by Bret Mills

The Iowa department of economic development knows Growth in iowa will be dependent on iowa’s ability to develop an innovation economy. don’t confuse innovation with another economic development buzzword, technoloGy-based economic development. iowa has had Growth in its tech sector, but the end result of tech-based economic development is an end-product that is shipped or sold. it’s important to understand that innovation doesn’t always lead to an end product. rather, innovation is a service, process, or system that may be applied to any industry
or business.

the benefit of an innovation economy is not limited to larger metro areas and technology centers. one example of this is from two iowa agricultural companies, pioneer and monsanto. as they have increased yield in corn per acre, it has substantially increased return on investment for those companies and for farmers. it has also increased the wealth in communities and the overall wealth and economic stability of the state. another example is from the wind industry. smaller communities are taking advantage of innovation in the growth of this new industry. the growth in turbines installed, wind industry manufacturing, and even workforce training has largely taken its lead outside of iowa’s largest metro areas.

OK, I was totally wrong about the MassChallenge.

When John Harthorne (at right, in the yellow tie), Akhil Nigam and their team were running around town trying to drum up support for a competition that would bring start-up companies to Boston from around the world, my response was: do we really need another entrepreneurship contest? Doesn't every local school with a business class or two, from MIT to Babson to BU to Harvard, already run a contest of their own?

It also seemed unlikely that they'd be able to raise $1 million in prize money in the midst of a recession.

And when they announced the 111 teams that made it into the competition — and would receive free office space on the Boston waterfront and mentoring from local entrepreneurs and investors — they included a handful of start-ups that seemed to me like they were on life support, having failed to raise money or come up with a workable business plan.

We (the employees of the Cambridge, MA Greentech Media office) finally got our hands on the Tesla Roadster. Previously tested by Michael Kanellos, we were lucky enough to score a drive in the new Roadster 2.5. While I won’t rehash Michael’s road test, or report what all the other automotive journalists have already written, I will tell you why driving a Tesla is a completely unique and special experience and why they are not the logistical nightmare some have made them out to be.

The Tesla Roadster is not just sports-car fast; it’s supercar fast. With a 3.7-second 0-60 mph time that rivals Ferraris and Lamborghinis costing hundreds of thousands of dollars more, full-bore acceleration in this car is downright violent. Mash the accelerator (no gas pedal here) and you are instantly pinned to the seatback. Unlike standard internal combustion engines, there is no wait for the revs to climb into the power band. Throttle response is instant and linear, and without the hassle of gears to change, 50-60-70mph comes up on the speedometer before you even have time to think, ‘What’s the speed limit again?’

Have you ever heard someone say they want to be a polymath? Have you ever heard anyone ask, how do I become a polymath? I haven’t. The word comes from the Greek polymathes or having learned much. A polymath is a person whose expertise spans a significant number of different subject areas. When we think of polymaths we tend to think of dead scientists from another era like Aristotle and Leonardo da Vinci. Rarely do we apply the moniker in modern times. We need more polymaths. We need a generation of youth who want to be polymaths when they grow up.

It’s easy to wrap our minds around the idea of a polymath in the context of ancient eras long gone. The entire body of knowledge on earth was accessible to an elite few. Those with an exceptional mind, privileged access, and the freedom to focus on interdisciplinary study, could become polymaths. In 384 - 322 BC Aristotle studied under Plato in ancient Greece. His writings spanned many subjects including physics, metaphysics, poetry, theatre, music, logic, rhetoric, politics, government, ethics, biology and zoology. In the late 15th and early 16th century Leonardo da Vinci was a prototype of the universal genius or Renaissance man. He was a painter, sculptor, engineer, astronomer, anatomist, biologist, geologist, physicist, architect, philosopher and humanist. Where have all the polymaths gone?

Two weeks ago, I attended the PDMA 2010 Global Conference, where innovators gathered and traded tips on the latest in innovation business practices. Several themes consistently emerged from the various presentations – shift to open source ideation, the importance of engaging the customer, and a shift toward business model innovation, to name a few. Reflecting on the conference, I got to thinking about the business trends that seem to be unfolding. Innovation is happening not just in product development, but in how businesses are run. What does the company of the future look like? Here are 10 predictions for 2020. Some of these developments are already happening on a large scale, others are more esoteric. Although stemming from things I have read or heard, these predictions are admittedly (un)educated guesses. If any of these predictions came to fruition, they would undoubtedly bring with them new set of challenges, but I believe that in each case, the opportunity far outweighs the complications.

