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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.

DETROIT — While its crosstown rivals stumbled through bankruptcy this summer, the Ford Motor Company pressed its advantage, and delivered surprising news on Monday that its cost-cutting efforts and improving sales helped it earn nearly $1 billion in the third quarter.

But now it faces new challenges in maintaining that lead. Both General Motors and Chrysler, with the stigma of their bankruptcies receding, are moving ahead with their own comeback plans.

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SALT LAKE CITY, Nov. 2 /PRNewswire/ -- The Utah Fund of Funds (Utah FoF), an innovative program created by the Utah State Legislature to foster entrepreneurship by increasing the amount and diversity of capital available to Utah's established, growth and emerging companies, today announced that the program's economic development effectiveness is far greater than that of the federal stimulus money.

Thus far, Utah's stimulus aid of just under $520 million spent as of the end of September had resulted in retaining or creating 4,164 jobs--approximately eight jobs per million dollars spent. In contrast, the Utah Fund of Funds program has resulted in 2,047 jobs, based on the $60 million deployed as of September 30 by the Fund of Funds program of its $100 million first fund. The Fund of Funds investment has thus far resulted in more than 34 jobs per million dollars spent, approximately 4.26 times the level of job creation provided by the federal stimulus money.

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Thinking of raising some angel capital for your new business? The New York Times has compiled a list of the new rule of angel investors that you should read. The most important rule is:
“Entrepreneurs should find ways to finance their own growth: working without salary, moonlighting, seeking grants, running lean operations and focusing on an aspect of the business that can generate revenue.”

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In a speech last week to the City Club of San Diego, John Lechleiter, chairman and chief executive officer of Eli Lilly, offered very candid remarks about the state of innovation in the pharmaceutical industry, saying that the engine of biopharmaceutical innovation is “broken.” His comments may be a bitter pill to swallow in light of escalating investment in research and development (R&D), but his frankness may just be the remedy the industry needs to reinvent itself.

“At a time when world desperately needs more new medicines—for everything from H1N1 to Alzheimer’s disease—we are taking too long, spending too much, and producing far too little,” said Lechleiter. “Repowering pharmaceutical innovation is an urgent need not only for our company and our industry but for our nation—and for communities like San Diego and Indianapolis [the headquarters of Eli Lilly] that have a huge stake in the life sciences. We remain dependent on a society that welcomes and values new ideas, and public policy that enables innovation to be rewarded for the value it creates. But we also know that we need to change.”

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Imagine if you will, somewhere in the distant recesses of our existence, a group of cavemen huddled around a fire. The wiseman of the group gathers the tribe around the fire and regales them with stories of their ancestors - how they fought the neighboring tribes, how they found the food necessary to survive. The shaman passes on the wisdom of the tribe, and teaches in the process.

Stories are the best way to learn, and the best way to communicate. For some reason, we've lost the sense of story in business. Rather than use stories we opt for hard and fast "facts" that often miss the root causes or issues. There's no story telling class in an MBA program, yet most of the best leaders understand the importance of storytelling, and they lead others by telling and retelling stories. Some of those stories are myths, meant to reinforce the culture. Some of those stories are true, meant to teach and instruct.

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When I was a child the innovations of the day included black-and-white televisions, copy machines and the first satellite, Sputnik. Truly groundbreaking innovation came once a year or even less frequently. But more recently, technological innovation has moved at the speed of light. In recent years I have witnessed the birth of the Internet, DVR, HDTV, Blu-ray, satellite radio and MP3, to name just a few.

The slow pace of innovation of my childhood is particularly stark to me given that I get to enjoy amazing new technological advances through the eyes of my own one-year-old child. Advances that took years in my youth will take weeks in his. My son's childhood will be filled with e-books, 3-D, GPS and more. I can't even imagine what astonishing technologies will be part of his life. But my fear is that his future won't include the rapid pace of innovation that we have enjoyed in recent years. What if decades roll by and innovation stands still?

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Federal Technology Watch

A study released by the Biotechnology Industry Organization (BIO) last week offers data on the importance of university/industry r&d partnerships to the US economy.

