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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.

Goals From A Small Business OwnerIn a recent AP-GFK poll, 72% of Americans said they’re optimistic about what 2010 will bring for the country. That’s a dramatic difference from their same poll answer where almost 75% of them thought 2009 was a bad year for the country.

Despite the recent earthquake tragedy in Haiti (and who knows what else the year will bring), I’ve noticed that people are generally much more hopeful this year. I know I am!

Here are some resolutions you can make, to have a great business and a great life in 2010:

1. I will first schedule for the year all activities that support my health and family (including workouts, doctor appointments, vacations, family events). Why? Because without these, I won’t be able to be productive in my business.

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SINGAPORE - If you are a private sector setup with an innovative product or solution that needs access to public sector intellectual property or infrastructure for test-bedding, you could find it easier to gain this access in Singapore's new economic landscape.

There could also be customised platforms to integrate capabilities of research institutions, private and public sector agencies, such as consortia between companies in the same sector to develop a common agenda for research.

These are some examples of how innovation and commercialisation of R&D can be strengthened to reap greater economic benefits, said the high-level Economic Strategies Committee (ESC).

It has outlined a three-pronged strategy which includes growing R&D expenditure to 3.5 per cent of growth domestic product (GDP) by 2015, focusing on commercialisation of R&D and giving emphasis to design-driven innovation.

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In the early 1970s, if you happened to be hiking in the woods around Marin County, you might have witnessed a rather strange sight: on the paths traditionally trod by horses or backpackers, an increasing number of outdoor enthusiasts were careening down the hills on bicycles. At the time, what we know as mountain biking was unheard of – bicycles were ridden exclusively on properly paved roads and sidewalks. The modern distinction between “road bike” and “mountain bike” quite simply did not exist. Why would it if no one wanted to pedal up and down rock-strewn dirt paths?

But, sure enough, some people did think this breakneck activity was a good idea. Unfortunately, their bicycles were incapable of handling the tumultuous rides on which the daredevils took them. So, with remarkable ingenuity, the bikers began modifying their bikes – tougher rubber for the wheels, motorcycle-style braking mechanisms – and soon enough, they started selling these “clunkers” to less mechanically inclined experimenters. Today, the mountain bike market in the U.S. is worth nearly $4 billion.[i]

The experience of mountain biking is not unique – in the past twenty years, researchers have documented a wide range of industries that experience what MIT Professor Eric von Hippel calls “user innovation.” These range from semiconductors to software to windsurfing. The proliferation of inexpensive digital communication and prototyping methods is only adding to the amount of user innovation. According to von Hippel, this form of innovation is an important source of novel product concepts and, in turn, economic growth, but do the insights of user innovation theory apply to the experience of poor farmers in the developing world?

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Innovation in the U.S. frequently fails to reward inventors. So-called patent trolls are evening the score

Utter the term "patent troll" in tech circles and you're likely to elicit a visceral reaction. Said trolls are companies that acquire patents and seek payment from companies they claim are infringing on those patents. They're viewed by many as blights on the tech landscape, looking to make money from patents that shouldn't have been granted in the first place, thereby forcing companies to spend billions of dollars in legal fees and slowing innovation. Even the more polite equivalent—nonpracticing entity (NPE)—suggests a company that fails to produce something of lasting value.

Both phrases are [Karl] Rovian in their ability to use emotional appeal to distract from the underlying issues, specifically the reasons why nonpracticing entities exist and may be vital to providing access to innovation.

To understand the role played by NPEs, consider a key challenge facing many of the biggest tech companies. Their products are increasingly complex, incorporating many different features and functions. For example, a smartphone serves not only as a phone, but also as an e-mail device, a minicomputer, a camera, a TV, an MP3 player, a Web browser, and more.

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I [TOM WALKER] recently enjoyed an opinion piece in The New York Times by Thomas L. Friedman, author and Pulitzer prize winner. Friedman, who has written extensively on the economy, says that what our country needs is "not more stimulus but more stimulation.”

His challenge to Washington — and it’s a great challenge for all of us — is to make 2010 the year of "Start-Up America” by leveraging the experience of our nation’s leading innovators to turbo-charge entrepreneurship across the U.S. and create jobs with an innovation movement.

