SSTI Digest

As the new administration settles in, the Economic Development Administration (EDA) has updated its investment priorities — the guiding principles behind all of its competitive grants. Changes to the priorities are outlined below so that participants in local innovation economies are better able to align their proposed programs to these federal priorities.

The EDA’s new list of investment priorities includes seven points, with the inclusion of “Equity,” “Technology-Based Economic Development (TBED),” and “Environmentally-Sustainable Development” being three notable changes. The list of EDA’s investment priorities, including commentary on their differences from previous administrations’ priorities, is as follows:

If venture capital was water, then sea levels continue to rise.  Yet more and more innovation-based startups across the country seemingly are being left high and dry as private venture capitalists continue to push their money into bigger, later stage deals. Investors seem increasingly set to cruise toward cashing in on the currently hot exit path of public listings. All of the key metrics in the latest Pitchbook-NVCA Venture Capital Monitor suggest many of the youngest innovation opportunities have been left out of recent VC activity, a trend that typically hurts those geographic areas receiving less VC than national averages. 

Pitchbook reports the total venture capital invested during the first quarter of 2021 nearly doubled the amount invested in Q1 2020, logging 92.6 percent more dollars flowing into portfolio firms. This explosive growth comes in the wake of the record year that 2020 proved to be for the VC industry.  Fundraising “also proceeded at a record-setting pace with $32.7 billion raised across 141 funds. For perspective, $79.8 billion was raised in 2020, the current annual record,” the authors write.

The Department of Defense is seeking comments and information on President Biden’s Executive Order, “America’s Supply Chains,” which directs several federal agency actions to secure and strengthen the country’s supply chains. The U.S. Department of Commerce is also seeking public input on a licensing or other pre-clearance process for entities engaging in certain information and communications technology and services transactions (ICTS Transactions).

The defense department is seeking input from consumers and producers, as well as those with relevant expertise, on increasing transparency; diversifying sources of supply and production; establishing and strengthening manufacturing of value-added products; research, development and demonstration priorities to support production and advanced manufacturing base for materials; and, more. The deadline for submitting comments is April 28, 2021, and the full announcement is available here.

A presidential budget provides, in theory, a strategic vision for the more than $1 trillion in annual, discretionary spending of the federal government. In practice, Congress will pass a spending bill that reflects its own will. The value of the president’s budget is the window it offers into the administration’s priorities. The Biden-Harris Administration’s skinny budget indicates priorities that should excite those working to build regional innovation economies.

As a reminder, the Trump administration’s budgets would have reduced or eliminated many programs — and even some entire agencies — that support tech-based economic development (as well as initiatives in other policy areas). The administration used its budget to make a clear statement about its interest in seeing a much smaller federal government. Congress, of course, was unwilling to pick up these proposals even halfway.

Last week, the Biden-Harris administration released an initial budget proposal for FY 2022 discretionary appropriations. The document (referred to in Washington as a “skinny budget,” not because of the overall size of spending but because it serves as more of an outline or framework for the full budget proposal which will come in May) clearly emphasizes the importance of climate change, economic opportunity, equity and health as cross-cutting priorities. For regional innovation economies, these priorities would translate into significant increases in R&D funding, as well as additional funds for tech-based economic development activities.

A total of $29 million in grants will be awarded to 44 organizations across the country as part of the Scaling Pandemic Resilience through Innovation and Technology (SPRINT) Challenge provided by the Economic Development Administration. The SPRINT Challenge, with grants ranging from between $200,000 to $750,000, was developed last year with the goal of addressing the health and economic risks brought on by the COVID-19 pandemic through investments in entrepreneurship and innovation.

The 44 awardees highlight a wide range of organizations, including nonprofits, higher-education institutions, and entrepreneurial-based groups. Among the winners were a number of SSTI members, including:

While the new administration is rolling out a new infrastructure proposal that includes $100 billion over an 8-year period for greater broadband coverage and affordability, the states have been busy in 2021 with their own broadband proposals. Governors across the country are responding to the digital divide that became even more obvious during the pandemic as students struggled to access online learning, individuals turned to the internet for telehealth appointments, and much of the workforce pivoted to remote work arrangements. This week, we take a look at some of the new broadband proposals revealed in the governors’ State-of-the-State addresses or proposed budgets.

Although the nation’s nonmetropolitan economies are less reliant on the R&D activity performed by institutions of higher education than the economies of urban areas, researchers in some rural areas show levels of higher education R&D (HERD) expenditures per R&D employee that are on par, or even exceed, their urban counterparts. Policy makers may wish to consider and prioritize the relative “outsized” importance of HERD funding and related research personnel in future policy decisions and public investments that are geared toward select smaller communities and rural places. For instance, innovation-oriented entrepreneurship concentrates around R&D-rich, knowledge centers, and this data indicates that there are non-metropolitan areas that fit that description.

In its effort to support a more diverse tech talent pipeline in the state, the Delaware Prosperity Partnership (DPP), in partnership with JPMorgan Chase, has outlined a plan to boost the tech workforce in the state and help diverse populations’ access pathways into IT. DPP, the nonprofit state economic development agency in Delaware, completed its work on a strategic plan to achieve those goals, that it says is dependent on the state’s ability to align state polices and resources to accelerate the impact of the IT talent strategy.

It is estimated that nearly 75 percent of information technology (IT) workers in Delaware are men and 60 percent are white. Only 15 percent of the IT workforce in the state is Black or Latinx, DPP says. The plan will enhance competitiveness of local industries and help residents of all backgrounds explore career opportunities in IT.

This week, Treasury posted key dates for the State Small Business Credit Initiative, a $10 billion program funded in the American Rescue Plan Act. Per its website, Treasury intends to release the amount of funding available to each state by April 12; states will be required to submit a letter of intent to participate by May 10; and, final applications from states will be due by Dec. 11. The amount of funding available to Tribal governments will be released on May 10, with notices of intent to apply due June 11. The information was provided as part of a refurbished web presence for SSBCI that also moved the original program reports and guidelines to a new location.

SSTI is tracking SSBCI developments closely and will continue to share updates as they are available. For more information on the program, contact Jason Rittenberg (rittenberg@ssti.org).

NIST’s Manufacturing Extension Partnership (MEP) is working with the Association of Public and Land-grant Universities (APLU) to support projects partnering universities and MEP centers to encourage adoption of advanced technologies by small- and medium-sized manufacturers (SMMs). APLU is working with Innovation Associates and Jim Woodell & Company to select three collaborative university-MEP pilot projects to develop and test different models of technology transitioning. APLU is currently soliciting two-page, pre-proposals from university-MEP applicant teams by April 16.

Teams are encouraged to create sustainable models involving connections with the broader ecosystem of state technology organizations, community colleges, federal labs, Manufacturing USA institutes and others.

A new commentary from a senior policy analyst at the Federal Reserve Bank of Cleveland examines the extent to which disparities exist between Black and whites in labor market outcomes such as levels of labor force participation, unemployment rates, and earnings. Economic inclusion trends have been studied at the national level, but this commentary takes a look at how those disparities vary within and across states with a specific look at the Fourth Federal Reserve District states of Kentucky, Ohio and Pennsylvania.