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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.

WSJThe venture-capital industry is undergoing some tough times, with returns scarce and new money hard to raise in the recession. But a new survey by law firm Fenwick & West shows some optimism is emerging as venture capitalists mark up the valuations of their start-up investments.

According to the Fenwick & West survey, which covers the third quarter, 41% of new venture financings in that period were for up rounds, which means a company was given a higher valuation when it received venture money. That compares to 36% down rounds and 23% flat rounds. It was the first quarter this year where up rounds exceeded down rounds, said the survey.

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Massachusetts ranked first in the nation per capita for the total number of patents produced by higher education institutions - with a rate nearly twice as high as the next closest state, the Greater Boston Chamber of Commerce said.

That was one headline of Competitiveness Scorecard issued by the chamber. The scorecard aims to be a barometer of cost and competitiveness issues facing the Massachusetts economy and a comparison of how the commonwealth fares against the 49 other states. This iteration of the scorecard focuses on the role that colleges and universities in the state play on promoting and sustaining innovation.

 

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David Brophy, director of the Center for Venture Capital and Private Equity Finance at the University of Michigan’s Ross School of Business, was honored Monday night with the Lifetime Achievement Award at the annual awards dinner of the Ann Arbor-based Michigan Venture Capital Association.

In 1972, Brophy, who is also an associate professor of finance, founded the Michigan Growth Capital Symposium to help diversify the state’s economy away from its dependence on auto manufacturing.

 

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Kentucky Broadband model used as national example goes global

LEXINGTON, KY - After being lauded as model for the United States in President Barack Obama's stimulus plan, the head of the program that has made it so 95 percent of Kentuckians can have access to high speed Internet has been invited to advise Malaysian Prime Minister Dato' Sri Mohd Najib bin Tun Abdul Razak.

Brian Mefford, chairman and CEO of Connected Nation, which grew out of ConnectKentucky – a program established in 2002 by the non-profit Center for Information Technology Enterprises to give people across the commonwealth the ability to connect to Web on more than just dial-up – was invited by the Malaysian PM to be a part of the Southeast Asian country's 12th International Advisory Panel Meeting.

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TORONTO, Nov 10 (Reuters) - Activity in Canada's venture capital market hit a 14-year low in the third quarter, tumbling 51 percent to $191 million from the same period a year ago as uneasy investors stayed out of the market.

According to data put out by the Canadian Venture Capital and Private Equity Association (CVCA) and Thomson Reuters, the province of Ontario saw the steepest fall in investment, sagging to $24 million from $179 million a year earlier.

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BERLIN (IDN) – There is so much gloom and doom after Barcelona and St. Andrews that a catastrophic climate change appears inevitable. Some seem to envision the planet Earth being smashed to the smithereens if the milestone Copenhagen conference fails to reach a legally binding agreement to replace the Kyoto protocol that holds the ground until 2012.

In this treaty agreed 1997, 37 industrialized states committed themselves to cutting emissions by an average of 5 per cent against 1990 levels over the period from 2008 to 2012.

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Yale UniversityNew Haven, Conn. — A consortium of six leading research universities and the Association of University Technology Managers (AUTM) today announced their endorsement of a far-reaching “Statement of Principles and Strategies for the Equitable Dissemination of Medical Technologies” in the developing world.

Harvard, Yale, Brown, Boston University, the University of Pennsylvania, Oregon Health & Science University and AUTM have taken a major step beyond Nine Points to Consider in Licensing University Technology, a 2007 statement endorsed by about 70 organizations and academic institutions, committing themselves to “implementing technology transfer strategies that promote the availability of health-related technologies in developing countries for essential medical care.”

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As a rule, angel investors are wealthy people who like to bet on early-stage startups.

They offer first-round financing, bridging the gap between bootstrapping and institutional capital, with the hope that their high-risk seed money will return big rewards.

Numbering about 260,500 nationwide, according to Jeffrey Sohl, director of the Center for Venture Research at the University of New Hampshire, angels work on their own or by joining private networks that pool money, share expertise and divvy the due-diligence tasks.

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WASHINGTON (Reuters) - The Obama administration has set a November 18 date for a small business forum to define a new initiative to boost lending to smaller firms and help reverse U.S. job losses, an administration official said on Monday.

The forum will gather business owners, lenders, lawmakers and regulators in a bid to make more credit available to small firms so they can expand again after the recession and curb U.S. unemployment that has swelled above the 10 percent rate.

U.S. Treasury Secretary Timothy Geithner and Small Business Administrator Karen Mills will host the meeting to discuss "new ideas and strategies for expanding access to financing for small business

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In just a short period of time the spatial location of invention can shift substantially. The San Francisco Bay Area grew from 5 percent of U.S. domestic patents in 1975-1984 to over 12 percent in 1995-2004, for example, while the share for New York City declined from 12 percent to 7 percent. Smaller cities like Austin, Texas, and Boise, Idaho, seem to have become clusters of innovation overnight. Despite the prevalence of these movements, we know very little about what drives spatial adjustments in U.S. invention, the speed at which these reallocations occur, and their economic consequences. In this paper, HBS professor William R. Kerr investigates whether breakthrough inventions draw subsequent research efforts for a technology to a local area. Evidence strongly supports the conclusion that centers of breakthrough innovations experience subsequent growth in innovation relative to their peer locations. Key concepts include:

Breakthrough inventions spur higher subsequent growth in innovation within a local area and technology compared to peer locations that, for example, have the same overall numbers of patents and similar technologies at the time when the breakthrough occurred.

The underlying mobility of the workforce is quite important for the speed at which spatial adjustments occur. Immigrants, and particularly new immigration to the United States, can facilitate faster spatial reallocation.

 

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Skimming the recent spate of somewhat rosy articles touting the resurgence and benefits of angel investing, I was persuaded to dig through some of my older posts to examine whether my somewhat caveat emptor position on raising angel capital had been swayed. With a few exceptions, it hadn’t.

This is not to say that I am a critic of the practice of start-up teams chasing investment dollars from individuals. Capital coming from private individuals is still how many, if not most, start-ups initially get off the ground. Additionally, in a challenging funding environment like the one we currently inhabit, finding individuals ready and able to “top off” institutional investment rounds is often a key element in getting those rounds closed at all. Indeed, one of my more popular posts over the last couple years, The Rise of the Pledge Fund, focused upon the emergence of “fundless” or non-committed funds that were targeting seed stage deals and offering individual angels the administrative, post-investment supervisory and deal flow benefits of a traditional venture fund without some of the drawbacks of being in a committed fund. On balance, I was a fan.

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As more U.S. companies send their sophisticated R&D offshore, America must provide worker retraining to maintain its tech leadership

Research and development is increasingly going global, according to a new report by Duke's Offshoring Research Network (ORN). More than half of U.S. companies now have corporatewide initiatives to outsource innovation activities, up from 22% in 2005, according to the ORN, which has been tracking the growth of outsourcing since 2004. And of those companies already offshoring development, 60% intend to do so more aggressively.

The days when you could trace development of the majority of the world's innovative technologies back to U.S. labs are fading fast. Outsourcing of R&D is irreversible. Still, the U.S. retains key advantages and remains well-positioned to continue its technology leadership. But that can happen only if as a nation we recognize the changing role of R&D and refrain from wasting scarce resources trying to recapture a bygone era. Mandating that R&D traditionally performed in the U.S. should stay in America would tie the hands of companies at precisely the time they need flexibility to compete against up-and-coming foreign competitors.

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