Malcolm Gladwell’s article on innovation in The New Yorker entitled Creation Myth is a brilliantly written piece that, in the process of dispelling some innovation myths about Xerox PARC, creates some new myths, such as the one that the Apple of 1980s was the epitome of agile innovation (see Part 1 of this article.)

Gladwell’s article sheds no light on how Apple in the last ten years (and other firms) have learned how to combine continuous innovation with disciplined execution in sector after sector. To understand that, we need a bit of management history. In the 20th Century, innovation was peripheral

In the 20th Century organizations tended to go through three phases:(i)

* In the first phase, there were startups run by commandos. They were swashbuckling innovators who were unpredictable and uncontrollable yet remarkably productive. However most startups failed.

It is less than a month until XSITE 2011—the Xconomy Summit on Innovation, Technology, and Entrepreneurship, our annual full-day innovation extravaganza that will take place this year on June 16 at Babson College. We have already announced most of the keynoters and many other speakers, which you can find here, along with the registration information.

Now we’d like to share a brief note from one of the main keynoters, Desh Deshpande, about what he plans to talk about—both to you and with you, as he has let us know he plans to take a lot of question.

Desh, of course, is co-founder of Sycamore Networks, chairman of A123Systems, progenitor of the Deshpande Center for Technological Innovation at MIT, and one of New England’s most prominent super angels. He is active not just in the U.S., but also in his native India. And his interests go far beyond making money, into nurturing ecosystems, improving health and education, and mentoring new generations of entrepreneurs . He has created a social entrepreneurship center in northern Karnataka, India. And just in the past six months or so his foundation committed $5 million over the next five years to support the Merrimack Valley Sandbox, a new innovation center at the University of Massachusetts Lowell that, as Greg wrote earlier this year, “will work together with local colleges and nonprofits to boost entrepreneurship among students and professionals, and to develop local leadership through mentoring and seed funding programs.”

There’s a new vocabulary around entrepreneurship this year: it’s from the Lean Startup movement, and it is centered around making effective use of resources to reduce the chance of failure. Started by Eric Ries, it has captivated not only Silicon Valley, but startups worldwide.

The principles of the Lean Startup are nothing new, but they often seem novel to the engineers who design today’s products. The engineer looks to finish or improve the product, forgetting that the most important part of a business is not the product, but the customer. Without the customer, there simply is no business and actually not much point in improving the product. It’s the old idea of features (what the product can do) v. benefits (what the customer needs). Customers pay for benefits, not features.

I talked about this book yesterday on stage at Disrupt and got a bunch of requests via email and Twitter for details so I thought I'd blog about it today.

Back in 2003, when Brad and I were starting USV, we were struggling to make sense of the bubble and its aftermath, what it meant for technology and what it meant for venture capital. If we were going to start a new venture capital firm, we wanted to start one that would be relevant, that would have a coherent investment thesis, and one that would make money for our investors.

This winter, sixty five graduate students studying for their Masters of Financial Engineering earned, on average, an annual salary of $94,068 working at Wall Street firms. As interns.

The generic term for what the students are studying to become is "quants," financial engineers that (generally) design trading systems.

Four years ago, $90,000 was about the average starting base salary paid to quants who had already graduated. But this year, at least 65 graduate students made that much as interns (the actual number of graduate student "quant" interns is undoubtedly much higher).

Big Question: Is Chicago witnessing the emergence of a new innovation ecosystem?

In less than 2 years, the Chicago technology and innovation ecosystem has seen an escalation of successful startup fundraising, growth and acquisitions. Chicago’s business and technology leaders now discuss how this represents a “new ecosystem” of tech in the city. I’ve had the benefit of participating in several conversations around this groundswell of activity in Chicago’s tech community ecosystem, support structures, incubators, networks and general ‘connectivity’ of Chicago startups, technology, and innovation. From our perception, the Chicago innovation ecosystem appeared- grew- and became aware of its impact on a global stage.