 Innovation is crucial in stimulating economy At i2E, innovation is the bedrock of everything we do. Last week, we had interesting meetings in Washington, D.C., with the Small Business Administration’s Investment Office and the Office of Innovation and Entrepreneurship, a new initiative within the Commerce Department geared to move ideas, research and inventions into new companies.

Both departments seemed highly motivated to make an even greater impact on innovation and entrepreneurship in America. They’re interested in what states are doing and were intrigued by the programs and initiatives in Oklahoma.

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New York From FlickrWith the announcement of Roger Ehrenberg’s new fund – IA Capital Partners – NYC now has another top-tier seed fund. I’ve had the pleasure of investing with Roger a number of times. He’s not only a great investor but also a huge help to the companies he invests in. It’s great that he’s going to be even more active and I hope to work with him a lot more in the future.

The NYC tech scene is exploding. There are tons of interesting startups. I’m an investor in a bunch and started one (Hunch) so won’t even try to enumerate them as any list will be extremely biased (other people have tried). I will say that one interesting thing happening is the types of startups are diversifying beyond media (HuffPo, Gawker) to more “California-style” startups (Foursquare, Boxee, Hunch).

In terms of investors, NYC now has a number of seed investors / micro-VCs: IA Capital Partners, Betaworks, and Founder Collective (FC – which I am part of – has made 7 seed investments in NYC since we started last year). The god of seed investing, Ron Conway, who I quote up top, has recently decided to become extremely active in NYC. One of the nice things about having small funds is we don’t need to invest millions of dollar per round so we all frequently invest together.

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With the rapid development of clean-energy technologies, what will our lives look like in the next 20 years? Are we going to be plugging in our cars soon? Will we have a smart meter in our home that tells us our washing machine is leaking?

These questions were posed at the end of a panel on clean energy at last week’s Private Equity Analyst Outlook conference. The panelists – a venture capital investor, a private equity investor and an energy lawyer – each gave their answers, as transcribed below. (For more coverage of this panel, check out this story in VentureWire about how strategic investors will be a major driver of clean-technology investment.)

Tucker Twitmyer, managing director, venture firm EnerTech Capital
From an end-consumers perspective, we think it looks remarkably the way it does today. People are just not interested in managing their daily energy consumption. They want to turn to switch on, wonder how the miracle happens, and enjoy all the benefits of cheap and available energy. And that actually informs a lot of what we do in our investing. In the end, the utilities win. They are regulated monopolies for some very fundamental reasons. And what you will see is – we think, not so much in-home displays – but the ability of central management and control through the electrical wires to reach down and observe and see those new solar arrays – we think hybrid cars more than pure electric – to see all those various things at the edge of this massive network and be able to integrate their vision and their decision making around these millions and billions of devices, as opposed to today where really the only thing they’re integrating is the large central power plant. So the changes will occur back to the core on the infrastructure side much more so than down to the consumer. But we’re all going to love our flat screen TVs and everything else in 20 years.

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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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During my introductory class of New Venture Management for undergraduates I explain the role the media has played in promoting entrepreneurs and the idea of running your own business. We discuss reality shows like American Chopper (Discovery Channel) and Ax Men (History Channel) and others like Shark Tank (ABC) and How Things Are Made (Science Channel) as well as ‘news magazine’ style shows like Donny Deutsch’s The Entrepreneurs and Bloomberg TV’s Venture.

The Wall Street Journal recently had a piece by Emily Maltby that looks into the trend of reality shows based on small businesses.

Small businesses have become popular fodder for reality television, where shop owners let viewers glimpse the daily dramas of their business operations in return for big publicity.

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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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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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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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Watch PR 101 for entrepreneursThe right media coverage can be a boon for any company and even more so for a start-up. Just ask the London, Ontario-based voice-over company who was recently mentioned in the New York Times article “The Do-It-Yourself Economy” by Thomas Friedman (author of many influential books such as “The World is Flat”). Friedman wrote about how the recession is encouraging companies to increasingly shop around the online marketplace for cheaper, faster and more convenient services and gave examples of companies like who are profiting from this trend.

The coverage landed the company several large new accounts as well as thousands of new users. Website registration and sales increased by 53 per cent after the article ran.

