Government Stories 2006

Christmas Pork.  The City of Luling (TX ) received a $1 M federal grant to help create its first industrial park. U.S. Rep. Lloyd Doggett, D-Austin, helped secure the grant from the Economic Development Administration of the U.S. Department of Commerce. [Austin American-Statesman, Dec 22] See Doggett's grin. Now why would those independent tax-hating Texans accept federal money for local buildings? Because, like SBIR, free money has a certain appeal.  Vote Doggett in '08 for responsible government finance!  Keep alive the Iron Triangle of beneficiaries, Congress, and federal administrators.

Too Mobile Technology.  Federal prosecutors accused five former employees of Eaton Aerospace of stealing trade secrets for the company and taking them to their new jobs in North Carolina. A federal indictment alleges that [the five] stole secrets from Eaton, where they worked, and took them to Frisby Aerospace in Clemmons, N.C., where they started working in January 2002. Frisby is now known as Triumph Actuation Systems. The criminal charges come about two years after Eaton filed a $350 million lawsuit against its former employees and Frisby, accusing them of stealing trade secrets. [Raleigh News and Observer, Dec 23]  At Frisby Aerospace, we always aim high.

Weeping and Gnashing. NSF Director says that "the results would be dire" if Congress sticks to a yearlong spending resolution. [Jeffrey Mervis, Science, Dec 15] With the no-limit spending Republicans about to be replaced by the no-limit spending Democrats, somebody had to call a time-out. The departing Congress did with a catch-all, no growth "temporary" appropriations law which the Dems are about to accept as the final budget for FY2007. The weeping has already started from the agencies who live by the idea that if a little is good, a whole lot is better (as long as it someone else's money). Science is actually politically easy to squeeze because the voters don't feel any pinch.

Fantasies. a (fictional) entity called the Iraqi Army, at the disposition of an (imaginary) power called the Iraqi government, can be welded into an (entirely fantastical) nonsectarian force by (as yet unavailable and putatively suicidal) U.S. military trainers [Alexander Cockburn, Dec 15]

Free Lunch.   since 2001 we've offered $2 in tax cuts for every $1 we have spent on the wars in Iraq and Afghanistan. And conservatives wonder why we have deficits. [EJ Dionne, Washington Post, Dec 15]  Meanwhile, the Army is saying that the free lunch is over, that we don't have enough Army for the wars assigned. And no flood of DOD procurement contracts in Mississippi or Massachusetts will produce more soldiers willing to die for their country. Nor SBIR contracts neither. 

Several Interesting cases discussed by SBIR Insider who obviously keeps up with the government doings (and failings) in SBIR.

The canceling of ATP killed NIST's Phase 1 SBIR for 2007. No money, no awards.

DARPA says it has restored the prizes for the Urban Challenge race of robotic vehicles in city traffic after legal machinations with the DOD Appropriations Act. First, second, and third will get real money of out of a possible 90 racers. But government being what it is, stay tuned.

The Dem leaders, even the great porker from West Virginia, said there will be no Congressional earmarks.  At least until the first chance they get to claim that the elected representatives know the nation's needs better than the president and his bureaucrats.  The great porker from Alaska is no doubt apoplectic.

It's our secret and not even $120B dollars of UK money will induce us to turn over the secret codes needed to operate the Joint Strike Fighter on two new aircraft carriers, Britain is now re-considering the Eurofighter Typhoon project. Not even Blair's political suicide of being the lead ally in the Coalition of the Willing is enough to get our neo-cons to be two-way partners in their one-way street called loyalty.

NASA SBIR picked 260 Phase 1 winners for $25M, an average of $90K per project.  Oh baloney! that $90K isn't enough for a smell test of the technology and the company. A candidate for most notable title and company name Software Tools that Control a Framework of Perceptual Interfaces and Visual Display Systems for Human-System Interaction with Robotic and Autonomous Systems by Turbogizmo. Of course many of the familiar company names dance through the list as NASA values experience over novelty. And of course a heavy diet of math modeling that improves NASA's understanding of its own technology would generate little economic value in any market. 

Army Found an Excuse. Due to lack of FY07 funding and the imminent start of the Army’s Commercialization Pilot Program (CPP), the Phase II PLUS program has been suspended indefinitely and new applications will not be considered. Thus the Army stops the one aspect of its SBIR that would actually bring new capital to the SBIR projects. 

Good Things Take Time and Money. Four years after President Bush ordered a limited missile defense system to be built and nearly a quarter century after Ronald Reagan first proposed the Strategic Defense Initiative, this sub-Arctic outpost, once a cold war training site and still a cold-weather training site, is where progress on the long-embattled missile system is perhaps most evident, military officials say. Eleven interceptor missiles are installed in underground silos here, buried beneath the snow and a former forest of black spruce. [William Yardley, New York Times, Dec 10] But MDA's reliability estimate took another hit when the Navy failed on Pearl Harbor Day to knock down two incoming missiles at once from the same ship off Hawaii's coast. The president of the Missile Defense Advocacy Alliance spun the result, Though this event is discouraging, the testing enables our defenses to be more efficient and more effective. Which means that the R&D money has to keep pouring into MDA's various sub-systems and $9B a year should be providing something like $5B of SBIR base which would produce $100M of SBIR awards.  How much actually gets awarded depends on how slippery the MDA comptroller can be in defining the SBIR base.

Let's Have More of Everything.  If only the so-called conservatives could have their own math to go with their own opinions. Now they want much more defense research. the Task Force on the Future of American Innovation. The group, comprised of organizations from academia and industry supporting investment in basic research, notes that though military R&D spending is at a record-high, the share of DoD science and technology investment dedicated to basic research has declined from 20% to 12% over the past 25 years. [SSTI, Dec 4]  While it's not surprising that academics want more research, the arch conservatives that see every problem as an opportunity for force were the ones who jacked up military hardware spending faster than military research spending. Now they want to bring that up too, all the while reducing the taxes to pay for their military security dreams and simultaneously running a foreign war of nation building that turned out to be more expensive they ever would admit possible.  They also note a potential decline in DOD civilian research folks while they work to undermine the job security that keeps a lot of smart dedicated people on the DOD payroll. Lower the pay and job security and see what kind of management of the bigger science program they get.

Unlimited Demand for a Free Good. Government (or any other) programs that hand out free money will never lack for applicants. Hobbies are fun. NIH is giving out 13 Pioneer awards for the farthest (but still credible) research out of 46000 proposals to all its programs of which about 20% get funded. For all the moaning about ignored science [many promising studies by scientists with stellar track records are also going up in smoke] from a growing supply of PhDs, even government has limits. Ultimately the economics of proposing limits the number of seekers to a decent percent of the amount that the government decides is enough national treasure for such an enterprise.  [facts from Sharon Begly, Wall Street Journal, Dec 8] SBIR of course faces the same limits with something like the same economics of proposing that leads to the same level of proposal funding. What I haven't heard is any hue and cry from the science community for more taxes on science salaries or profits to pay for more science.

When buying and selling are controlled by legislation, the first things to be bought and sold are legislators. -- P.J. O'Rourke

Too Much of a Good Thing. Federal advisers yesterday said that drug-coated stents, which have been implanted in millions, offer clear benefits to many patients but present higher clotting risks to others, suggesting they may be overused. ... Today's [FDA] discussion will cover the public health implications of nearly 60% of the 5 million stents implanted in patients whose conditions do not meet the strict descriptions on the device labels. [Dietra Henderson, Boston Globe, Dec 8]

Maine’s elected leaders believe a sizable injection of public funding is required to accelerate research and technology commercialization ... Businesses in the fields targeted by the R&D program would receive additional support from a $20 million Maine Cluster Development Fund, which would support industry partnerships and organizations that promote job growth, entrepreneurial training and networking opportunities. The program would offer 5-7 competitive awards per year to business-led public, private and academic consortia with strategies to stimulate cluster activity.

Commerce Secretary Carlos Gutierrez formed the -- deep breath -- "Measuring Innovation in the 21st Century Economy Advisory Committee" to develop ways of measuring innovation to help policy makers understand its contribution "to American economic prosperity and high living standards," according to a press release. [Benjamin Romano, Seattle Times, Dec 6]

Is Government the Answer? Clean energy now gobbles up almost a tenth of America's venture capital. ... Almost all clean energy therefore relies on government subsidies to make it competitive with fossil fuels. For the moment, politicians seem quite happy to pay up. No fewer than 49 governments, according to Goldman Sachs, an investment bank, have established targets to promote greater use of renewable energy sources: the voters pay, either through higher prices or through direct subsidies. ... But subsidies are not the best way to achieve that goal. Governments that try to pick winners often choose losers. Subsidies distort investment: since the German government fixed the price for solar power at munificent levels, the country has been sucking in huge numbers of solar panels that could be put to better use in sunnier climes. ... But government subsidy is a wobbly foundation on which to build a business. Politicians are a fickle lot. [The Economist, Nov 18]

Oh Dash It, Poor Data. The GAO delivered more evidence that SBIR is nothing but a political handout to an interest group when its most recent study found that SBA's data were inadequate for any decent evaluation. Slap wrists and move on. The wrists belong to the agencies for delivering the inadequate data and to SBA which did little to improve the situation since neither wants an economic evaluation of SBIR. The present government doesn't want meddling in free markets and the agencies don't care about national economics. Agencies Need to Strengthen Efforts to Improve the Completeness, Consistency and Accuracy of Awards Data  There are ways to get economic impact, one pioneered by BMDO more than a decade ago: use the Law of Diminishing Returns to make downstream investment a criterion for subsequent SBIR awards to the company's technology. Oh don't worry, Congress is not about to make the competition that stiff and rewarding.

With a new governor set to take office in January and the world's largest biotechnology convention headed to Boston next spring, leaders of universities and local biotech businesses are meeting this morning to try to launch a lobbying group and think tank that would unite life-science companies, academic laboratories, and hospitals. ... Although the group doesn't yet have a firm agenda, it has a name -- the Massachusetts Life Science Collaborative -- and a budget of more than $600,000 in donated funds. [Stephen Heuser, Boston Globe, Dec 6] 

Meanwhile, Texas wants biotech too.  Texas needs to draw more venture capital funding and to increase its number of biotech companies if it wants to catch up with established biotechnology centers in California, Massachusetts and North Carolina. That's the report James Greenwood will deliver to the state's biotech companies ... The former Republican congressman from Pennsylvania is in charge of a lobbying group for the industry, Biotechnology Industry Organization. ... Texas, like dozens of other states, has selected biotech as an emerging industry that it wants to expand. [Lilly Rockwell, Austin American-Statesman, Dec 5]

Government as competitor. Portland (OR) cuts the cord today, unveiling the first stage of a free wireless network that aspires to make Web access available throughout the city within 18 months.  [The Oregonian, Dec 5] The telcos' addiction to a monopoly for their huge installed capital base have run afoul of a public demand for high speed Internet that the politicians can pretend is free. I doubt that the taxpayers voted to raise their taxes to pay for the new public convenience. 

Too Much Temptation Meets Too Much Opportunity.   quizzicus writes "Paperless electronic voting machines 'cannot be made secure' [pdf] according to the National Institute of Standards and Technology (NIST). In the most sweeping condemnation of voting machines issued by any federal agency, NIST echoes what critics have been saying all along, that due to the lack of verifiability, 'a single programmer could rig a major election.' Rather than adding printers, though, NIST endorses the hand-marked optical-scan system as the most reliable."  

Potomac Fever. A  retiring Republican after 24 years in Congress is selling his home there and taking a part-time job at a think tank in Washington.  [AP, Nov 24]  Small government is only for speeches.

Now that the election is over, the White House lowered its forecast for economic growth, and people can continue to believe politicians' economic forecasts at their own risk.

Turning Left Into a Wall. These fractious [Democratic] groups have coalesced for now around some obligatory centre-left shibboleths. ... The Democrats think that they won this month at least in part because globalisation has given free market economics a bad name. Voters in the Midwest and in northeastern America voiced grave concerns about economic security. These voters are no longer the Reagan Democrats who embrace small government, but steelworkers, car workers and service sector employees who fear for their jobs from global competition. Here, the most worrying aspect is that even the centrist Clinton folks have backed away from the free market ideas they used to embrace.  ... Americans have not given up on the free market yet, thank goodness, but the endurance of [Milton] Friedman’s legacy will be severely tested in the next few years. [Gerard Baker, The Times (London), Nov 21] The danger is that Dems will over-emphasize economic defense at the expense of the wealth-creating free market enterprise. They could well fall into the trap of copying  the defensive SBIR crouch of the handout advocates and the government mission agencies. 

Prepare to Believe!  The world's first Creationist museum , including its blog, will promote the idea that Genesis factually tells the creation of the world. Open next year in rural Kentucky with its motto: "Prepare to Believe!" Enough people believe to put up $20M+.  Stephen Bates, The Guardian, Nov 13 describes it in the religion section. It's all part of the amazing museum building all over America and England; try, for example, North Platte NE and three one-room store front museums in Regent ND. 

Ping-pong school boards: Anti-evolutionists John Bacon (R) and Kenneth Willard (R) appear to be heading back to the state school board. Oh well Kansas, we'll see you after the dark ages. [New Scientist blog, Nov 20] I wonder if KTech wonders why it has to struggle so mightily to attract scientists and entrepreneurs to Kansas. Perhaps it's not just the wheat fields and empty spaces.

Defer the Pork. The grand old party that came in with the high principles of the 1994 Contract With America will punt their last chance to execute those principles into the next Congress where they think the Democrats will also bog down also. They have a point about the bogging  down since the electorate is still expecting a nearly free lunch. Therefore no decisions on pending appropriations bill at least until January. Some of the losers in the pork expectations could be plus-up" and other direct Congressional meddling in the awarding of SBIR contracts, especially Phase III "awards".

Handholding 101.  The Army is on the street for a single handholder for SBIR companies that don't know how to commercialize Army technology. I wonder why they can't!  The Commercialization Pilot Program, another Congressional cosmetic small business program, wants to increase Army SBIR technology transition and commercialization success to accelerate the fielding of capabilities to Soldiers and to benefit the nation through stimulated technological innovation, improved manufacturing capability, and increased competition, productivity, and economic growth. The ultimate measure of success for the CPP is the Return on Investment (ROI), i.e. the further investment and sales of SBIR Technology as compared to the Army investment in the SBIR Technology. ... The CPP BAA requires the performance of six tasks as follows: Task 1: Assess and Recommend SBIR Projects and Companies with High Transition Potential; Task 2: Provide Market Research and Business Plan Development; Task 3: Match SBIR Companies to Customers and Facilitate Collaboration; Task 4: Prepare Detailed Transition Plans and Agreements; Task 5: Make Recommendations and Facilitate Additional Funding to Select SBIR Projects; and Task 6: Track Metrics and Measure Results. CPP wants government to tell private firms how to compete in the private market with technology that the Army chose solely on its governmental merits.  Let the Army write an incentive award contract such that the winner collects only if the company actually commercializes and makes an ROI that a private economist would recognize. Otherwise it's eyewash.

NASA Needs Partners. Scott Hubbard says the concept behind [NASA's VC venture] Red Planet is a practical one. NASA's current budget priorities, which include most notably overhauling the space shuttle program, are making it increasingly difficult for it to develop new, usable technologies for future missions, says Hubbard, an 18-year veteran of NASA who until earlier this year ran the agency's Ames Research Center.  "My notion was these days you don't have enough money to do everything yourself," he says. "Why not partner or co-invest, so some things being developed for the private sector might have dual use for NASA's purposes. This fund would be a piece of that strategy."  Red Planet says it'll invest in companies working on commercially viable technologies NASA could adapt to suit space environments. [Lisa Scherzer, Smart Money, Nov 16]  Now why didn't I think of that?  The very idea that NASA should put its seed money into ideas that would have a development life afterward from private capital. Talk about "leveraging" (bureau-speak for getting somebody else to spend their money too.)  Or better still, why was no agency listening to my decade plus of speechmaking (and years of investing BMDO's SBIR money) about why SBIR money should be directed to companies with ideas that private money would start to run with by the end of Phase 2?

Trading Walls. The American worker, not Corporate America, will be the central focus of U.S. trade policy as far as the new Democratic majority of Congress is concerned. ... less-expensive electronics, apparel and other foreign-made goods increasingly available to U.S. consumers. But it also has cost a growing number of American workers jobs, pay increases and pensions. [Kevin Hall and Margaret Talev, McClatchy News Service, Nov 19] Democrats represent jobs and Republicans represent corporate profits. Democrats like walls even at the expense of a wall against American exports. 

Mass Wannabe. Kentucky took a full page ad in MIT's Technology Review, and who knows where how many other places, to tout its matching of SBIR awards. Max Phase 2 match $500K. How many Massachusetts entrepreneurs do you think would for $500K leave the thriving intellectual climate of eastern New England for the mint julep climate of the South? Or even the ad's claimed inducements: low cost of living, low stress commutes, natural beauty, and a best place to raise a family. Where are the mobile labor pool, the like-minded entrepreneurs and geeks, the VCs, the world class universities, the direct air travel, ...?  It's hard for a sovereign political jurisdiction to accept the economics of comparative advantage.

Get 1523 Third Street to Vote. Using new levels of sophistication in how they collect, clean and manipulate the information in their massive databases, the parties are able to predict with reasonable accuracy how individual voters will vote when they get to the polls, and to target voters individually where needed. ... "It's a 365-day-a-year job, and it doesn't take a break after the election cycle. They're already matching database up with the voter outcome." [Wayne Rash, eWeek, Nov 16] Data mining for pattern recognition.

