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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.

I'm Paul Maidment. This is Notes On The News. Tom Falk, chief executive of Kimberly Clark, the health care and consumer goods company that has big plans in China, told us a story of meeting a mayor in China who was pitching his city as a place for Kimberly Clark to invest, one of the selling points being that the city produced 200,000 new graduates a year.

Across China, universities are minting new graduates at record rates, half of them majoring in science or engineering. This has doubled the number of people working in science and technology over the past two decades and tripled the number working in R&D. China is also pouring money into R&D to the point where it is now the third-biggest spender, behind the U.S. and Japan.

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Harvard Business School’s Josh Lerner, an expert on entrepreneurial finance, has largely good things to say about recent steps out of Washing D.C. to strengthen small business growth.

But the Obama administration has gone wrong on some key policy directions, Lerner says, steps that could seriously undermine the best of intentions.

For example, the administration is focused on the idea of loosening up bank credit to fund expansion. Yes, that would help many small businesses, but not the ones that create jobs — the object of this exercise. Lerner points out that very young companies — say less than 5 years old — are the biggest job creators. A 25-year-old small business is more likely cutting than hiring. Actions to help venture capitalists and angel investors, who are also hampered these days, would better serve start-ups.

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Observations

By now you've probably heard of Australopithecus sediba, the 1.95-million-year-old human species that made news on April 8. In a nutshell, researchers have found two beautifully preserved partial skeletons that they say represent a previously unknown member of the human family--one that may have given rise to our genus, Homo. You can read my story on the find here.

There's a lot to talk about with this discovery, so I thought I'd supplement the story with some tidbits from the cutting room floor and material that came in after my deadline.

First, some tidbits:

  • Lead investigator Lee Berger's nine-year-old son Matthew spotted the first A. sediba fossil--a collar bone that turned out to be from a juvenile individual around Matthew's age. Matthew was originally listed as a co-author on the Science paper describing the fossils, but the reviewers of the paper rejected that idea, according to a news story that accompanied the technical reports in the journal.
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Suite101 Motivation in business is a critical key to success. It is easy to lose focus and become overwhelmed with the demands of entrepreneurship. Operating a business often takes the owner away from family and creates financial stress or burden, especially during the start-up stages or in rough economic times.

This collection of small business quotes features pearls of wisdom and motivation from those who have gone before and were able to persevere through challenging times. Others in this collection are simply humorous and meant to lift an entrepreneur's spirits and provide the motivation to push through obstacles and build a better business.

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Good Company Ventures is hosting its Philly launch event about social entrepreneurship and mission-driven investment. Then the party moves to Ladder 15 for the Philly Startup Leaders happy hour.

Agenda
5:00 Registration
5:30 Introductions -- Beth Cohen

GoodCompany 2009 Company Speed Pitches
GoodCompany 2010 Social Impact Incubator -- Garrrett Melby, Chris Bentley
Missioneurs -- Blake Jennelle

6:15 Panel Discussion -- Venture Capital as Engine of Social Innovation

Josh Kopelman, Gil Beyda, Nate Lentz, Len Lodish, Tom Balderston, Jacob Gray (Moderator)

7:15 Networking Reception

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Transcript of Governor Schwarzenegger Announcing the Establishment of the Office of Economic Development

SECRETARY BRADSHAW:

Good morning, everyone. Let me be the first one to officially welcome you to the Governor's Office of Economic Development. (Applause) My name is Vickie Bradshaw and I'm California Secretary for Labor and Workforce Development and I'm going to introduce a few people before we get started. Robert Rivinius, president and CEO of the Building Industry Trade Association; (Applause) Patricia Fong Kushida, president and CEO of the California Asian-Pacific Chamber of Commerce; (Applause) Steve Gándota, Sacramento Hispanic Chamber of Commerce; (Applause) Juan Alday, director of the Latin Business Association; (Applause) Ken Macias, the chairman of the California Hispanic Chamber of Commerce; (Applause) Stuart Drown, the executive director of the Little Hoover Commission; (Applause) Wayne Schell, the president and CEO of the Association of Local Economic Development; (Applause) Danny Curtin, the director of the California Conference of Carpenters; (Applause) Some of them are buried deep in the back. Aubry Stone, the president and CEO of the Black Chamber of Commerce; (Applause) Bill Dombrowski, the president and CEO of the California Retailers Association; (Applause) Edwin Lombard, board member of the Black Chamber of Commerce; (Applause) Malaki Seku-Amen, the legislative advocate for the California State Conference of the NAACP; (Applause) Linda Adams, the Secretary of Cal EPA; (Applause) a couple other cabinet members are tied up at the moment. Bill Leonard and Teri Takai - ah, we found him. Bill Leonard is making his way up. And Undersecretary Will Brown of the California Department of Food and Ag. (Applause)

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Kenya's National Council for Science and Technology and the British Council are to work together to expand the Africa Knowledge Transfer Partnership programme. The aim is to provide opportunities for businesses to improve their competitiveness and productivity through the better use of higher education knowledge, technology and expertise.

