SSTI Digest

Earlier this month, California Gov. Gavin Newsom released his proposed FY 2022-2023 budget, which he said “reinforces our role as the global leader in climate protection, innovation and job creation.” The budget focuses on new investments and “positions the state as a global leader in innovation and solutions to both mitigate and adapt to the changing climate.” The proposal includes billions in one-time funding from various sources over five years to advance the state’s climate and opportunity budget and provide equitable climate solutions. Additional money is proposed for innovation hubs, clean energy and more.

In looking to further economic growth and job creation, the budget:

Since 1990, the United States has produced its own national climate assessment report to, in the words of the project’s director Allison Crimmins, “provide Americans with information on the accelerating impacts, vulnerabilities and responses to the climate crisis.” Work on the fifth assessment is well underway and NOAA has made available for public comment annotated outlines of each of the 32 chapters included in the draft report.  In addition to the public comments on the report, there are a series of open workshops daily over the next several weeks to allow the public to engage more actively in the process. The list of topics and schedule of times are available here.

The report and workshops cover both national and system-level topics as well as climate change in 10 regions of the U.S. Comments will be accepted for 45 days.

Loyalty to alma maters matters financially beyond March Madness™ and college sports betting, it turns out — to such a degree that policy makers, venture development organizations and university seed funds hoping to attract equity investments for local innovation startups should pay considerable attention to the educational attainment section of founders’ LinkedIn profiles or resumes. Additionally, seed and VC funds organized in part for economic development goals may want to tap alumni networks from the regions’ institutions of higher education to identify potential investment partners, according to a recently released working paper from a trio of professors in Iowa, Texas and Michigan.

The U.S. Securities and Exchange Commission (SEC) recently released guidance through its Division of Corporation Finance to address the risks of investing in companies that are based in or have a majority of their business operations in the People’s Republic of China. This action continues a trend of expanding regulation of investments related to China, and the SEC’s statement clarifies that the purpose of the disclosures is to protect investors from recently-enacted restrictions by the Chinese government on China-based companies in regard to raising capital from foreign investors. According to a report by PitchBook published earlier this year, venture capital investing in China was on pace to exceed $100 billion in 2021, with foreign investors participating in approximately one-quarter of these deals.

Despite the Covid-19 pandemic and recession, most states experienced growth in annual Higher Education Research & Development (HERD) expenditures between 2019 and 2020. Given higher education’s role in generating knowledge that catalyzes innovative new technologies developed by high-growth startups, R&D conducted at institutions of higher education is one of the most important metrics for evaluating an area’s innovation economy. This edition of Useful Stats examines data from NSF’s recently updated 2020 HERD survey, specifically examining one- and 10-year changes in HERD spending by state.

National HERD expenditures in 2020 increased by 3.3 percent ($2.8 billion) over 2019, reaching a total of $86.3 billion. The states with the greatest total HERD expenditures in 2020 were California ($10.9 billion), New York ($7.2 billion), Texas ($6.6 billion), Pennsylvania ($4.8 billion), and Maryland ($4.8 billion). The states with the lowest total HERD expenditures in 2020 were Idaho ($170.6 million), Maine ($151.3 million), Puerto Rico ($111.1 million), South Dakota ($110.6 million), and Wyoming ($93.1 million).

PitchBook and NVCA have published an initial look at the Venture Monitor Q4 2021, and the data already suggest an astounding level of activity in 2021. As of Dec. 31, PitchBook had identified $330 billion invested across more than 15,000 deals, substantial increases over the $167 billion invested across 12,000 deals in 2020. The increases were driven by venture capital stage investments (as opposed to seed and angel investments), which accounted for 80 percent of the additional deals. Firms raising new venture funds also did very well in 2021, with 730 funds raising $128 billion — up from $87 billion in 2020. These data are preliminary and will be updated when PitchBook and NVCA publish the formal Venture Monitor for 2021, which SSTI will then cover in detail (including by sharing state-level investment activity).

Celebrating its 25 years in operation, the National Robotics Engineering Center’s (NREC) success is revealed in an economic study commissioned by Carnegie Mellon University “to inform the future development of boundary-pushing institutions.” Established decades ago as “a new model of academic-industry partnership,” the NREC study, conducted by Fourth Economy Consulting, reveals how the robotics institution changed the economy of the neighborhood, region and robotics industry in Pittsburgh.

While not written as a traditional economic impact study, some of the key effects revealed in the study include:

In January, the Carnegie Classifications of Institutions of Higher Education released an updated 2021 classification list for universities. In this update, nine more universities have achieved the “Doctoral/Very High Research Activity” or “R1” category, the highest possible rank among research universities. Six additional universities were also added to the list following a six-week review period. To achieve the “R1” classification, a university must meet the following requirements: award at least 20 research/scholarship doctoral degrees in the update year; spend at least $5 million in total research (as reported through the National Science Foundation (NSF) Higher Education Research & Development Survey (HERD)); and, score high in a Research Activity Index calculation.

The U.S. Department of Energy (DOE) announced the establishment of a new Office of Clean Energy Demonstrations that will support projects in areas including clean hydrogen, carbon capture, grid-scale energy storage, small modular reactors, and more. The recently-signed Infrastructure Investment and Jobs Act provides $21.5 billion in funding for the office’s administration and projects through 2026.

In a press release making the announcement, Secretary of Energy Jennifer M. Granholm said the new office will “move clean energy technologies out of the lab and into local and regional economies across the country, proving the value of technologies that can deliver for communities, businesses, and markets.”

Although it led the global digital revolution, the United States is faltering now when it comes to digital skills possessed by the workforce. That is one of the findings of a recent report from the Information Technology and Innovation Foundation (ITIF), which goes on to say that such developments bode poorly for long-term U.S. competitiveness if such trends aren’t reversed.

In Assessing the State of Digital Skills in the U.S. Economy, Stephen Ezell, ITIF vice president of global innovation policy, writes that a facility with digital skills becomes more imperative for individuals wishing to make productive, value-adding contributions in their occupations. Moreover, the broader quality of a workforce’s digital skills base is important to the economy as it becomes a key determinant of enterprises’ and industries’ competitiveness and innovation capacity.  Ezell holds that government policies can be important in supporting funding for programs that teach and incentivize investment in digital skills.

This edition of SSTI’s Useful Stats begins a series of articles examining recently updated Gross Domestic Product (GDP) data for 2020, identifying changes in GDP per capita during the first year of the economic impacts from the Covid-19 pandemic, and setting the stage for future articles diving deeper into the impacts of the pandemic on local economies. Specifically, this analysis focuses on the annual percent change from 2019 to 2020 in county-level GDP per capita (calculated as total county GDP divided by total county population) using comprehensive geographical data from the Bureau of Economic Analysis (BEA) and population data from the Census Bureau.

Societal stereotypes that depict girls as being less interested in computer science and engineering may be hindering girls from participating in those fields later in life, according to a recent article in the Proceedings of the National Academy of Sciences. The authors found that young children and adolescents endorsed gender-interest stereotypes, which negatively predict girls’ interest in pursuing computer science and engineering and sense of belonging in these fields.

In their study of stereotypes, authors Allison Master, Andrew N. Meltzoff and Sapna Cheryan found that children as young as six and adolescents across multiple racial/ethnic and gender intersections endorse stereotypes that girls are less interested than boys in computer science and engineering. And the more that individual girls believed that, the lower their own interest and sense of belonging in those fields was, according to the study.