Dear SBIR Insider,

Here's a quick update and some answers to a few of your questions. You've been very generous with your comments, and they're deeply appreciated. I want to concentrate on some questions that were critical of the SBIR Insider's reporting.

Although the comments critical of our reporting are minimal by comparison (I can't tell you how fortunate I feel), several bring up important questions/views that you should be aware of.

SBIR/STTR PROGRAM STATUS

As reported previously, and now signed by the President, 10 of the 11 SBIR agency programs have been extended through April 30, 2010. The exception is the DoD which is good through September 30, 2010. Everything is running "as is" with no major changes.

There is no progress to report concerning the House & Senate compromising to pass a full SBIR/STTR reauthorization bill.

The green economy is a new opportunity for Rhode Island that can increase the number and diversity of jobs and raise wages. Education and training must be aligned to support job opportunities at all levels. Advancing the green economy will bring collateral benefits like waste and energy use reduction and energy price stabilization. Ulti- mately, advancing the green economy will require efforts with all kinds of companies: nurturing new, entrepreneurial efforts; helping existing companies grow and convert to green practices; and attracting existing or new ventures from outside the state.

As a result of the work done through the Rhode Island Economic Development Corporation’s June 2009 Green Economy Roundtable and the subsequent Roadmap development processes, RIEDC has identified acceleration initiatives for advancing the green economy:

• Make green products and green the advanced manufacturing process
• Build or retrofit high performing/energy efficient buildings and infrastructure
• Integrate the elements of innovation: research, development and then business application in the marketplace, resulting in business growth and adoption
• Build the hub of a local supply chain for onshore and offshore wind power for the Northeast and Middle Atlantic states

Following the roundtable, RIEDC assembled key leaders to develop the roadmap for the critical green economy initiatives that were identified in June. The content for the roadmap is based on the outcomes of seven small workshops — one for each initiative, an additional workshop for wind and two workshops on workforce development — held in late 2009 and early 2010.

Policy, originally defined as an initiative, has now been identified as a building block that will tie the acceleration initiatives together.

Green policy, workforce training and education, behavior change, capital, and business growth and adoption were determined to be the five building blocks that will drive all the acceleration initiatives. In order for the four accelera- tor initiatives to succeed, the building blocks must provide a strong foundation. Strong building blocks will yield: aligned policy to redirect resources; up-to-date, innovative workforce training and education programs; increased behavior change of citizens; more available capital; and accelerated business growth and adoption. Further, it would create a strong competitive advantage for green business attraction and retention in Rhode Island.

Most high-tech entrepreneurs and innovators don’t have time to put on a tie and sit through a three-hour meeting about policy issues in Washington, D.C. They are too busy creating the next generation of digital mobile applications and lifesaving health care products, and creating jobs for the new innovation economy. There has not been a strong voice or presence in the nation’s capital to represent these innovators, who neither have the money nor bandwidth to lobby or educate representatives on their needs and interests — until now.

CONNECT, a San Diego-based nonprofit tech organization, has opened an office in Washington, D.C., to help facilitate, from a federal level, the needs of local high tech and life science entrepreneurs and their companies.

While successful technology entrepreneurs like Bill Gates and Steve Jobs founded their respective companies after dropping out of college, research universities have still succeeded in fostering their own innovative technologies. Currently, however, when a professor or student develops a particularly extraordinary idea or product, the process of spinning-off the intellectual property into its own company is usually a slow and expensive process. David B. Lerner, an entrepreneur, angel investor and director of Columbia University's Venture Lab/Spin-Off program, recently proposed that universities work to reverse this trend and better facilitate startup spin-offs.

Some schools, like the ones we recently profiled in our list of the best entrepreneurial college programs, are doing a great job of facilitating entrepreneurship on the educational level. But as Lerner points out in his blog post Why and How Universities Should Embrace Startup Culture, most schools could benefit from revamping their spin-off practices.

The Honourable Tony Clement, Minister of Industry, today announced funding for several groundbreaking, large-scale, multidisciplinary research projects. These projects will play an important role in connecting academic researchers to Canadian organizations in an effort to propel new knowledge generation and technology applications for the benefit of Canadians right now. The grants, totalling $56 million over five years, from the Natural Sciences and Engineering Research Council of Canada (NSERC) will support 11 research networks focused on areas of social and economic importance. The networks will create new market opportunities for various sectors, including manufacturing and forestry. Minister Clement made the announcement during a keynote address at the Canadian Manufacturers & Exporters conference held today in Ottawa.

"Our government's investments in science and technology are creating jobs, stimulating the economy and improving Canadians' quality of life," noted Minister Clement. "We are investing more in innovation than ever before in Canada's history. By supporting the research being done by these networks, we are building the economy of tomorrow and helping our universities blaze the way to greater long-term prosperity and innovation that will benefit Canadians for years to come."

Between Y Combinator's Startup School, the influx of seed fund incubators, the list of legendary mentors and investors and the dotcom bust's school of hard knocks, is there really any reason to go to grad school? At ReadWriteWeb we're supportive of lifelong learning and universities that coach entrepreneurs, but a recent post by Venture Hacks founder Naval Ravikant has us wondering, "What is the value in grad school?"

ycombinator_image_feb10.jpgRavikant suggests that incubators and accelerators like YCombinator and Techstars are the new grad school.

He writes, "In some ways, it's better," and that unlike business schools, YCombinator pays entrepreneurs, which allows founders to be their own boss and encourages original work.

In addition to Ravikant's points, the fact that every incubator participant is connected to advisors through a financial agreement means the group may be motivated to maintain their network and share contacts. Nevertheless, before dismissing the idea of grad school altogether, it's good to remember many of the top entrepreneurs and investors in Silicon Valley are MIT, Harvard and CalTech grads (including some of the Venture Hacks team). Perhaps the argument here is not so much about incubators over traditional institutions, but in the value of good mentors that have a stake in your success and do not rest on the laurels of a tenured position.

The New Republic (Rahman and Muro) - [T]he new budget unveils not one, but several proposals to support regional industry or innovation “clusters” through multiple federal departments. Clusters, as we have noted previously, are a fundamental fact of national economies, and a critical enhancer of regional economic performance. However, as we have also noted, the U.S. lags other nations in providing support to these “bottom-up,” region-based systems of business development, innovation, and talent matching. And so the 2011 budget seeks to change that by applying cluster approaches across multiple segments of the federal delivery system--rather than anchoring it in a single agency.

And so at least four agencies are this year engaged in a new, more pervasive embrace of cluster policy in the 2011 budget:

• The EDA’s proposed $75 million Regional Innovation Clusters program would provide regional planning and matching grants focused on leveraging regions’ competitive strengths to boost job creation and economic growth. (See pages 2, 41, 46 of the Department of Commerce Budget-in-Brief)
• The Small Business Administration would support EDA’s cluster effort by directing a proposed $11 million toward promoting greater small business participation in regional clusters by better coordinating its resources for business counseling, training, and mentor-protégé partnerships. (See page 136 of the President’s Proposed FY2011 budget for the SBA) 
• The Department of Labor (DOL) would use its newly proposed Workforce Innovation Fund (of up to an estimated $108 million) to help ensure that the workforce development system also aligns with regional cluster growth by facilitating regional collaboration among training and employment services providers and stronger linkages with employers so that worker training leads to good jobs. (See pages 4, 17 of the DOL’s Employment and Training Administration Congressional Budget Justification)
• The National Science Foundation (NSF) plans to invest $12 million to promote new “NSF Innovation Ecosystems” as a part of its existing $19.2 million Partnerships for Innovation program. The new “innovation ecosystem” component aims to support regional innovation clusters around universities by engaging faculty and students across all disciplines in efforts to increase the impact of promising innovations through commercialization, industry alliances, and start-up formation. (See page 4 of the NSF Budget Overview)
  
• The Department of Agriculture’s (USDA) budget request calls for a Regional Innovation Initiative to align federal resources to promote more economic opportunities in rural communities and have greater regional impact.(See page 14 of the USDA Budget Summary)  

The European Commission is threatening action against Facebook for recent changes to its privacy settings, which make personal information available by default, going against the EU's drive for more privacy protection on the Internet, especially for minors.

The commissioner in charge of data protection, Viviane Reding, will announce her "concern" about Facebook's recent moves in a speech today (9 February), during European Safer Internet Day celebrations in Strasbourg.

Despite growing pressure to improve data protection and the safety of social network users, Facebook surprisingly changed its privacy policy at the end of January, making it easier to access to personal information hosted on its platform.

Since January, Facebook profiles have been accessible by default. Users with greater privacy awareness will have to make their profiles private so that they can only be viewed by friends, if they want to maintain control over their personal information.

ABC News – Money: As an accurate indicator of innovation and business health, patents are among the best, and a recent report confirms the recent economic downturn’s effect on intellectual property protections. UN Patent Filings Dropped for 1st Time Since 1978 via the Associated Press provides more clarity to this relationship:

The number of international patent filings dropped last year for the first time since 1978 as companies hit by the global economic downturn sought fewer new protections on their intellectual property, the U.N. said Monday.

Most patents filed in 2009 were for computer technology, followed by pharmaceuticals and medical equipment. Innovations in computer chip design and nanotechnology saw the greatest rise in patents.

