Latest news with #innovation economy
Fast Company
5 days ago
- Science
- Fast Company
Underserved students interested in STEM are often overlooked
The STEM talent shortage in the U.S. isn't caused by lack of student interest in science, technology, engineering, and math. It is caused by us overlooking and under-supporting the students who are most capable of driving the innovation economy forward. For years, policymakers have rung alarm bells about the shrinking American STEM pipeline. The data is sobering: While Japan, China, and Korea award over 40% of their college degrees in STEM fields, the U.S. lags behind at under 20%, according to the Center for Security and Emerging Technology. As the global economy becomes more knowledge-based, America's ability to compete depends on whether we can widen and diversify the pool of STEM talent. Much of the public narrative around STEM has mainly focused on students who are behind grade level and need additional supports to catch up. But an equally urgent and far less discussed issue is the vast population of students who are ready to accelerate but remain invisible in our systems. Schools need to actively recruit students According to a report by The Education Trust and Equal Opportunity Schools (EOS), more than 640,000 Black, Latino, and low-income students who are academically capable are missing from Advanced Placement (AP) and International Baccalaureate courses each year. These students often attend schools that offer advanced coursework, but they are not actively enrolled in those programs. The problem isn't one of supply. The courses exist. The opportunity gap lives inside the enrollment lists. Even more telling, College Board data shows that many Black and Latino students have already demonstrated their potential to succeed in AP-level math and science through PSAT performance. Yet they are never invited to take the leap. The result? A leaky pipeline that loses capable students who might have become engineers, data scientists, or biotech innovators. At EOS, we've partnered with hundreds of districts across the country to identify and enroll these 'missing students.' Our work proves that when schools take an intentional, data-driven approach to proactively recruit underrepresented students into rigorous courses the results are transformative. Students are ready for advanced coursework This isn't about fixing students; it's about fixing opportunity and adult mindsets. A rigorous independent evaluation by George Smith and researchers at Mathematica found EOS significantly increased AP course enrollment—particularly among underserved students. Practically, this means enrolling an average of 52 additional students per school—two full classrooms of previously overlooked young people. Furthermore, there was no difference in the schools' average AP exam performance, which underscores an important truth: These students were always ready for advanced coursework. Without proactively identifying and enrolling them, they would have continued to fall through the cracks. Targeted supports yield substantial returns Identifying and enrolling students is only the beginning. To ensure students and teachers thrive, capacity-building must follow enrollment. The National Math and Science Initiative (NMSI) College Readiness Program has shown that, in participating schools, students enrolled in more AP science courses and increased the number of earned college credits. Female students and Black students, in particular, saw significant gains. Within six years, 28% of Black NMSI students earned STEM degrees—compared to 12% of the general national student population. Among female students, 27% of NMSI students earned STEM degrees within six years—versus 12% nationally. What made the difference? A multi-tiered support system: ongoing teacher training, student prep sessions, curriculum resources, reduced exam fees, and targeted incentives. This type of capacity-building suggests that small, targeted investments can yield substantial returns. Unlike intensive interventions designed to help students reach grade-level proficiency, many high-potential students hovering just below AP readiness may benefit from lighter-touch supports such as adaptive learning tools to fine-tune gaps, short-term tutoring to reinforce core concepts, and professional development that equips teachers to deliver rigorous, culturally affirming instruction. The good news is this approach may be more scalable than we think. The marginal cost of providing these additional supports for students who are already academically proximate to advanced coursework is relatively low compared to the long-term payoff in postsecondary success and workforce readiness. Strategic touchpoints with adaptive learning, targeted tutoring, and additional resources can significantly propel students forward. Unleashing the full potential of those ready to soar—especially when so many of them have been overlooked for far too long, yields meaningful dividends for students. EOS-identified students have passed over 290,000 AP exams since 2011-2012, which would amount to roughly $345 million in college tuition and fee savings for EOS-partner students and their families based on trends in pricing. Final thoughts The STEM pipeline isn't just leaking at the bottom—it's leaking at the top too. Policymakers, educators, and business leaders must center opportunity as the foundation for improving outcomes. Bold action is required, such as establishing competitive grant programs for states and districts to increase enrollment and success of underrepresented students in advanced coursework. Investing in students ready to accelerate, leveraging adaptive learning and targeted tutoring, and scaling proven initiatives like EOS and NMSI are essential next steps. Our economic future and national competitiveness depend on fully tapping all of America's talent.
Fast Company
11-07-2025
- Business
- Fast Company
Is our innovation economy at risk?