The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007, finds a $187-billion positive impact on the US Gross National Product (GNP) and a $457-billion addition to gross industrial output, using very conservative models.

 

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In pursuit of a prestigious prize, people often push the boundaries of what is possible.

The $10 million Ansari X Prize proved that to be true five years ago, when its winners launched a private manned vehicle into space. The prize spawned a resurgence of high-profile competitions, with private foundations and companies putting up hundreds of millions of dollars to solve technological challenges as urgent as building more efficient cars, and as trivial as predicting what movies people would like.

Recently, prize fever has also breached the thick walls of government bureaucracy, and more federal agencies are using competitions as a strategy to spur innovation. The competitions leverage modest amounts of taxpayer money to attract inventors and investors to certain scientific and technological problems.

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The Great Recession has badly damaged the entrepreneurial sector of the U.S. economy.

Everyone knows that the United States is in the midst of the most severe recession since the Great Depression. But, while the media is full of reports about how the recession has affected large businesses and consumers, little has been said about its effect on new and small businesses. I’ve taken a look at the data, and, I’m sad to report, the Great Recession has damaged the entrepreneurial sector of the U.S. economy.

Business failure rates have jumped. According to the Office of Advocacy of the U.S. Small Business Administration (SBA), business bankruptcies increased 79 percent from the fourth quarter of 2007 to the first quarter of 2009, and employer firm terminations rose from 2007 to 2008.

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SHANGHAI — The highly anticipated opening of China’s new Nasdaq-style stock exchange last Friday is already being seen as a watershed moment for the country’s capital markets, providing new opportunities for Chinese investors and an alternative source of financing for upstart companies.

Investors went on a wild buying spree during the first day of trading Friday on the Growth Enterprise Market, or GEM, sending the shares of some companies soaring as much as 210 percent.

“This is potentially a major game changer in China’s high-tech industry,” said Yu Zhou, a professor at Vassar College in Poughkeepsie, N.Y. “For about 10 years, the biggest problem for China’s innovative companies was finance. You know it is very hard for them to get loans from state-owned banks.”

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Federal Grants

WASHINGTON, Nov. 2 - The U.S. State Department's Middle East Partnership Initiative has announced that it expected to award a maximum of two discretionary cooperative agreements for projects that encourage youth entrepreneurship in the Middle East and North Africa.

The award ceiling for this funding opportunity is $1,500,000.

This funding opportunity is open to institutions of higher education, non-profits, for-profits, and small businesses.

 

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I guess I'll never fully understand the depth of concern that many management teams have around command and control, especially in an era of constant change. It seems that the more demands are placed on an organization to create new products and adapt to environmental change, the more resistance to that change is created and encouraged at mid and senior management levels. I understand that what's "known" is comfortable and what's unknown and new is uncomfortable, but at some point every firm has to create some new products or services or it will simply atrophy.

Recently I've witnessed what I'll call "innovation in a bottle". That is, a relatively successful innovation effort that the management team approved and blessed spawned interest in innovation across the organization. People in other business units and geographies wanted to know more, and learn more, about innovation and the successful work that was done. We on the project team viewed this as a good thing - a successful innovation effort being recognized as such. It was clear that many people wanted to understand the tools and process, and implement that kind of thinking in their lines of business.

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Let others focus on election day tomorrow or dread the employment report coming up on Friday.

I’m looking forward to a week of events that celebrate entrepreneurship. Starting Tuesday, the two-day Mid-Atlantic Capital Conference at the Convention Center is expected to attract 1,000 people to learn about 40 area companies, including TerraCycle Inc., of Trenton, and iPipeline Inc., of Exton.

More intriguing is what’s happening on the University of Pennsylvania campus that celebrates ideas at a much earlier stage. It’s Innovation Week at the Weiss Tech House, a student-run organization that’s proof a little money, a little structure and a lot of teamwork can produce amazing things, including new companies.

 

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Whoever said nonprofit news couldn't be exciting? Today I bring you a report of drugs, domestic violence and mental-health. What will happen to our heroine when she faces all of these ominous stumbling blocks in a month-long downward spiral?

