition of Useful Stats will look at the Business Dynamics Statistics of High Growth Firms (BDS-HG) experimental dataset from the Census Bureau. Specifically, it explores state-level trends for the percentage share of high-growth firms among all firms since the late 1970s. SSTI calculated the percentage share of high-growth firms by taking the number of high-growth firms and dividing by the total number of firms captured by the BDS-HG. Firm growth data within the BDS-HG is broken down into nine growth rate bins, ranging from -2 to 2. The -2 bin represents exits,…

While some college computer engineering profs may be advising their students not to worry about artificial intelligence derailing their salary projections and long-term career options, it would appear businesses are getting on with deploying the latest AI advances as quickly as possible to see what improvements might be made for the firms’ productivity rates and bottom lines. A recently released working paper from Germany’s Fraunhofer Institute for Systems and Innovation Research (Fraunhofer ISI) reports on an early analysis of AI adoption in the innovation research process. The authors’ preliminary conclusion?  “AI is currently used more for competitive differentiation, but in 15 years it can become the standard as a so-called basic technology and thus a factor critical to competition.” The authors suggest, however, that “the energy-intensive use of AI will remain an immense challenge.” One may wonder, in addition to the authors’ observations, if AI electricity demand will drive electricity rates to the point that only the companies in the best market and financial position will be in a position to optimize AI use, particularly when AI energy draw is coupled with…

The national picture of how 46 states, Washington, D.C., Puerto Rico, and the U.S. Virgin Islands chose to allocate $7.9 billion approved so far by the U.S. Treasury to spend through the nation’s second go at the State Small Business Credit Initiative (SSBCI) is getting clearer. Equity and venture capital programs—often important financing tools for high growth and innovation-oriented companies—have garnered approximately $2.9 billion, across 79 equity/venture capital programs, based on a Treasury-generated list of all programs and allocations and SSTI analysis of press releases. The remainder of the total approved is distributed across 110 credit support programs.

Information on the geographic distribution of innovation and entrepreneurship is not easy to tease out of many federal statistical data sets, leading regional policy often to be based on trends in all business starts or life span and size—ignoring the fact that some firms have greater impact on regional economic growth than others. The U.S. Census Bureau is well aware of the challenge and, earlier this week, released an experimental data set that allows for an examination of state-level long-term trends in the change in high-growth firms and establishments across the nation. The data set, titled “The Business Dynamics Statistics of High Growth Firms,” with the acronym of BDS-HG, covers key economic data on high-growth firms with metrics such as the number of firms and establishments, job creation and destruction, employment, and growth rates. It extends the statistics published by the Business Dynamics Statistics (BDS) program with a focus on high-growth companies. The BDS-HG was developed by the Center for Economic Studies, and its data compiled from the Longitudinal Business Database. The methodology can be found here.   What data is…

As part of the CHIPS & Science Act, Congress created the Tech Hubs program to help more regions become leaders in key technology sectors through substantial investments into regional consortia. It authorized spending $10 billion on the program from FY2023 through FY2027. But appropriations for the program are not keeping up with the vision that was embraced by strong bipartisan majorities in both chambers. For FY2023, Congress appropriated $500 million for the program, and it followed that up with only $41 million for FY2024. The need for the program has not changed. If you believe the program should receive funding in line with the vision Congress laid out in the CHIPS & Science Act, we invite you to join us and let Congress know by signing a letter that will strongly voice support for the program. Read the full letter and sign on today.   This article was prepared using funds from the Innovation Advocacy Council (IAC). For information on joining the IAC, contact Jason Rittenberg at rittenberg@ssti.org