The World Intellectual Property Organization, or WIPO, received about 155,900 international patent filings last year, a drop of 4.5 percent compared with the nearly 164,000 filings received a year earlier.

Many small businesses continue to experience cash flow problems – the majority, in fact, according to a survey by the Discover Small Business Watch.

That cash flow is an issue right now for small businesses might sound obvious to most of you that run your own businesses, but a worsening trend might not be. So here’s a chart that shows what has been going on with small business cash flow over the past three years.

The figure plots the percentage of respondents to the Discover Small Business Watch monthly survey of a random sample of 750 small business owners who answered “yes,” they are experiencing temporary cash flow issues. Although there has been a slight down tick over the past two months, the chart shows a (noisy) trend towards an increasing share of small business owners experiencing these problems. (The thick blue line is the actual data; the thin black line is the linear trend plotted from it.)

We all probably know a lot about HR management and the value of good team in a startup. To further help on the same issue we surveyed some startup employees and have compiled a list of most popular and significant mistakes committed by some well known Indian startups and their founders. For privacy issues we have not used any names.

1. Forgetting to appreciate: You have read enough about employee motivation but you must learn to appreciate daily procedural work as well. Things that look trivial actually make a lot of difference to your company in the long run. Like a good resume found by your HR department on Naukri or forwarded by your current employee. Appreciate that, even if it was their daily work. This requires consistency and may not be easy but certainly keeps the employee excited all the time. – HR executive, BPO

Late last week, scientists at CERN announced they would be turning the Large Hadron Collider back on. The world’s largest physics experiment broke down shortly after its first test runs in 2008 and has only been tested once since then. Unfortunately, the LHC will operate at half power for the next two years before being turned off yet again for another year’s worth of repairs.

So science lurches forward, smashing together protons in search of elusive particles needed to fill holes in equations and answer some pretty heavy-handed questions. Some expect to find the Higgs boson particle from LHC experimentation, others expect to find that we’ve been wrong about everything for a long time, this is the beauty of science. The process isn’t glamorous, it has taken 15 years and over $9 billion to build the LHC. Nor is it unanimous, but this is how we do science now. The figurative rock-star scientists of our generation are looking inward for their answers, combing through information at the microscopic level for a better understanding of our world.

Are the Triangle’s best days behind it after more than 25 years of growth? As the Research Triangle Park enters its sixth decade of existence, has it passed its peak as one of the world’s leading sites for the blending of high tech, life sciences, medicine and education?

What challenges must be overcome during the next 10 years to keep the shine on what former Gov. Jim Hunt likes to call “the Golden Triangle”?

Education, public policy, taxes and maintenance of entrepreneurial passion that leads to growth as well as new businesses, highlight the list of concerns as expressed to Raleigh Metro Magazine in a series of interviews with technology, business and policy leaders.

Steve Ogburn, chief executive officer at Capstone Bank in North Raleigh, was quite succinct in his appraisal.
“The quality of life, good economy, workforce, the government being proactive in recruiting, and the availability of capital” are among the strengths, he explained. On the other hand, the “strength of banks, bank regulation, the weakness of government budget and increased taxes” are among the threats.

BERLIN (Reuters) - Bain Capital Ventures, the venture capital arm of private equity firm Bain Capital, has raised $525 million for a new venture fund, a source familiar with the situation said on Monday.

It is the fourth venture fund that Boston-based Bain has raised, and is slightly higher than the previous fund of $500 million.

Bain Capital Ventures has about $1.5 billion in assets under management and has made investments in companies including DoubleClick and Shopping.com.

It has started investing the most recent fund. One of its investments included buying $12 million preferred stock of public company filing business Edgar Online (EDGR.O).

Wisconsin long has lagged other states in venture capital funding, but a new "fund of funds" could help change that. It's a great idea.

Think of a lush summer's garden - a difficult thought to conjure in early February, but bear with us.

To grow the garden, you will need to transplant vegetables from someone else's garden, tend the plants you already have or plant a lot of seeds and hope they germinate.

Economic development is something like that. For the Milwaukee 7 region to grow, business and government leaders must get better at the care and feeding of existing companies, attract new ones and grow our own.

So, we were encouraged by the recent news that a group of business and government leaders are planning to raise $100 million for a Wisconsin-based venture capital fund.

Dear Colleagues:

On behalf of the National Academies’ Board on Science, Technology, and Economic Policy (STEP), it is my pleasure to invite you to attend a high-level symposium on “Clustering for 21st Century Prosperity.”  This symposium will be convened under the auspices of the STEP Board’s analysis of Competing in the 21st Century: Best Practice in State and Regional Innovation Initiatives, led by former Under Secretary for Technology, and National Academy of Engineering member, Dr. Mary Good. 