NIST Summarizes ATP Input. In the 44 competitions that have been held by ATP between 1990 and 2004, and the nearly 7,000 proposals received, 768 awards in all technologies have been selected for ATP funding. These awards have involved 1,511 participants, an equal number of subcontractors, more than 170 university and 30 national laboratory participants. This amounts to 218 joint ventures and 550 single company awards and $4,371 million of funded high-risk R&D—of which the ATP share is $2,269 million and the industry share is $2,102 million.  Over 66% of all ATP awards have been made to projects led by small businesses. The June 2006 report details input ("investment") in semiconductors and electronics. The report does not show any ROI.   Whatever ATP's value from market intervention, it apparently will end.

Texas Nursery; Georgia School.  Sony, IBM, and Toshiba will move their super-duper Cell microprocessor development at Georgia Tech. The technology that the companies jointly developed in Austin over five years at a cost of $400 million is making its debut in Sony's new PlayStation 3 video game console. ... With $320,000 of funding from the three Cell partners and additional money from outside grants, researchers at Georgia Tech's new STI Center of Competence will explore ways to adapt the technology for other industries, including biotech, finance and digital media creation. [Bob Keefe,Austin American-Statesman, Nov 14]

“Exceedingly unlikely to be indefinitely sustained” Those are – best I can tell – the words former Treasury Secretary Robert Rubin used to describe the current pattern of global capital flows, one which has allowed the US to finance a current account deficit that Rubin considers “almost unimaginable” in size  [Brad Setser, Nov 13]  Meanwhile, the beneficiaries of the government spending expect the music to keep playing or at least they expect a chair will be waiting for their handout when the music stops.

Stem cells OK in Missouri. Missouri's voters OK'd 51-49 a state constitution amendment that will protect embryonic stem cell research from fits of morality by local government or the legislature. By the narrowest of margins, the electorate voted for an investment climate for scientific advance. But no human cloning which at this stage is merely shooting at stars anyway. The narrow margin, however, does not bode well that the ban will last in the state that nourished the religious politics of John Ashcroft.

Good riddance, say its critics, who believe that market forces, not a government agency, should determine the commercial fate of new technologies. [Science, Nov 3] Now that Congress has officially killed ATP, will there be a eulogy or a resurrection after $2.3B in 768 projects? It all depends on the politics of free market intervention. Of course its advocates never call it that, just like they fuzz any serious SBIR questions. They focus on success stories, with emphasis on temporary local jobs created, and evade any economic evaluation of the whole package.

Best Rich Lowry line ever: Liberals cannot count on conservatives being associated with corruption, incompetence or an unpopular war forever. I'm interested in the passive voice. Associating themselves with the mendacious, malevolent, incompetent, and disconnected-from-reality Bush administration was not something that was done to conservatives, but rather something that conservatives did. [Spencer Ackerman quoted on Brad deLong's blog, Nov 14]  Don't worry (or do worry), the electoral pendulum will swing away from the deficit spending Democrats soon enough as the country still longs for a free-lunch government. And the SBIR advocates have their bellies right up to the free-lunch bar for handouts that they don't have to justify economically.

it's painfully obvious that neither political party promotes free market capitalism as an integral component of their platform. ... More than any other asset class, Americans own dollars. ... With neither political party representing the interests of honest, profit-seeking capitalists, it's clear that ominous economic winds are beginning to blow. Dumping the dollar might be precisely the trade that provides shelter from the gathering storm. [Jonathan Hoenig, Smart Money, Nov 13]  And using SBIR for purely USG stuff does almost nothing to strengthen US technology competitiveness. And using deficit finance for SBIR compounds the problem. Yes, when DOD borrows for its R&D spending, part of its SBIR is borrowed money.  And further, with the voters still believing in a free lunch, neither party is likely to advance balanced budget beyond the usual platitudes. SBIR companies are citizens like everyone else and have to insist on responsible national government finance that includes a little haircut for SBIR as part of the cure.

Jefferson, the ultimate optimist about progress in science and democracy going hand in hand, died in 1826, at the dawn of what became known as Jacksonian America, a raucous new era of muddy-boots rule by "the people." Alexis de Tocqueville, the French aristocrat who toured this America in 1831 and was its most perceptive chronicler, worried about the prospect for science in the new Republic. "Nothing is more necessary to the culture of the higher sciences or of the more elevated departments of science than meditation; and nothing is less suited to meditation than the structure of democratic society," Tocqueville observed in "Democracy in America."  For a very long time, this appeared to be the rare Tocqueville insight that was off the mark. Our current age, though, seems bent on proving him right after all.  [Paul Starobin, Who Turned Out the Enlightenment, National Journal, Jul 28]

Gridlock is Our Friend. Every war in American history that lasted more than a few weeks was authorized by a unified government. It's also worth noting that every major entitlement program -- the spending programs that are bankrupting the country -- was enacted by unified governments. [Mark Perry (Carpe Diem), Nov 8]

Federal Funding Strategies For Today's Manufacturer. Some useful advice from Industry Week.

Believe half of what you see and nothing of what you hear.  The spin we hear from all sides in the closing days of a campaign is like a bad poll that oversamples two demographic groups: people who have no idea what's going to happen, and people who wouldn't tell you if they did. [Bruce Reed, Slate] You can always tell when a partisan is spinning: the lips move.

The governor-elect [Patrick] has reassured biotechnology executives by saying he supports embryonic stem-cell research, and wants to finance it with state bonds. ... But it is Washington that has the real impact on life-science companies. The federal government is the single largest purchaser of healthcare in the nation, chiefly through Medicare, and what it pays for drugs and medical devices can affect local giants [Stephen Heuser, Boston Globe, Nov 9]. And Democrats have a gene for directly helping the lower economic class even at the risk of lowering profits that incentivize research. It's a case of seeing the drug availability problem from the bottom rather than from the top. Eventually, the federal ban on research funding for stem cells will go away and the progressive states will no longer have to do it themselves. 

Rummy takes the spear. Like a faithful warrior, SECDEF Rumsfeld resigned when the messy war that he advocated and formally ran finally caused a political landslide on the President's party. Shades of Robert McNamara. How many more times do we step into or facilitate civil war before we learn?  Probably many times since politicians don't seem to learn much from international history.  They use myths of history selectively, as a drunk uses a lamppost, more for support than for light. The departure also breaks up what Maureen Dowd called a love story: W. is the hood ornament, but Cheney & Rummy are the chitty chitty bang bang engine of this administration. Their four-decade friendship stretches from Nixon to Bush II, from Vietnam to Vietnam II.  ... Rummy did have one other defender. The House majority leader, John Boehner, told Wolf Blitzer that it is the generals who should be blamed if the war is going badly.  [New York Times, Nov 4] Politics works that way: failure is never and always the fault of the maximum leader. 

Whatever Gets Votes. In Dubuque the Democrat Congressional challenger tries bashing globalization and Bush's "unfair trade deals." He has urged more focus on labor rights in national trade policy and talked of using economic sanctions to keep America competitive. If he watched the river traffic, he might notice all the grain going to export that would stop if the US built a high tariff wall and our trading partners took the same beggar-thy-neighbor policy. The Republican free-trader says the Democrat is living in a "protectionist fantasyland," but concurs that "deep down, there is that kind of angst" over trade and the economy. [Wall Street Journal, Nov 6] Unfortunately for democracies, short term protection for present jobs takes precedence over long term policies that adapt to worldwide realities of inevitable competition.  Perhaps the strongest competitive tool the US has had since its founding is its Constitutional ban on internal tariffs.  And if we look for the causes of short-sighted government, the best tool is a mirror.

When Policy Should be Based on Whatever Works. The central problem that the Coalition for Evidence-Based Policy seeks to address is that U.S. social programs are often implemented with little regard to rigorous evidence, costing billions of dollars yet failing to address critical needs of our society -- in areas such as education, crime and substance abuse, and poverty reduction.  A key piece of the solution, we believe, is to provide policymakers and practitioners with clear, actionable information on what works, as demonstrated in scientifically-valid studies, that they can use to improve the lives of the people they serve. The coalition is the brain-child of Jon Baron who ran (in a limited sense) the DOD's SBIR for five years in which time he tried to steer DOD's SBIR into a path of favoring projects that had a downstream future. For one, he invented the Fast Track idea that has withered since he left. Fast Track used the idea that the best indicator of a technology's future was early investment by third parties with their own money at risk.  Jon's evidence-based idea is a variation on "measure what you treasure" instead of basing policy on intuition, popular myths, and a free lunch.  

Paving a Road. Intel hopes to work with local companies and governments to replicate the setup in hundreds of other villages in China, and is helping deliver computers and Internet access to rural health clinics and schools. It is also rolling out similar initiatives in India. [Wall Street Journal, Nov 3] Suppliers of IT stuff better hope that Intel succeeds in building an American high tech presence among the two billion people. The PC-saturated American market has had its big growth phase and bloggers don't need new hardware and don't create wealth. 

First State Innovation is Delaware's move to get out of the cellar of the fifty-state innovation league. At the outset, the organization will work on attracting venture capital and investment money. Second, it intends to create an "angel fund" that will provide seed money for early-stage business. Next, it will work on forming a closer link with academia.   [MAUREEN MILFORD, The Wilmington News Journal, Oct 30] The usual things states do. On the board are the CEOs of Dupont and Hercules, not exactly high tech biggies in bio- or info-tech even with Dupont's claim of operates as a science and technology company with a heavy dose of chemistry research among its 5% of revenue going to R&D. Microsoft devotes 15% and Intel 12%.  Delaware had only 92 SBIR projects in 2002 of which 33 went to one company. Next door Pennsylvania had 820 projects spread all over although a few SBIR mills get a chunk. What Delaware might consider is a Tri-State operation centered on Philadelphia that would bring in higher powered universities like Drexel and Penn and the aerospace companies.  After all, what Delaware wants is a vibrant economy, not small high tech businesses as an end in itself. Just as Silicon Valley needs San Francisco and all the counties around the lower Bay, a Delaware Valley hotbed needs tech-smart entrepreneurs in all the counties along the river from Wilmington to Trenton. Otherwise they can never have critical mass. 

SciTech for the Elite. In New York's New Explorations Into Science, Technology and Math school, which is widely admired as an oasis in the New York City school system, more like an elite private school than the public school it is, the parents are vetted as well as the applicants. Who they are affects kindergarten admission. One PTA meeting became so heated that the police were called to break it up. [Elissa Gootman, New York Times, Nov 4]

It's About Me. Welcome to the Technology Administration (TA), the only Federal agency working to maximize technology's contribution to America's economic growth. Please visit our site regularly to find all the latest news from TA and its three agencies. The top tech stories are all about "the Under-Secretary says".  Lawyer and political operator: Before his confirmation, [Under Secretary Robert] Cresanti served as Vice President of Public Policy at the Business Software Alliance.  Prior to this, he was Senior Vice President and General Counsel for the Information Technology Association of America. Earlier in his career, he served as Staff Director for the Senate Special Committee on the Year 2000 Technology Problem. He was also Staff Director for the Subcommittee on Financial Services and Technology for the Senate Banking Committee. Mr. Cresanti received his B.A. degree from Austin College and his J.D. degree from Baylor University.

science has outrun the capacity of politics to manage, or of society to understand, the implications of technology's rapid advance. A chasm has opened up -- a dangerous one, in Mr. Ikle's view. We live in a world in which biotechnology is near to acquiring the capacity to change the human species; and biological weapons threaten the survival of mankind itself. Scientists are working busily to create super intelligence systems that may well synthesize the computer and the human brain. [Walter Laqueur reviewing Fred Ikle's Annihilation From Within, Wall Street Journal, Nov 2] And to hear the present political debate, one wonders whether democracy has the capacity to elect insightful leaders in an era of instant and complete communications.

High-Tech Cred. Declan McCullagh, CNET writer and techno-political expert. rated Members of Congress on their attitudes toward tech. Top score to Sen George Allen VA who voted the "correct tech way" 78%. Lowest were Representatives Davis KYand Westmorland GA 13%. Full story.

Thinking Sino-Business?  people are asking about China.  Here are a couple of resources.  From a post on the China Law Blog, I learned about This Is China Weblog.  If you are doing business in China, or considering it, these are both blogs to visit periodically. I've been reading One Billion Customers by James McGregor.  I'm early in the book, but already lots of good insights. [Bill Conerly, Businomics Blog, Oct 28]

Charles H. Mack Associates Inc. which develops and markets medical management software, will receive a $2.5 million Innovation Ohio Loan Fund loan at an interest rate of 8 percent, according to a news release. The company will use the loan for machinery and equipment, and make other improvements to its Blue Ash headquarters. [Cincinnati Business Courier, Oct 31, 06 ] No SBIRs.

So far the money for local [Houston] startups is more likely to come from government funds set up to promote early-stage investment, and the amounts are relatively small. ... NCI recently awarded Fairway Medical Technologies  $2.7M to apply nanotechnology to its imaging system, which at this time is focused on early detection of breast cancer.  The Texas Emerging Technology Fund recently gave Nanospectra Biosciences nearly $1.3M to pursue human trials of cancer therapeutics. [Houston Chronicle, Nov 2]  Nanospectra has had at least two Phase 2 SBIRs. Fairway apparently none. The policy failure comes later for the SBIR winners that rely heavily on increasingly easy SBIR and avoid entering the commercial marketplace. Government has to learn to reject such continued dependence and insist on up-or-out. Fat chance!

Logan Monopoly Rejected. A two-year effort by Logan International Airport officials to shut down private alternatives to the airport's $8-a-day wireless Internet service was decisively rejected yesterday by federal regulators, who blasted airport officials for raising bogus legal and technological arguments. [Boston Globe, Nov 2]

VoterTech on Trial. jcatcw writes "One-third of Americans will use voting machines next week that have never before served in a general election. Computerworld.com provides an overview of e-voting in each of the 50 states and the District of Columbia — equipment, systems for voter registration, polling, significant legal challenges to the systems, previous media coverage, links to government watchdog sites, the vendors, technologies and laws that are important to the issue, and a review of "Hacking Democracy."" [slashdot.org, Nov 1]

Geek Wanted. The Congressional Research Service (CRS) seeks a Senior Network Engineer to provide expert technical advice and to create standards and procedures for LAN/WAN development, implementation, and management. Minimum Education: High School Diploma. Practical knowledge rules. Must be able to provide answer desired and to keep mouth shut as politician mangles it in public.

The Pittsburgh Life Sciences Greenhouse gave grants to three local companies: 2-year-old Respironics spinoff Starr Life Sciences makes tools for research labs and universities to monitor small animals such as mice and rats used in lab research -- will use the $150,000 to more quickly launch new products; Clear Count Medical Solutions will use its $250,000 check to help get regulatory approval early next year for the 3-year-old firm's main product, which is used to track surgical tools and reduce medical errors; Neuro Kinetics, which had been around more than 20 years and makes devices that help diagnose diseases, will use its $130,000 to try and win over ophthalmologists for its latest iteration, a new tool designed to help them quickly detect diabetes-induced eye disease. ... Since the beginning of the year, the greenhouse has spent $2 million funding 15 local firms [Corilyn Shropshire, Pittsburgh Post-Gazette, Oct 31]

Clinton says her priorities in the new Congress will be [among others] creating an energy research agency to speed development of alternative technologies.[David Ignatius, Washington Post, Nov 1]  Oh sure, just the ticket, another bureau.

Puff the Red Planet.  NASA's new Red Planet VC fund got a Washington Post [Oct 31] puff piece by Marc Kaufman.  The few facts presented are that the fund will have $75M over five years, was largely instituted by Administrator Mike Griffin who was once president of CIA's In-Q-Tel fund [and was a supporter of SDIO's now defunct SBIR venturing], and that In-Q-Tel employees got a piece of the cake when it cashed in on one supported company. Like the CIA and fledgling Army VC projects, the devil is in the details not in the happy words.  NASA has had 20 years to invest its SBIR in venturesome technologies with a future but allowed the center directors to do what the DOD does - serve their own immediate interests. Red Planet is likely to work only as long as Griffin heads the agency and insists that it work on accountable criteria. Unfortunately, such a project requires years to bring fruit in a political climate that changes NASA administrators frequently.

It's the year of innovation in China. Led by President Hu Jintao, the government is exhorting companies to transform China by focusing on the lab as well as the factory.... Biotech startups are offering experimental therapies unavailable or prohibited in the West. ... The country's status as an incubator of deadly viruses is a powerful motivator ... "It's inevitable that [the mainland] will become an innovation center," says Vince Feng, Hong Kong-based managing director for General Atlantic Partners, a U.S. private-equity fund that has invested $48 million in Beijing Internet company Oak Pacific Interactive. China has history on its side, Feng argues. "Whenever manufacturing is located in a country, innovation always follows,"  [Bruce Einhorn, Business Week, Nov 6]

And what is the USG doing to improve US innovation? Well, the free marketers are trying to kill market intrusion programs like ATP and MEP. The federal mission agencies are pouring the SBIR money into dribs and drabs of minor league self-serving technology advances. And the SBIR multiple beneficiaries weep all over the politicians for more such protection from the innovation furnace. The only good news is that the Chinese government is probably intruding even more into the market.

No Free Lunch. "Massachusetts' high land and housing costs are driving the state's workforce away", says the market-oriented Pioneer Institute for Public Policy Research ...Nine specific industries in the Bay State have costs of doing business that are 20 to 30 percent higher than for their counterparts in New Hampshire, North Carolina, and Texas.  There's a price for a great intellectual climate and a smart mobile work force.