That’s the power of PR at its best - the ability to create demand and open doors. Being mentioned by a key influencer via a topic of interest to the public can be more effective than advertising or marketing, especially if it comes from a credible source. But PR is about more than just media coverage and getting mentioned by the right people in the right places and at the right time - it is a hybrid of different communications that build bridges with influencers such as analysts, journalists, customers, bloggers, and investors among others. Not only must a startup build key relationships both offline and online, they must do so strategically, using key messaging about their company that resonates with these influencers and their audiences. And they often have to do all this with limited resources.

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#1 Babson College, Arthur M. Blank Center for Entrepreneurship, Babson Park, MA
#2 University of Houston, Wolff Center for Entrepreneurship, Houston, TX
#3 University of Arizona, McGuire Entrepreneurship Program, Tucson, AZ
#4 Baylor University, Baylor Entrepreneurship Program, Waco, TX
#5 Temple University, Innovation & Entrepreneurship Institute, Philadelphia, PA
#6 Drexel University, Laurence A. Baiada Center for Entrepreneurship in Technology, Philadephia, PA
#7 University of Dayton, Entrepreneurial Leadership, Dayton, OH
#8 DePaul University, DePaul Entrepreneurship Program, Chicago, IL
#9 City University of New York - Baruch College, Entrepreneurship and Small Business Management, New York, NY
#10 University of Southern California, Lloyd Greif Ctr for Entrepreneurial Studies, Los Angeles, CA
#11 University of Oklahoma, Center for Entrepreneurial Studies, Norman, OK
#12 Northeastern University, Entrepreneurship & Innovation, Boston, MA
#13 Syracuse University, Entrepreneurship and Emerging Enterprise, Syracuse, NY
#14 Washington University in St. Louis, Skandalaris Center for Entrepreneurial Studies, St. Louis, MO
#15 Miami University, Miami Institute for Entrepreneurship, Oxford, OH
#16 University of Wisconsin - Madison, Weinert Center for Entrepreneruship, Madison, WI
#17 The University of North Carolina at Chapel Hill, Center for Entrepreneurial Studies, Chapel Hill, NC
#18 Brigham Young University (UT), Center for Entrepreneurship and Technology, Provo, UT
#19 Xavier University (OH), Xavier Entrepreneurship Center, Cincinnati, OH
#20 Loyola Marymount University, Hilton Center for Entrepreneurship, Los Angeles, CA
#21 Ball State University, Entrepreneurship Center, Muncie, IN
#22 The University of Alabama - Tuscaloosa, Management Program with Entrepreneurial Track, Tuscaloosa, AL
#23 University of Iowa, John Pappajohn Entrepreneurial Center, Iowa City, IA
#24 Washington State University, Center for Entrepreneurial Studies, Pullman, WA
#25 University of North Dakota, Entrepreneurship/Entrepreneurial Studies, Grand Forks, ND

Report from

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This could be the year that venture-backed companies start to get their IPO groove back.

Last year marked the second consecutive year of unusually low numbers of initial public offerings launched by companies owned by venture-capital firms. There were eight such IPOs in 2009, according to data from Dow Jones VentureSource. That amounts to just 15% of the 54 deals that priced, according to Dealogic. The proportion of venture IPOs could be skewed by the small number of deals last year as 2010 is being forecast as a much larger year for new issuance overall.

"Valuations have been getting better, and that's been making that [IPO] channel more attractive [to issuers] than it's been in a long time," says Scott Gehsmann, a global capital-markets partner at PricewaterhouseCoopers.

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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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Art by Mike LucasThis morning’s roundup of the latest venture capital news and analysis across the Web:

How Low Can We Go? - As expected, 10-year investment returns are falling faster than Pink in a robe. Research firm Cambridge Associates released its quarterly report this morning that shows returns from the past 10 years (the typical life of a venture fund) is at 8.41%, falling from 14.3% in the previous quarter and 40.2% a year earlier. Funds from 1999 have paid just 0.63 times the amount of capital paid in by limited partners, while 2000 funds have paid just 0.38 times. It’s worth noting there are still hundreds of companies out there that raised venture capital at least 10 years ago, so those numbers have the potential to go up - whether or not these companies will be able to exit at strong prices is an open question.

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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:


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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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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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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