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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.

To view the Greenbook, visit link.

alt“This set of tax reforms strikes a balance between targeted tax cuts to spur investments in job growth and innovation here at home, middle class tax relief to make our tax system more fair, measures to crack down on abuses that send jobs overseas, and long-term fiscal discipline.”
— Treasury Secretary Tim Geithner

As part of the Administration's effort to restore prosperity and create an economy that works for all Americans, the U.S. Department of the Treasury today released the General Explanations of the Administration's Fiscal Year 2011 Revenue Proposals (Greenbook). The Greenbook outlines the Administration’s plan for short-term tax incentives to create jobs and encourage business investment, its proposals to deliver tax relief to middle class families and small businesses, and its blueprint for restoring fiscal discipline and responsibility to our tax code.
 
Key Administration Priorities in FY2011 Greenbook
Tax Cuts to Jumpstart Job Growth and Support the Economic Recovery
§  An Immediate Small Business Jobs and Wages Tax Cut in 2010
§  Tax Incentives for Small Businesses to Make Immediate Investments
§  Bonus Depreciation for Business Investment in 2010
§  Tax Credits for Investment in Advanced Energy Manufacturing Projects
§  Extending the Making Work Pay Tax Credit
Tax Cuts to Encourage Innovation, Investment and Sustained Economic Growth
§  Eliminating Capital Gains Taxes for Investments in Small Businesses
§  Making Permanent the Research and Experimentation Credit
§  Making Permanent the Successful Build America Bonds Program
Permanent Middle Class Tax Relief
§  $10,000 For a Four-Year College Education by Making Permanent the American Opportunity Tax Credit
§  Nearly Doubling the Tax Cut for Middle Class Families to Pay for Child Care Expenses
§  Increasing Matching Credits to Encourage Retirement Saving and Providing for Auto-IRAs
Reform, Responsibility and Fiscal Discipline

§  Financial Crisis Responsibility Fee to Recoup TARP Losses and Reduce Financial Risk
§  Reforming the International Tax System by Reducing Transfer Pricing Abuses, Tax Evasion, and Incentives to Shift Investment Overseas
§  Allowing the 2001 and 2003 Tax Cuts for Households Making more than $250,000 to Expire
§  Eliminating Inefficient Fossil Fuel Tax Subsidies and Closing Additional Loopholes to Make the Tax Code More Fair 

THIS IS A START BUT WE WOULD STILL HAVE A MAJOR GAP IN FINANCING PROGRAMS FOR INNOVATIVE SMALL BUSINESSES IF THIS BUDGET PASSED AS PROPOSED. ADDITIONAL PROGRAMS OR GAPS THAT NEED ATTENTION TO STIMULATE ENTREPRENEURIAL JOB GROWTH ARE:
  • - A NEW EQUITY INVESTMENT PROGRAM TO ADDRESS THE GROWING "VALLEY OF DEATH" FOR HIGH GROWTH SME'S
  • - PERMANENT REAUTHORITIZATION OF THE SBIR PROGRAM
  • - CREATION OF A NATIONAL ANGEL CAPITAL INVESTMENT TAX CREDIT PROGRAM
YOUR COMMENTS OR SUGGESTIONS WELCOME. RICH BENDIS
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Copies of President Barack Obama's budget are delivered to the Senate Budget Committee on Capitol Hill in Washington, Monday, Feb. 1, 2010. (AP Photo/Manuel Balce Ceneta)WASHINGTON -- President Barack Obama's multi-trillion-dollar budget would boost spending for several government agencies while slashing the account for others. Here is an agency-by-agency glance:

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Agency: Agriculture

Spending: $148.6 billion

Percentage change from 2010: 9.7 percent increase

Mandatory Spending: $122.8 billion

Highlights: Obama's proposed budget includes hundreds of millions of dollars in increased spending to help feed the poor while also limiting government handouts to wealthy farmers.

The budget would provide $8.1 billion for nutrition programs, a $400 million increase from the president's 2010 budget. It would allocate $10 billion over 10 years to improve access to USDA food programs, establishing higher nutrition standards at schools and aiming to reduce childhood hunger.

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As we described last week in State Job Creation Strategies Part I: Finding the Money and Investing in Human Capital and Physical Infrastructure, competing globally for jobs starts with policy makers instituting fundamental investments in education, human capital and physical infrastructure that make their state a productive environment for economic innovation.

The next step, as this Dispatch will describe, is helping the private sector leverage opportunities for job creation and technological innovation. Too often, some state leaders treat economic development as merely a bidding war between states to give away the most tax breaks or economic subsidies to big corporate bidders. Not only do most studies show such tax-giveaway approaches to be ineffective -- fundamentals like labor productivity and physical infrastructure are more critical in site selection for most global businesses -- but they end up devoting most state resources to a few large businesses while ignoring investments in start-ups and smaller homegrown firms that are the heart of long-term local prosperity.

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A new OECD report provides data on startups and similar measures for 39 countries. Lots of variables, e.g.:

  • Number of enterprises by size class
  • Employment by size class
  • Value added by size class
  • Exports by size class
  • Employer enterprise birth rates (manufacturing and services by industry, by size class)
  • Employer enterprise death rates (manufacturing and services, by industry, by size class)
  • One- and two-year survival rates (manufacturing and services)
  • Share of one- and two-year-old employer enterprises in the population (manufacturing and services)
  • Share of high-growth firms (employment)
  • Share of high-growth firms (turnover)
  • Share of gazelles (employment)
  • Share of gazelles (turnover)
  • Employment creation by enterprise deaths
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The unemployment pressure does not appear to abate. Layoffs continue every day and despite massive government intervention for economic recovery, there is little evidence of anything more than a slow, prolonged recovery. It is time to give a payroll tax holiday for young firms.

Different forms of hiring incentives to fight the jobs crisis have been proposed in Congress without much success to date. For example, Sens. Orrin Hatch (R., Utah) and Charles E. Schumer (D., N.Y.) proposed suspending payroll tax payments for companies that hire workers who have been unemployed for 60 days. President Obama in turn vowed in the State of the Union address last week to make small-business hiring a key piece in the jobs agenda, proposing tax credits for small companies that hire new workers or raise wages. He said that government should create the conditions necessary for businesses to hire more workers and that “we should start where most new jobs do – in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides it's time she became her own boss.”

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If you are thinking about founding your first company, standing at the edge of the entrepreneurial swimming pool, trying to figure out if you should dive in, here is a checklist (sort of a Meyers Brigg for founders) to help you figure out if this life is for you. It is based on my observations of the thousands of entrepreneurs who I have gotten to know over the past 4 years. I would say, if you’re answer is “No” to more than 10 of these statements, think very carefully about making the jump. There is no science or data to support this checklist. Strictly my own observations of what is required to enjoy and excel in this experience.

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Bills in hopper: General Assembly, VCs eye TNInvestco expansion | Baylor Swindell, the Windrow Group, Bo Johnson, Nathan Poss, TNInvestco,CAPCOs, TSBICCA, capital formation, venture capital, Reagan Farr, Matt Kisber, economic development, Memphis Biomed Ventures Tennessee, NEST-TN, Legislation now before the General Assembly puts in-play the expansion of Tennessee's eight-month-old TNInvestco capital-formation program.

The two place-holder bills that were introduced last week by State Senators Jim Kyle (D-Memphis) and Jack Johnson (R-Franklin) provide no details regarding the ultimate thrust of efforts to revise and expand a state program that has, thus far, helped to fund six new venture-capital funds in Tennessee.

The filing of the bills does, however, seem to signal the beginning of an array of lobbying efforts that could mean expanding cumulative TNInvestco tax-credit allocations to a cumulative $200 million or more, from the program's original $120 million.

With that much money on the table, various camps are organizing to protect what they have, or to enlarge the TNInvestco program to bring more funds into the tent.

THE TENNESSEE TNIvestco  CAPITAL-FORMATION PROGRAM IS ONE OF THE MOST INNOVATIVE EARLY STAGE, STATE FUND OF FUND PROGRAMS, THAT IS DESIGNED TO HAVE NEW IN-STATE MANAGED VC FUNDS , MANAGED BY EXPERIENCED TENNESSEEANS, THAT WILL INVEST IN ENTREPRENEURIAL TENNESSEE COMPANIES.

RICH BENDIS
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I [Jeffrey Phillips] had the opportunity to speak to a group at a university recently about innovation. In fact, I've spoken to four universities about innovation in the last few months. There's a growing awareness that innovation needs to happen in university settings. This would include innovation on the administration of the university, in the teaching methods and in what is taught. But that's a sideline to what I want to write about today.

In my most recent speaking engagement I was confronted by a senior faculty member who argued that all this talk about "innovation" was pointless, and missed the main target, which was that we needed more focus on science and engineering education. In his mind, innovation was equated to technology, and only scientists and engineers could bring new technologies to life. While I agree that scientists and technologists can bring innovations to market, I'd argue that that definition of innovation is awfully narrow. It seems to me that innovation can occur in many avenues that have little or nothing to do with technology, engineering or science.

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Measuring InnovationOne of the constant challenges for an innovator is to prove the value of their work. Many believe that innovation and creativity cannot be measured and therefore will always struggle with getting the respect it deserves within an organization.

The perception that innovation impact cannot be measures is a myth. At the same time, its not a slam dunk either. The challenge is getting an organization aligned on what the right metrics and measurements.

One metric that is commonly used and one that I don’t agree with is:

Innovation = R&D Spend as % of Revenue

This is the metric that Wall Street applies to most companies. So what’s wrong with it? Its non-predictive of future success and it doesn’t take into account:

  1. Innovation delay: They are measuring future output of R&D spend against today’s revenue. Any valid metric needs to ensure time scales are consistent.
  2. Revenue is impacted by a lot more than just R&D spend: Revenue has a lot of things thrown in that are not impacted or even influenced by innovation/R&D spend. A valid metric needs to ensure that the components of the metric is influenced by R&D.
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Collaboration used to be”hype”. Nowadays it’s social media and the iPad/ Kindle e-readers. The speed of innovation is increasing. It’s getting harder and harder to divide these topics. In my eyes they are interconnected, and will become even more woven together. How will this change us?

We have moved from a closed in collaboration (software for use only within the organization, document sharing and workflow) towards a more open and including form of collaboration, where Twitter now seems to be in the forefront of the development. The best forms of collaborative activities are those who appear from nowhere, that aren’t planned, in short are anarchistic in their form. That doesn’t mean that they are purposeless, it means that the collaborative need develops from an individual (or small group) that has a motif for finding answers and solutions quickly. The most effective way to get there is to search for other people that might have the answer,a part of an answer or/ and a benefit from participating with you to solve a topic. Because of the relational interaction, collaboration starts to develop. The blending of collaboration and community (social media) happened in the process, because it’s the most effective way to get to the goal.

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Morgan’s Posterous - Things I want to share with lots of people.Attention philanthropy is a gift of notice. In a noisy world, deluged in advertising, overrun with PR flacks and crowded with the superficial, one of the biggest barriers to success for a small, good idea or noble enterprise can simply be getting noticed in the first place.

Attention philanthropy is all about shining a light on good work that's worth supporting. It is grantmaking that deals in access, rather than cash (though because many funders, journalists and changemakers read Worldchanging, the pattern is that notice on Worldchanging often leads to more media coverage, funding and networking opportunities for the people and groups we note).

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South Korea To Invest $300M+ US Dollars for Technology R&DThe South Korean Ministry of Education, Science, and Technology will spend close to $355B won in 2010 to develop technologies to enhance the nation’s competitiveness in the global marketplace, and to increase its portfolio of ‘home-grown’ technologies. Of the total investment, about 22% will be allotted towards new investments, which is a 43% increase from 2009. The recent investment announcement aligns with the country’s goal to advance basic R&D by 2021.

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