Good or bad news on immigration from Mexico: Bush signed the higher, longer fence bill that will help keep the illegals in the US where they are in demand. Election year fantasy laws to repeal the laws of economics. Supply interdiction does not work against a strong demand except in the mind of politicians. High tech small businesses, on the other hand, have to be realistic about the laws of economics.

Quietly fixing a technical problem usually makes customers happy. But not when the problem is in voting machines and the voting authority isn't told when Diebold "corrected" a motherboard problem. Fixing electronic voting equipment is too sensitive in a world of conspiracy theorists to be left to technicians behind a curtain. Voting has to be completely transparent and auditable.

For Prosperity, Elect a ???. Does the stock market do better when a Republican is president or when a Democrat is? ...  far better under Democrats. .. during those 72 years [1927-1998] the stock market returned about 11% more a year (than Treasury notes) under Democratic presidents and 2% more under Republicans. [Hal Varian, NY Times, 2003] Hoover was frozen by conservative orthodoxy and Clinton got a great ride.  Oh sure, each party can rationalize a way out of blame times while taking credit for good times, but it's all blather because the president has little to do with stock prices during his tenure.

pursuit of an ethical policy is rarely a practical option because politics is the amoral art of the possible, the skill in choosing between the disastrous and the unpalatable [AJ Stockwell, History Today, Nov 06]

Chasing Hydrogen. The administration is announcing, just in time to get the hydrogen vote, $100M for 25 hydrogen R&D projects. [Houston Chronicle, Oct 25]

CT Events. One by one, leaders of newborn companies, from CoolSpine to PowerToad, pitched their products from a podium. In two minutes or less, they talked about the billion-dollar markets they planned to tap and played down any looming competition. ... and the Connecticut Technology Council gave a demonstration of a new database that is designed to help new companies with big ideas, said Liddy Karter, a council director. When launched next month, the database will catalog and store information on start-up companies with potential for growth and less than $10 million in sales. [Hartford Courant, Oct 20]

Little Capital. GAO found that only 7% of the DoD SBIR awards went to firms that had received venture capital investment. It's no surprise that DOD cares little about third party investment or anything but their own immediate R&D requirements. [GAO Report, Apr 06] But with Congress and the White House run by Republican free-marketers (except for pork), why would we expect any link between government and private investment?

Just Glory. DARPA says since the latest DOD Appropriation forbids cash prizes for innovation contests, the three best robots in city traffic will not get a $2M check like the Stanford team got last year. In the form of a partial prize, DARPA did pay eleven contestants $1M each to participate. [Alicia Chang, AP, Oct 20]

Massachusetts gubernatorial candidate Deval L. Patrick said he would take a dim view of using state tax incentives as a major tool for attracting business expansion in the state, saying companies whose plans turn on tax breaks probably aren't worth attracting. [Boston Globe, Oct 22]

Noting that the [New England] region has suffered a loss in manufacturing, as have other parts of the nation, [Dep Commerce Secretary] Sampson told economic developers there was no golden age to economic development, only an ever-changing marketplace where the key to success is looking ahead and capitalizing on new ideas and approaches. [Manchester Union Leader, Oct 20]

NASA handed out 120 Phase 2 SBIRs (from 280 proposals) apparently all at the maximum allowed amount $600K. The list included many of the usual suspects doing the usually suspected stuff. The list by firm.  One multiple winner had had 120 Phase 2s and 220 Phase 1s; another multiple winner already had about 80 Phase 2s and 250 Phase 1s which supplied something like $70M to feed an average staff of about 20 employees since 1988.  One firm has had at least 67 Phase 2s and 160 Phase 1s. One multiple winner has had $200M of SBIR. One firm has had at least 90 Phase 2s and 220 Phase 1s. And on and on.  All of which mocks NASA happy talk about commercialization in its SBIR. The brutal fact is that the centers, not the commpercialization talkers, run the selection show and don't care about actual commercialization or economic return. They just want their government R&D done.   Rookies: eight winners had no Phase 2s as of two years ago.

"The Chinese Government helps out its manufacturers -- our government doesn't," says Combs. [Tracy Purdum, Industry Week, Oct 11] A business leader complains about not enough government while I presume complaining in the next hour about too much government. I wonder if conservative SBIR winners complain about government meddling and inefficient pork. Where you stand depends on where you sit. One response to the IW article said: This is a first! A congressman saying our government needs to help manufacturing. And the truth is that China DOES help it's manufacturing base. I do not feel our government does. The one way they could would be to force China to stop floating it's currency. Also, our government must acknowledge the economic value of manufacturing.  After the respondent learns the difference between "it's" and "its", he/she can read up on the continuing politics of helping business. I'm sure the responder has a unique and personal definition of such help. I also wonder if he/she is willing to pay the price to play in business politics.

Free Lunch Time. Republican leaders this week reminded candidates to focus on local issues, such as money they have brought home to build roads and bridges or for libraries and schools. [Jeanne Cummings, Wall Street Jounral, Oct 18]  Politics is local, and the national Treasury is a free piggy bank.

Where's My Hydrogen? mattnyc99 writes In its new cover story, 'The Truth About Hydrogen,' Popular Mechanics magazine takes a close look at how close the United States is to powering its homes, cars and economy with hydrogen — including a calculation of where all the hydrogen would come from to meet President Bush's demands. Interesting that they break down the future of hydropower not by its advantages but by its challenges: production, storage, distribution and use." [slashdot.org, Oct 17] Panaceas are for politicians; the real world has to deal with choices and economics.

No interest like a vested interest. [85] Silicon Valley executives and politicians signed a letter Monday demanding that federal lawmakers lessen the nation's dependence on oil, ensure more flex-fuel vehicles are sold and use electricity for transportation.  [San Jose Mercury News, Oct 17] How green is our valley!

"A good announcement here, a good announcement there; the fact is that government handouts don't create jobs," [Michigan] state Republican Party Chairman Saul Anuzis says.  But as a political move, the drumbeat of business-subsidy announcements looks to be working  [Christopher Cooper, Wall Street Journal, Oct 16]  If, a big IF, government subsidy programs, SBIR included, are meant for better economic efficiency because of a true market failure, they should be judged by their economic efficiency, and not just their politcial efficiency. Handouts to uncompetitive firms rarely improve on the economic results of just letting capitalism do its thing. SBIR was predicated on the idea that small firms should get the same percentage of R&D business that small firms get in the private sector. A fair-share argument with no economic justification, which has been demonstrated after twenty years of handouts with no showing of any better economic results than doing nothing and letting government invest its R&D as it sees best.

Have Hearings, Will Spend.  Examining hearings of 14 Congressional committees, political scientist James Payne found that 1,014 witnesses argued in favor of greater spending while only seven advocated less, an imbalance of 145 to 1. This is worse that a Cuban election. [Wall Street Journal, Oct 16]

District 3 Mike Turner (R) Richard Chema (D) It's refreshing when a Republican endorses public-private partnerships to revive his deteriorated urban district, as Turner does, rather than trotting out the same old claptrap about the miracle of the market.  In Ohio's District 3, Esquire magazine endorses incumbent Turner. Maybe Turner could insert a lot more private into SBIR. 

Getting Invention Safely to Market. About four months ago, WiSys produced a catalog of roughly 50 UW System inventions intended to make it easy for Wisconsin companies to find technologies they might use. ... from therapeutics for treating alcoholism and seizures to fluorescent molecular probes, and a method for determining water contamination, age and quality. WiSys visits campuses to find the technologies, and works through the Wisconsin Entrepreneur's Network to approach local businesses about using them.... a subsidiary of the Wisconsin Alumni Research Foundation, the patenting and licensing arm of UW-Madison, and one of the oldest and best-endowed academic technology transfer offices in the country. [Kathleen Gallaagher, Milwaukee Journal Sentinel, Oct 14]

Susan Wood made a stir a year ago when she quit the FDA in protest after the agency refused to make emergency contraception available over the counter. (FDA later reversed its decision.) Now, Wood is back in the news as a co-founder of Scientists and Engineers for America (SEA), a political action committee backing pro-science congressional candidates in next month's elections. [Science, Oct 6] Want the government to do what you think is right, influence politicians with more than pleas.National Competitiveness Investment  - An Act. The President, through the head of each Federal research agency, shall establish a program, to be known as the Innovation Acceleration Research Program, to support and promote innovation in the United States through research projects that can yield results with far-ranging or wide-ranging implications but are considered too novel or span too diverse a range of disciplines to fare well in the traditional peer review process. Priority in the awarding of grants under this program shall be given to research projects that--  1) meet fundamental technology or scientific challenges; (2) involve multidisciplinary work; and (3) involve a high degree of novelty.  S.3639  Council on Competitiveness President Deborah L. Wince-Smith said Hooray. Just what the agencies need: another telescoped grand objective program with its own rules. As if SBIR weren't enough burden already. Stay tuned to see if any money is actually appropriated or whether it is just an election year stunt.

Expenditures Rise to Exceed Income. According to the WSJ, "the federal budget expanded to $2.7 trillion last year, a 9% increase, or three times the inflation rate. Over the past six years the federal budget has increased by 49.2%."  The budget deficit is shrinking because of a "tidal wave of tax revenues:" Tax collections have increased by $521 billion in the last two fiscal years, the largest two-year revenue increase in American history (even adjusting for inflation). [Mark Perry, Carpe Diem blog, Oct 7]

What's Congress For?  Schenectady NY wants its three Congresscritters (everybody has three except DC's none) to somehow stop a defense contractor from closing a local operation and moving the 260 jobs to Pittsburgh for more efficiency. [Albany Times Union, Oct 12] Why does the federal government never shrink? Because the voters want goodies. They must think the federal money is free, and no Congresscritter is likely to tell them otherwise. Somehow they think that federal money comes from heaven or whatever other magic they believe in. SBIR advocates do the same thing: beg for favored treatment while demanding efficient government.  Everyone wants the benefits of dynamic capitalism (oh, hate socialism) without paying the price of economic efficiency. And why do we see unending stories of sloppy and corrupt government? Long ago Schenectady was a thriving industrial center with the core of General Electric and American Locomotive, with industries all over the Mohawk Valley within reach of the Erie Canal and the New York Central RR.

Every State Hopes.   the Rhode Island Research Alliance will award $1.5 M in grants this year in support of technology research in the state. ... for the competitive research grants, to be awarded in amounts up to $200,000, comes from the R.I. state budget. ...  fund research that will attract follow-on investment from federal and private-sector sources [Mass High Tech, Oct 11]  The politicians spend tax money to pursue dreams of government influence on the private economy. It takes dollars from the private sector to re-cycle to the private sector after a fraction is skimmed to support the politics. With concentrated beneficiaries and diffused costs, such programs are irresistible to politicians and apparently ignored by the taxpayers who are busy earning the bread from which the taxes will be taken to buy votes. Application season Nov 1-15.

SBA is unveiling a revamped Web site today to give business owners a centralized source of regulatory information. Business.gov, formerly devoted to starting and managing a business, now focuses solely on compliance. The site pulls together links from 94 federal agencies' Web sites on business compliance topics ranging from hiring and firing employees to importing goods. [Wall Street Journal, Oct 12]

DOD money for researchy things (6.1, 6.2, 6.3 in DOD-speak) will rise by less than 1% for 2007, which is a lot better than Bush's proposed 16% cut. In an election year Congress hates taking anything away from anybody. So, SBIR money should stay about the same.

Don't Ask.  FDA isn't prepared to ensure the safety of products made with nanotechnology, [because] lacks funding and regulatory power to adequately oversee nanotechnology and may miss potential safety problems or spot them too late to prevent harm, said Michael R. Taylor, a professor at the University of Maryland School of Medicine and a former deputy commissioner of the FDA. [St Louis Post Dispatch, Oct 6] Don't ask an administration that hates business regulation to get out in front of a problem with potentially profitable advances. If there are no demonstrable bodies in the streets, why meddle?

For Togetherness. the most important motivation for participants to form a joint venture was to benefit from the complementary R&D expertise of their partners. In fact, most ATP joint ventures would not have formed without an ATP award. Thus sayeth O'Brien,Wang, Shipp, and McTigue, [Findings from the Advanced Technology Program's Survey of Joint Ventures, GCR 06-889, July 2006] who surveyed ATP winners 1990-2001. There's a bit of circularity running around here: ATP favored combinations of companies for the awards and then surveyed the winners to find out why they combined. The winners needed to say something other than we did it for the money. All hail softball surveys of beneficiaries to justify government funding programs!  Let's have another round of SBIR surveys as well. Michigan, today, is at a crossroads. Start a handout program with some dire and critical situation. This one is the The 21st Century Jobs Fund that will appropriate $394M (if Michigan doesn't collapse before 2007) for commercialization (of anything that will replace auto building).  Applicants must leverage other resources as a condition of the grant or loan. Leverage is bureau- code for sharing the cost. Whom will the state tax to get the money? The politicians mumble.

Almost Heaven.  West Virginia University's new Health Sciences Center is advertising for 42 top health scientists for a new center to be maninly funded by Wyeth. Tenure offered if the holder can get funding from NIH within four years.  Candidates who bring present NIH programs go directly to tenure. [Vicki Smith, AP, Oct 4]

The Walls Have Ears. US Attorneys in more than one jurisdiction will and have prosecuted cases of SBIR fraud in duplicative contracts and fraudulent work after a worker in the company went to the US sheriff with a legally binding promise of a reward of a percent of any money recovered from the guilty company and owner.  Protect yourself: in your proposal explain any past or pending contracts related to your proposed project, and see that you do not charge the government twice for the same work or charge the government for work never done at all by merely copying results from earlier work. The government doesn't mind your repeating testing and experiments if you change the conditions of the test and honestly report the results.  

Some Massachusetts Pork Chops.  The budget includes line items for the following companies and institutions: Massachusetts General Hospital/Harvard University -- $15.905 M for the development of the medical free electron laser;  DRS Technologies Inc., Hudson, Fitchburg -- $11 M for the Permanent Magnet Motor System;  Center for the Integration of Medicine and Innovative Technology/Partners Health Care Inc. -- $9.6 M to develop minimally invasive medical technology;  University of Massachusetts, Amherst and Lowell -- $4.6 M for nanomanufacturing, communications antenna and biomass research.  [Mass High Tech, Oct 2] Why pork? If these items were competitive, they would be funded by the federal agencies who would conduct competitions. The only competition for these awards is political. Will the Mass voters reward the politicians for handing out the goodies at the expense of the other 49 states, or will they realize that that Mass voters are paying for similar goodies in the other states in a way that the only winners are the funded entities and the politicians? If the voters everywhere cannot see through the scheme, they deserve the sloppy and expensive government they get.  

More Science, Less Tax.  In an effort to please everyone, a House panel wants to up the NIH budget by another 5% [Science, Sep 22], while the Ways and Means Committee plots ways to cut taxes. What they need is either some new math or continued public disinterest in deficit financing. If everybody gets something, who will complain except the future voters who will get stuck with the bill after the present lawmakers have passed on?  After all, what's more important than buying votes for the upcoming election?  On the way out the door to go campaign for re-election, Congress ponied up another $70B (war is expensive) for continued war prosecution. (hundreds of billions and no one has to pay any extra tax!) After the election, we will again have budget discipline in the abstract and profilgacy in the details. It will all be fine until the Chinese stop financing the gap at low interest rates.

The fantasy doubling of SBIR was declared DOA in the Senate in the crush of competing priorities, says SBIR Insider Newsletter. The Small Business Committee politicians made the usual encouraging noises for a proposition that had little chance of success. Not content with diverting 2% of federal contract R&D, the small high tech grubbers wanted twice as much despite no showing of any benefit that would not have been obtained if the agencies were free to spend it as they wish. [Sep 06]

September Surprise. Just before his re-election vote, the Governor announced a grand plan to revitalize job growth  although My personal philosophy is to let the private sector do what it does best by driving efficiency and new ideas, but these are some smart, sensible ways we can help. ...  Innovation Tennessee is an economic development initiative hosted by Nashville nonprofit Tennessee Tomorrow Inc., which would receive $5M from the state's Department of Economic and Community Development to provide seed funding to firms commercializing new technologies.  Find out more about the "Next Steps: Job Creation" strategy on Governor Bredesen's website at: http://www.tennesseeanytime.org/governor/viewArticleContent.do?id=865&page=0
[SSTI, Sep 27]

How to Get Funding For an Energy Startup:   Seek Government Interest (there's just nothing quite like a political subsidy); Show Some Success (hopes and dreams won't suffice); Look for Investors with Experience in Your Field; Be Prepared to Wrangle Over Valuation; Don't Overestimate Customers' Willingness to Change (you have to adapt to them); Walk the Walk (eat your own cooking).  [Jonathan Shieber, Wall Street Journal Startupjournal.com, Sep 25] If all else fails, try the Energy Department SBIR where economics isn't so important; it's free even if somewhat suffocating.

Pandora's NanoBox. If federal officials, business leaders and others do not devise a plan to fill the gaps in their knowledge of nanotech safety, the report warns, the field's great promise could evaporate in a cloud of public mistrust concludes an NAS report "A Matter of Size." [Washington Post, Sep 26]

Liberty Beware the Executive.  The Republicans' political frenzy of security lawmaking looks like it will hand an authority-minded President, weakly constrained by elastic law, license to be arbitrary in designating "unlawful enemy combatants", a term that is easier to say than to define. Critics of unrestrained government should be aware of the dangers of speaking out in ways that challenge such an enabled strong executive. Think how Mugabe and Chavez got to be what they are.

