NEW YORK (Fortune) -- There doesn't seem to be a recession on at Fahrenheit 212. Stepping into the boho-chic downtown Manhattan office of this "innovation consultancy" is something like stepping into a time-warp. Cheeky foyer art? Check. (Fahrenheit's is a gorilla beauty queen done in oils.) So many glass walls they ought to be a workplace hazard? Double-check. Completely anachronistic mahogany library, complete with rolling ladder? Does one even have to ask? And everywhere you look, beautiful, bright-eyed people skipping around like it's 1999.

But it isn't, and with 2009 as abysmal a year as most of us can remember, just about the worst thing to be is a consultant, let alone an innovation consultant.

WASHINGTON, DC, December 16, 2009 (ENS) - At a Middle Class Task Force meeting today which focused on manufacturing, Vice President Joe Biden announced the administration's support for up to $5 billion in additional funding for a successful Recovery Act program that will accelerate job growth in Clean Energy Manufacturing.

This increase would more than triple the funding of the Recovery Act's Section 48C Advanced Energy Manufacturing Tax Credit.

The program covers a number of clean energy technologies, providing a 30 percent tax credit for investments in factories that manufacture products used in clean energy technology.

The innovation industry took a hit this year, as executives dialed back on initiatives—and paid the price. But some encouraging trends also emerged

In 2009 the world was no longer flat; much of it was flat broke. Deflated by slumping sales and income, companies roundly did what innovation consultants say they never should—they cut spending on research and development. The U.S. drug industry, historically one of the most lavish spenders on research and development, announced the elimination of a record 69,000 jobs this year, up 60% from 2008. At many companies, quick hits and line extensions replaced more costly, though potentially more rewarding, investments in game-changing inventions.

Still, creativity lives on. Among fresh or fringe approaches that became mainstream tools in 2009: trickle-up innovation, design thinking, and open innovation. And while innovation may no longer be the golden goose it was in flusher times, the penny-pinching has forced companies to break some bad habits—such as wantonly pursuing every new idea—which could help them roll out new money-making products and services as the recession eases and an economic recovery takes hold.

The calls for reform continue to resonate in the body politic. This year’s state budget embodied significant reform and change in the state’s Empire Zones program. New, more stringent tests for existing participants were enacted and are being applied retroactively. Future participants must meet even higher standards. The sunset of the zones program was accelerated to June 30, 2010. The governor himself heralded the “end of the program.”

Businesses considering expansions and site selectors are unsure of the nature of state assistance going forward. Even surviving participants in the zones program are unsettled by the prospect of the state changing the rules in midstream again. There is little but uncertainty on the horizon.

Small business will pave the road for recovery. What a lovely thought.

The Big Trend

More capital starvation. One of many haunting data points: Bank reserves now exceed the U.S. Federal Reserve's regulatory floor by $1 trillion; before the credit crisis, excess reserves (the inert stuff banks hate to hold) came to only $2 billion. It may take another year for things to loosen up. Result: Companies that have neither the huge growth prospects to attract venture capital, nor a river of steady cash to entice skittish banks, will go wanting.
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The Unconventional Wisdom

Spur job growth by nurturing mid-sized businesses. Only 5.8 million of the 25 million businesses in the U.S. have employees, and just 650,000 of those have at least 20 employees. Most small businesses (which politicians and pundits love to laud as the primary engine of job growth) serve local consumers, businesses and governments--many of whom are tapped out at the moment. Midsize businesses can take advantage of national and global markets, and in turn put people back to work. Now.

This is part of my [David B. Lerner] ongoing series on University Entrepreneurship.

As I sometimes like to say- if the licensing side of the university tech transfer business is 29 years old by now, the practice of spinning-out companies based on university intellectual property is still really a teenager. The field is still young enough such that no one has written the definitive book on its application and in the meantime the field simply continues to evolve and grow at a stunning pace. And, like any teenager worth his or her salt, this form of university entrepreneurship is becoming increasingly boisterous, ambitious, somewhat unruly at times and yet is displaying enormous creativity, energy and imagination. As I approach the beginning of my fifth year in this field and with the benefit of having spun-out almost 50 university startups during this period, I have taken a moment to reflect on what I have seen and am seeing occur.

According to AUTM statistics, American universities are now spinning-off companies based on university intellectual property at a clip approaching 600 per year. In addition, as demonstrated in a recent white-paper authored by a team led by MIT's legendary Ed Roberts, this number of 600 per year is actually dwarfed by the thousands of other companies being launched each year by university entrepreneurs forming companies of their own that are not based on their university's intellectual property. Another important development is the well-known fact that as the costs of launching a company continue to decrease due to the advent of cloud computing and the like- so has it steadily become much easier for university-age students to try their hand at entrepreneurship.