African Knowledge Transfer Partnerships, or AKTPs, are UK-sponsored partnerships between higher education institutions and private sector organisations in the UK and Sub-Saharan Africa. The partnerships are being piloted in six African countries - Kenya, Uganda, Ghana, Nigeria, South Africa and Rwanda.

The aim, according the British Council, is to help companies improve their productivity and competitiveness by using the scientific knowledge, technology and skills available in higher education institutions through collaborative projects.

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If you listen to climate scientists — and despite the relentless campaign to discredit their work, you should — it is long past time to do something about emissions of carbon dioxide and other greenhouse gases. If we continue with business as usual, they say, we are facing a rise in global temperatures that will be little short of apocalyptic. And to avoid that apocalypse, we have to wean our economy from the use of fossil fuels, coal above all.

But is it possible to make drastic cuts in greenhouse-gas emissions without destroying our economy?

Like the debate over climate change itself, the debate over climate economics looks very different from the inside than it often does in popular media. The casual reader might have the impression that there are real doubts about whether emissions can be reduced without inflicting severe damage on the economy. In fact, once you filter out the noise generated by special-interest groups, you discover that there is widespread agreement among environmental economists that a market-based program to deal with the threat of climate change — one that limits carbon emissions by putting a price on them — can achieve large results at modest, though not trivial, cost. There is, however, much less agreement on how fast we should move, whether major conservation efforts should start almost immediately or be gradually increased over the course of many decades.

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In states across America, higher education institutions and systems are working to become key drivers of economic development and community revitalization. They are:

  • Putting their research power to work by developing new ideas that will strengthen the country’s competitive edge in the new economy — and then by helping to deploy those innovations into commercial use.
  • Providing a wide range of knowledge-focused services to businesses and other employers, including customized job-training programs, hands-on counseling, technical help, and management assistance.
  • Embracing a role in the cultural, social, and educational revitalization of their home communities.
  • And, most fundamentally, educating people to succeed in the innovation age.

Together, these trends suggest a new paradigm for economic development programs — one that puts higher education at the center of states’ efforts to succeed in the knowledge economy.

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Authors: David F. Shaffer and David J. Wright

Although most of my blogs have focused on advice to technology entrepreneurs, I take the chance in this blog to reflect on the role of government in stimulating innovation. I was recently invited to participate in an on-line debate on government’s role in innovation on the Economist.com. The proposition was “This house believes that innovation works best when government does least”

I voted in favor of the motion, for three simple reasons. First, I believe governments are terrible decision makers in the innovation forum; they do not understand it and have access to limited expert help. As a result, much of their activities has, at best, limited impact, at worst damaging effect on the free-market decision-making process. Second, government involvement in innovation is usually slow, motivated by political imperatives and distorts market forces. As a result, it can damage as much as it can help. This is particularly the case when you explore the gestation period of innovation policies, which are longer than the life of government. Finally, by encouraging innovators to respond to government programs and fulfill government requirements, we divert their attention from identifying customers, and expanding internationally. Even with the best intentions, in the words of John Wanamaker

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Venture capitalists and angel investors can be very useful external sources of capital for established businesses, but the value they bring to new ventures and start-ups is questionable at best. Entrepreneurs should aim to finance their ventures by means other than venture capitalists, private equity and angel investors unless a large fortune is needed to finance business start-up activities or they choose to work with investors specifically focused on very early-stage start-ups. Here are eight strategies in which many entrepreneurs might choose to finance their ventures:

Business Credit Cards
Many successful businesses, such as Under Armour, were financed through credit cards in the very early stages of their venture. While credit cards are not necessarily the most ideal source of financing as they do have their drawbacks, if used correctly they can be a very effective source of financing.

How to use a business credit card correctly:
- Effectively manage cash flow by not having to pay for purchases until the end of the billing cycle. 
- Use to pay for start-up fixed and upfront costs so you can make your first sale 
- Plan ahead on how you will pay off the balance, then create a backup plan

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