The new BioRN Guide presents organizations from the fields of health research or health industry in the Biotech Cluster Rhine-Neckar. The compendium contains 130 pages and introduces the renowned research facilities, biotech and pharmaceutical companies as well as service providers and suppliers. Simultaneously, the electronic version of the BioRN Guide has gone online.

Shares of Yandex, a Russian search engine barely known in the United States, surged by more than 55 percent on Tuesday, signifying the latest multibillion-dollar technology offering and stoking the debate about whether this market has the makings of a bubble.

The debut of Yandex defied already lofty expectations, coming on the heels of the initial public offering of LinkedIn, the professional networking site whose shares more than doubled on their first day of trading.

General Motors launched its first venture capital fund—GM Ventures—last summer. We covered the news, and in December, still early in the $100 million fund’s life, I did a Q&A with GM Ventures president Jon Lauckner. At the time, the fund had invested in just two startups—battery maker Sakti3 and Bright Automotive, which offers a new approach to hybrid electric vehicles. GM Ventures was really just getting going—and Laucker was limited in what he could tell a reporter.

Now, things have changed somewhat—and the fund is definitely heating up. It has closed four deals—with Powermat (wireless charging technology) and Envia Systems (materials for increasing the storage capacity of lithium ion batteries) joining the initial two. Four more have been approved and should be announced relatively soon. Another pair of GM investments that predate the founding of GM Ventures, Coskata and Mascoma (both biofuels companies), were also transferred over to Lauckner’s charge. All told, GM has put about $30 million into those six companies, with investments typically running between $3 million and $7 million per deal. And Lauckner says a half dozen or so more deals are in the works.

Google announced today that it will invest $55 million in a large Mojave Desert wind energy farm. The LA Times reports that the search giant is partnering with Citibank, "which is also shelling out $55 million to help finance part of the Alta Wind Energy Center, one of the world's largest wind installations," and that the move is seen as a "key step in California's efforts to regain its once enviable title as the world's capital for wind power." When the project is complete, it will be capable of generating 1.5 gigawatts, enough to power 450,000 homes.

University of Nebraska-Lincoln plant pathologist James Van Etten holds patents for discovering a family of viruses that infect algae. That seems esoteric, until you realize that those viruses could become a tool to convert algae into a biofuel.

“The information is out there — but nobody's made practical use of it,” Van Etten said.

That gap is where James Linder, NU's new “czar” of innovation and economic competitiveness, steps in. His mission: to forge new links between researchers and business, to help transform inventions into commercial products.

Linder, a physician, inventor and businessman from Omaha, started last week in the position created expressly for him. NU President J.B. Milliken named him senior associate to the president for innovation and economic competitiveness.

Linder also is the first president of University Technology Development Corp., the umbrella organization that oversees “technology transfer” — the process of making research findings available to a wider range of users — across the University of Nebraska's four campuses. He will be paid $126,514 annually.

What if your pajamas could tell you how well you slept? That's the dream of startup Nyx Devices, which has developed a nightshirt embedded with fabric electronics to monitor the wearer's breathing patterns. A small chip worn in a pocket of the shirt processes that data to determine the phase of sleep, such as REM sleep (when we dream), light sleep, or deep sleep.

"It has no adhesive and doesn't need any special setup to wear," says Matt Bianchi, a sleep neurologist at Massachusetts General Hospital and co-inventor of the shirt with Carson Darling, Pablo Bello, and Thomas Lipoma. "It's very easy—you just slip it on at night," says Bianchi, who has no formal role with Nyx Devices.

 bBridge Investment Fund recently scored its biggest win — in the eyes of job-creation-conscious local investors, at least — when Israel-based portfolio company IceCure decided to establish its U.S. headquarters in Cleveland.

That’s exactly what the Cleveland-based venture capital fund was designed to do when it was set up in 2005: Invest in Israeli medical device firms that would benefit from setting up operations in the Cleveland area as they look to break into the U.S. market, and boost job growth and economic activity in Northeast Ohio’s growing biomedical sector.