Homeland Security, the adopted darling of Bush politics, is on the street again for SBIR/STTR. What can we read from its last batch of awards from its still new SBIR?  The latest Phase 1 SBIR list had 44 awards to 36 firms. Nine firms got their very first SBIR ever.  Five awards went to one firm that has already won at least 589 SBIR projects of which about half went to Phase 2 (a normal ratio).  In rough numbers, that's about $200M of SBIR to one firm over 16 years (SBA data is two years behind) as the firm grew from a handful to over 100 employees.  That's an average of over $10M a year to support an average of 50 employees which is about $200K per employee. Clearly, a firm that the government (including DHS) loves.  Three other firms have had over 200 Phase 1s each. Inference 1: experience helps. Inference 2: commercialization history is irrelevant.

Perfect Computers. "Apparently Maryland election officials never have computer problems. That's why they're fighting so hard to keep their Diebold e-voting machines. Washington Post reporter Marc Fisher received nothing but bad attitudes, dodges, and excuses when he attempted to discuss the issue with the state elections administration and Diebold." From the article: "I asked the state's elections administrator, Linda Lamone, whether Maryland wasn't just a bit too quick to adopt electronic voting. Doesn't the computer at your desk ever freeze up on you? 'No,' she replied. Never? 'No.' But surely people in your office have had that experience? 'No.' (Maybe we've found the solution to Maryland's voting problem: Everybody head on down to Linda Lamone's office, where the machines work 100 percent of the time.)"  [slashdot.org, Sep 23] If you believe in infallability of electronic voting machines, I have a bridge I'd like to sell you who are underestimating the imagination of unethical people when great power is at stake. How many rigged machines do you think would have been needed to grab the Florida 2000 presidential vote? Do you think that state and local election officials are up to the 100% electronic security task, especially the ones politically appointed? 

Think Rust is Good. what does a Rust Belt state have to offer companies in a high-tech hotbed like Austin?  geography, tax reform and research and development incentives. ...  Ohio also has created a $1.7B R&D initiative to focus on new product development, and the state is creating venture capital funds to spur investment.  [Lori Hawkins, Austin Statesman-American, Sep 9]

DOD abandoned a controversial proposal that would have required universities to keep a watchful eye on foreign nationals involved in defense research. ... the Pentagon has removed the badging and separate work area requirements, bringing its rules in line with those at the Commerce and State departments [Science, Aug 25]

A refrigerator hit the bullet. MDA shot down a mock warhead over the Pacific with a "kill vehicle" the size of a refrigerator (says AP) that ran into it at 18,000 mph. Things are still moving toward a workable system, as they have been from the mid-1980s. It ain't easy to do reliably even with plenty of warning. Unfortunately for the US struggle against stateless terror, it's irrelevant.

More Ideas than Money.  The NIH's budget has flat-lined in the last three years, and the grants awarded during the last year of the glory days are running out. As a result, the plug is being pulled on promising research by scientists with solid track records.  [Wall Street Journal, Sep 1] As always with a free good, unlimited demand. It's musical chairs, when the rising money music stops, the freely minted post-docs find too few open chairs.

In-Q-Tel says it has: Delivered more than 130 technologies, many of which have contributed directly to CIA and IC missions. Technology delivered by In-Q-Tel, for example, makes it possible to fuse data from maps, images, text and other sources; visualize information in ways not previously possible; rapidly process vast amounts of information in multiple languages; make sense of seemingly unconnected information; and identify the most critical intelligence faster and more effectively.      Engaged with more than 90 companies, most of which were previously unknown to the government, and more than 10 universities and research labs, which In-Q-Tel identified through its commercial and academic outreach programs and by reviewing more than 5,800 US and international companies' business plans.     Cultivated a network of more than 200 venture capital firms, 100 labs and research organizations, further broadening the IC's access to innovative technologies.   Leveraged more than $1B in private-sector funds to support technology for the CIA and the IC.  Attracting private capital to develop government usable technology is where SBIR has fallen on its face. Because the mission agencies, who control most of the SBIR money, would rather have day-to-day control than a ride on a productive machine.

Infinite Money. The politicians have dreams for doing good that merely require infinite money. What could be better for all than doubling basic research over ten years? Or massively increasing funding for sci-tech education?  Science [Aug 18] reports that a small group of staffers is at work in Washington, D.C., on legislation that could influence science spending for years to come. Their goal is to craft a broad bill aimed at bolstering U.S. competitiveness that Congress could pass before the November elections.

MIT Tech Review has an interesting analysis of the democratization of cruise missiles with emphasis on a conflict with Iran.

only 2 years after the first center was created, Congress has become so unhappy with DHS's management of its research portfolio that it is poised to levy a double-digit funding cut next year across the department's $1.2 billion science and technology directorate, including the centers program. A Senate panel last month labeled the directorate "a rudderless ship without a clear way to get back on course."  ... Legislative aides say that members felt they had no choice but to crack down on DHS's research activities after finding what the House appropriations committee calls "financial reporting deficiencies, including serious difficulties maintaining accurate financial records related to obligations and disbursements." In short, says one congressional staffer, "the directorate [has failed] to answer how it is executing its programs and what it has done with its money."  [Yudhijit Bhattacharjee, Science, Aug 4]  Politicans typically have trouble with basic research because it doesn't produce clear policy answers in a short time (before the next election).   Never mind that Congress created part of the problem by inventing the DHS and wanting instant answers

Wisconsin's 152 economic development programs are not adequately tracked, often overlap one another and have included situations in which businesses awarded grants later laid off employees, according to a sweeping legislative audit ... tax credits provided to the insurance industry cost more than $90,000 for every job created. [Patrick Marley, Milwaukee Journal-Sentinel, Aug 8] Handouts [including SBIR] sound better in politicians' mouths when they are announced than in the cold light of economic day after. 

A Naval Prize - sort of.  The Chief of Naval Research offered to spend $1 million for innovative S&T ideas brought to ONR during last week's 2006 Naval Science and Technology Partnership Conference. Note that it is not a prize in the classic sense of a reward for something valuable achieved; nor does the Navy press release say whether a whole million will go to every hot idea or will be spread like peanut butter over all the good ideas.  Jumping on good ideas is a great idea itself, but ONR and the larger Navy R&D establishment could always do it any time it wants. If a two-star officer cannot write a check for $1M, what are all those stars for?

Models are for Slowpokes. At an innovation conference organized by the White House STEP, Graham Mitchell of Wharton spoke of lessons from the private sector in a "resource constrained environment" (bureauspeak for "there's never enough money"). One was that defensive research was the arena for models - when most data are known and progress comes in increments - and that action people of fast change live in a world of experiment and learning by doing and juggling options (that seem to shift too often).  The federal mission agencies who use so much of SBIR money for models could take the lesson that models are not the route to innovation; they are the route to improving your understanding of what already works. As thermodynamics was invented to explain the steam engine and form an ever improving base for incremental improvements. 

the American Competitiveness Initiative, called for by President Bush ... has committed $5.9B in the fiscal year 2007 to increase investment in research and development, strengthen education and encourage entrepreneurship, largely through basic research in technology and manufacturing. [Cleveland Plain Dealer, Aug 5]

In Fiasco Thomas Ricks’ says the war on Iraq and subsequent occupation was ill-conceived, incompetently planned and poorly executed. I have no quarrel with that. What dismays me is that anyone expected any different. All wars are full of incompetence, mendacity, fear, and lies. War is big government, authoritarianism, central planning, command and control, and bureaucracy in its most naked form and on the largest scale. The Pentagon is the Post Office with nuclear weapons. [Alex Tabarrok, marginalrevolution, Aug 2]

Rationalizing Public Spending.  Iowa discusses its spending public funds for economic development.  It recognizes that much of the argument for public subsidy is mere camouflage for benefitting politically targeted groups. Simplistic attempts to determine state and local fiscal surplus run the risk of seriously overstating the public revenue yield over total costs and should not be done without extensive research. Unfortunately it is tempting for vendors and decision makers to try to build models that use simple weighted averages to estimate state and local public service cost functions. These simple models rarely can stand much scrutiny, however, before they are determined to be either invalid or simply incorrect. Read about market failure before cheering for programs like SBIR.

climate scientist Andrew Dessler at Texas A&M started a blog  The science and politics of global climate change. You, too, can have an opinion. And the government loves to fund model work with SBIR. Climate models are such fun since they have necessary simplifying assumptions that give the do-nothings a lever. The models are like doughnuts that give the opiners a chance to focus on either the solid or the hole.  The do-nothings don't like to buy insurance and so they reject the precautionary principle and presumably expect that if it goes wrong, the government will bail them out. Conservative until they need government. 

Hugh Hewitt notes that "Bush and his team ... continue to enjoy bedrock support at home and abroad" due to their handling of the war on terror. It's certainly true that Bush is down to his bedrock  Sure, 40% of the electorate will vote for the Republican, no matter what. [Professor Bainbridge blog, Jul 27]

Dept of Energy announced 104 Phase 2 SBIR/STTRs to 78 companies of which 25 awards went to 13 firms that already had a total of something like 1500 Phase 2s. One experienced firm got five awards. Which suggests that Energy acts just like the other mission bureaus in funding R&D that directly serves DOE needs with little regard as to whether the company has the least commercial instinct.  A further clue is the ordinary work shown in the posted vague abstracts. Expected benefit to the economy?  Plenty of blather.

A Bullet for ATP. Senate Appropriations Committee approved ATP's termination in FY07. Not everything good has to be done by the government. SBIR doesn't run the same risk since it gets no direct appropriations. Eventually, slowly, the handout programs have to be whittled down to prevent bigger deficits as the Boomers switch from filling the Treasury to draining it. Maybe a Dem control of Congress in FY07 would resurrect ATP but it still could not avoid the whittling knives. 

PolySci Meets Religion.  Karl Rove –- explaining why Bush planned on vetoing the bill — told the Denver Post that “recent studies” show researchers “have far more promise from adult stem cells than from embryonic stem cells.”  The Chicago Tribune contacted a dozen top stem cell experts about Rove’s claim. They all said it was inaccurate. So who wrote the “studies” that Rove was referring to?  White House spokesman Ken Lisaius on Tuesday could not provide the name of a stem cell researcher who shares Rove’s views on the superior promise of adult stem cells. [Think Progress, Jul 19]

From Washington to Washington any pork money will do.  A proposal to build a new semiconductor and micro device research and development laboratory in Vancouver, Washington recently got a jump start thanks to Congressman Brian Baird.  [who] secured $100,000 in federal funding to be used towards Phase I development of the facility. ... The [money] will come from the Housing and Urban Development Economic Development Initiative’s Facilities Construction/Renovation account.  [Washington Tech Center] Do you think the voters of southwest Washington will thank (and re-elect) their Member while they complain about out-of-control federal deficits?

Must-Pass Legislation. A new federal courthouse to be built in downtown Nashville would be named after Senate Majority Leader Bill Frist under a proposal approved by a Senate committee. [Nashville Tennessean, Jul 25]

Only the Rearview Mirror Works. Every time Alan Greenspan used to go up to the Hill, Sen. Paul Sarbanes (D., Md.) would go though chapter and verse of the Fed forecast of years past and conclude the thing is never right. Mr. Greenspan would always agree. Everybody should view the Fed forecast as just another opinion. It's no better or worse than Merrill Lynch's opinion, for example. [James Bianco, Wall Street Journal interview, Jul 21]

Take Every Chance to Pander. While great issues of finance and world conflict thraten the national stability, our politicians focus on their "base" which itself is focused on "values" - religious questions of no societal impact. Eleven Republican senators who started last week with perfect scores from the National Right to Life Committee Inc. saw them drop to 50% because they supported broader embryonic stem-cell research.  But the dramatic drop was to last for only a matter of days. The senators will have the chance Tuesday to raise their scores with a vote to strengthen states’ parental consent laws. [Wall Street Journal, Jul 24]  They want to get re-elected so they can do nothing for the next 2-4 years. 

Entrepreneuring Pays.  The truth is that there is so much money to be made in smuggling both drugs and people across our southern border that even the tripling of the size and budget of the Border Patrol in the past decade has done little to stem the flow.  [John Fund, WSJ Opinion, Jul 24] Wherever a demand, a supply will arise at the market price. The lessons learned from Prohibition have yet to be absorbed by our politicians who are busy voting against sin.

Three Texas Investments The committee of 17 picked three beneficiaries for $2.25M: $1 million to Endothelix for the development of cardiovascular diagnostic technology; $750,000 to itRobotics  developing inspection robots for tubes in power plants and nonenergy pipelines; and $500,000 to Bauhaus, an animation software company. ... The governor, lieutenant governor and House speaker approve projects for funding. [Austin Statesman-American, Jul 22] Since the $200M fund is still new and hopeful, the politicians take center stage as the governor does the announcing. Later, when the mediocre results come in, the "bureaucrats" can be the symbol.  The role of the usually well-paid and safely employed civil servant is to give the credit to the politicians for what goes right and to take the blame for what does not.

capitalism has not corrupted our souls. It has improved them. ... liberal capitalism is succeeding. says Deirdre N. McCloskey in her Five hundred dense pages of ethical philosophy The Bourgeois Virtues . Reviewer Matt Ridley [Wall Street Journal, Jul 22] says Fashionable thinkers sneer at the free market and its practitioners, but economic liberty may actually be a force for personal goodness and And the bourgeoisie is not entirely a lost cause while it has such able defenders.  If capitalism is succeeding, why do the politicians need to invent programs like SBIR to correct its "market failures"? They don't have to - and it's not the least bit clear that there is a "market failure" in seeding new technology - but they cannot resist high blown rationales for their pork. Anyway, the actual agency management of SBIR doesn't aim at improving capitalism; just at doing what it is told to do with the least damage to what it wanted to do in the first place.

A Merrillism: You can't succeed in government until you acknowledge that it's about representation, not efficiency.  [Washingtonian, Aug 06]

Pork in Space  Congress is shameless in routing pork spending back home. But would Congress gut NASA and de-fund valuable scientific programs in order to fund more pork? The answer is yes: Congress would.  Even the replacement for the space shuttle, a new generation of rockets and launch vehicles due in 2010, is not immune. The projects will have to be put on hold in order to spend billions on specially earmarked pork projects. NASA Administrator Mike Griffin is basically begging Congress to ease up on the pigging out, lest NASA find itself unable to carry out its mission. Then again, a problem with being dependent on a government agency for basic science and space exploration is the political baggage that comes with every decision. You essentially get what you pay for with the government-run model, then you pay again. [USA Today Jun 11 quoted by Reason Express Jun 13] SBIR qualifies as pork: the agency is directed not only what business to do but with whom to do it with no standards for evaluation.

Army Turmoil.  Stand by for an SBIR ground attack - the Army says it will cut its domestic spending to fund overseas combat. [story from Washington Post, Jul 21]  That usually means shuffling funds away from unliked programs, like SBIR, even those mandated by law. The first step would be to freeze SBIR for a while, and award no new contracts or extensions of present contracts. Oh sure, it's mandatory, but so is fighting in Iraq. Only Congress can resolve the conflict and in an election year, a Republican Congress's attention will be elsewhere, as in "values" shows against flag burning and gays. 

More Energy Science.  House and Senate appropriators passed a 14-16% increase for DOE's Energy Science, plus of course $30-48M earmarks for its political friends. See http://www.aip.org/fyi/2006/068.html  Congressional devotion to energy science goes up and down with the price of oil.

More Government Advice on Commercialization.  NIH will continue its Commercialization Assistance Program for SBIR Phase II awardees. The program smells like the DOE program with Dawnbreaker, only NIH is using LARTA as the "teacher". training workshops, individual mentoring and consulting sessions, ending with an opportunity for companies to present their business opportunities to potential investors and strategic partners at the NIH Life Sciences Showcase.  The problem is that the commercialization effort starts only after NIH funds companies with technology geared to government tastes. If NIH were serious about commercialization, it would incorporate commercial potential as a live criterion in its SBIR selection. No chance when selections are made by panels of science experts. While peer review may be great for science, it won't tag good economic potential. But then NIH doesn't need commercial success; it only needs a show for Congress. Details.

Silicon Cabal? The ever-litigious New York AG Spitzer is suing several chip companies for fixing prices on DRAMs. How much free publicity can a gubernatorial candidate get away with? He is just one of 34 states filing their suit in California. Meanwhile, the US Attorney is looking for stock options fraud.

Reinforcing the idea that cool climates make energetic people, Maine's Creative Economy Council estimates that 8.3% of Maine's workforce is made up of creative workers - artists, artisans, engineers, entrepreneurs and researchers. In Maine, this group has an average income 33%higher than the rest of the workforce. How to do it: Maine's Creative Economy Community Handbook: Maine State Government Resources for Communities

Experience Again.  Homeland Security handed out nine Phase 2 SBIRs in its first go-round. By two years ago, four of the nine winners already had a total of at least 1700 SBIRs. Three of the nine had fewer than ten awards each. So, DHS acts like DOD and NASA in furthering its own R&D agenda with little regard to economic potential (although all the veterans probably spun a tale of commercial fantasy that satisfied whatever criteria the agency used). It's an old story: when proposing to mission agencies, tell them some commercial story that they can use to paper over their actual criteria of economic disinterest. The agencies all ignore the idea that  technologies with no economic future can only get developed and used if the government foots the whole bill, and then probably only ever for government service.

Energy for Software.  Tech-X Corp got five more Phase 2 SBIRs from 2005 DoEnergy for software projects to add to its collection of at least 19 Phase 2s in the past few years. Its Phase 1 collection from 2004 DOE was ten projects and from 2003 eleven Phase 1s. That's enough to keep a firm of 23 PhDs and some MSs well devoted to government service.  Prospects for more Phase 2 work should continue good from the eight DOE Phase 1s in 2006 and eight in 2005.  Economic Return on Investment and law of diminishing returns? Only the company and the DOE SBIR managers know because private firms don't have to tell anyone except the government, which is a great tool for preventing outside evaluation of a government program. And there is not much evidence that the government agencies care about ROI anyway.

Semiconductor equipment manufacturers expect a large growth spurt of 18%  in 2006, pushing sales to hit the $35.8 billion mark.. This is in contrast to an 11.3% decline in 2005 according to the SEMI Capital Equipment Consensus Forecast.  [Adrienne Selko, Industry Week, Jul 11]

consultant Ron Leckie concluded that makers of chip equipment and materials will need to spend a total of $16 billion to $20 billion annually on research by 2010 to keep up the pace of innovation. But together, they can only afford about $10.4 billion based on expected revenue. [Don Clark,Wall Street Journal, Jul 8]

Big State, Big Money.  Texas will put up $30M for a regional nanotechnology research institute at the UT Austin, one-thirs each from UT endowment, the state Emerging Tech Fund, and semiconductor companies. [Houston Chronicle, Jul 11]

Government Claims Firewall. a post by Bruce Schneier on his site indicating that the U.S. Navy may be patenting the Firewall. Whether or not it is their intention to do so is unclear. From the patent description: "In a communication system having a plurality of networks, a method of achieving network separation between first and second networks is described. First and second networks with respective first and second degrees of trust are defined, the first degree of trust being higher than the second degree of trust. Communication between the first and second networks is enabled via a network interface system having a protocol stack, the protocol stack implemented by the network interface system in an application layer." [slashdot.com, Jul 7] 

More Science Money.  Bush wants the Congress to spend $130+B more over ten years on basic scientific research and other stuff to boost U.S. competitiveness in the global marketplace through innovation. The other stuff is training thousands more science and math teachers and of course extend the popular R&D tax credit.  Oh sure, sounds good.  But why is it a federal task to train teachers?  A true conservative/libertarian would object to the idea that everything good has to be done by the government. He might alternatively invest no new money (that we don't have anyway) but just put the next decade's $15 billion or so to be spent on SBIR into companies and ideas that will transition high risk technological innovation from the nursery to market-competitiveness. For that, he would have to kick the mission agencies into a new mode of thinking about economic security and how to get technology that private capital will pay to develop.

Hopeful start, then budget decline. The taxpayers of Schenectady NY cut the subsidy for the six-year old business incubator, Metroplex Chairman Ray Gillen said his economic development agency supports the work done by the center. But it never intended to provide a long-term operating subsidy [Kevin Harlin, Albany Times-Union, Jul 7] One problem with all subsidy programs is that the politicians soon tire of paying when there is no politically exploitable news, particularly state and local politicians who have to balance a budget. And one contributor to that problem is the beneficiaries who live on the subsidy.  SBIR has managed to stay alive despite a heavy load of permanent beneficiaries with little incentive to sink or swim. Federal politicians can get away with permanent pork with seemingly endless deficit financing for which they too have no incentive to force constituents to sink or swim. States Keep Trying. The Illinois Department of Commerce and Economic Development will invest $500,000 in .. a venture capital fund. The money will be invested in Akoya Inc., a software firm with offices in Peoria and Northfield, which plans to expand its payroll from 15 employees to about 70 by the end of next year. [Chicago Tribune, Jul 6] No SBIR record. Sounds suspiciously like laundering state money through a VC fund to a company that the VC would not have picked with its own money. Else, why is the government be investing in a private firm?  Where is the "market failure" for a mere business expansion? At least SBIR was invented to cover just technology risk, not busines risk. If it doesn't work out, where will the politicians find the culprit? In the mirror? And if the $500K isn't enough for the job, where will the timely next tranche come from? 

Dangerous Thought. The murder rate of Iraqi academics has risen steadily since the April 2003 invasion. ... The hit list includes scientists, university officials, engineers, doctors, and journalists .... Says one engineering professor who is sticking it out in Baghdad, "We carry our coffin every day we go to work."  Sectarian undermining of opponents society, destroying modernism while seeking reversion to medieval standards, and plain kidnapping for money. [Richard Stone, Science, Jun 30]

We already know that many members of Congress have no clue what they're talking about when it comes to technology. [The Senator] talks about why government regulation of the internet is a bad thing: "The regulatory approach is wrong," are his exact words. If that's the case, why was the exact same Senator so damn eager to regulate all aspects of cable TV last year, saying that the FCC needs to crack down on cable indecency -- even though the law is pretty clear that the FCC has no jurisdiction over privately built cable lines? Once again, it seems we've caught [the Senator] contradicting himself. It's one thing not to understand the basic technology that you're trying to regulate (or not). But, is it so much to ask that the good Senator try to be internally consistent on whether or not regulating these networks is good or bad? [Mike, techdirt.com, Jul 6] Mike's fellow geeks piled on by lambasting politicians. They seem to forget the first law of politics - get elected and re-elected without ever fearing to insult the voters' intelligence. After all, reeds go only where the wind goes.

Yale Today, You Tomorrow. The federal government does not like sloppy accounting for its R&D money, and it can have a long memory. Yale University, a premier research place, has been subpoened to account for its grant-funded expenses for a decade that may have been used to pay for unallowed activities. DOD, NSF and HHS are jointly investigating. [Jennifer Levitz, Wall Street Journal, Jul 5]

Gotta Grow, Grow, Grow.  FOR THE FIRST time in three decades, federal funding for the National Institutes of Health was cut this year. .. could cripple that progress and prompt economic setbacks that have a ripple effect on other industries.  [James T. Brett, Boston Globe, Jul 5]  And who/what will pay for the endless expansion? Another supply-side upper class tax cut?

Making History? "For the first time in US history, a researcher has received jail time for falsifying research data to obtain federal grants. Eric Poehlman pled guilty to defrauding the government to the tune of nearly 3 million dollars by changing and making up research and was sentenced to a year in a federal prison work camp and a lifetime ban on further federal grants." [slashdot.org, Jul 1] Poehlman was a tenured research professor at the University of Vermont whose downfall started when one of his conscientious research assistants blew the whistle. [HHS Office of Research Integrity, Mar 17]

the roundtable's [2001] "Call to Action" has been pretty much ignored. Software quality is still bad, and I don't see much going on with ethics education for teenage hackers, or simplified security architectures, or "a holistic approach" that looks at technology in the context of everyday life.  .. Howard Schmidt—the former FBI agent and cyber-security advisor to Microsoft and eBay and the White House—.. said that little progress is made when nobody has to make progress. his new list of must-be-dones, taken from the President's National Strategy to Secure Cyberspace, which he helped to write back in 2002:  1) A national security response system that stops malware before it gets to PCs and phones and other connected devices;  2) Better hardware and software that configures and repairs itself ("I got great service when I worked at Microsoft. But what do real people do?"); 3) Awareness and training, as in teaching kids safety and security online; 4) Securing government networks ("We pay [government workers] a pittance…and we hire them away when they get expertise."); 5)  International cooperation on cyber-security  [Debbie Gage, eWeek, Jun 29]

Try a Plus-Up. The town of TREASURE ISLAND, Fla. isn't unlike a small (allegedly) high tech company. When faced with actually having to pay for a bridge with its own money, it hired a lobbyist who knew well an influential Congress critter.  Shortly the town got an appropriations earmark for several time the cost of the bridge, After that, the towns $5000 a month to the lobbyist  generated another couple of million.  Says the mayor, "They're worth every penny they get."  [Judi Rudoren, New York Times, Jul 2] Was it a free lunch or a mirage? Who is paying for all the Treasure Island bridges and roads? You are and they are because there are Treasure Islands all over America who see only concentrated benefits and diffused costs - the only way Congress can get away with the self-serving.  Good news and bad news: SBIR companies can do the same thing - get a Congress critter to earmark an appropriation, called a plus-up, for its highly worthy Phase III that the regular government doesn't seem to want. Washington teems with lobbyists ready to take your plea to Congress and your check to the bank.

Conflict of Interest Standards?? The Bush administration's cybersecurity chief is being paid $577,000 under a two-year agreement with the university that employs him and also does extensive business with the federal office he manages.  .. In his defense he says, I could make a lot more in the private sector, although probably not as a geek since a longtime attorney who has held a number of state and federal legal and managerial jobs, has no formal, technical background in computer security. [Ted Bridis, Raleigh News and Observer, Jun 28] The turmoil at DHS and the White House's Nixonian obsession with calling all the plays doesn't make the cybersecurity chief's job all that desirable for the hyper-talented. And Congress is not about to pay such a chief several multiples of their salaries to tell them how much they don't know about the world beyond getting re-elected. Now if the House districts were drawn by non-political boards, many more would have to compete for the political center, and then ...... we would have fewer flag-burning amendment circuses and more realistic budget discussions.

Democracy in action: Something for Everybody. House appropriators give NSF 7.9% increase, with the usual blather about national competitiveness. Plus tax cuts to pay for it. Fiscal fantasyland. At least the language has an innovation: innovation inducement prizes  allowed (but not mandated), acknowledging that The concept of inducement awards to encourage broad involvement in solving a specifically stated scientific problem has been a catalyst for scientific advancement since at least the early 18th century.

The Hudson Valley is going to be America's next Silicon Valley, said the New York governor  when AMD took a $1B state "incentives" deal to locate a 2000 employee plant in Malta, a small town on the route from New York to Adirondack Mountains vacations. That Capital District area was an industrial center in the 19th century where the Erie Canal met the Hudson River. Perhaps the 21st century will revive it as it competes with many other states for job machines. But chip plants don't make a great anchor for imitating Silicon Valley. It takes tons of R&D enterprises around at least one world class academic house, which Rensselaer Poly is trying to become. It also takes the kind of place where smart people want to congregate, which is not usually a place of icy winter (the Minneapolis medical equipment industry being a general exception).  I won't move back there where I grew up.

Go-Getter at Ames. Simon "Pete" Worden, the new director of NASA Ames .. was once called Darth Vader for his advocacy of missile defense as an Air Force colonel. He also championed the Pentagon's successful Clementine mission to the moon before retiring from the Air Force in 2003. An astronomer by training, the 56-year-old Worden is an old friend of NASA chief Michael Griffin. ... Name one radical idea you would like to pursue.  I think we can build a small lunar lander for under $50M in less than 2 years, in collaboration with private companies. We can start sending several of these landers to the moon. [Science, Jun 16] Pete was the bad guy who stirred the pot and made things happen albeit at the expense of alienating more conventional bureaucrats. Worden, Griffin, and astronaut Gary Payton all held the same job in sequence - chief of advanced technology for Star Wars. They supported SDIO/BMDO's approach to SBIR that sought companies with ideas that had a future after SBIR.

The "Trust Us" Administration. Cheney Assails Press on Report on Bank Data [NY Times, Jun 24] The Bushies believe passionately in a strong Executive where checks and balances apply only to other people. They even recently announced a goal of rebalancing power in favor of the President. But they misread the Constitution which intended a central government by representative  democracy - the Congress of elected representatives. The executive was meant to be weak. Late 20th century developments upended that idea as the Congress effectively ceded power to the Executive with a large central executive staff. Congress could, if it had some backbone, simply cut the executive staff and thereby cut the flow of information to the executive. But it is easier for Congress to let the President take the heat for decisions while Congress runs for re-election by grandstanding on the issue for the day.

Inland Washington has the Grand Coolee Dam and sells a lot of hay to Japan. Now it wants to seed  technology companies in a number of market sectors, including bio-products/health sciences, energy and the environment, value-added agriculture, and defense/homeland security with public money, some from federal government's Economic Development Adnminstration. A politician's dream. Sirti. [SSTI, Jun 19, 06]

Nationalism Still Rising. the Chinese telecommunications-equipment maker is stalled in efforts to spend $164 million on new facilities [in India] and has been forced to stuff 750 staffers into a hotel annex. India's government has rebuffed its efforts to obtain a trading license needed to sell directly to the booming domestic market -- rejecting its application at least nine times since early 2003, The given reason: national-security concerns. ...  India is experiencing China's economic might firsthand  [Peter Wanacott, Wall Street Journal, Jun 21]  Note that SBIR is equally nationalistic in locking foreign firms, and sometimes even foreign workers, out of developing innovation, no matter how beneficial it might be to US economic interests. Pork works that way. "Shut up," he explained.  We need to have the ability to have senior management on a similar and consistent schedule to have the collaboration we need to move forward. So said the federal department press secretary to "explain" a political appointee's canceling flex-time for employees. He either must be an oil man wanting to sell more gasoline for commuting or a hatchetman appointed to lower federal employees by discouragement. [Stephen Barr, Washington Post, Jun 20] What to say next time you want to be arbitrary about employee working arrangements in a way to drive the best minds elsewhere. The fellow has some track record: The Senate confirmed Dorr, an Iowa farmer, in July 2005, ending a four-year battle over his nomination. The Senate vote, 62 to 38, came after he wrote a letter of apology for making what critics called racially insensitive remarks in 1999 and for a controversy that led him to reimburse the government for some federal farm subsidies.

We say that we know better than federal officials and bureaucrats .. where to spend money, says US Rep Joe Knollenberg about the House Appropriations Committee. Pure politics plus power, but "we know better" forms the basis for the SBIR advocates' screeching for more SBIR money.  In a parallel, non-SBIR company got $37M over a decade for  ...  a technology involving magnetic levitation, was conceived as a way to keep submarine machinery quieter, was later marketed as a way to keep Navy SEALs safer in their boats and, in the end, was examined as a possible way to protect Marines from roadside bombs. All the applications have one thing in common: The Pentagon hasn't wanted them. [Charles Babcock, Washington Post, Jun 19]

Helmets to Hardhats aims at more recent veterans who, despite occupational experience in the military, often struggle finding the information and credentials they need in civilian life. Got a job needing doing?  Iraq vets have done much nastier jobs. Except for the GI Bill after World II and Korea, America does not reach very far to pay back veterans for putting their lives on the line while missing civilian job experience.  A medal, a handshake, and directions to the unemployment line. For the wounded, getting back into real life is incredibily tougher. Several states, including Wisconsin are doing the federal program

Let a Woman Do It.  In its Congressionally mandated efforts to get government contracts to women, SBA is now pressing a new rule that would let contracting officers restrict competition for some contracts to eligible women-owned small businesses.

The launch of Google U.S. Government Search, http://usgov.google.com , targets federal employees who often need to search across several government agencies.  The site is also designed to help citizens navigate convoluted pages of government-speak and tailors news feeds to their interests.  [Kim Hart, WashingtonPost, Jun 15]

Having It Both Ways. A university got the IRS to allow it to have a VC/incubator operation while keeping its tax deductibility. Any "profit would go to enlarging the fund. The great conflict with taxable risk takers for profit could be moot since the announced facts of the case say it is an economically depressed area, an indicator that sizeable profits won't happen anyway. The great dreams that a local company can invent Netscape or Lotus overlook the reality that economic success requires at least a small crowd of like-minded enterprises plus a world-class center of learning and large company R&D activities.

Since the first energy crisis 33 years ago, our nation has been unable to develop effective solutions.  [Wall Street Journal, Jun 16] Roger Altman (an Asst SECTREAS for Clinton) wants another ARPA for energy because federal R&D efforts are so small and unfocused as to be embarrassing. Which is a kudo for the real ARPA (DARPA this year) which has been at the leading tech edge for 40 years. A typical political approach - throw money at the problem - because the American public does not want to hear that they have to give up their cherished auto-centered life. And only the rare politician will tell the voters an unwelcome message. 

If they really want ARPA kind of results, divert some of SBIR from DOD and NASA and Energy into an investment tank run by Craig Fields or Dwight Duston if either of those two could be lured back into the hassle of being entrepreneurial in government. CIA's experience with In-Q-Tel may give a clue of what can happen when the dead fingers of government are pried from the innovation money pot.

SBIR's appeal for more money taps imto the pork-barrel tradition that keeps the military spending more money on the same stuff in the same places. "What's good for my state must be good for the nation", an echo of engine Charley Wilson for General Motors. Jonathan Karp tells the old story again in the (June 16) Wall Street Journal. And just like the destroyers from Mississippi, SBIR's fortune will swing on raw politics with no regard for economics or efficiency.

Chasing the Federal Dollar. seven states are aggressively trying to land a billion-dollar power plant prototype that's virtually pollution-free.  Illinois, which has a third of the one dozen sites chasing FutureGen, has up to $80M in incentives on the table,  [Jim Suhr, AP, Jun 18] Another federal opening to make one temporary friend and six enemies. Gratitude in politics, after all, extends only to what you will do for me next.

Once a Lab, Always a Lab.  Too many sensitive jobs—not just those of the researchers, but of the thousands of support staff at the laboratory—are at stake for New Mexico's representatives in Congress to let the place [Los Alamos NL] close. [The Economist, Jun 17]

a proposed amendment to the American Innovation and Competitiveness Act directing priority funding only for programs in the physical sciences, technology, engineering, and mathematics was changed to include the social and behavioral sciences, after AAAS wrote a letter http://www.aaas.org/news/releases/2006/0518letter.pdf Typical politics: threaten a change and then retreat before onslaught of  screaming interests. "something for everybody" explains why the federal budget is so hard to control.

Economic nationalism alive and well in flag-waving politics:  The House easily approved a measure Wednesday to block the Bush administration's efforts to ease restrictions on foreign ownership of U.S. airlines. [Houston Chronicle, Jun 15] Which suggests that pork-barrel plotters should emphasize the American exclusivity of any proposed program. Like "SBIR will foster American innovation," and "hold back the Chinese hordes". Never mind that there is little evidence that SBIR fosters much market competitive innovation at all.

a patent backlog of "historic proportions," says Jon Dudas, under secretary of commerce for intellectual property, while the SBIR pork barrel advocates claim SBIR is needed to fill a shortfall in innovative ideas. The Patent Office says it is hiring another 1000 examiners this year (if it can find good lawyers willing to work for the government salary), but given the scale of the bottleneck, but expert analysts say it could take close to a decade to fix the problem. [Seth Shulman, MIT Tech Review, M/J06 http://www.technologyreview.com/read_article.aspx?id=16789&ch=biztech ]

We Need More SBIR, Again. When you lose sight of the objective, re-double your efforts. After twenty years of SBIR that has produced almost nothing, Roland Tibbetts and the SBIR advocates have the answer: double the money again. Of course, Roland, who invented SBIR, does not admit that SBIR is a national waste of time. Instead, he talks http://www.nsba.biz/docs/tibbetts_sbir_reauthorization.pdf about the need for early finance for infant technologies in small companies. Roland makes the same wrong-headed arguments that were made for SBIR for twenty years. But more money in more mediocre firms for stuff that only a government could love will not yield any more national innovation. The basic problem is the structure that lets federal agencies do whatever they want with no evaluation. There is also no compelling evidence that America lacks capital investment in high innovation, nor that SBIR has done much to fill a claimed funding gap.  The advocates have consistently blocked any economic evaluation of SBIR which they claim is needed for America's economic good. Senate Bill S2111 proposes the increase to 5%  http://www.nsba.biz/docs/s__2111__bayh_.pdf . Don't look for the opponents of such a pork jobs-for-our-guys to get much hearing in the motherhood politics of small business.

Robert Cresanti, new U.S. Undersecretary of Commerce for Technology, says: There's no funding for new [ATP] programs, and I think the [2007] budget zeroes ATP completely out. There is huge financial stress coming down on a lot of different programs. Don't fully despair; the Congress may well rescue ATP, again, in yet another election year.

"Milwaukee doesn't have a technology problem, it has a technology transfer problem, and solving that problem begins with having the right people in place in the major academic institutions," said Tom Still, president of the Wisconsin Technology Council. [Milwaukee Journal-Sentinel, Jun 13]

A Great Idea Still Needs a Champion.  When Lt. Col. Chester "Trip" Buckenmaier III was deployed to Iraq three years ago, he was allowed to carry only two bags. His first contained personal effects; what he packed in his second would begin to change the way the Army treats pain.  Lt. Col. Buckenmaier, an Army anesthesiologist, filled one of his two allotted bags with portable infusion pumps made by Sorenson Medical ... Sorenson's aim was to create a pump that costs less than institutional models used for hospital inpatients, but retain much of their flexibility in dosing. Mr. Sorenson says it has taken about $20 million to get its current pumps designed and on the market. Sorenson's ambIT pump sells for about $300. ... Based on the ambIT pump's use in Iraq, the military contacted Sorenson and sought a contract to supply pumps for two years.  [Robert McGough, Wall Street Journal, Jun 13]

Meanwhile, the U.S. Navy, in an effort to run more efficiently, is sending its admirals back to school to learn how to think more like entrepreneurs. [WSJ, Jun 13]

In an effort to raise the nation's awareness about the impact of small businesses, the House of Representatives has established a National Entrepreneurship Week. [Inc. com, Jun 9] It will be in the spring along with National Coin Week and National Pickle Week. Meanwhile, The Purchase Card Waste Elimination Act, passed [the Senate] unanimously, seeks to level the playing field by giving another edge to small business in federal procurement. Would Congress actually pass such things? You bet, as long as the interest group promises campaign support. It's democracy in action. Like all the other interest groups, small business wants its share of handouts too.

a national effort to preserve Japan's manufacturing heritage [from Chinese competition], ... A draft government white paper to be released later this month, entitled "A Strategy for Growth," asserts that while the U.S. now relies on service rather than manufacturing as its engine of growth, Japan should "take a different path" and cultivate twin engines of services and manufacturing. [Jathon Sapsford, Wall Street Journal, Jun 9] If Japan shifts more effort to higher value products, we have a more intense competitor for what we consider our national strength. If India competes in services, China in low value goods, and Japan in high value goods, where is our advantage going and with what economic effect?  I suppose we could sell our military power to the highest bidders, for as long as we could afford to maintain it. We sold it in Desert Storm and it might have worked again in Iraq if we had had enough patience to wait for the threat (whatever it was) to be accepted by the other nations. But our oil-man hubris of military and financial omnipotence just couldn't wait.

Free markets. What if private schools pushed to reduce public school money so more families would flee the public system? ... [The GOP] favors specific competitors rather than favoring competition. [Business doesn't want competition (except among its suppliers).]  ... Free markets aren't pro-business - they don't favor incumbent companies if upstarts do the job better. Competition is good wherever it comes from - even the government - so long as it lowers social costs and increases wealth. And efficiency is good regardless of who it might hurt; it is especially good if it hurts those who feed off inefficiency. [Larry Lessig, Wired May 06 http://www.wired.com/wired/archive/14.05/posts.html?pg=7 ]

Spinning Science. The quality and credibility of government research are being jeopardized by inconsistent policies for communicating scientific findings to the public, says an independent group of scientists that advises Congress and the White House. ... a lack of clear, consistent guidance to scientists and press offices on releasing information to the public and the news media.[Andrew Revkin, NY Times, Jun 9]

If you can stand almost two hours of Al Gore's patronizing tone, a blizzard of the perpendicular pronoun, and only two-thirds of the global warming debate, you can pick up some tips on visual (PowerPoint-able) presentation to an audience in The Inconvenient Truth. Actually, if enough people see it, it may even popularize a debate so far a political standoff between climatologists and business interests. A niggling off-message discord: he rides around in big autos and flies first class.

It is easier to persuade governments to ride your hobby horses than it is to get business or your fellow scientists to do. ... Scientists like public funding, of course, as wasps like jam, but private funding of science has been more effective. ... There is a strong popular conviction that research and development funding in a country correlates strongly with its future economic growth, but Kealey cites OECD evidence that it is only private research funding which does this. [Adam Smith blog citing Kealy's research, Jun 6 ].

the Indiana Public Employees Retirement Fund (PERF) has decided to place $100 million into higher-risk equity placements .. The fund will exclusively target venture capital deals within Indiana. Divided loyalty typical of political investment funds. To maximize return to the fund, it should not limit itself to Indiana which is not known as a hot bed of innovation. The employees should object to such sub-optimization for social goals.

A South Carolina law says the state will "invest" $12 M in operating costs and direct investments through innovation centers at the state's three research universities. ... intellectual property attorneys, financial institutions, and building partner networks to align with Launch! clients. ... 42 existing and potential Launch! clients in the areas of advanced energy, automotive, advanced materials and nanotechnology, and health sciences and biotechnology. They also are in the process of collecting new proposals [SSTI, May 22]

The time-honored pre-election right-wing red-meat ritual is happening again of so-called conservatives trying to amend the Constitution for flag burning, bashing homosexuals, and any other social flag they can get away with. Cooler heads will prevail because it is very hard to amend the Constitution, made so by true conservatives that wanted to leave policy issues to legislatures, preferably state legislatures.  If the red-meaters lose either house in November, such theater will slow considerably.

When the moans sounded about cutting energy efficiency R&D programs, the Bush administration officials counter that the private sector doesn't need support since lower energy costs should be incentive enough. That's unrealistic, industry representatives say. On the plant floor, "the production schedule is more important than energy savings," says Nasr Alkadi, energy manager at General Motors' Wentzville (Mo.) plant. [John Carey, Business Week, May 1] Beneficiaries of government R&D funding always moan about any cuts while advocating lower taxes. They are all looking for the free lunch that comes from the government money printing press in the sky. Bush's free marketers have a point: energy costs industry a lot, there is a big automatic incentive to reduce its use. Efficient profit-sensitive companies will find a way when the cost of a resource rises:  New equipment installed at the Frito-Lay plant here sucks water off sliced potatoes before they go into the chip fryer. The 16 gallons per minute the equipment recovers reduces the fuel needed to boil excess water off the chips. The plant is also recapturing the heat from its ovens and rerouting it into boilers, as well as automating the dampers in ovens' chimneys to cut heat loss. [Chad Terhune, Wall Street Journal, Jun 5]  Does everything good have to be done by the government?

SBIR Bureaubabble.  MDA's house organ for Tech Applications (a fine program) carried an interview with MDA's so-called SBIR Manager (a rather ill-defined term). In a typical shields-up approach, he says almost nothing about what MDA is looking for in technology, in investment potential, or in company attitude.  Just the usual babble about process. Which means a high premium on schmoozing the people who decide (if you can find them behind their shields). One clue comes from the pronouncement of Phase II Enhancement that would match $500K from a DOD acquisition program which generally means they want near-term usable results.  http://www.mda.mil/mdalink/pdf/spring_06.pdf  Another MDA program shielded from any public view that might evaluate it. 

On Wisconsin.  Venture Investors Early Stage Fund IV Limited Partnership - is the largest of its kind ever created in Wisconsin. It will help finance young companies formed around discoveries in the life sciences, engineering and information technology sectors.  $69M ...  At the core of those potential opportunities is the University of Wisconsin-Madison, the fourth-biggest academic research institution in the nation.  Fourteen of the 18 companies in Venture Investors' last fund were spun out of research done at Midwestern universities  [Kathleen Gallagher, Milwaukee Journal-Sentinel, Jun 3]

Politician Speaks for Science.  Today, we are seeing hundreds of years of scientific discovery being challenged by people who simply disregard facts that don't happen to agree with their agendas. ... Hopkins' motto is Veritas vos liberabit - "the truth shall set you free" - not that "you shall be free to set the truth!"  I've always wondered which science those legislators who create their own truths pick when their families need life-saving medical treatment. [Michael Bloomberg, commencement speech, May 25]  Bloomberg is not your run-of-the-hall Republican politician.

The majority of American senators and congressmen were schooled as lawyers. But each of China's senior leaders -- all nine members of the Politburo's Standing Committee -- was trained as an engineer: ... This is no small difference. Engineers strive for "better," while lawyers prepare for the worst. [RL Kuhn, Business Week, Apr 24]

This week, ScienceBloggers tackled the question of how much control the public ought to have over the scientific research that its tax dollars pay for. The question was phrased like so: Since they're funded by taxpayer dollars (through the NIH, NSF, and so on), should scientists have to justify their research agendas to the public, rather than just grant-making bodies? And the answers? Well, the answers depend on what you mean by "justify".  ....  ".. astrophysists would be submitting proposals to 'know the mind of god' ... the knee-jerk response of most Sciencebloggers was to answer the question narrowly (please don't vote on my own grant) instead of broadly (the public should approve that experts choose how funds for science are allocated) is worrisome. ...

Think Less DOD SBIR. whether or not defense gigantism is a recipe for military disaster, today's level of spending on big-platform systems is simply economically unsustainable [Mark Williams's review of The Reagan Imprint: Ideas in American Foreign Policy from the Collapse of Communism to the War on Terror By John Arquilla, MIT Tech Review, M/J06 ] "Anything that cannot go on forever, won't,"  and development spending on military toys is the largest component of the SBIR base.

The government has already reached the limit on high-tech worker visas for 2007 even though the fiscal year doesn't start until Oct. 1, the US Citizenship and Immigration Services said yesterday. [Boston Globe, Jun 2]

When politicians talk about getting a big bang for the buck out of public investments in research, they assume it's possible to measure the bang. Last year, U.S. presidential science adviser John Marburger disclosed a dirty little secret: We don't know nearly enough about the innovation process to measure the impact of past R&D investments, much less predict which areas of research will result in the largest payoff to society (Science, 29 April 2005, p. 617).  In response, NSF wants several million for "the science of science policy."  As in all bureaus, there is always a good idea that needs some new money.  [NSF 's SBE Divison head] Lightfoot is in the process of hiring someone to coordinate the initiative within SBE and across NSF. The White House is also forming an interagency task force to oversee the initiative. [Science, Apr 21] Maybe, some day, NAS will emerge with a parallel evaluation for SBIR "investment" before Congress disbands the small business committees that foist such handouts on unwilling federal agencies. 

Texas Invests. With political smiles, the governor announced that the state's Emerging Technology Fund has invested nearly $6M in four Texas companies: Molecular Imprints - lithography technology for the semiconductor industry (one Phase 1 SBIR);  CardioSpectra -a high-tech catheter to better predict a patient's risk of heart attack; Xilas Medical - three medical devices to help prevent and treat diabetes-related foot problems; CorInnova - a medical device to reduce the risk of congestive heart failure in heart attack victims.  The state's payback: a right to later buy stock in the companies. [Robert Elder, Austin American Statesman-American, May 31]  Can the home of Enron resist the urge to politicize the owning of companies?

Small Biz Politics.  The NFIB National Small-Business Summit brings together the country's most politically active entrepreneurs and key policymakers to discuss how small-business owners can become more involved and effective in the political process. SBIR lovers take note that SBIR is a purely political creature with no other compelling justification. Without a political mandate, the agencies would deep-six ity in a minute.  And there is no good evidence that SBIR brings any more business to small biz.   http://www.nfib.com/page/summitHome.html

The next DARPA robot vehicle challenge will be a simulated six-hour military supply mission in a city with moving landscape (other vehicles).  November 2007 with second and third place prizes also. http://www.darpa.mil/grandchallenge  DARPA's objective is a congressional mandate (wish list) to automate a third of all military ground vehicles 2015.

DOD SBIR Chapter xxx.  DOD's newest SBIR solicitation seeks some of the usual suspects: Transient, Rocket Exhaust Plume Modeling for Static Test Analyses; Structural Damage Effects to Army Vehicles;  Remote Control Improvised Explosive Device (RCIED) Low Band Jammer (need it yesterday). If you are commercially minded, go for DARPA; if a government R&D company, go for the services. Just don't go after July 13.  http://www.acq.osd.mil/osbp/sbir/solicitations/sbir062/index.htm

And with fiscal conservatives demanding curbs on spending, the outlook for proposals to increase spending on basic science research as well as math and science education is unclear. [Greg Hitt, Wall Street Journal, May 31]  Bush, Inc still thinks it can win votes by promising more than it can deliver in more favored government spending while cutting tax revenue. Oh, sure, the supply-siders conveniently claim that lower taxes actually increase government revenue. More research money for "competitiveness" (which sounds suspiciously like "compassionate conservatism")?  Don't bet on it. Science is just another bowl at the banquet of government.

While telcos dither to protect monopolies and maximize profits, Wi-Fi Coming to Parks in New York City ... ''We believe that free Internet is an amenity and should be provided to all New Yorkers just as grass, trees and benches are,'' said Dana Spiegel, executive director of NYCwireless, a nonprofit  [MIT Tech Review, May 18] Woe to Our Handout. A bipartisan panel of influential budget experts warned of dire federal budget problems, which will pose a risk to U.S. funding for research and development and undermine the core of American competitiveness. Some 500 scientists, policy makers, educators, and students attended the Forum. Read about the factors driving the U.S. budget: http://www.aaas.org/news/releases/2006/0421budget.shtml   AAAS CEO Alan I. Leshner testified before the Senate Commerce Subcommittee on Science and Space, stating that the 2007 budget request for the National Science Foundation will leave important work in education and human resources research unfunded. Read the remarks about the pressing need for funds that bolster science education and research: http://www.aaas.org/news/releases/2006/0505nsf.shtml

Mirror, Mirror on the Wall. Software Adds Age To Photographs Of Faces In an attempt to draw interest in a survey on Scotland's aging population, government health officials are offering software that allows people to see what they will look like when they are 65. [from TechWeb Today]

Dedicated to the supply-side theory that rationalizes lower taxes for the upper incomers, Bush proudly signed another tax cut bill. The latest economics study I have seen says that such cuts pay back less than half the calculated revenue loss. Almost all the cheering for tax cuts is post hoc ergo propter hoc arguments (particularly loudly by Steve Forbes) not much more intellectually advanced than connecting cancer rates to sun spots. If you believe in tax cuts, you can always find plenty of supporting theories that ignore long-run provable economics. Eventually, (democracy doesn't do long term until a crisis hits) the deficit hole will yawn so large that a bloody battle will pit government beneficiaries against each other in a war of all-against-all. Sugar subsidies against NIST and military pensions, etc. For now, though, in election year, something for everyone with the bill sent to the future.

The usual suspects, vague abstracts, and unmarketable technology fill DOE's latest SBIR Phase 1 class. The winners list . Multiple awards to companies that are slogging away at incremental research on technologies they have already been funded for years to do. Projects that develop a framework for computer modeling. Little sign that DOE dares ask: What have you done with the results of earlier SBIR projects that succeeded technically (few companies admit the project failed)?  The deciders show no sense of business history in a program supposed to foster entrepreneurial businesses.

Business Needs a Self-Constrained Executive. with their powerful database programs tracking a massive amount of personal details of Americans' daily lives, a growing number of companies find themselves sandwiched between the privacy expectations of their customers and the national security demands of the federal government. [Joseph Menn and James Granelli, LA Times, May 12] in Silicon Valley the news fueled outrage among business and community leaders -- particularly those who make a lot of overseas calls. [San Jose Mercury News, May 12] Which businesses will tell the government "no" and pay the costs for the legal battles? Not any who hope for government contracts. One route is to elect presidents who accept Constitutional limits on executive action. Passing more privacy laws won't do much good when the President cites national security as the excuse for doing whatever he pleases. That is, after all, a common route to dictatorships (of either monarchs or presidents) that the Founders hoped to constrain with a weak executive. 