The Obama Administration is undertaking a number of important initiatives with regard to the development of high-tech clusters, such as the newly announced “Energy Hubs.”  This conference will provide an opportunity to learn about these important initiatives and current best practice among U.S. states as well as leading countries overseas such as Brazil. 

The meeting will be held in Washington, DC, on Thursday, 25 February 2010 beginning at
8:30 AM at the National Academy of Sciences located at 2100 C Street, NW.  Breakfast will be available from 8:00 AM, a served lunch will be provided, and there will be a networking reception following the conclusion of the day’s presentations and discussions.

The symposium will bring together senior officials from the White House, the Departments of Energy and Commerce, and other federal agencies.  We also plan to include representatives from U.S. national laboratories, congressional staff, and leading universities, and we believe it should include examples of best practice from key countries and international organizations such as the OECD. 

Please let us know if you are able to join us by responding to me (This email address is being protected from spambots. You need JavaScript enabled to view it.) and my colleague Adam Gertz (This email address is being protected from spambots. You need JavaScript enabled to view it.) or by calling us at 202-334-1529.
                           
Sincerely,

Charles Wessner, Ph.D.
Director
Technology, Innovation, and Entrepreneurship

Editor's Note: More information (including the agenda) can be found here:  http://www8.nationalacademies.org/cp/meetingview.aspx?MeetingId=4203
 

If I asked you: what is the best way to incentivize work and innovation in a large economic system? You would immediately respond: financial reward. However, that assumption might not be correct. Here's why.

As a serial entrepreneur, I'm constantly thinking about building new businesses. One of my long standing dreams has been to start a real world company that operates like a massively multiplayer online (MMO) game. One reason I believe that this type of venture would work (and that my dream wasn't purely a fantasy) is this simple insight: MMOs with persistent environments (aka "worlds") have proven an ability to incentivize tens of millions of players to do billions of hours of work.

I'm talking about real, active work and not merely mindless, passive entertainment. Everything from drudge work to extremely complex analysis to the coordination of large groups in the pursuit of solving complex problems. All of this work was accomplished without a real world economic incentive. Instead the pay-off was (tested over billions of hours of play):

* Improvement in status (level).
* Gain new capabilities (new tools) and skills.
* Earn in-game faux money (to purchase new tools and status enhancing items).

PHILADELPHIA — The Comcast cable guy and his truck are getting a new look.

The Philadelphia cable giant last week said it would rebrand its TV, Internet and telephone services as Xfinity on Friday to signal to customers that this isn't the same old company.

Comcast will remain as the corporate name, but the company will emphasize Xfinity in advertisements and on 24,000 service trucks and thousands of employee uniforms.

The new brand name will first appear in Comcast ads around the time of the Winter Olympics in 11 markets, including Seattle, and will then appear in Comcast's cable franchise areas in other parts of the country.

Innovation is in these days. The word is on the lips of just about every CEO, CFO, CIO, and anyone else with a three-letter acronym after their name. As a result, many companies are launching all kinds of "innovation initiatives" - hoping to stir the soup. This is understandable. But it is also, far too often, very disappointing...

Innovation initiatives sound good, but usually don't live up to the expectations. The reasons are many.

What follows are fifty-six of the most common ones - organizational obstacles we've observed in the past twenty-two years that get in the way of a company really raising the bar for innovation.

BERLIN and MUMBAI, India, February 8 /PRNewswire/ -- Innovation by Germany's Information and Communications Technology (ICT) industry is a key to rapid economic recovery. Europe's largest market and a propeller of cutting-edge technology, Germany's IT industry is responsible for 80 percent of German innovations in all industries. Left relatively unscathed by the downturn, ICT has continued to perform well worldwide. Germany Trade & Invest will be presenting the latest in ICT innovation at this year's NASSCOM India Leadership Forum 2010 from February 9 - 11 in Mumbai, India.

Germany is leveraging its strong position in ICT innovation to boost future growth. The industry posted over EUR 133 billion in revenue in 2008 and holds 19 percent of the European ICT market. To secure this position Germany has boosted funding for research and development projects. The government's High-Tech Strategy supports the ICT industry with over EUR 1.5 billion reserved for ICT R&D projects. Over EUR 15 billion is additionally available for project grants and research funding to further promote innovation.

The ICT industry has an umbrella effect on other sectors, which is evident in the number of patents the industry registers. These innovations contribute to industries such as automotive, medical technologies and logistics industries. With 1,800 patents in 2007, Germany was behind only the USA and Japan.