SSTI Digest

The PitchBook-NVCA Venture Capital Monitor for the first half of 2021 reveals that the market is set to break a number of investing records, but strikingly, the record levels of investment activity are all being set by the later stages of investment. At the other end of the funnel, activity is increasing, but not at the same pace as the overall market.

Through June, the market is on pace for $300 billion invested (nearly doubling 2020’s level) across more than 16,000 investments (a 25 percent increase on the previous record), leading to median venture capital (VC) deal sizes that are roughly 50 percent larger than in 2020 (the increases for angel and seed deals are much smaller).

This explosion of investing activity is supported by what is sure to be a record year for exits — at $372 billion, the exit value through the first six months has already surpassed 2020’s record of $287 billion.

Earlier this week, the House science committee advanced a series of technology-focused bills, including a $7 billion authorization of regional technology hubs. This legislation completes the committee’s work to produce a companion to the Senate’s U.S. Innovation and Competition Act. The House and Senate legislation are not identical, however, and so the chambers will need to bring their versions into alignment. Among the key differences are that the House authorizes less funding for the program but also creates a new regional clean energy innovation program.

Vulnerabilities in the international networks that supply goods and services needed for finished products used by the Department of Defense were exposed to a higher degree during the pandemic, and became the subject of a congressional Armed Services task force. The bipartisan Defense Critical Supply Chain Task Force was established to make the security of the U.S. supply chain a legislative priority, and their recent report details actionable legislative proposals to mitigate risks that could be considered for the FY 2022 National Defense Authorization Act (NDAA).

The U.S. Department of Energy (DOE) announced $60 million in funding for its largest-ever cohort of university-based Industrial Assessment Centers (IACs) to assist small- and medium-sized manufacturers in reducing their carbon emissions and lowering energy costs. The new cohort of IACs at 32 universities will focus on improving productivity, enhancing cybersecurity, promoting resiliency planning, and providing trainings to entities located in disadvantaged communities. As part of a new pilot project, some of the IACs will expand to the commercial building market and partner with community colleges and technical programs to train diverse students and professionals to conduct energy-efficiency assessments of small to medium-sized buildings, including those located in disadvantaged communities.  

Falling demand for office real estate and public transit, greater need for flexible child care and requirements for reskilling are some of the insights gained into the future of Massachusetts’ workforce. A recent report released by the Massachusetts Governor’s Office which draws extensively on material prepared by McKinsey and Company shines a light on a post-pandemic outlook for a state that has been heralded as one of the most attractive states for citizens to live, enjoying the third-highest per-capita income, a thriving venture capital market and a growing concentration of entrepreneurial start-ups. Yet, as the report notes, “Despite these competitive advantages, the effects of COVID-19 have profoundly challenged the Commonwealth.”

The report explores what work could look like in Massachusetts in both the near term (2025) and five years beyond that, including implications for economic sectors, commercial centers, local downtowns, and more. It anchors its findings in four overall themes:

Today, the Economic Development Administration (EDA) announced funding opportunities for the $3 billion Congress provided the agency in the American Rescue Plan Act. Funds are available through six distinct challenges, with separate goals and application processes/deadlines for each. The Build Back Better Regional Challenge, funded at $1 billion, may be the most substantial opportunity for tech-based economic development (TBED) organizations, but each of the six can support innovation economies — particularly now that TBED is an explicit component of EDA’s investment priorities.

EDA is making the $3 billion available across six funding streams:

The House Committee on Appropriations advanced an FY 2022 funding bill that provides for substantial increases to many science and innovation programs. The Commerce-Justice-Science (CJS) bill includes $50 million for the Build to Scale program — a top priority for SSTI’s Innovation Advocacy Council, $275 million for the Manufacturing Extension Partnership, $9.6 billion for the National Science Foundation and more. Highlights from the bill for regional innovation economies follows:

Last week, SSTI’s Innovation Advocacy Council chair Ben Johnson (also of BioSTL) testified before a subcommittee of the House Committee on Small Business about the role that innovation plays in job creation and how the U.S. Small Business Administration’s (SBA) Regional Innovation Clusters (RIC) and Growth Accelerators Fund Competition (GAFC) support these efforts.

In his testimony, Johnson spoke to how the needs of innovation-based companies differ from those of Main Street businesses:

“The types of support needed to mature a technology from idea to market readiness are different than the supports needed to manufacture or market a widget. … The types of capital raised by innovation-based businesses are different as these companies take longer to mature to revenues. … And, the networks of industry-specific expertise … need to be deeper in defined expertise, than broad networks of business, finance, or marketing mentorship that is generally applicable across all types of business.”

Editor's note: SSTI discovered that NASA updated their data which was used in this article after its publication. Specifically, the update included previously omitted 2020 application and awards data for Kentucky, Maine, Mississippi, and Nevada; and 2014 data for Iowa. While the changes to the data were minute, we strive to provide the most accurate and reliable data available. As such, the article and the interactive graphic below have been updated to reflect these changes.

President Joe Biden nominated Laurie Locascio, Ph.D., to lead the National Institute of Standards and Technology (NIST) within the U.S. Department of Commerce and serve as Undersecretary for Standards and Technology. Locascio is currently the vice president for research at the University of Maryland, College Park and the University of Maryland, Baltimore, where she oversees the research and innovation enterprise of the two campuses. Prior to her work there, Locascio had a long career as a researcher, innovator and scientific leader at NIST, where she most recently served as the acting principal deputy director and associate director for laboratory programs. She received a B.Sc. in chemistry from James Madison University, a M.Sc. in bioengineering from the University of Utah, and a Ph.D. in toxicology from the University of Maryland, Baltimore. As a biomedical researcher, she has published more than 100 scientific papers and 11 patents over the course of her career.

Whether or not your state embraced strict measures in an attempt to reduce virus spread, the current pandemic has created the need for reflection and revision of how each of us go about our lives. The same opportunity has arisen for the public and private sectors to rethink how they engage in many core functions.  Civic leaders in Arkansas did just that and today released a strategic plan with recommendations to guide economic development in the new era.  Its central themes, including strong focus on innovation, entrepreneurship, and talent, could have broader applicability to other states as we move forward.

When planning and evaluating programs and policies in local and regional innovation economies, a key measure is the amount of private business research and development (R&D) activity taking place, typically found in the Business Enterprise Research & Development Survey (BERD). The Census Bureau, in cooperation with the National Science Foundation’s National Center for Science and Engineering Statistics (NCSES), is seeking public comment on planned updates to the BERD survey. BERD is instrumental in the federal government’s duties to calculate national gross domestic product, setting policy at the White House’s Office of Science and Technology Policy, and also informs researchers from academia, industry, and the nonprofit sector.

As required by law, the Census Bureau has released a Request for Information (RFI) seeking information from the public on the proposed changes and structure to BERD for the 2021-2023 cycle. Specifically, the Census Bureau will use information from the RFI to: