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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.

AboutWhen it comes to research on entrepreneurship, few organizations do more of it than the Kauffman Foundation. For a just-released study called Making a Successful Entrepreneur, Kauffman surveyed 549 company founders of successful businesses in high-growth industries to determine the factors that influence the success or failure of startups. The key success factors, it turns out, are "prior work experience, learning from previous successes and failures, a strong management team and good fortune." Let's look at the highlights one at a time.
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GigaThe crossfire from friends and colleagues debating net neutrality has caught my attention in recent weeks and got me thinking about how it affects my industry, venture capital. We make our money by investing in startups, of course, which would not, by definition, exist without capitalism. Many of the technology startups we invest in similarly wouldn’t exist without the Internet, as they use it as a platform on which to provide their services.

The capitalistic system on and off the Internet encourages economic growth by the use of free and open markets to distribute goods. While some could argue that a free and open Internet means less regulation and oversight, my experience leads me to believe that an Internet that encourages innovation and startups is one that supports net neutrality — and unless such neutrality is enforced, capitalism on the Internet is in serious jeopardy.
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SVIGetting a job at Google or a hot startup like Facebook can be a painful process.


* An Ivy League degree
* A 4.0 GPA (even if you're in your 30s)
* The ability to answer inane interview questions.
* An ardent desire to bring about world peace through a search engine or a social network. (Or the ability to fake one.)
* And, you know, complete and utter competence at the job.

Facebook engineers seem particularly hard to please. Consider this anecdote posted to by a former job applicant:
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Sam PitrodaDr Sam Pitroda, a leading innovator, entrepreneur and thought leader was recently appointed as India's first Innovation Czar, a post curiously titled as the “Infrastructure, Innovation and Information” adviser to the Prime Minister. Perhaps this the first step towards having a full fledged Ministry of Innovation, something that Dr Mashelkar has been advocating for a while now.

As one can appreciate, this is a critical milestone in the history of Indian innovation policy. The Mint published an editorial of mine reflecting on this milestone, as below:
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Electronics NewsFederal, State and Territory Innovation Ministers said they adopted a set of national innovation principles to guide policy development and increase the consistency of government innovation programs across Australia.

The adoption of the "Framework of Principles for Innovation Initiatives" by all governments, said Australian Innovation Minister, Senator Kim Carr in a statement, will increase the coordination of innovation program design to ensure that the programs are complementary and respond to the changing needs and priorities of Australian businesses.
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MSNBCA team led by the Massachusetts Institute of Technology spread the wealth far and wide to locate 10 red balloons in undisclosed locations across the country on Saturday and win a $40,000 cash prize from the Pentagon's think tank.

The DARPA Network Challenge was designed to celebrate the 40th anniversary of the creation of ARPANet, the precursor to today's Internet, and to study how social networking could help solve big problems in a small amount of time.
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William CarletonFred Wilson blogged this morning about the bad policy in Senator Dodd's financial system regulatory reform bill that would make it harder for startups to raise seed financing from angels. Fred put it in the context of public policy concerns generally that impact startups, including immigration reform, software patents, net neutrality and open spectrum.

I'll [William Carleton] just speak here to Dodd's bill. As currently drafted, Dodd's bill would hurt seed financing for startups in two ways: (1) it would require the SEC to raise the net worth and income level thresholds needed to meet the "accredited investor" definition, and (2) it would end federal preemption of "all accredited" offerings, so that every state in the country would be permitted to regulate such offerings, even though they already met the federal requirements. See this post on Seattle 2.0 for a good overview of the current law and how federal preemption of state law in this area makes sense. Suffice it to say here that Dodd's bill, as written, could knock many angels out of the startup ecosystem, and would certainly greatly increase legal fees and costs for financings (perhaps even make modest seed financings not do-able at all where investors may be from different states).

