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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.

The Silicon Valley Association of Startup Entrepreneurs (aka SVASE) has set up a new seed funding program for Silicon Valley entrepreneurs in conjunction with newly established early-stage investment firm Cambridge West Ventures.

On the East Coast, meanwhile, things are in motion too, with the introduction of a new seed startup fund dubbed IA Venture Strategies that was founded by New York angel investor Roger Ehrenberg.

SVASE and Cambridge West Ventures are looking to connect with startups and entrepreneurs in Silicon Valley, and have developed a program apt for very early-stage companies. Selected startups are eligible for up to $50,000 in venture capital in return for an unspecified ‘modest stake’ and deferred legal costs up to $15,000 from certain law firms from the region.

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The Rochester of the 1830s got rich off the Erie Canal and flour production. So it was again after the Civil War and through much of the 20th century, with industries such as men's clothing and manufacturers including Eastman Kodak and Bausch + Lomb, and later Xerox, creating fortunes for investors and careers for legions of workers.

The 21st century — marked so far by downsizings at the Big Three and even the dynamiting of unused buildings at Kodak — has been less rosy. Health care and education are growing, and employers such as the University of Rochester and Paychex Inc. are expanding. But the region is barely holding its own as old-line manufacturing and its well-paying jobs decline.

Where do we go from here?

"If this region is going to grow, it's going to be through startup companies," said James Senall, president of High Tech Rochester, a nonprofit economic development organization that runs a pair of business incubators. "Our community has got to get behind forming and growing new companies."

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My PhotoEven if your region could retain all of its graduates, that would still put your hometown at an economic disadvantage. Consultants travelling around the country telling towns, cities and even states how to keep natives closer to home are offering bad advice. Renaissance Chicago is a good example of the talent attraction imperative:

Chicago’s turnaround following the 1980s was remarkable in that a fundamental restructuring supported it. Specifically, though the metropolitan area shed much of its manufacturing base, its work force shifted increasingly into professional and business services. In response, many Chicagoans crafted a new image of their metropolitan region: Instead of being a “hog butcher for the world” and the regional locus for manufacturing and transportation, Chicago (at least in the mind of its citizens) was moving into a new role as a global city, one whose economic connections were being forged with other world business capitals. Chicago was seen as a city casting off its roots for something better.
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In a report from the Conference Board of Canada, Canada ranked ahead only of Australia, Italy and Norway for innovation. Switzerland, Ireland and the United States topped the list. File photograph.OTTAWA — Canada gets a D in innovation, according to a report card issued Tuesday, ranking the country 14th among 17 industrialized nations for its ability to turn knowledge into money-making products and services.

In a report from the Conference Board of Canada, this country ranked ahead only of Australia, Italy and Norway for innovation.

Switzerland, Ireland and the United States topped the list.

"The biggest challenge that we're facing is to turn some of the great ideas that we have into products that we can sell on the global market," Gilles Rheaume, the Conference Board's vice-president of public policy, said in an interview. "While we're doing some great research and development at the university level — and it's an important factor — it's not sufficient."

Of the 12 indicators used to compile these rankings, Canada was given a D in nine categories, two Cs and one B. Its highest grade was given for the number of scientific articles published relative to the population. Canada was eighth in that category.

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(KANSAS CITY, Mo.), Feb. 2, 2010 – Despite promising economic growth numbers in the last quarter of 2009, economics bloggers have a grim outlook, according to a new Ewing Marion Kauffman Foundation survey released today. Just last Friday, the U.S. Bureau of Economic Analysis released its advance report of a 5.7 percent growth rate (annualized) of gross domestic product during the fourth quarter of 2009. But even before the fourth-quarter estimate was published, 48 percent of economics bloggers said in the mid-January survey that the economy was "worse than official government statistics show." Most respondents rate the overall condition of the economy as "mixed," and 33 percent say it is still "facing recession" or "weak and recessing."

In the inaugural Kauffman Economic Outlook: A Quarterly Survey of Top Economics Bloggers, the Kauffman Foundation sent invitations to more than 200 top economics bloggers, most of whom were on the Palgrave's December 2009 rankings. The Foundation will be surveying the bloggers about their views of the economy, entrepreneurship and innovation every quarter to provide a new gauge for the nation's fiscal health.

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Glenn Llopis says that instead of focusing solely on profit, business leaders should insist their companies and employees have a positive social impact

Karen E. Klein Last month, an eclectic group of entrepreneurs, academics, and nonprofit executives gathered at Chapman University's Argyros School of Business and Economics to explore the intersection of innovation and humanity. Entrepreneur and former agricultural business executive Glenn Llopis, 43, of Irvine, Calif., organized the first summit as an outgrowth of a think tank he founded last year, the Center for Innovation and Humanity. Llopis, the author of Earning Serendipity, told Smart Answers columnist Karen E. Klein that he believes companies should promote social change through ethical innovation. Edited excerpts of their conversation follow.

Where do innovation and humanity come together for entrepreneurs and small business owners?

Every small business owner has a dream and feels they can create the impossible. I'm hoping to help them integrate a social priority or identity into everything they do.

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bhan-5emerging-1.jpgOne of the most misunderstood terms in the business world is disruptive technology. Too many companies—and the marketers in charge of bringing these companies' innovations to market—assume that "disruptive" connotes a highly-sophisticated, high-end product with cutting-edge technology that will appeal to early adopters. Actually, Harvard's Clayton Christensen argued the opposite in his groundbreaking book on business innovation, The Innovator's Dilemma. As Christensen pointed out again and again, "disruptive technologies were exactly those that did not appeal to entrenched market leaders because they tended to under-perform existing technologies and served a less-profitable consumer demographic." (Source: Dominic Basulto)

Taking Christensen's insight on disruptive innovation (summarized so well by Basulto) as the starting point, we could just as easily extend that thought to say that those innovations that are simpler, cheaper and offer value to the less profitable—those successful at the Bottom of the Pyramid (BoP), in other words—are the ones which contain seeds of disruption in markets outside of their intended audience.

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Steve Nash is not only one of the NBA’s best shooters, passers and playmakers. He’s also its most active entrepreneur. “I realized the more I did, the more good I could do,” he says. Here’s a breakdown of Nash's wide-ranging portfolio, from a film production company to a marketing start-up to one of the league’s most respected foundations.

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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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