SSTI Digest

Innovations are often born from small businesses, operating with few employees, if any at all, to bring new technologies and processes to market. However, new small businesses frequently fail and are not the only source of innovation. Understanding the regional dynamics of business creation can help leaders better support their regional innovation economies, and this edition of Useful Stats builds on our previous analyses of net establishment creation and net job creation by state and by industry to explore net establishment creation by state and by establishment size (as measured by the number of employees) for 2019.

The emerging innovation-intensive sector of urban farming is seeing heightened interest by venture capitalists, investments are growing faster than the crops: $2.4 billion so far this year at last count by PitchBook. That reflects a year over year (YoY) investment growth rate of 214 percent.  The number of individual deals also is rising 14 percent YoY. The sector is expected by many market analysts to capture an increasing share of the nation’s food supply for a number of reasons. Most notably, the historic drought in the western half of the U.S.

The Federal Communications Commission announced its second round of funding for new broadband investments through the Rural Digital Opportunity Fund (RDOF). It also revealed that it is “continuing its work to refocus the program to ensure that funding goes to unserved areas that need broadband,” and as a result dozens of winning bidders from the previous round have “chosen not to pursue buildout … .”

This second round of funding authorizes more than $163 million to 42 providers in 21 states that will bring broadband service to approximately 65,000 locations over the next 10 years. In July, the FCC sent letters to 197 winning bidders offering providers “an opportunity to withdraw their funding requests from places where there was evidence of service or where questions of waste have been raised.” As a result of that process, 85 bidders chose not pursue buildout in areas that had evidence of existing service or questions of potential waste.

Benson Hill, a unicorn (a startup valued over $1 billion) that closed its deal to become a public company last week, was able to leverage several sources of public capital to accelerate its early success. The St. Louis-based agricultural technology company uses machine learning and genome editing to facilitate the production of sustainable and healthy crops. Founded in 2012, Benson Hill has utilized state-sponsored venture capital and federal grants to reach its funding goals.

In 2013, Benson Hill received a $225,000 Phase I Small Business Technology Transfer (STTR) from the National Science Foundation (NSF). The company received another $270,000 in STTR Phase I and Ib funding from NSF in 2014, along with a $100,000 Small Business Innovation Research (SBIR) grant from the U.S. Department of Agriculture.

The news that a drug has been developed that appears to significantly reduce the risk of hospitalization or death from COVID-19, understandably garnered international attention. While most of the coverage centered on Merck, dig a bit deeper and one learns that Emory University researchers developed molnupiravir which Merck and Ridgeback Biotherapeutics have licensed. For the TBED community, there is another interesting angle to the story if one goes even further: this work was a result of a non-profit that Emory had set up, Drug Innovation Ventures at Emory (DRIVE), to help bridge the gap between scientific discovery to helping patients.

Understanding the industry-level dynamics of business and job creation can help pinpoint which industries in regional economies may be hotspots for innovation activity. This edition of Useful Stats builds on previous SSTI analysis of business and job creation by state and examines data from the Census Bureau’s recently updated Business Dynamics Statistics (BDS) on net establishment and job creation in 2019 at the state and industry levels.

Specifically, this analysis examines net establishment creation (calculated as the difference between new establishment openings and establishment closures) and net job creation (calculated as the difference between the jobs gained from existing plus new establishments and the jobs lost to existing plus closing establishments) at the 2-digit NAICS code level. The data serves as a useful baseline of where the economy stood prior to the pandemic’s start in 2020.

The National Science and Technology Council (NSTC) has released a new request for information (RFI) related to a national strategic plan for advanced manufacturing, and the National Institutes of Health (NIH) are seeking information on how the scientific community uses public data tools. Both RFIs provide an opportunity for the tech-based economic development field to shape the future of federal innovation policy. 

A new strategic plan for the Appalachian region reaffirms the Appalachian Regional Commission’s (ARC) primary investment goals emphasizing economic development. It benefits from insights gathered from more than 1,800 stakeholders and is built on multistate and regional collaboration.

Federal co-chair Gayle Manchin said in a press release that the while the investment goals (building Appalachian businesses, workforce ecosystem and infrastructure; building regional culture and tourism; and building community leaders and capacity) reaffirm the core mission, they are “reflected through a modern lens of promoting equity, innovation, sustainability and resilience into our work.” Manchin also noted that the success of the plan “is completely dependent on how well all 13 states and 420 counties in Appalachia can work collaboratively to build upon our past work to bring the region to the next level.”

The U.S. Economic Development Administration today announced the 50 organizations that will share in grants totaling $36.5 million to support programs that fuel innovation and tech-based economic development as part of the Build to Scale program. The 2021 awardees will leverage an additional $40 million in matching funds from a variety of private and public sector sources. SSTI has been a proponent of the Build to Scale program, which had not received any federal appropriations prior to the creation of SSTI’s Innovation Advocacy Council.

This week marks the 10th anniversary celebration of National Manufacturing Week. National Manufacturing Week celebrates the role of the manufacturing sector within the United States. With roughly 12.1 million employees, the manufacturing sector is the fifth largest employer relative to other industries, according to the U.S. Census Bureau. The manufacturing sector continues to evolve with the adoption of advanced manufacturing technologies and improvements in workforce development.

Implementing innovative policies is necessary for driving the manufacturing industry forward in Illinois, according to a recent report from the Illinois Manufacturing Excellence Center (IMEC). Nearly 600,000 Illinoisans are employed directly in manufacturing, and the manufacturing industry accounts for 12 percent of Illinois’s annual GDP. The findings of the state report, however, are adaptable and can be utilized across the United States in regions that seek to encourage innovation in manufacturing and promote job growth in an increasingly competitive globalized economy.

IMEC partnered with the Illinois Manufacturer’s Association, the Technology and Manufacturing Association, the Valley Industrial Association, and the W.E. Upjohn Institute for Employment Research for a study highlighting the status of advanced technology adoption for small and mid-sized manufacturers in Illinois. The resulting report covers the challenges that manufacturers in Illinois face and how they have been implementing advanced technology to overcome them. The report also covers the benefits and opportunities that come with adopting advanced manufacturing technologies.

Pew Charitable Trusts recently published data demonstrating that Q1 2021 experienced the largest year-over-year personal income growth rate since 1948. All states recorded increases in total personal income, and 27 experienced their strongest year-over-year growth on record. This sharp uptick is largely attributed to an “unprecedented” increase in government aid and pandemic-related federal economic relief packages, primarily received through Social Security, Medicare and Medicaid, safety-net programs, and state unemployment insurance, according to the report.