 

A prominent Chinese scientist, one of the founders of the chip manufacturing industry in the country, has admitted to stealing his research. Could you get away with such a scam in SBIR?  Actually, maybe, for a while. Unlike private actors, the government doesn't care much about company intellectual ownership of SBIR research since the government acquires a royalty free license. And it might be a long time, given the way SBIR research is hidden from public sight, before the rightful owner discovers the government's using the technology without a valid license. But then, you might well find yourself in a federal criminal court for fraud.

A Prize for Your Hydrogen Engine. The House science politicians (not an oxymoron) passed a bill by 416-6 to put up a $10M prize (plus some smaller interim prizes). DOE would run it with all research done in the US.  Heaven forbid we should acknowledge that a foreigner got the answer we need!

by tapping into its far-flung grassroots base, [NFIB] has become a force in Washington. More than a decade ago, the federation, which now has a $95M annual budget, began rallying its 600,000 member businesses to pressure lawmakers — personally, when necessary. [Elizabeth Olson, New York Times, May 4 http://www.nytimes.com/2006/05/04/business/04sbiz.html ]

Pork for All.  As Congress piles on  the earmarked "projects", no beneficiary seems to ask, "Who's paying for this?" We all are. Every dollar spent in Mississippi is offset by taxes collected to pay for projects in Pennsylvania and the other 49 states. The government does not invent money, it collects what it spends from the taxpayers (plus tapping the national credit card like an addicted junkie).  No, there never was a free lunch.

Doing Well By Doing Good.  "The engine driving growth here is federal spending, especially for technology related to military and homeland security," says economist Stephen Fuller of George Mason University in Fairfax, Va.  The federal spending boom — up 22% since 2000, after adjusting for inflation, to $2.5 trillion in 2005 — created a wealth of high-paying jobs for private contractors. It also helped poorer states such as Mississippi by boosting health care spending.  No state could match the affluence of the nation's capital, which had average personal income of $54,985 in 2005, up 19.8% from 2000. "The Washington, D.C., area is what Atlanta used to be — a place where corporations locate their headquarters or at least large regional offices," says SunTrust Banks economist Gregory Miller. "Everyone wants to sell to the federal government, so you've got to be there."  [USA Today, May 4] Title credit to Tom Lehrer's song "The Old Dope Peddler".

Money and Deficits For All. How are you going to fund a major initiative like this and cut [overall non-security discretionary] spending at the same time? The ACI proposes nearly a billion dollars ($910 million) of new research funding for three specific agencies, and a commitment to double their combined budgets over 10 years -- a total of $50 billion during that period. [FYI  http://www.aip.org/fyi/2006/054.html ] Give it a nice name AMERICAN COMPETITIVENESS INITIATIVE and pretend we can afford everything; "Reagan proved deficits don't matter."  Of course S&T folks deserve every penny for their indispensable talents that can survive only with taxpayer subsidy. Don't ask how America came to be the world's capitalist and S&T heaven before government funding of S&T came along.

Merit Pay Redux.  If your DOD overseer seems distracted, it may be the new DOD pay-for-performance plan, not at all unlike the Merit Pay System of the 1970s. Despite the bologna of "This is a critical time for America," speeches by the administration, there are still no objective measures for almost all government jobs. Thus the supervisor's opinion will still prevail, and sucking up to the boss will still govern. Ah well, every Republican administration sees a Democrat behind every desk that impedes an efficient Executive government.

Public Money, Public Data. taxpayers should have free access to the results of federally financed research says a Senate bill ... which would demand that most recipients of federal grants make their findings available free on the Web within six months after they are published in a peer-reviewed journal   [Rick Weiss, Washington Post, May 3 ] Goodbye scientific journals.

Public Wireless Gaining. Municipal wireless networks are cheaper to build than cable or fiber- optic networks and are easier to deploy. According to one study by muniwireless.com, an industry Weblog, more than 120 such networks are up and running around the country, including some that allow public access and others that are exclusively for city services. Nearly 60 other cities and towns have requested proposals from vendors or taken steps toward creating networks. [Tim Gnatek, New York Times, May 3]  For some travel options, see Going Online on the Go by David Pogue [NY Times,]

"Wired is reporting that the federal government intends to invoke the rarely used 'State Secrets Privilege' in the Electronic Frontier Foundation's class action lawsuit against AT&T. The case alleges that the telecom collaborated with the NSA's secret spying on American citizens. The State Secrets Privilege lets the executive branch step into a civil lawsuit and have it dismissed if the case might reveal information that puts national security at risk." [Posted by Zonk April 29, http://slashdot.org/ ] Fear of terror can lead to a fear of government when and if enough arbitrary power is allowed in the name of safety. As Ben Franklin observed, Those who sacrifice liberty for safety deserve neither. We could well look to Franklin's general attitudes about life and government in our search for balance.

SBA Re-Shuffle. The head of SBA resigned, to be replaced by a guy who runs a company that includes a pest control service. Shades of Tom Delay? Representative Donald Manzullo, the Illinois Republican who is chairman of the House Small Business Committee, praised Mr. Barreto's efforts. .. while ..  Democratic lawmakers were much harsher. "He was simply not up to the challenges of running this agency," said Representative Nydia M. Velázquez of New York, the senior Democrat on the House small business panel. [NY Times, Apr 26]

120 technologies partly funded by In-Q-Tel have been deployed by the CIA or other agencies. "Unfortunately, we can't talk about the specific uses,", said Amit Yoran who resigned abruptly as CEO after only four months "for personal reasons".  Only the White House can talk, and then only when the President surreptitiously de-classifies material for political gain. [Apr 06]

Bill Paying Time. National Federation of Independent Business plans to shell out $8 -10 M for Campaign 2006, targeting up to 30 House races and 10 Senate in hopes of helping Republicans hold their majority. Among those the small business lobby aims to help: vulnerable Senate incumbents Talent of Missouri and Santorum of Pennsylvania. [Wall Street Journal, Apr 21] Time for SBIR law beneficiaries to pay their bill. Or do they think Congress supports SBIR for the invisible and unproven economic return?

Shuffling and Dodging to Please Everybody. NASA's science chief has offered space and earth scientists half a loaf in response to withering complaints about cuts in the agency's proposed 2007 budget. Even so, it's a better offer than the one NASA Administrator Michael Griffin made last week to life and microgravity scientists: He announced a new timetable for finishing the international space station that will leave almost no room in the next 4 years for U.S. research projects. [Science, Mar 10] The NASA chief can say whatever he likes on the budget because the final decisions will be made by Congress to juggle political priorities. The NASA chief then takes the blame.  Don't forget Senate Rule 12: more for Mississippi, even $700M to relocate a private railroad. Fiscal discipline? maybe next year.

ARPA Envy.  Turning basic research into commercial technology has never been easy. [Eli Kintisch, Science, Mar 17] Now Energy thinks it has an answer - an Advanced Research Projects Agency. After all, it worked pretty well for DOD over the 48 years, and Homeland Security has one. But if commercialization is the objective, government agencies must first get out of self-help mode. Experiments, of still unknown result, are underway in several places with programs like In-Q-Tel, NASA Red Planet Capital, DHS ARPA, an Army pseudo-VC fund. Stay tuned for political announcements followed by bureaucratic silence as results takes years to produce. First indicator:  Energy has made no defensible economic pronouncements on any ROI for its 20 years of SBIR. Only BMDO has done any defensible economic study, and even that was abandoned to routine self-help. 

Liability for Official Burglar Tools? VC-backed Narus has found itself at the center of a legal fight over domestic spying. We're now wondering how its software is being used abroad in places like China and the Middle East.  Narus is based in Mountain View, and makes a network management software. This week, the Electronic Frontier Foundation filed documents contending Narus' software was plugged into AT&T's network as part of a massive surveillance program conducted by the National Security Agency -- to eavesdrop on Americans' international phone calls and e-mails. [siliconbeat.com, Apr 12]

Biotech Handouts.  Look out, Cambridge. Wichita wants a piece of you. Fueled by more than $500 Min public money, the state of Kansas has mounted a massive effort to recruit new biotechnology companies, joining battle with Florida, Washington, and other states trying to claim a share of the nation's growing life-sciences industry. [Steve Heuser, Boston Globe, Apr 16] But optimistic and desperate companies should also beware that it takes a little more than cheap money to succeed in an industry. Better to be in a world of other companies, large and small, in the industry. Further, biotechs should beware of the adverse and arbitrary power of religion in "conservative" state politics.

Any Tax Cut Must Be Good. Silicon Valley's biggest companies pulled billions of dollars in profits back to the United States from their foreign operations in 2005, thanks to a one-year tax break with a misleading name: the American Jobs Creation Act.  Want to know how the companies used this perk?  Too bad. The public will never find out. [Mike Langberg, San Jose Mercury News, Apr 10] Don't tax you, don't tax me; tax that guy behind the tree.  Financial responsibility? Not in a gerrymandered, incumbent-protected legislature where deficits are abstractions absolved by the benefits of handouts. 

By the end of this year, the Air Force plans to conduct a first, fully loaded test flight of its Airborne Laser, a jumbo jet packed with gear designed to shoot down enemy missiles half a world away, at the speed of light. The ABL also packs a megawatt-class punch. [Doug Beason, CNet, Apr 11] What's the big problem? Aiming. Just like the distracting wandering of a laser pointer on a projected viewgraph.

Veronique de Rugy, of the American Enterprise Institute, is one of the individuals who has been called to testify. In a recent editorial on Forbes.com, Ms. de Rugy reiterated her recommendation to “abolish the SBA and get rid of subsidies aimed at small business.” She further states that the government should not be giving small firms any “special regulatory treatment or preferential access to government contracts.” What she fails to acknowledge is that small businesses are where most Americans work and where most U.S. tax revenue is derived. Thus spake The American Small Business League http://www.asbl.com/showmedia.php?id=165 about the kill-SBA Senate hearings discretely planned by anti-pork Coburn. But if most American work there and pay huge taxes, why does it need a subsidy anyway? Where's the market failure? 

Like to Tinker? NASA's Looking for You.  the agency is offering 13 contests, which it calls Centennial Challenges, that anyone can enter. The prizes range from $200,000 to more than $5 million, for building gear as diverse as solar sails, lunar excavators and the tiny elevators. [Noah Shachtman, NY Times, Apr 5 http://www.nytimes.com/2006/04/05/technology/techspecial4/05nasa.html?ei=5087&en=dafa4f98b8b82653&ex=1144728000&pagewanted=all ] And SBIR, too.

Taking Archives for Granted.  Engineers and information specialists from government, industry and academia agreed this month at a National Institute of Standards and Technology (NIST) workshop* that immediate action is needed to keep vast amounts of digital knowledge from disappearing into cyberspace or becoming in 200, or even 20 years, as incomprehensible as the markings on Babylonian cuneiform tablets.  March 30]

Nano Beware. Government officials in Germany have reported what appears to be the first health-related recall of a nanotechnology product, raising a potential public perception problem for the rapidly growing but still poorly understood field of science.

Oklahoma Senator Tom Coburn has called for a Congressional hearing to be held on April 6th to hear testimony from individuals that believe the Federal Government should eliminate programs that assist small businesses, woman-owned firms, minority-owned firms and firms owned by disabled veterans. [Pat Panchak, Industry Weeek  http://forums.industryweek.com/forums/forumdisplay.php?f=5 ] Other than allowing a political article of faith in small business, how much should a free-market government do for small business in the most business friendly nation in the world?

Weakening patent laws, whether in the Supreme Court or Congress, is no more than a government bailout of the infringement problems big tech companies deliberately made for themselves. ... It's hard to go to Congress or the courts and admit that you're one of the richest companies in the world, have huge profit margins and infringe lots of valid patents held by honorable people . . . but you don't want to pay them. So naturally, these companies paint a different picture. They claim that patents are low quality; yet there is no objective evidence of this. They claim patent litigation is exploding; but the actual figures show just the opposite. There are fewer patent lawsuits than copyright, trademark or other major forms of commercial litigation. [Nathan Myhrvold, Wall Street Journal, Mar 30 http://online.wsj.com/article/SB114368437650611883.html?mod=todays_us_opinion ]

Hoopla for Handout.  The Gov and a state legislator  announce the rollout of the Biomedical Technology Alliance grant program.. ...  a $500,000 state grant to fund collaborative research projects among five universities in southeastern Wisconsin. ... But,  The Legislature has yet to approve additional funding for the program.  [Guy Boulton, Milwaukee Journal Sentinel, Mar 28 http://www.jsonline.com/story/index.aspx?id=411204  ]

Handout politics beats budget cutting again, The Senate stuck back into SBA's budget most of the stuff the White House took out.  Can't cut small business (nor small farmers) in an election year. Handouts are tangible; deficits are abstract.  [Mar 06]

More Innovation Wonks. The Information Technology and Innovation Foundation is a non-profit think tank committed to articulating and advancing a pro-innovation, pro-productivity, and digital economy public policy agenda internationally and at the federal and state level. http://www.innovationpolicy.org/ 

UnAmerican Metal.  one case where a spring valued at $1.30 resulted in the Pentagon withholding $10,500 from its payment for a large weapon system that contained the spring in 10 different subsystems. Mr. Douglass says about 50 suppliers have come forward thus far and estimates about 50,000 different kinds of parts are under scrutiny, including nuts, bolts and cotter pins.  [Timothy Aeppel, Wall Street Journal, Mar 27  http://online.wsj.com/article/SB114342583668708743.html?mod=todays_us_page_one ] Beware the source of metal in parts for DOD contracts. 

"Many companies concede," says the report, "that the uncertainty created by Congress' inability to provide a reliable mechanism to hire skilled professionals has encouraged placing more human resources outside the United States to avoid being subject to legislative winds." Last week computer maker Dell Inc. announced that it hopes to double its workforce in India to 20,000 within three years. There's another such announcement by some company nearly every day. A Wall Street Journal editorial http://online.wsj.com/article/SB114341277438308548.html?mod=todays_us_opinion  argues for admitting and keeping smart immigrants.  But the politicians can't keep their hands off the policy levers. In general, the best policy for labor, for taxes, for most things, is to make a policy and let it alone. Business has a hard time investing for the long term when the rules keep changing.

NIH is still on the side of the VC-backed biotech firms for SBIR funding.  The NIH said last year that the new eligibility rules were restricting its ability ''to fund high quality, small companies that receive venture capital investments." Dr. Elias A. Zerhouni, the NIH director, told the Small Business Administration that many deserving applicants were being turned away and ''the goals of the SBIR program are being undermined."   [Bryan Bender, Boston Globe, Mar 24] Massachusetts pols are still trying to amend the SBIR law in the face of determined opposition from the life-style companies that vacuum up SBIR money from the mission agencies. If and when Congress ever wants anything substantive out of SBIR, it will find a way to bring in real entrepreneurs that get VC money from bigger sources.  Until then, SBIR will remain a mostly mindless payoff to small biz lobbyists. At least it does no substantial harm in shifting government R&D spending from one group of R&D performers to another equally qualified group, thus accomplishing nothing that would not have happened anyway.

Utah Buying Jobs.  Utah will pay Minnesota glass manufacturer Viracon up to $750K cash to build its third US manufacturing plant in St. George by paying Viracon $3,000 per job for each worker it adds, up to 250. [Lesley Mitchell, Salt Lake Tribune, Mar 22  http://www.sltrib.com/business/ci_3630032]  Note: St George and Utah are somewhat different from the rest of America; among the large majority clean living Mormons are sizeable numbers of anti-immigrant nativists who want government to force businesses into immigration enforcement. St George is like many Southwest cities, booming in expansion, perhaps importing enough outsiders even to challenge the existing establishment. Viracon is not an SBIR company.

The combination of making patents easier to get ... (peanut butter and jelly sandwiches) ... and simultaneously more potent when enforced has led to an explosion in patent litigation ......  a perfect storm: a complex and intensifying combination of factors that increasingly makes the patent system a hindrance rather than a spur to innovation. ...  (Changes in this [needed] direction are at the heart of the patent reform bill currently under consideration in the House Subcommittee on Courts, the Internet and Intellectual Property.)  [Adam Jaffe and Josh Lerner, Wall Street Journal, Mar 21http://online.wsj.com/article/SB114290663621603691.html?mod=todays_us_opinion ] Economists Jaffe and Lerner have written extensively on venture capital and Lerner is one of the few academics to seriously examine SBIR.  For those with 20-year memories, Josh was a GAO analyst of SBIR before even getting his Harvard PhD.

Our results suggest that public R&D financing does not crowd out privately financed R&D. Instead, receiving a positive decision to obtain public R&D funds increases privately financed R&D. Furthermore, our results suggest that this additionality effect is bigger in large firms than in small firms.  At least in Finnish companies. http://www.enepri.org/Publications/WP030.pdf An economic evaluation of public financing of private companies. Maybe the government should hire the Finns to evaluate SBIR with similar methods instead of groping for some rationalization for a political handout.

NIH Proposal Help?  Noted without endorsement: Our team at BBC has experience across most of the SBIR/STTR agencies, but because our core expertise is in the life sciences, we are intimately familiar with NIH and have worked on >hundreds of NIH SBIR/STTR proposals.  You can learn more about us at our web site at www.bioconsultants.com.

Nibbling at the edges with toothless gums, the Republican Congress is about to jack up the public debt limit to $9T, half more than it was when Bush took office. Meanwhile, members run for re-election on a platform of more for everyone: money programs for those who need or want help and tax cuts for those who don't need help. What says the vox populi other than "gimme"?