Of course, there’s no guarantee all of Bridge’s portfolio companies will set up shop in Northeast Ohio. Cold, rational business decisions will rule the day, as illustrated by Bridge-affiliated device maker EarlySense, which last month chose Massachusetts as its U.S. base.

ABU DHABI // The emirate will almost double its annual green-energy prize to $4 million, organisers have announced.

The Zayed Future Energy Prize, which commemorates Sheikh Zayed, the founding president of the UAE, awards international leaders in clean-energy innovation.

The top prize remains $1.5 million (Dh5.5m), while the award for the first runner-up was boosted to $1m and second runner-up to $500,000. Both were previously $350,000.

Prize administrators also created a category for large corporations, separating them from small and medium-sized ventures and non-government organisations.

Oakland County's Automation Alley will team up with former Chrysler CEO Tom LaSorda to help entrepreneurs realize their big ideas.

LaSorda and an anonymous investor have created a $100-million investment fund to help companies that need capital to get their innovative, patentable technologies to the global marketplace.

Automation Alley, a business association group created in 1999 to promote opportunities in southeast Michigan, will help the fund -- dubbed Stage 2 Innovations -- determine the best ideas submitted for a piece of the investment fund.

Science and engineering research space at the nation's top research universities grew by 4 percent in 2008 and 2009, compared with the previous two-year period, reflecting a rebound in the expansion rate after a slowing trend that reached a low point in 2006 and 2007, according to a new report from the National Science Foundation.

Next time you want to give your kid a Rolo, think twice. You could be either teaching your kid to become a criminal or a CEO.

There's research to back this up.

In the 1970s, psychologist Walter Mischel examined preschoolers' ability to delay gratification. Those who could wait longer before eating marshmallows became more popular, well-adjusted teenagers who scored higher on their SATs -- and were more likely to become CEOs.

According to psychologist Dr. Susan Albers: "In general, the amount of time a child could wait for a marshmallow was indicative of their ability to deal with stress and frustration. Kids who can wait longer periods of time are CEOs and doctors in the making. One must be able to tolerate high levels of stress and years of effort before obtaining a payoff."

Economic analysis reported by the Small Business Administration shows that small companies “create more than half of the nonfarm private gross domestic product (GDP)” and “employ just over half of all private sector employees.” That level of economic impact makes encouraging small business economically important to government officials.

Interest in how small business friendly states are has led a number of think tanks to rank states on the favorability of their small business policies. One example is the Small Business and Entrepreneurship Council (SBEC), which put out its Small Business Survival Index 2010 earlier this year.

According to the SBEC, South Dakota is the most small business friendly state. And to attract and nurture small business, other states should adopt South Dakota-like policies.

French President Nicolas Sarkozy opened up the eG8 Forum in Paris with a keynote speech and interview with Publicis Groupe CEO Maurice Levy and journalists.

His speech was basically a big smooch for the internet. The internet is a revolution and a new world, Sarkozy said, and he wants to do everything to help entrepreneurs make it awesome.

Sarkozy called the internet the "third wave" of globalization, and the most important: the first wave was that of explorers like Columbus and Magellan, the second wave was the Industrial Revolution and what came after, and the third wave is the internet

According to the latest BizExchange Index, the volume of businesses for sale has increased in the first quarter of 2011, potentially driven by an aging population. However, younger generations are not in a position to buy.

The volume of businesses for sale has increased during the first quarter of 2011 after a fall in the previous quarter, says the latest BizExchange Index. The rise in the volume of businesses for sale also means an increase in the number of companies with an EBIT ratio between two and three. However, over two thirds of them still have a EBIT ratio lower than two.

“There was a slight upturn in values under $500,000 turnover and over $5 million turnover, while values in between remained flat,” said David Bird, BizExchange Chairman.