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innovation DAILY

Here we highlight selected innovation related articles from around the world on a daily basis.  These articles related to innovation and funding for innovative companies, and best practices for innovation based economic development.

Phoenix Suns point guard Steve Nash is looking for nothing but net returns as he checks into the venture capital game.

The basketball star has teamed up with advertising executive Mike Duda to launch a hybrid marketing consultancy and venture capital firm. The New York firm, Consigliere, will offer fee-based marketing services, as well as seed-stage capital. Duda said he and Nash are raising $20 million and will invest up to $250,000 in consumer products that can benefit from creative marketing.

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The fast-growing use of cell phones in Africa — where many people lack the basic human necessities — has made headlines worldwide the past few years. The surprising boom has led to widespread speculation that cell phones could potentially transform the impoverished continent.

But new research by economists Isaac M. Mbiti and Jenny C. Aker has found that cell phones — while a useful and powerful tool for many people in Africa — cannot drive economic development on their own.

Mbiti, at Southern Methodist University in Dallas, and Aker, at Tufts University in Medford, Mass., say that while there is evidence of positive micro-economic impacts, so far there’s limited evidence that mobile phones have led to macro-economic improvements in African countries.

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altCoimbatore Krishnarao (C.K.) Prahalad would have celebrated his 69th birthday on August 8, 2010. He was one of the most influential and original strategic and management thinkers of the last 50 years. He was also a friend to strategy+business and, most significantly, a friend and mentor to management thinkers and practitioners all around the world — particularly in India, where he was born and educated, and in the United States, where he lived for most of his career until he passed away from a sudden lung illness on April 16.

Starting in 1977, Prahalad held a post as professor (the Paul and Ruth McCracken Distinguished University Professor of Strategy) at the University of Michigan’s Ross Business School, while building a body of groundbreaking work on the most significant themes in business today: strategy, emerging markets, innovation, and organizational structure. His book Competing for the Future (Harvard Business School Press, 1994), coauthored with Gary Hamel, established core competencies as a strategic enabler, and strategic intent as a managerial purpose; The Fortune at the Bottom of the Pyramid (Wharton School Publishing, 2005) anticipated the remarkable growth of emerging markets; and The New Age of Innovation: Driving Co-created Value through Global Networks (McGraw-Hill, 2008), coauthored with M.S. Krishnan, proposed that the most value-added corporate activity would occur across hierarchical boundaries. Along the way, C.K. wrote three of s+b’s most prescient articles: “The Fortune at the Bottom of the Pyramid” (First Quarter 2002, coauthored with Stuart Hart), “The Innovation Sandbox” (Autumn 2006), and “Twenty Hubs and No HQ” (Spring 2008, coauthored with Hrishi Bhattacharyya).

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A depth-sensing camera and palm-top projector turn an ordinary work surface into an interactive one.

When Ryder Ziola places a bell pepper on the kitchen work surface in front of him, the tabletop springs to life, suggesting recipes and other information. He can also use the work surface like a touch screen, selecting options with a finger--to see, for example, what ingredients might go well with his pepper. Ziola, a graduate student at the University of Washington, developed the system, dubbed Oasis, with researchers at Intel Labs Seattle led by senior scientist Beverly Harrison. Ziola is demonstrating Oasis at the ninth annual Intel Research Day, held at the Computer History Museum in Mountain View, CA.

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patentApple just filed a patent application for technology that would integrate your iPod or iPhone with a smart bike.

Call it the iBike?

Patently Apple, which is great at tracking this stuff, picked up the story first.

The bicycle patent is similar to the Nike + iPod system, which tracks your workouts.

There's plenty of companies making little sensors to track information on bicycles, but we imagine Apple will offer the cleanest, most comprehensive software solution.

For serious bike riders, this will probably be pretty attractive.

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The InnovatorsThey are the mad scientists, the game-changers, the contrarians. Whatever you choose to call them, they represent a new economy driven not by products and profits, but rather by people willing to take a chance on a new idea and make it happen. They are the innovators, moguls of the entreprenurial economy.

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Barbers turn to other barbers when they need a trim. Doctors consult other doctors when they get inexplicable aches and pains. And lawyers — well, we all know the adage about the wisdom of lawyers who represent themselves.