Earlier this week, the White House announced a series of actions being undertaken by federal agencies to focus on women’s health.  Both NIH and ARPA-H announced new funding opportunities centered around women’s health, while the White House and other agencies took action without indicating any funding associated with that funding. ARPA-H’s Sprint for Women’s Health, launched in February 2024, commits $100 million to transformative research and development in women's health. ARPA-H is soliciting ideas for novel, groundbreaking research and development to address women's health and opportunities to accelerate and scale tools, products, and platforms. NIH is launching an NIH-wide effort to close gaps in women's health research across the lifespan. This effort—initially supported by $200 million from NIH beginning in FY 2025—will “allow NIH to catalyze interdisciplinary research, particularly on issues that cut across the traditional mandates of the institutes and centers at NIH,” according to a White House fact sheet. NIH is also creating a dedicated one-stop shop for open funding opportunities for women's health research. “This platform will make it…

Many federal funding programs have the potential to support technology-based economic development (TBED) initiatives, even when technology and innovation aren’t their explicit focus. This is the case with the Appalachian Regional Commission (ARC). SSTI recently sat down with Christy Johnson, ARC program analyst, to learn how three of ARC’s funding opportunities can support TBED activities in the Appalachian region. Programs discussed include the Area Development Program, the Appalachian Regional Initiative for Stronger Economies (ARISE), and Partnerships for Opportunity and Workforce and Economic Revitalization Initiative (POWER). An overview of each of these programs is included in the newest installment to SSTI’s Federal Funding Video Library.   Video: Appalachian Regional Commission   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…

The Office of Advanced Manufacturing at the National Institute of Standards and Technology (NIST), an agency of the U.S. Department of Commerce, intends to announce an open competition for a new Manufacturing USA institute. The expected competition, according to the notice of intent (NOI), will seek to establish a Manufacturing USA institute “focused on the use of artificial intelligence to improve resilience of U.S. manufacturing.” The U.S. Government intends to enter into a five-year agreement with the winning institute, with the possibility of a non-competitive extension for up to an additional two years and provide federal funding of up to $70 million. This funding is to be matched or exceeded by funding from private industry and other non-federal sources, with a minimum 1:1 cost share. The competition is expected to be announced in early Spring 2024, with a formal announcement on Grants.gov, the NIST Office of Advanced Manufacturing website ( www.nist.gov/​oam), and the Manufacturing USA website ( https://www.manufacturingusa.com/​). Because the agency has announced this intent but has not…

Editor’s note (April 4, 2024): This article has been updated to reflect relevant programs included in the second of two FY 2024 omnibus appropriations bills. Many tech-based economic development (TBED) programs are seeing level funding in FY 2024, with some of the most high-profile programs experiencing decreases. Politically, this situation is less about disapproval than broader budgetary circumstances, as Congress agreed that spending would revert to FY 2022 levels. Practically, however, this means even the continued programs will not be keeping pace with increased demand or costs. The good news for organizations seeking federal support is that, despite the topline setback, there are multiple programs that can fund regional TBED initiatives. A note about supplemental funding Federal TBED initiatives received robust funding in FY 2023 largely due to a supplemental package that was included with the overall omnibus appropriations bill. This supplement included billions of dollars across the Department of Commerce and National Science Foundation, among other agencies. As of publication, the FY 2024 appropriations do not include any comparable supplemental…

From the Securities and Exchange Commission (SEC) to the Department of the Treasury, the White House budget, and Congress, various stakeholders across the federal government have proposed multiple regulations in the past several weeks that would affect the venture capital industry in general and, in some cases, venture development organizations. We offer a brief roundup of these issues. House passes bill to facilitate private investment The House passed a bill last week that would modify multiple regulations affecting venture capital and crowdfunding rules, as well as several company assistance activities that are common for venture development organizations. A summary of changes in the law, as amended, includes the following: Pushing the SEC to adopt its proposed registration exemption for “finders” that help issuers raise capital; Helping to facilitate “demo days” by defining “general solicitation” and “angel investor” more clearly; Increasing crowdfunding limits within a 12-month period from $5 million to $10 million and easing liability concerns for crowdfunding platforms; and, Expanding “accredited investor” to include individuals who…