SSTI Digest

The Economic Development Administration (EDA) has announced the seven recipients of the inaugural STEM Talent Challenge, awarding a total of $2 million in grants through the inaugural STEM Talent Challenge, which aims to boost local science, technology, engineering, and math (STEM) talent. Three SSTI members were among the seven winners: Ohio University received a $295,643 grant in the digital manufacturing sector; University City Science Center won a $246,179 grant in biotechnology/cell and gene therapy; and, the University of Michigan won $300,000 in grant money in the advanced manufacturing and cybersecurity sector. More information on all of the recipients is available here. The funding opportunity kicked off in August 2020 to further build STEM workforce readiness and spur innovation.

The U.S. Small Business Administration has announced the winners of two award programs. The Lab to Market (L2M) competition was launched in September and recognizes organizations, programs and ideas that support R&D innovation ecosytems, particularly those focused on underrepresented communities and pandemic responses. SBA also announced recipients of the annual Tibbetts Awards, which recognizes companies, organizations, and individuals for exceptional success achieved through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. SSTI is happy to note that several of our members were recognized in each of the awards.

Deals raising at least $50 million grew by nearly one-quarter in 2020, driving an additional $18 billion in deal value to a new record of $156 billion invested. This data, from the PitchBook-NVCA Venture Monitor, suggests that the total venture capital market will see a slight decline in investment deals overall from 2020.[1] This slip in deal activity is driven by what is currently an 11 percent decline in seed or angel deals and a 20 percent decline in early venture capital deals.

This national trend held for many of the states in the country. Half of the states saw more money invested in 2020 than in 2019, with a 13 percent increase across the country in the year. Again, this investment volume occurred despite fewer deals in 2020 in all but 13 states. The states with more deals were Connecticut (+22 deals), Georgia (+3), Iowa (+13), Maine (+9), Massachusetts (+17), Michigan (+10), Missouri (+2), North Carolina (+18), Ohio (+4), Rhode Island (+4), West Virginia (+1), Wisconsin (+4) and Wyoming (+2).

President Joe Biden has named geneticist Eric Lander the director of the Office of Science and Technology Policy (OSTP) and the president’s science advisor. Biden also promoted the science advisor role to a cabinet-level position, becoming the first president to do so, stating that, “science will always be at the forefront of my administration.”

The exact role Biden envisions for OSTP is not entirely clear but is likely to revolve around using bioscience to address the pandemic and leveraging research and innovations to improve America’s economic competitiveness. As Science points out, Biden has already named multiple officials to address climate change in other offices and so this may not be a significant part of OSTP’s portfolio. A public letter accompanying Lander’s nomination directs him to work to answer five questions for the country:

Each year more than half of the discretionary portion of the federal budget is spent by the Department of Defense (DOD). In FY 2019, the DOD figure is estimated to be $712.5 billion and 77 percent of it was spent in the 50 states and District of Columbus, based on a new report from the Office of Local Defense Community Cooperation (OLDCC) — formerly the Office of Economic Adjustment. The report outlines those DoD personnel and contractual expenditures in each state for the year. The nature and importance of defense spending varies widely by state, as the following SSTI chart and the original DOD report reveal.

Awareness of the composition and relative share defense spending plays in a state’s economy should be  inputs in policy determinations on how best to support the defense investment and to maximize its contributions toward future state growth. Aggregate research and development expenditures, for instance, only has a significant share of total defense spending in a handful of states. Policy makers may wish to exploit these established relationships with programs intended to grow the share even larger.

The early days of vaccinating against the coronavirus might not be the most receptive time to raise issues of antitrust in the U.S. pharmaceutical industry, but a November 2020 Barcelona GSW Working Paper raises several concerns about the degree and effect of common ownership within big pharma. Does this explain the resistance of drug prices to fall? Should Congress take on the likes of brand firms Johnson & Johnson, Merck and Pfizer, in addition to already challenging the tech giants, in 2021?

European scholars Albert Banal-Estanol, Melissa Newham and Jo Seldeslachts found the common ownership linkages between the three largest U.S. pharmaceutical companies mentioned above, already dense at the beginning stage of their research in 2004, increased sharply in density by 2014. Generic firms, in contrast, maintained sparse ownership linkages throughout the study period.

