SSTI continues its reporting on actions taken by state legislatures to invest in economic growth through science, technology, innovation and entrepreneurship. This week, we look at the budgets passed and signed by governors in Arizona, where R&D infrastructure will get a boost at the state’s public universities, Montana, which will see an increase in funding for some higher education research facilities, and Nebraska, where the state maintained the amount authorized for funding to small businesses for commercialization activities.

Arizona

Investments and policy to support innovation-focused agendas have flourished with the close of the 2014 legislative sessions in several states. Crowdfunding legislation, incentives for attracting talent, higher education affordability, punishing patent trolls, and encouraging greater accountability are some of the areas where lawmakers focused their efforts.

As new and supplemental state budgets are being proposed, SSTI is monitoring the proposals and will report on developments impacting prosperity through science, technology, innovation and entrepreneurship. The first budgets released – from Colorado, Mississippi, Oregon and Wyoming – represent a mixed bag with new initiatives proposed in three states and program elimination in the fourth.

The big data technology and services market is expected to grow at a compound annual rate of 23.1 percent over the 2014-2019 forecast period, with annual spending projected to reach$48.6 billion in 2019, according to a 2015 study from IDC – a market research firm. Hoping to leverage this exponential growth into research and economic development opportunity, several universities are fund raising to establish new big data R&D Centers in the communities they serve.

Governors are continuing their annual address to legislators and constituents and workforce development continues to take center stage, with the governor of Oregon rolling out a new five-step plan she hopes will invigorate the economy and close the skills gap while Oklahoma acknowledged difficult times and Tennessee says it may achieve an education goal two years ahead of schedule.

A bipartisan group of 17 governors signed the Governors’ Accord for a New Energy Future – a joint commitment to support the deployment of renewable, cleaner and more efficient energy technologies and other solutions to make the U.S. economy more productive and resilient as well as spur job creation in member states.

Oregon derived about 28 percent of its GDP from information and communication technology (ICT) industries in 2012, according to a new report from the Technology CEO Council, based on Moody’s Analytics data.  The report highlights the importance of ICT exports to each state economy. ICT hardware, software and services were the largest U.S. export sector in 2012, generating $272 billion for the U.S. economy.

Addressing accessibility, affordability and ensuring workforce preparedness topped legislators’ agendas in many states during the 2014 sessions. States and regions are increasingly competing for talent as the trend toward growing and nurturing innovation ecosystems continues.

With an eye toward long-term payoffs associated with investments in research, lawmakers dedicated funds and strengthened ties with industry partners. Some states made significant investments in facilities and R&D to grow cancer research capabilities, while others looked to universities to establish new avenues for discovery or attract star researchers. In Washington, the life sciences community banded together to save a nine year-old grant fund that invests in R&D and helps the state remain competitive.

At least three dozen states offer reductions in tax obligations to companies for some portion of the costs of the businesses conducting research and development within their particular state. During the 2017 session, one fewer could be included among the ranks. With little documented opposition, the Oregon legislature decided to get out of the R&D tax credit business altogether (p. 41, source).  Why? Are there lessons for other states’ advocates for innovation?

State spending for the Oregon innovation economy during the 2017-2019 biennium in the Oregon Business Development Department received a sharp increase, thanks in part to nearly $14 million of funding for the new Oregon Manufacturing Innovation Center (OMIC).

In Q3 2014, venture capital (VC) investments in the U.S. dropped by 30 percent from Q2 totals, according a new report from CB Insights. Q3 VC deal levels also dropped by 10 percent from Q2 totals. The severe drop, however, can be attributed to Q2 being the most successful VC quarter since Q1 2001. The good news is that the first three quarters of 2014 saw the U.S. VC investment total reach $33.75 billion – an increase of 59 percent compared to the first nine months of last year.

On November 4, 42 states will vote on 146 ballot issues across a wide array of issues. In addition to initiatives on gun control, bear baiting, and the minimum wage, several initiatives relevant to the TBED community are also up for decision. SSTI has gathered information on many of these and will discuss their results after next week’s elections.

In case you missed it, the midterm elections were on Tuesday, resulting in Republicans taking control of Congress, several new governors, and five states endorsing minimum wage increases.

This week, governors in Oregon and North Dakota released their budget proposals for the upcoming budget cycle. Although the budgets differ in both size and scope, education, workforce development, and other programs related to technology-based economic development are set to receive considerable amounts of state funding.

Many promising technologies created by Oregon startups wither on the vine due to a shortage of high-risk angel capital and many other startups leave the state in search of funding, according to a new report from the Technology Association of Oregon (TAO) – Oregon Angel Investment: The Economic Impact of High-Risk Investment in Oregon's Entrepreneurial Enterprises.

Over the past few months, SSTI has followed proposals issued by governors in their budget requests, State of the State Addresses, Inaugural Speeches and other events. Now that many state legislatures have begun approving budgets, the SSTI Digest will check on the status of these proposals, and examine the state of technology-based economic development funding in the states. This week, we review actions in Tennesse and Nebraska.

Action toward improving the availability and speed of broadband in rural areas is emerging as an early theme in 2019, continuing activity from 2018. Oregon, Washington and the USDA all announced new initiatives last month. In mid-December, the USDA announced the availability of $600 million in grants and loans to support improvement of broadband accessibility across rural America. Funding is split into three equal pools.

The economy, workforce and climate change continue to surface in governors' state of the state addresses. While today’s strong economy allows most governors to reflect on how the states have grown, preparing for the next downturn continues to be a point of concern.

Across the country, the governors have begun delivering their State of the State addresses, an annual ritual where they have the opportunity to review where the state’s economy stands and preview their plans for the coming year. This year’s remarks reflect the dire conditions most states are experiencing with the pandemic, economic fallout, racial strife and national political upheaval. Despite the heavy focus on states’ efforts to respond to the pandemic, governors have struck a hopeful note and are focusing on recovery.

Reviewing another slate of governors’ state of the state and inaugural addresses reveals some recurring themes. With a focus on maintaining gains made since the Great Recession and increasing budgets, many governors are holding off on major new initiatives, but are proposing means to increase broadband access, diversify their economies, build renewable energy efforts, and increase their rainy day funds in case of an economic downturn.