SSTI Digest

A working paper from the Innovation Growth Lab (IGL) series featuring researchers from the Max Planck Institute for Innovation and Competition provides causal evidence on the effectiveness of innovation vouchers and adds to the argument for implementing small-scale government funding mechanisms like innovation vouchers. Innovation vouchers are designed to link small and medium-sized enterprises (SMEs) with external knowledge resources to promote small-scale innovations.

The Association of Public and Land-grant Universities (APLU) is building a program to create new career pathways for low-income rural students. Through a partnership with the North Central Regional Center for Rural Development at Purdue University, the program will address the needs of rural employers by creating a model to identify rural workforce needs, developing stakeholder partnerships, mapping workforce pathways, recruiting and supporting low-income rural learners, and building entrepreneurship and leadership skills. In a press release, APLU noted that the program will work to help low-income rural students looking for their first career options while helping non-traditional working-learners, such as displaced workers.

Already weakened before the pandemic, a new report from the National Defense Industrial Association (NDIA) finds that the health and readiness of the U.S. defense industrial base — composed of manufacturers, technology innovators, and systems integrators, research organizations, and suppliers — faces particularly large obstacles in the areas of innovation and supply chain. Assessed along eight different metrics, NDIA assigns an overall letter grade indicating the health and readiness of the defense industrial base. This year’s report assigned the final grade of a “C,” which is a passing grade, but leaves much room for improvement.

The first area NDIA identifies as one of concern is innovation, which it says has declined since 2018. The driving factor for this poor innovation score is a drastic decrease in average annual patent applications in both the manufacturing and scientific R&D services industries.

Editor’s notes. Feb. 18: We have updated the article to reflect assignments to key subcommittees in both the House and Senate. 

Nearly a month into the 117th Congress, formal committee assignments are being announced. The highest-priority committees for tech-based economic development policies are those affecting science and small business issues. The lists, below, provide a description of those committees in the Senate and House for the next two years.

Senate Commerce Committee

The U.S. Senate Committee on Commerce, Science and Transportation authorizes policies and programs related to trade, manufacturing, science and transportation, including the National Institute of Standards and Technology (NIST), National Science Foundation (NSF), and the Build to Scale program at the Economic Development Administration (EDA), as well as shared responsibility for the Small Business Innovation Research (SBIR) program with the small business committee.

The COVID-19 pandemic highlighted the country’s reliance on overseas manufacturing production when there was a lack of medical supplies and equipment to treat those affected by the virus as supply chains were reliant on supplies from outside the country. A recent report from Heartland Forward finds that many domestic and foreign companies are recognizing the strategic advantages of locating in the U.S. and are considering reshoring operations. With the heartland’s historic manufacturing capabilities and its remaining culture, skills and infrastructure to support production facilities, it stands to benefit the most from reshoring activity, and bipartisan support for such an effort has never been stronger, the report maintains. Heartland Forward defines the heartland as the 20 states located largely between the Appalachian Mountains and the Rockies.

Last week, the U.S. House of Representatives again passed the National Apprenticeships Act, which is intended to increase the diversity of occupations and people covered by approved apprenticeship programs. Apprenticeships receive substantial attention for their track record of strong economic impacts when measured at the state level, and the bill also hopes to improve the ability to track impacts across the country.

The bill would create a federal-state-local structure that resembles the workforce development program. States would designate apprenticeship agencies to form an advisory council, develop a state plan for recognizing approved programs, provide technical assistance to expand participation, authorize hubs throughout the state, and measure performance outcomes.

The U.S. House of Representatives is working through the coronavirus relief package in committee markups this week, and there are several provisions that could have a significant impact for regional innovation economies. The highest-profile of these is $10 billion for a new State Small Business Credit Initiative (SSBCI) program. Reauthorizing this program has been a top priority for SSTI's Innovation Advocacy Council, as SSBCI was one of the federal government’s only sources of funding for equity investments in the past two decades.

Despite facing enormous challenges posed by the COVID-19 pandemic, manufacturers and Manufacturing Extension Partnership (MEP) Centers continued to deliver a “consistent and significant return on investment to the nation,” in FY 2020, according to a new analysis from the W.E. Upjohn Institute. MEP Centers deliver technical assistance to primarily small- and medium-sized manufacturing establishments to help them improve their productivity and competitiveness. The research team models different scenarios to estimate the broader economic effects of the collective activities of its MEP Centers on the U.S. economy, and found that the federal investment of $146 million into MEP Centers yields a return to the Treasury of about $1.99 billion, for a return of 13.6:1 according to one estimate.

The Blackstone Charitable Foundation has announced a $40 million commitment to expand the Blackstone LaunchPad program to support underrepresented students and communities. Going forward, LaunchPad will focus on colleges and universities that have a majority diverse population or are serving under-resourced communities, increasing the program from 30 to 75 campuses over the next five years. The LaunchPad program mentors college student-founders from idea to growth stage and provides other mentoring to students interested in entrepreneurship. Blackstone LaunchPad will also develop new offerings to bring its critical entrepreneurship training to a broader set of students and offer an expanded set of programs for entrepreneurial skill-building – like building business acumen and creative problem solving –  to support career mobility in 21st century jobs.

Given higher education’s role in generating the 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 NSF’s recently updated Higher Education R&D (HERD) survey, finding that most states, although not all, experienced growth in HERD expenditures from 2018 to 2019. This analysis also examines 2019 state HERD expenditures by R&D field, finding that life sciences accounted for the lion’s share of HERD spending in every state except Alaska, typically followed by either engineering; the physical sciences; or the geological, atmospheric, and ocean sciences.

More than half of the nation’s governors have given their State-of-the-State addresses, and in this week’s coverage of the addresses, we complete our review of those that addressed their constituencies through January. As the COVID-19 crisis highlighted the need for greater broadband connectivity and affordability, we again see the state leaders focusing more attention on building out those capabilities. Diversifying state economies also plays a role in Alaska, Hawaii and New Mexico, while opportunities for development through renewables features in addresses from Nevada and New York. In addition to those states, this week’s installment takes a look at innovation-related initiatives set forth in addresses from the governors of Delaware, Indiana, Massachusetts, Michigan, Missouri, Montana, and Utah.

New one-year estimates from the American Community Survey (ACS) show that in 2019, women made up 48 percent of all workers but only 27 percent of STEM employees. This figure has risen over the last 50 years where, in 1970, women accounted for just 8 percent of STEM employees while representing 38 percent of all workers. While the disparity between the number of women in STEM and the number of women in the workforce has shrunk, they remain underrepresented in STEM careers.