Looking back on 2009, it seems clear that the uncertainty of the global economy combined with the general maturation of the social entrepreneurship space made it something of a building year. I [Nathaniel Whittemore] believe that 2010 will begin to materialize some of the innovations that people spent 2009 clearing the way for, with significant long-term consequences. All in all, I'm far more excited about the coming year than I was about the last.

The most common critique I have of myself looking back at my predictions from last year is that I failed to recognize how many of them were in line for a gestation period before the really significant changes. I think that my Trend #5: Mobile Platforms and Trend #3: Blended Value Investing definitely ended up having a building period last year. White House partnership on social entrepreneurship was even more behind the scenes, and it's still unclear exactly who is going to benefit from the Social Innovation Fund.

Personal branding is not a new concept, but it’s something small business owners and marketers have to pay attention to now and certainly through 2010. Your brand is your clear differentiator and your competitive advantage. It’s also the first impression you have with potential customers and the source of attachment you create with your current customers.

Over the past few years, we’ve seen personal branding become more and more important because of the pressure of the economy and through the rise and acceptance of social media technologies for both business and personal use.

The last decade saw the obsolescence of several technologies that once seemed cutting edge or permanent.

Of course, the gales of creative destruction aren't slowing down. The next decade will see all kinds of upheaval and violent change.

Last week The Bureau of Labor Statistics published an interesting study about the way employment will change over the next several years.

It specifically identified 10 American industries that will see the biggest declines in employment between the years 2008-2018. Some are surprising, and others are industries that have long been due to die.

A Carefully Targeted Tax Break to Boost Innovation Could Be Worthwhile

Clarence Odbody, the great-hearted but bumbling angel who saves George Bailey from himself in the post-war Christmas classic It’s a Wonderful Life, counted on Jimmy Stewart’s character to earn Clarence his “wings.” Angel investors, those wealthy individuals who bankroll the innovative entrepreneurs at the earliest stages of company creation, don’t drop from heaven like Clarence, but they do save entrepreneurs struggling to turn their new ideas into successful companies and in turn count on the entrepreneurs they support financially to get past the nearly suicidal hours required to create explosive new companies—think Google or Genentech—which create the majority of new and well-paying jobs in the United States.

Angel investors aren’t in this game to earn their wings, of course. Wealth is the goal, but so too is job creation for these mostly local serial entrepreneurs who thrive on the thrill of building companies that help their communities grow and prosper. Problem is, these and other very early-stage investors in innovation companies—including the inventors and founders of these new companies and their friends and family who put up their first rounds of cash—often don’t reap the rewards of their early risk taking. The reason: Once a young company reaches a certain point of success it usually stumbles as it tries to bring its new product or service to market—at the very time it needs lots more money to grow.

When Josh Kopelman and I first spoke about me joining First Round Capital, we talked a lot about alignment of interests—what First Round Capital was interested in with regards to investing in New York City, and also what my interests were with respect to my own career.

Given that our discussions had only started about a week and a half before my last fulltime day at my startup, I hadn’t really had a lot of time to think about what my next move was going to be. It didn’t really make sense for either of us to commit to a big four year engagement when I couldn’t say for sure what my goals were. Josh suggested that I help First Round firm up their footprint in NYC over the next year while I figure it out.

A Survey of VC Attitudes Towards Investing in Nuclear Power

Is there a role for Venture Capital in the nuclear industry? Despite the term “Venture” in their asset class, VCs tend to want to minimize risk as much as possible. And nuclear is full of risk.

Market risk. Technical risk. Regulatory risk. Finance risk.

Most of the investors we spoke with were supporters of nuclear as citizens. But they had difficulty rationalizing the timeframes and scale inherent in nuclear with the goals of their limited partners and the dictates of their funds.

Maybe Minnesota is doing better than we thought in attracting venture capital.

Minnesota has always lagged California and Massachusetts -- the nation's two venture capital powerhouses. But there was a nagging sense that Minnesota lagged some of its Midwestern neighbors, too.

Apparently not so. Now comes Jay Hare, a partner at PricewaterhouseCoopers who focuses on early-stage venture investment deals, to say we may be better than we think.

Washington (CNN) -- It's the oldest trick in the political playbook: Call together a "summit" of fancy people so you'll appear to be focused on work that must get done.