Bendis agrees with William Carleton"s Position that raising the SEC  "Accredited Investor" definition would reduce the number of angel investors in America, and reduce the number of early stage financing's  for promising high risk, high growth entrepreneurs that are already dealing with a significant funding "Valley of Death and are dependent on angels to fill the Venture Capital void. Bendis recommends that NASVF, ACA, NASBIC  and NVCA all work together on educating members of Congress, regarding the financing challenges in the U.S. and unless the Federal Government intends to address the Valley of Death, everyone needs to do more to encourage accredited angel investors to continue thier investing in entrepreneurial small businesses, which are critical to creating jobs and helping America recover from this economic recession.

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ITIFWith unemployment north of 10 percent, there is renewed interest in a job creation agenda.  But many of the proposals put forth to date overlook two key sources of job growth going forward: exports and innovation.  An increase in sales from exports creates twice as many jobs as a dollar in sales from domestic demand, and jobs in technology firms can spur greater multipliers, creating even more jobs.  Moreover, exporting firms pay 9 percent more than jobs in firms that export less while jobs in technology industries pay 90 percent more than other jobs.  This ITIF WebMemo proposes nine ideas that can drive not only job growth in the short run, but competitiveness and innovation in the long run.

  • Stop defending the dollar.
  • Expand funding for trade enforcement at USTR.
  • Temporarily expand funding for federal and state export assistance programs.
  • Provide incentives for companies bringing back work from offshore to high unemployment areas.
  • Provide a bonus R&D tax credit for 2010 and 2011.
  • Allow IT investments to be expensed in 2010.
  • Provide $500 million to universities that invest in needed research infrastructure in 2010.
  • Allocate $1 billion for grants to support private sector researchers to take 18 month sabbaticals in universities or federal laboratories.
  • Provide funding of $2 billion to state economic development agencies to help high-growth businesses start and grow.


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Dr. Karl Ulrich spoke to me after his Wharton Talk at Supernova on the subject of Innovation Tournaments (which is also the title of his most recent book.) He describes innovation tournaments, and how companies are already using this format to help find more ideas that can be funneled and used to drive new products and services. The key is generating as many ideas as possible at the top of the funnel. Interestingly enough, Innovation Tournaments and American Idol have common elements, leading to a discussion of Kelly Clarkson versus Sanjaya.


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This report shows how three metropolitan areas—Portland (OR), Kansas City, and Boise—became centers of high technology industry without the presence of a major university. For each metropolitan area it describes the history of high-tech development, current status of high-tech industry clusters, and the roles that public policy and higher education played in spurring the growth of high-tech industry. In the three metropolitan areas high-tech industry is very specialized, anchor firms and new business startups helped it develop, high-tech industry predated supportive public policies, and local universities that were not major research institutions helped support high-tech growth after high-tech industry was already established. The evidence on high-tech development in the three metropolitan areas offers important information for policymakers and practitioners interested in technology-based economic development outside of large, well-established high tech centers.
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As California’s second most famous open innovation scholar — a distant second — I sometimes get emails from people asking about open innovation topics. This week a couple of visitors came from Japan to pick my brain, and we got talking about various open innovation topics, including markets for IP and innovation.

One question I’d heard before was “how is open innovation practiced in Silicon Valley?” It’s been my impression that the various Chesbrough books on open innovation had less of an impact on Silicon Valley than almost anywhere else. Yes, HP created an “Open Innovation Office,” but that’s just a new name (and broader responsibilities) for the existing university relations staff.
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University World NewsA top official at the European Commission has signalled an important change in the EU's attitude towards innovation that will highlight the role of creativity and design. The new approach could see a shift away from support for high-tech companies and towards new 'creative clusters' of design firms, business support services and progressive regions.

It may also form the nucleus of a European Innovation Act, pledged by commission President José Manuel Barroso by the spring of next year. Some clues to the commission's thinking have now been revealed in a speech by Jean-Noël Durvy, Director of Innovation Policy at the Brussels enterprise department, as reported by the Brussels-based news service Euractiv.
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