The last few years have been unpredictable for the innovation economy—the ecosystem that sees new science and technology taken through initial development, often in universities and public institutions, and then passed on to the private sector to build products and services using these new innovations. Sometimes, the new technologies create whole new industries, such as the internet or artificial intelligence. The innovation economy is responsible for most new high-paying jobs and economic growth. This is the formula that has resulted in robust long-term U.S. economic growth in spite of setbacks such as the great financial recession in 2008 and the pandemic. It's important to appreciate the true impact of a robust innovation ecosystem. In 2008, the U.S. and EU had roughly the same-sized economies, with economies around $14 trillion to $16 trillion. Fast-forward to 2024, and the U.S. economy is near $30 trillion, while the EU's is under $20 trillion. What can explain this disparity in growth? As always, there are many factors involved, but one critical difference is the higher investment rates in the U.S. in scientific research and development (R&D). According to the National Center for Science and Engineering Statistics, in 2023, the U.S. invested nearly $900 billion in R&D across public and private sectors. Contrast that to the EU, where in 2023, the total R&D expenditure was around $381 billion. This large disparity is certainly part of the explanation for the faster economic growth in the U.S. In both the U.S. and the EU, the majority of investments in R&D are made by the private sector, but interestingly, the real driver of transformative innovation is often the public sector investments. Why? Because that's where the early-stage innovation happens. This type of innovation is extremely difficult, time-consuming, and takes years and decades of trial and error. Private companies and investors often have much shorter time horizons and are not interested in pursuing multi-decade basic research. Private sector R&D investments are mostly focused on applied science, where a foundational technology like the internet or AI is used to build products for consumers and businesses within a couple of years. Even in earlier-stage companies that are often funded by venture capital investors, a three- to five-year time horizon from when the money is invested to when the company goes public or gets acquired is the expectation. This has been the innovation flywheel now for decades: The public sector funds basic and long-term research, and companies funded by private investors develop commercial applications for the newly discovered science. The public is rewarded for funding the basic research with their tax dollars with new jobs, higher wages, products that improve their lives, and more. The private investors are rewarded with handsome returns (hopefully!). While the private sector rate of investment has increased over time, the U.S. public sector investment in basic R&D as a percentage of the GDP has significantly declined over the past few decades. Although it reached a high of almost 2% of the GDP in the early '60s, it is now at around 0.6% of the GDP—and that's before the recent deep cuts in federal government research programs and significant proposed cuts across the board for public institutions and university research programs. This most certainly will mean fewer new products, treatments, and breakthrough advancements. It would, then, make sense to think that the private sector would step up to make up for these cuts. However, this may be impacted by some other worrying trends in the private markets. Back in 2020 to 2022, when the Federal Reserve lowered interest rates to zero percent and the federal government provided significant stimulus to businesses and households, private market investment rates exploded. This was due to the large amount of liquidity in the economy and investors having plenty of cash to invest. While this sounds good, such a major uptick in investments in a short amount of time can result in a lack of discipline. Consequently, much capital was invested in companies that did not have great prospects and often at high valuations, divorced from the company's fundamentals. The private markets have been dealing with the consequences of these investments for the last few years. Many of the companies that were funded struggled to hit their growth milestones, achieve successful exits, or secure follow-on financing. Many were saddled with high valuations and struggled to raise new funding at anything close to those numbers. Also, the higher interest rate environment means a higher bar for investors to deploy risk capital. This mismatch in the operator and investor expectations for valuations meant few IPOs and a slow M&A market, and thus lower capital distributions back to the sources of capital. The results of this go beyond just lower returns for investors and some disappointed founders. When there are low exit rates in private markets and low capital distribution back to institutional investors (e.g., retirement funds, endowments, etc.) and family offices, there is less money to be recycled back into the next generation of companies. Add this to the deep cuts for R&D in the public sector, and you can be looking at a serious threat to the innovation economy. HOW BUSINESS LEADERS CAN RESPOND In an environment of lower availability of capital and uncertain policy, focusing on efficient growth becomes a priority. That means that the old mindset of 'growth at any cost' no longer applies. Company leaders need to carefully think through how each dollar spent will bring in new revenues in the short term and manage their net burn rates. Investors in public and private markets are looking for companies that are disciplined and are adjusting their plans based on market realities. It also means being realistic with valuation expectations and not using assumptions that are too aggressive in growth projections, which are often the basis of valuation negotiations with investors. While we've seen frothy markets before, long-term value creation once again comes down to good fundamentals and planning.