But what about venture capitalists, the people who provide seed funding to early-stage companies with big ideas but small, or even nonexistent, bank accounts? Where do venture capitalists go to get venture capital?

They look to other venture capitalists, of course.

In 2005, the state of Ohio created the Ohio Capital Fund — “a fund of funds” — to help promote and facilitate that process. Simply put, the Ohio Capital Fund issues taxpayer-backed bonds to raise private money to invest in other venture-capital funds, in Ohio and elsewhere. Those funds, in turn, invest in fledgling companies.

The only caveat: At least half of the Ohio money has to go to fledgling companies in Ohio.

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california-sunset.jpgCalifornia has long been a destination for those seeking a better place to live. For most of its history, the state enacted sensible policies that created one of the wealthiest and most innovative economies in human history. California realized the American dream but better, fostering a huge middle class that, for the most part, owned their homes, sent their kids to public schools, and found meaningful work connected to the state’s amazingly diverse, innovative economy.

Recently, though, the dream has been evaporating. Between 2003 and 2007, California state and local government spending grew 31 percent, even as the state’s population grew just 5 percent. The overall tax burden as a percentage of state income, once middling among the states, has risen to the sixth-highest in the nation, says the Tax Foundation. Since 1990, according to an analysis by California Lutheran University, the state’s share of overall U.S. employment has dro

pped a remarkable 10 percent. When the state economy has done well, it has usually been the result of asset inflation—first during the dot-com bubble of the late 1990s, and then during the housing boom, which was responsible for nearly half of all jobs created earlier in this decade.

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With nearly all net job growth in our country coming from companies less than five years old, Congress has debated this year what the role of government should be in developing programs and interventions that support entrepreneurship. While the World Bank’s Doing Business project reported a record number of new pro-entrepreneurship legal and regulatory reforms around the world in 2009, governments and multi-national institutions continue to be tempted to develop entrepreneurship development programs.

Legal and regulatory reforms clearly provide impetus for new business creation. For example, after accounting for differences in per capita income across nations, countries with easier and less expensive procedures for registering new businesses have higher rates of new business creation, according to an analysis of the World Bank Group Entrepreneurship Survey. However, there is less clear evidence as to which interventions or “programs” to equip potential entrepreneurs with the skills they need to start and grow successful companies work.  At a time when it seems daily we report on this blog about new “SME programs”, there should rightfully be concern about whether government programs for “small business” or SME development help much. Too few entrepreneurship programs are developed from robust research and frequently conceived and run by people who have never been entrepreneurs. And, as the adage goes, sometimes more is less.

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The internet calling service Skype is finally gearing up for an Initial Public Offering. In a registration statement with the SEC, the company (whose CEO, Josh Silverman, is pictured to the right) announced that it intends to raise a maximum of $100 million through the offering, and that it will list the stock on the Nasdaq. The filing leaves some details ambiguous, so the actual IPO amount may end up being much more, or less, than $100 million.

The news comes after eBay finalized the sale of 70 percent of the company in November 2009 to an investment consortium led by Silver Lake Partners. It included participation from Canada Pension Plan Investment Board, venture firm Andreessen Horowitz, and Joltid — the peer-to-peer technology company founded by Skype’s founders Niklas Zennström and Janus Friis. The sale left eBay with 30 percent of Skype, Joltid with 14 percent, and the rest of the investment group with the remaining 56 percent. The deal valued Skype at $2.75 billion, and eBay was paid $1.9 billion in cash, and received a note from buyer worth $125 million.

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Should Megatrends Influence Innovation Strategy?When I run strategy seminars, I usually do a session on long-run trends in the macroenvironment. While firms can’t usually influence macro-trends such as interest rates, demographics and legislation, changes and trends can open up strategic opportunities and threats. While some of these can be predicted with a degree of certainty, such as an aging population in Europe, others are harder to estimate (oil prices for example).

I don’t put a lot of faith in predictions regarding these trends. Our psychology means that we have a tendency to extrapolate from the past to predict the future and this means that we continually miss discontinuous change. Some of the famous predictions about the future of technology are part of business folklore:

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1. Go online only when you have something specific to do. Till then stay offline. Sitting on the Internet, you could end up wasting a lot of time chatting or visiting sites that are not relevant.

2. Don’t keep checking your mail all day long. Check only twice or thrice a day after having focused on work for sometime.

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