Before X-rays and MRIs could peer inside the human body, physicians turned to bodily wastes, particularly urine, in order to make diagnoses. The practice of uroscopy arose from the observation that the color, consistency, smell, and even taste of urine change with different ailments. With a sample of the ailing person’s urine, physicians and laymen alike turned to widely popular illustrations known as urine wheels to make their diagnoses. While some associations were clearly flawed—such as the idea that turbidity could indicate that a woman was not a virgin—in many ways uroscopy paved the way for modern laboratory medicine.

Since it was launched in 2008 by the Kauffman Foundation and Enterprise UK, more than 18,000 partner organizations joined the global movement to shape the next generation of entrepreneurs. In its still short life, GEW has established a solid and ongoing presence in more than 100 countries -- and counting. During the same time period, over 10 million people around the world have participated in GEW activities and 2010 promises to boost that total to tap even more human capital and breathe life into new startups.

While the majority of nations this year will start Global Entrepreneurship Week on November 15th, some countries are conducting their celebrations a week or more in advance due to an important Muslim holiday, Eid al-Adha, falling on November 16th. For example:

* The Young Arab Leaders’ (YAL) Regional Entrepreneurship Summit under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, is a Summit of 400 leaders from private industry, government, academia and non-governmental organizations that generates new ideas, partnerships and business opportunities around the theme of “Bridging the Divide: Entrepreneurship for the Arab Future.” Aspiring young entrepreneurs from throughout the Arab world get access to role models, mentors, partners and venture capitalists.

November 2 midterm elections marked a shift of power in Washington, D.C. The Republican Party wrested control of the U.S. House of Representatives from the Democrats, who had held power across both houses of Congress and the White House since President Barack Obama's election in 2008.

Just days after the midterm elections, a report from the American Association for the Advancement of Science (AAAS) and a related story in The New York Times examined what would happen to federal science agencies if the GOP carried through on their planned budget cuts. The 2010 Republican agenda, "A Pledge to America," proposed rolling back discretionary spending to 2008 levels, with exceptions for seniors and the military. (Discretionary spending makes up roughly one third of the federal budget; the rest goes to mandatory programs such as Social Security and Medicare.)

Boston, Mass. -- Boston’s angels are increasingly interested in cleantech. But to what end?

At the state of Massachusetts’ sixth annual Conference on Clean Energy, leading early-stage investors discussed the differences between venture firms and angel investors. Whereas institutional funds focus on market-disrupting technological innovations, angels are more willing to consider smaller businesses, niche markets and service companies.

“It is very important to differentiate between what is a good business for you as the entrepreneur versus what is a good business for me as a VC investor,” said David Wells of Kleiner Perkins Caufield & Byers. “I am trying to move the needle on a billion-dollar fund and create a durable enterprise that will still be standing 10 or 20 years from now. That is very different from you achieving success with your venture. Just because I declined to invest does not mean it is not good for you. It means that I cannot achieve my objectives with my fund. Angel investors and high-net-worth individuals have their bar set in a different place.”

In recent blogs, I have tried to address many of the questions raised by entrepreneurs looking for financing. You can download a guide that we prepared for entrepreneurs pitching to the Dragons in CBC Dragons’ Den.

In this blog, I will answer the two specific questions raised in the previous blog.  How do you raise large amounts of money without giving up too much equity and how do you develop an exit strategy to maximize the likelihood of receiving investment?

How do you raise large amounts of money without giving up too much equity?

In a previous blog, I identified that you can decide how much money you need to raise from third-party equity investors, by first working out the negative cash flow for the first three years of the business, and then identifying sources of non-equity finance (debt, government grants, customer advances etc.). From this you can calculate how much cash in exchange for equity you need to raise.  However, if you ask for all of this at the beginning, then your equity will be significantly diluted. If you obtain the same amount in stages, then you can give up a smaller amount of equity if you have increased the value of your company at each stage. This puts you in a better equity position and increases the likelihood of being able to attract further investment subsequently.

It’s said there are no bad jobs during a recession. But there are depressing ones—like trying to recruit new business. That was Jeffrey Edwards’s task as head of Utah’s Economic Development Corporation (EDC), a publicly funded carnival barker for new and emerging companies. Every state has a comparable office. But while nearly every local economy succumbed to the frozen credit markets, failing to grow much during the last two years, Utah has flourished. With Edwards’s help, it set its own records for new companies (more than 40) and capital investment (nearly $2 billion). That has helped sustain an average of 3.5 percent annual growth during the last five years, more than any state other than energy-rich North Dakota. “It’s a weird countercyclical phenomenon,” says Edwards, “but we’ve been busier than we’ve ever been.”