Beginning in early March, potential wage levels will play a leading role in the selection process that determines H-1B visa recipients, worrying some that it may result in a decrease in the number of international students wanting to pursue their education in the U.S. The rule modifications, originally introduced in October 2020 and covered by SSTI here, state that the new procedure will focus on “selecting registrations based on the highest Occupational Employment Statistics (OES) prevailing wage level that the proffered wage equals or exceeds for the relevant Standard Occupational Classification (SOC) code and area(s) of intended employment,” deviating from the current lottery-style system for H-1B selection.

The U.S. Department of Energy announced more than $123 million across 46 awards to projects supporting manufacturing innovation. About half of the funds are going to efficiency improvements in manufacturing processes, with the remainder split between improving chemical manufacturing and supporting more efficient facilities and systems. SSTI members included among the project awardees include Argonne National Lab, Sandia National Lab, University of Cincinnati, University of Michigan, and the University of Tennessee. More information on the program and individual awards are available through the department’s Advanced Manufacturing Office.

Department of Energy advanced manufacturing awards (2021) by location 

Nearly 75 years ago, the head of the U.S. Office of Scientific Research and Development, Vannevar Bush, published what became a seminal report in the science community. The report chronicled the necessity of basic scientific research, investment by government in science and innovation, and identified the reasons to push the limits of our own knowledge. Science, The Endless Frontier was Bush’s call for a committed relationship between government and science. In the spirit on Bush’s pioneering report, the National Academies of Science (NAS) and the Council on Competitiveness (the Council) have published reports outlining the ways in which policymakers, the private sector, and researchers can boost American innovation in the years ahead.

Bush’s answer to the uncertainty of the postwar society was government funding for basic scientific research and innovation. Today, NAS argues that to deal with the grim issues facing our world, we too must embrace the endless frontiers of science and retool our institutions to be more responsive and nimble in the face of immense change.

Entrepreneurship in the U.S. has declined significantly over the past four decades, which has contributed to an annual productivity growth of 3 to 4 percent less than it would be if entrepreneurship had remained unchanged since the early 1980s. Those are among the findings a report from the Congressional Budget Office (CBO), which points to three contributing factors for the decline and outlines measures policymakers could put in place to help spur entrepreneurship.

With the current state of the economy, CBO’s assertion that past recessions have been a contributing factor to entrepreneurship’s decline should raise a greater drive to combat those effects. The report notes that the recession of 2007-2009 in particular played a role, when firms faced restricted access to financing and a weaker economy. The burst of the dot-com bubble in the late 1990s seems to have been a significant and negative turning point for productivity gains by new, technology-focused businesses.

This week’s SSTI Weekly Digest contains a full slate of stories, some of which focus on the federal government. To report these stories without commenting on yesterday’s events and not acknowledge what has occurred over the last 24 hours could give the impression that we do not think the assault on the Capitol was significant. Nothing could be further from the truth. 

In my lifetime, September 11, 2001, and yesterday were the two worst days for America. On 9/11, I along with the rest of the country mourned the loss of thousands as a result of an attack of foreign terrorists, and I wanted justice for those lost. Yesterday, I watched symbols of our democracy polluted by an assault of domestic terrorists.

The Senate chamber where the body deliberates and votes; the speaker’s dais where FDR declared December 7, 1941, a date which will live in infamy; and statuary hall with statues of American heroes from Daniel Webster, Henry Clay and Sequoyah stand were overrun by domestic terrorists intent on preventing the House and Senate from fulfilling their constitutional duty to receive the votes from the Electoral College.

As 2020 came to a close, we received word that former Pennsylvania Gov. Dick Thornburgh had passed away on Dec. 31. Obituaries in the New York Times, Washington Post and Pittsburgh Post-Gazette, rightly focused on his tenure as U.S. Attorney General and his two terms as governor, including his handling of Three Mile Island shortly after becoming governor. But I would like to focus on his legacy as it relates to technology-based economic development (TBED) and as a person.