SSTI Digest

An inaugural report looking at the landscape of capital resources in Arkansas may be useful to others who are interested in examining the capital access in their state or region. The report will serve as a baseline for trends in public, private and philanthropic investments in entrepreneurship across the state and may be a useful resource as the state plans its State Small Business Credit Initiative strategy.

Topics covered in the report include core economic indicators, angel and venture capital investments, SBIR/STTR awards and small business loans. A team at the University of Arkansas coordinated the 2020 Arkansas Capital Scan, with input from an advisory committee of local stakeholders, and compared their findings to neighboring states Oklahoma, Missouri and Tennessee.

The U.S. Census Bureau has recently announced that data collection has begun for Phase 7 of the Small Business Pulse Survey (SBPS). The SBPS measures the effects of changing conditions for small businesses (businesses that have a single location and under 500 employees) during the COVID-19 pandemic. This phase of the survey also includes new questions on changes in the use of digital technologies and in business, production, and management practices. Aside from surveying strictly business metrics, Phase 7 will also include questions that assess workplace COVID-19 vaccination and testing statistics and the overall well-being of business owners.

The first six phases of the SBPS took place in roughly three-month intervals between April 2020 and October 2021. Initial data from Phase 7 will be posted on Nov. 24 – updated data will be posted every Thursday from Dec. 2 through Jan. 20, 2022. Phase 7 includes questions from the previous phases that ask small businesses how metrics such as revenue, costs, and number of employees have changed relative to what was considered normal for the business before the start of the COVID-19 pandemic.

Last week, Japanese Prime Minister Fumio Kishida’s advisory panel called for an $88 billion university fund to establish the nation as a center of science and technology and distribute wealth to the wider public. The fund and other growth initiatives would likely become part of a larger “new capitalism” stimulus package worth several tens of trillions of yen that Kishida, who replaced Yoshihide Suga as prime minister of Japan on Oct. 4, is expected to unveil later this month.

A job market that was struck an unprecedented blow with the pandemic became the focus of a recovery built on better jobs, not simply maintaining the status quo. And for workers across the country, myriad programs exist, or are being developed, to help them upskill or reskill as they seek new opportunities and adjust to changing demands of the labor market. Even as National Apprenticeship Week is underway this week, change is evident as the U.S.

The U.S. Department of the Treasury will be meeting with SSTI members on Nov. 22 to discuss the State Small Business Credit Initiative (SSBCI). States, venture development organizations and numerous other tech-based economic development entities around the country are looking for information on how to best use the program to effectively support small business capital access in their regions. SSTI has produced multiple resources to aid these efforts, including an introductory video that is available to the general public.

In addition to joining Monday’s meeting, SSTI members can participate in SSTI “office hours” for small group assistance, access additional reports and videos, or receive customized technical assistance (for State and Sustaining level members).

As the Economic Development Administration (EDA) continues to award its $3 billion allotment of pandemic relief funding made available by the American Rescue Plan Act of 2021 (ARPA), many states are taking aim at several specific areas of economic concern — while others are maintaining a broad perspective. Under the Statewide Planning, Research & Networks program (“planning grants”), EDA provides $1 million grants to states to use in forming coordinated state-wide plans for economic development as well as developing the data, tools, and capacity to evaluate and scale evidence-based economic development efforts. SSTI’s analysis of the funded projects’ brief descriptions shows that states were split between those focusing on broadly-scoped planning projects and those focusing on a few specific areas of interest.

Congress passed the bipartisan infrastructure framework, formally, the Infrastructure and Investment Jobs Act, and President Joe Biden is expected to sign it the week of Nov. 15. While small as a percentage of the trillion-dollar total, there are a number of proposed items that can support regional innovation economies, with broadband being the highest funded. Other proposals of interest include funding that will stimulate demand for clean energy innovations, further cybersecurity development and reauthorizing the Minority Business Development Agency (MBDA).

Technology and innovation highlights from the bill include the following:

The U.S. Department of the Treasury released long-awaited guidance on the new implementation of the State Small Business Credit Initiative (SSBCI). The rules provide preliminary guidance to states, territories and Tribal governments on permissible uses of $9.3 billion in funds to support small business capital access. SSBCI 2.0, which was authorized by the American Rescue Plan Act, provides $2.5 billion of the total for businesses owned and controlled by socially- and economically-disadvantaged individuals — these rules are the first time Treasury has defined these businesses. Treasury is expected to release additional guidance and clarifications in the coming weeks, and SSTI is working with our members to interpret the guidance and determine how the rules will affect optimal SSBCI strategies going forward.

This edition of SSTI’s Useful Stats examines the expected allocation of approximately $8.5 billion in State Small Business Credit Initiative (SSBCI) funding by state and allocation category based on the Department of the Treasury’s recent guidance update. For the first time, these allocation amounts include how much a state is receiving for the program’s new funds to support businesses owned and controlled by socially and economically disadvantaged individuals (SEDI).

The interactive map below shows how much funding states are likely to receive — as indicated by the degree of blue shading. California stands to receive the greatest amount of funding ($1.182 billion), followed by New York ($502 million), Florida ($489 million), Texas ($472 million), and Illinois ($355 million). All combined, Tribal governments, which are newly-eligible to the program, are also estimated to receive more than $709 million in total SSBCI funding.

Gov. J.B Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) have announced a new project for interactive broadband mapping and speed test tools that is intended to help expand access to high-speed internet in communities across Illinois. The project entails the creation of the interactive Connect Illinois Broadband Map and the Illinois Broadband Lab. DCEO has partnered with stakeholders including the University of Illinois System, Illinois Innovation Network, and the Benton Institute for Broadband & Society for this project.

A $7.17 billion Emergency Connectivity Fund (ECF) was established by the 2021 American Rescue Plan Act to help ease the educational impact on students of school closures in response to the Covid-19 pandemic. While much instruction transitioned to an online environment, many students were inadequately equipped to properly participate. To address issues with access to technology, the program provides funding to schools and libraries across the nation to purchase connected devices and equipment needed for students to use off-campus. The Federal Communications Commission’s (FCC) latest commitment of $421 million brings the program’s total funding to more than $3 billion.

The U.S. Small Business Administration is hosting its first innovation ecosystem summit, a free virtual event that is open to all. The summit is expected to connect entrepreneurial support organizations (ESOs) that work with startups and small businesses — particularly those serving underrepresented communities — that are trying to build out and commercialize their technologies. The three-day summit takes place next week, Nov. 15-17.

SBA says attendees will learn how to navigate the SBIR/STTR world; leverage each other’s strengths on how to best connect entrepreneurs working on advanced technologies to the country’s largest source of early- stage funding; discover ways to build a network that is inclusive of underrepresented communities; and more.

Sessions will cover a variety of entrepreneurial topics including SBIR Catalyst and collaborative partnerships; funding for ecosystem builders; entrepreneurship in regional innovation economies, which will be led by SSTI Policy and Development Director Jason Rittenberg; and more.