Why Utah? Founded by Mormon pioneers, the state, which has been called “a quasi theocracy” by the editor of its largest newspaper, is overwhelmingly white (93 percent) and Mormon (60 percent). Those demographics make for a socially conservative mind meld—no gay marriage, mixed acceptance of women in the workplace—that might seem hostile to the idea-swapping associated with a go-go economy. Mix in a thin coffee-and-booze culture, and you might expect Utah’s economy to be listless as well.

A market-leading pain management product and an autoimmune disease treatment are just two success stories that have got a head-start from the Australian Government’s Innovation Investment Fund.

Announcing that over $160 million in venture capital will be made available through four new funds, Innovation Minister Senator Kim Carr said venture capital is a critical element of an effective innovation system because it links research to world markets.

“The venture capital we are providing these fund managers today will help early-stage high-growth Australian companies commercialise their research. This will lead to new skills, jobs and trade opportunities that will grow our economy,” Senator Carr said.

A group of mechanical engineering graduate students have created a “recyclable laptop” that can be completely disassembled by hand in under 30 seconds.

As part of a corporate-sponsored design class, Mechanical Engineering 310, “Project Based Design, Engineering and Development,” the Stanford students collaborated with students at Finland’s Aalto University to design and build the “Bloom” prototype laptop over the course of a year.

At the beginning of 2009, Autodesk, the team’s assigned sponsor, asked the students to create a fully recyclable consumer-electronics product using the company’s design software.

Catherine S. Renault, Ph.D., is the director of the office of innovation at Maine's Department of Economic and Community Development and is on the board of the Maine Technology Institute. She spoke this week with Business Monday about building the research and development capacity of Maine industries.

Can you talk about the current state of the Maine economy?

Renault: Obviously, it's challenging. But what we see is that the companies we've supported through state-funded research and development programs are doing pretty well. They're poised to move forward as the economy recovers because we've helped them invest in new products and processes, and even new business models.

Can you tell us what MTI is about?

Renault: The Maine Technology Institute is one element of the state of Maine's 10-year-old effort to invest in research and development. Specifically, MTI is designed to build the R&D capacity of industry. Some other monies go to the University of Maine and our nonprofit laboratories. MTI helps Maine companies with competitive award programs that help them develop new products and processes.

After record-high participation in the 2008 general election, the Millennials have apparently settled back into a business-as-usual pattern of dismal voter turnout for the midterm election. I’ve read lots of commentary about this today, with most authors concluding that young people didn’t turn out because politicians didn’t engage them enough in this year’s campaigns. Some speculated that since most young people are Democrats, and the current candidates didn’t excite them, they just didn’t turn out. While others said that—of course—it was the fault of the Tea Party and its lack of diversity that scared students away from the polls. I guess if you can’t blame it on Bush, then it must be the fault of the Tea Party, which, by the way, isn’t a party.

I would imagine that I could find young people who would fall into each of those categories, but I doubt that any of those explanations account for the high degree of young-voter apathy that we saw this week. Maybe the problem is that young people—and especially those who are college students—feel geographically adrift and aren’t really sure which state or district to call their own if their family home is in one state and their dormitory or apartment is in another. Some young people might not even know who is running for election, especially if their college isn’t within radio or television range of their voting precinct.

The venture capital business is highly competitive. There is more money out there chasing good deals than most people imagine. It is also true that there are good deals and good entrepreneurs that can't find anyone to invest in them. That is a failure of the system. But this post is not about that. It is about how a VC can compete and win a deal that many others want.

Here are my rules:

1) Do your very best to connect with the entrepreneur. If you don't have a great personal connection, you won't win the deal. Don't even bother to try to win a deal where you don't have good personal chemistry with the founder/CEO.

The European Commission will present on Wednesday (10 November) its energy strategy for the coming decade, calling for investment of around €1 trillion to secure the bloc's energy needs in a sustainable way.

The new strategy will set out priorities for 2020 in order to deliver on the EU's energy and climate goals.

This will require the EU to spend €1 trillion over the next decade on infrastructure, new technologies and electricity storage, according to a draft, seen by EurActiv.