Thursday, the White House convened CEOs from companies such as Boeing, AT&T, Comcast and Dow Corning, top leaders of the United Steelworkers, United Food and Commercial Workers, American Federation of Teachers unions, Ivy League academics and a few small-business representatives to brainstorm how the country might generate much-needed jobs.

A schmooze-fest is nice, but the hard work of putting America back to work will be done by entrepreneurs, not the leaders of the biggest companies in the nation and the heads of big unions.

15/12/2009 - What impact has the crisis had on innovation and spending on research and development? How can innovation help to solve environmental and social threats? How are countries tackling these challenges?

The OECD Science, Technology and Industry Scoreboard 2009 provides the data and analysis to answer these questions and others to give policy makers an insight into the trends shaping science and innovation.

The Scoreboard includes more than 200 internationally comparable quality indicators to explore the progress of national innovation strategies and recent developments in science, technology and industry. In addition to data for OECD countries, it provides a broad range of statistics for other major economies such as China, India, Israel and the Russian Federation.

Commerce, Justice, Science Appropriations Subcommittee Chairwoman Barbara A. Mikulski (D-Md.) on Sunday, Dec. 13, announced final Senate passage of $31 billion for agencies focused on science and competitiveness, including the National Science Foundation, National Institute of Standards and Technology, National Oceanic and Atmospheric Administration and National Aeronautics and Space Administration.

The funds are included in the CJS Appropriations bill, which was approved as part of Congress’ Fiscal Year 2010 Consolidated Appropriations bill. It now goes to the President to be signed into law.

This bill makes sure American manufacturers leverage new technology to create new jobs for our communities, while expanding U.S. markets overseas. Mikulski has been fighting for federal investments that strengthen America’s innovation economy, ensuring that our national research programs keep America competitive in the global arena.

We continue to challenge the relevance of the college “degree” as being an insufficient measurement for what “educated” is, or is not, in an innovation economy. With the cost of a college degree spiraling upward and the value of the degree spiraling downward, the market will tip in favor of the alternative education measurements.

It is important to note that we do not challenge the existence of institutes of higher education, only the “degree” as a unit of measurement. The four year Bachelor degree and two year Masters degree are irrelevant as a title (there is no legal title since the age of the guilds) and arbitrary in duration to respond to the diversity, speed, and scope at which new technologies become available for deployment.

A comprehensive snapshot of San Diego’s innovation economy shows a slowdown in new company formation, with 78 technology startups created during the three months that ended in September. But federal grants for basic research jumped to new highs, with funding awarded by the National Institutes of Health (NIH) up 44 percent and funding from the National Science Foundation (NSF) doubling over the previous quarter.

The total of 78 technology companies started during the third quarter is down about 24 percent from the 102 startups launched in the previous quarter, and is down about the same amount from the 103 companies created during the third quarter of 2008, according to the report released yesterday by Connect, a San Diego nonprofit group that promotes technology innovation and entrepreneurship.

The UK's National Endowment for Science Technology and the Arts (NESTA) has released its new pilot Innovation Index . As the press release states:

The aim is to make a significant improvement on existing metrics, both by making clear the contribution of innovation to productivity and growth, and by capturing 'hidden innovation'.

The index is now in its pilot form with launch of its final form due in the fall of next year. The Index is actually three reports.

The first report provides a growth accounting framework, built in part on the measurement of intangible assets as formulated by Corrado, Hulten and Sichel in the US and Marrano, Haskel and Wallis in the UK (see previous postings).

The second report is a follow on to their earlier report of "hidden innovation" - that is innovation in industries where levels of traditional R&D investment are low. These include: architectural services: accounting; business and management consultants; legal services; software and IT services; automotive industry; construction; energy; and design services. The report shows that low R&D intensive industries are not necessarily low in innovation. And even in areas were industry wide innovation may be low, successful companies are more innovative than their peers.

To succeed, innovation needs to be more than a nebulous desire to foster creativity in an organisation. It needs to be a concrete business process driven from the top. Roger La Salle explains.

It’s probably only in the last forty years that creativity started to gain momentum as a formal business tool that could perhaps be used to enhance the flow of new business insights.

Creativity in itself is a generic term. Its use seems to be more in reference to the cerebral processes and many teachers in the craft refer to left brain, right brain, free-flowing thoughts and letting your mind drift to allow hitherto inhibited thoughts to escape to the conscious mind where they can be captured, explored and potentially exploited. Indeed, I recall one recent conference where a presenter gave everybody a balloon to inflate, then on command asked that they be released to “freely fly around the room”.