Okay fine, there's no heroine. There's no downward spiral, unless you count this article. What this story does have, instead of the things I listed, are community courts, drug courts, re-entry courts, domestic violence courts and mental-health courts. Courts! See why I couldn't lead off with that? But now you're still here, so let me bring you the low-down.

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With IPOs hard to come by, venture investors look to mergers and acquisitions for most of their exits. That’s been an argument for smaller fund sizes because corporate acquirers don’t normally pay $1 billion for start-ups. For a $200 million fund, a $250 million exit looks mighty fine.

But even those are rare, more so today than a decade ago. Our colleagues at Dow Jones VentureSource looked at the percentage of mergers and acquisitions since 2000 that were valued at $250 million or more and found they accounted for a mere 5.1% of venture-backed companies sold during the period.

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Together, the Canada Foundation for Innovation and the Quebec government have pledged more than $62 million for new state-of-the-art research infrastructure to support the work of five McGill researchers deemed key to keeping Canada and Quebec competitive in the global marketplace:

  • Vincent Giguère (Department of Biochemistry, working in the Rosalind and Morris Goodman Cancer Centre) for a major collaborative project to probe the links between the progression of cancer, obesity and cachexia.
  • Paul Lasko (Department of Biology) for the MIRGED research group on embryology and disease, a co-initiative of McGill and the Institut de recherches cliniques de Montréal.
  • Chao-Jun (C.J.) Li (Department of Chemistry) for a com pre hensive project to move the field of organic chemistry toward using environmentally sound solvents.
  • David Plant (Department of Electrical and Computer Engineering) for the Laboratories for Broadband Optical and Wireless Systems to adjust existing communications net works in order to handle increased connectivity needs.
  • David Y. Thomas (Department of Biochemistry) for the McGill University Life Sciences Complex’s Disease to Therapy Initiative, which aims to develop new medications for neglected infections and chronic diseases.

Read the rest of the article here.

BOOK REVIEW: The very recently published book Innovation: The Key to Prosperity - Technology and America's Role in the 21st Century Global Economy by Aris Melissaratos and N.L. Slabbert is quite the interesting and nugget packed book. Taken aback, this Blogger was, by the advocacy of MagLev train technology as a means to spark a transport revolution in America at the start of the book.

Maybe it was from the experience riding the Shanghi MagLev the past July; or, perhaps, it is my SiFi-thing of utilization of MagLev trains on the Moon to boost payload to orbit, I don't know. But this Blogger was impressed by the notion that MagLev technology should be pushed by the nation as a new alternative for rapid transport.
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No one disputes that Silicon Valley is the global capital of the tech world. But this wasn’t always so. It is the Valley’s dynamism and networks which have given it an unassailable advantage. Silicon Valley has simply left rivals like Boston’s Route 128 in the dust.

I mentioned a little bit about my first Columbus Day in California in a previous column. But I didn’t tell you the whole story. I was invited to three amazing events on the night of October 12. Venture capital firm Alsop-Louie—known as one of the wackier and unconventional VC firms—invited me to their legendary Columbus Day party. On that same evening I had an invite from Henry Chesbrough, Executive Director of the Center for Open Innovation at the University of California-Berkeley to attend a dinner party for his forum. Down in Silicon Valley I also had an invite to speak at an event with India’s former Minister of Disinvestment, Arun Shorie—the guy who was once in charge of privatizing the country’s moribund nationalized firms and who is as close as you can get to financial royalty in India.

 

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Nine in ten companies, globally, consider innovation as critical to preparing for the upturn. And despite the recession, the world's leading corporate innovators increased research and development spending in 2008, says a study.

Dr Hatem Samman, Director, Ideation Centre, Booz & Company's think tank in the Middle East, told Emirates Business: "Innovation is not a choice, it is imperative as it is the way forward. Innovation is important not just for companies but also for countries and individuals. Where will we be without it? It is especially important for companies as it helps them increase their market share, boosts growth and increases prosperity. For example, let's take the example of computers, one of the great innovations of our times.

 

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