What if the politicians give your technology away?  Houston Chronicle staffer Alexis Grant takes an in-depth look at the city's plan to set up an area-wide WiFi network. Fortunately, SBIR gives your rights only to the federal government to do with it as it pleases for government purposes. But it would not be a far stretch for the federal government to give it to state and local governments for their public purposes with no compensation to you.

if we shift our attention from invention to innovation, we begin to see a much broader horizon. Innovation -- the ability to create and capture economic value from invention -- is what really drives both the economic prosperity of nations and the shareholder value of corporations.  Innovation isn't just confined to commercialization of new products. It can also build upon creative new practices, processes, relationships, or business models, and even institutional innovations such as open-source computing -- invention occurs in all these domains. And while breakthrough innovations can generate significant economic value, sustaining that value requires a capacity for continual incremental innovations.   R&D GHETTO.  From this perspective, Western executives may want to spend a little less time lobbying Washington for more government spending on their pet R&D projects and more time trying to boost their own innovation capability. When the horizon broadens from invention to innovation, Washington becomes more marginal.  [John Hagel and John Seely Brown, Business Week, Feb 16  http://www.businessweek.com/innovate/content/feb2006/id20060216_568704.htm ] And one of the most marginal R&D programs is SBIR which has never proved to produce any decent economic return after 20 years. All the research about innovation by small business was tossed out the window in favor of a hypothetical rationalization for pork. Yes, small businesses under 20 employees once showed a remarkable innovation rate, but handing decisions on what to fund to government mission managers makes all that research irrelevant. So, we have evolved the classic iron triangle of program permanence: politicians buying votes, managers making careers, and beneficiaries getting money. Actually, it's only a two-sided, but nonetheless stable, triangle because the mission managers would ditch the program in a heartbeat if their agencies could recoup the money. Only the politics keeps it alive. [Oh, sure, SBIR Speech 101]

Remember that in capitalism, government does not create wealth; government redistributes wealth for public purposes.  And rarely efficiently, since the power of redistribution invites abuse. What's fair is in the eye of the beholder.

Live on Arrival. Even though the free-market, big business Bush White House sent a budget with zero ATP and half the MEP, the Congress will not go along, especially since the governors want the money to keep flowing. It's just a perennial game of a weak statement of principles with no intent to actually veto the eventual appropriation. Ken Jacobsen of Manufacturing and Technology News (Mar 3) reviewed the tired bidding. Are they worth doing? Well, at least, unlike SBIR, the architects have to prove the economic value for which ATP has employed up to 71 equivalent full time people. It takes a lot of paper shufflers to keep a handout program handing out. 

Call it Start-Up Management 2.0. In high-tech hot spots like California's Silicon Valley, Boston and Austin, Texas, venture-capital investors are going back to basics: They're monitoring the start-up companies they fund more closely than they did during the technology boom and trying to foster better management practices. In the late 1990s, many start-ups didn't get attentive care and feeding from their investors, since even poorly managed companies could launch successful initial public stock offerings and make venture capitalists rich.  [Rebecca Buckman, Wall Street Journal, Mar 13]

SpeechGear (Northfield, MN)'s solution is a software suite -- the only one of its kind, Palmquist said -- that provides near-instant translation of anything users to see, hear, say, read, write or type. ... The units cost about $5,000 each and can be configured to translate more than 200 languages, including Arabic, Korean, Chinese, Japanese and Russian. The company also sells software for PDAs that translate one language pair, say German to English, for $69.95 ... While the Navy and Marines have been the primary customers so far, Palmquist is aiming SpeechGear software and tablet computers at other clients, such as police, hotels, restaurants and retailers. ...  Government contracts have provided money for research and development and, along with sales to the military, have accounted for the bulk of SpeechGear's revenue, Palmquist said. [Larry Werner, Minneapolis Star Tribune, Mar 13  http://www.startribune.com/535/story/300024.html  ]  Near $2M in Navy SBIR.

Mississippi Polymer Tech www.parmax.com is being bought by an international chemicals and pharmaceuticals group in Brussels. MPT founder Bob Gagne was "enthusiastic", but then Bob has been enthusiastic and dogged since the early SBIR days of his polymer in California where the parent Maxdem still resides. Was SDIO's seed SBIR critical? Well we bureaucrats who needed all the success stories we could get will say so; if nothing else, it helped Bob do what he probably would have done without SBIR only slower . Entrepreneurs find a way. If today's SBIR managers want companies that will do something good after SBIR, they should look for the many Gagnes out there. Only when they exhaust the supply of Gagnes should they fall back on good science and engineering by good scientists and engineers needing  a job.

The Sound of Money. Clarity Technologies was bought for $17M cash last year by an English firm, Cambridge Silicon Radio http://www.csr.com/home.php , the leading Bluetooth provider.  Clarity grew out of Gail Erten's tiny IC Tech http://www.ic-tech.com/ (Okemos MI), winner of several Phase 2 DOD software SBIRs, crediting an AF $1.3M contract and a BMDO 1997 signal conditioning SBIR as the seeds.  Clarity says it is a leading provider of software and services for improving the audio quality and performance of voice-based communications systems and products. It also claims $28M in business and investments.

Looking for more stories that emerge from SBIRs? Try MDA's superb tech applications bulletin www.mdatechnology.net which is still unfortunately like standard government TA blurbs - heavy on the technology and light on the economics. But then there a lot of lawyers lurking to pounce on misstatements of what can only ever be speculation on future markets. Better safe than sued, or called before Congress to be yelled at in election year showtime. 

Big Bait, Big Fish.   Frank Wolf (R-VA) wants NSF to find (mostly) private sources  to fund a $1B prize for an energy independence idea. Can you imagine the NSF academics deciding who has a billion dollar idea?  Peer review to the max? The political appointees? Maybe the Nobel Committee. Anything to avoid the leadership burden of convincing the voters that there is no free lunch in energy. What if voters had to first explain entropy  ...

Write for scanners. Jakob Nielsen (no known relation) www.useit.com/papers/webwriting says on-line readers don't; they scan. And when you write SBIR Phase 1 proposals, think likewise. If you were a federal tech reviewer who had 50 proposals and a day, how would you triage down to the best three or four for serious study?  Some other Fast Company suggestions for web writers -like you: www.contentious.com ; www.cluetrain.com; www.netpress.org/careandfeeding.html

lately, tech companies are relying increasingly not on electrical or software engineers to drive their stock prices but on financial engineers. They have little choice. Revenue growth has fallen to around 10% a year, half the rates of the go-go '90s. That slowdown has turned tech shares into laggards. [Business Week, Mar 20]

R&D Competition. Small US firms that expect to R&D for US companies have a new competitor. companies such as Procter & Gamble Co., Motorola Inc. and International Business Machines Corp., among many others, have been investing to expand their Chinese R&D operations to develop products for the global market. [Kathy Chen and Jason Dean, Wall Street Journal, Mar 13] Which should incentivize the SBIR of the mission agencies to reach for more dual use R&D. But don't expect DOD and NASA to look beyond their noses.

On the bright side, Information-technology spending among corporations is seeing a slow and steady acceleration, [Wall Street Journal, Mar 13]

Patent Auction. Patent holders and potential buyers will gather at a tony San Francisco hotel, where Ocean Tomo LLC, has organized a two-day event that will culminate in live bidding to sell 430 patents. [Wall Street Journal, Mar 9]

Ruling: Corning, the world's biggest maker of liquid-crystal display glass, won a court ruling that may force SRU Biosystems to stop selling an optical sensor used in drug development. [Boston Globe, Mar 9]

Tableau Software was named "most promising new company" at the WSA's industry-achievement awards, an annual event hosted by the Seattle-based technology trade group.  .. also won most promising new technology award for VizQL; its database interaction language lets users interpret information visually. Tableau was developed by a computer-science professor at Stanford University, and received $5 million in first-round funding in 2004. ...No record of any SBIR ...  DatStat, a Seattle company developing research-management software, won the business product of the year award for its online survey program DatStat Illume. ...  NPower , a national network of 12 non-profit groups that give technology assistance to other non-profits, won the "technology for the greater good" award. [Kim Peterson, Seattle Times, Mar 9]

blazing data transfer  IBM has created a technique that will let computer networks share and transfer data about six times faster than they can now.  In what they dubbed ``Project Fastball,'' IBM researchers were able to transfer 102 gigabytes per second -- what they called the equivalent of downloading 25,500 songs from the Internet in a single second -- at the Lawrence Livermore National Laboratory in Alameda County. The previous data transfer record was 15 gigabytes per second, according to IBM. [San Jose Mercury News, Mar 9]

Affinergy (Research Triangle Park, NC) raised $3 M in its second round of VC.  The biotechnology company will use the money to expand its partnering activities and begin developing proprietary products. It will add five scientists this year. The Duke University spin-off is developing coatings for medical devices that enable biological and nonbiological surfaces to stick together. [News and Observer, Mar 9] No SBIR.

Small businesses, we are told, are the fountainhead of job creation and the engine of economic growth, responsible for two-thirds of all new jobs created in the U.S. .. Small Firm Idolatry, says Veronica de Rugy (of free-market AEI)  [Forbes Mar 13]  In our new entrepreneurial economy it is not small businesses per se that are important but flexible, innovative risk-takers.  ... It's time to abolish the SBA and get rid of subsidies aimed at small business. .. instead ..low tax rates, low levels of regulation and a stable legal structure that protects property rights. Size doesn't matter.  Good news and bad news: SBIR already has the flexibility to subsidize only innovative market-driven firms but systematically ignores it. Why? The people making the decisions have NO incentive to advance innovation; they have only a great incentive to buy what they want for their government program.  http://www.forbes.com/columnists/forbes/2006/0313/034.html?_requestid=5142

Cold Fusion Just Sounds So Good. Purdue University is investigating allegations that a scientist thwarted his colleagues' efforts to test his claims of producing nuclear fusion in tabletop experiments ...  Seth Putterman, a professor of physics at the University of California, Los Angeles, who received a $350,000 grant from the Defense Department to try to reproduce Taleyarkhan's findings, said he has been unable to do so. [Rick Callahan, AP, Mar 9]  Researchers all over the landscape have been finding apparent energy anomalies for at least a decade but no cold fusion finding has yet been validated by being reproduced in an independent lab. DOD has even done several SBIR Phase 1s to explore apparent net energy gains from unknown mechanisms.

Native Textiles will close its doors, eliminating the last 26 jobs at the Queensbury (way upstate NY) knitting plant. One of the last remnants of an industry that abandoned its Northeast home decades ago when both labor and electricity were cheaper in Dixie.

One Republican Congresscritter observed that  Congress does two things well: nothing and overreacting," he said. "We're into phase two in the port ownership debacle and the 218-year struggle for power among the three branches of government. Today's lead Wall Street Journal editorial makes its typical argument: executive power for Republican presidents.

A healthy increase in venture-capital funding of medical-device companies has helped lift overall investments in life-sciences industries, even as biotechnology deals have tailed off.  [Wall Street Journal, Mar 8 http://online.wsj.com/article/0,,SB114178928805492250,00.html?mod=djemHL  ]

Ceradyne suffered an 8% hit to its stock [today], as an analyst suggested the supply of body armor for the U.S. Army was nearing its peak and could possibly decline. ... Shares of Ceradyne were recently off $4.07 at $53.40 on volume of 4.5 million shares, versus average daily turnover of 830,400 shares. [Henry Sanderson,  Dow Jones Newswires, Mar 8]

Gong! At a recent Silicon Valley conference, two dozen Internet start-ups presented business plans to an "American Idol" style panel of judges, who gave advice on whether the ideas, cool as they might be, could become the basis for a business.  
http://online.wsj.com/articles/portals?mod=djemPJ  Ridicule sells tickets.

In The Better World Project, launched [recently] by AUTM, readers can learn the stories behind the Google™ search engine, Honeycrisp apple, V-chip, cochlear implant, Habitrol® nicotine patch and other products used in health care, environmental protection, agriculture, safety and 16 other fields.  ...  Both The Better World Report and Reports From the Field are fully searchable via an online database that is soon expected to include stories from Europe, Asia and Australia. Print copies of the reports, the online database, and licensing success stories from the United Kingdom are available at http://www.betterworldproject.net.

IBM disclosed Wednesday that it is moving all of the design and development of its vaunted business consulting offerings to the fast-growing country. [Paul McDougall, Information Week, Mar 8] The loss of another source of business for small US high-tech firms should bring the SBIR pleaders to Congress's handout window again with another empty cockamamie story.

Tech entrepreneurs. Several Web sites selling made-to-order Trojan horses to hackers have been shut down, the two cooperating security companies who led the investigation said .. while ...  A university systems engineer who said a Swedish hack-my-Mac contest was too easy closed down his own challenge Tuesday, and said that even after 4,000 log-in attempts and two denial-of-service attacks, his Mac mini remained untouched.  [Gregg Keizer, Tech WebNews, Mar 8].

The Future Success of Small and Medium Manufacturers: Challenges and Policy Issues is a follow-up to a 2001 report on the importance of SMMs during the height of the 1990s prosperity boom. Since that time, a major recession has occurred causing many shifts in the manufacturing industry.  The report identifies two important trends that are shaping the future of SMMs. First, large manufacturers are increasing their dependence on suppliers of parts as they streamline their operations to increase productivity. This has been positive for many SMMs, the report indicates, as they have expanded businesses into areas formerly owned and operated by large manufacturers. On the flip side, however, the pressure to reduce prices is passed down the supply chain with the burden of cost reduction and innovation falling on SMM suppliers. The second trend is the development of increasingly sophisticated production in developing countries, which has toughened the landscape for SMMs. In order to stay competitive, SMMs have to offer value to their customers that low-cost overseas competition cannot match, such as proprietary, high-technology products, a willingness to customize, and fast turnaround times, the report states.  ... available at: http://www.nam.org/s_nam/bin.asp?CID=202515&DID=236457&DOC=FILE.PDF  Links to this paper and more than 3,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/  [SSTI, Mar 7]

Planning to sell to the world? "Be prepared for a time commitment. World-class status isn't achieved overnight and cannot be purchased. It must be earned on the shop floor through extensive training and application of improvement tools. Four to five years of practice is required to fully understand what it means to be world-class and to be a 'true believer' in the continuous improvement tools. Many buried issues will be uncovered."   -- The HON Co. -- Cedartown Plant, Cedartown, Ga

NSF's biennial Science and Engineering Indicators (nsf.gov/statistics/seind06) features analysis, statistics, and tables on everything from academic research spending to zoo attendance.  http://www.sciencemag.org/cgi/content/full/311/5765/1228

www.evolvingexcellence.com: A blog on lean enterprise leadership from the editors of Superfactory. [Industry Week, Mar 8]

.A committee of the National Academy of Sciences has warned that 'the vitality of Earth science and application programs has been placed at substantial risk by a rapidly shrinking budget.'.. For its part NASA says that tight budgets force it to cut funding for all but the most vital programs. 'We simply cannot afford all of the missions that our scientific constituencies would like us to sponsor,' NASA administrator Michael Griffin told members of Congress when he testified before the House Science Committee February 16. [ScuttleMonkey on Slashdot.org, March 07, smooth wombat writes]  "vital" includes politically inspired Mars missions as Presidents try to sound grand. 

For a discussion of research funding in the new federal budget, musings about scientists' public image, or a host of other opinions,  cosmicvariance.com

Green for Green.  A record $502 M in VC was invested in green technology companies during Q4 2005 in North America, according to the Cleantech Venture Network (downloads press release).  This investment represented a 59.8% increase over Q4 2004. [siliconbeat.com, Mar 8] 

Albany Molecular Research bought Hungarian firm ComGenex which combines chemical synthesis and computational chemistry to create drug-like compounds.

from the power-to-go dept.prostoalex writes "AVC and Antig Technology will demo a production-ready fuel cell for laptops next week on CeBIT trade show. According to PC Magazine, 'the CD-ROM size fuel cell will fit within the media bay of a notebook PC, replacing the drive with additional battery power.' The fuel cell battery will last 8 hours."  [hardware.slashdot.org, Mar 2]

Ibis jumped 10% Tues Feb 28, 06 without benefit of news announcement.

Want Your "innovative" Technology Accepted?  Rondrin writes "CNN has an article detailing a $9 billion loophole in the tax code to spur synthetic fuel development. Unfortunately, spraying coal with pine tar qualifies. From the article: 'The wording is so bland and buried so deep within a 324-page budget document that almost no one would notice that a multibillion-dollar scam is going on. Not the members of Congress voting for it and certainly not the taxpayers who will get fleeced by it. And that is exactly the idea.'"  [politics.slashdot.org, Mar 2] Get yourself a majority party pork merchant.

The constitutionality of a popular tax credit used by most states to lure and retain businesses will be challenged today before the US Supreme Court. [Sacha Pfeiffer, Boston Globe, Mar 1] Interstate competition, as old as industrialization, for economic activity invites large tax incentives to corporations with jobs. Critics of corporate tax incentives argue that they have become lavish giveaways that businesses have not only come to expect, but have learned to manipulate by playing states off one another. ... But many economists say most tax incentives have little or no effect on economic development, and that taxes generally don't affect companies' decisions on where to locate. As a result, they say, states would be better off encouraging development by investing in education, technology, and infrastructure. Not many SBIR-class companies get into such questions sin ce they start and stay where the founders and the angel investors live.

Microsoft offers an new set of Web-based applications: Office Live, www.officelive.com, free during the beta period. WSJ's Walt Mossberg, who gives it an OK with need for improvement, says he made a very basic Office Live test site for a fanciful fake company at www.waltwsj.com.

Ethanol Valley. Following the smell of money, Silicon Valley VCs are looking into ethanol - during working hours. Unhappily for the prospects of making money in a VCs time frame, ethanol as a fuel still depends on government subsidy from a fickle government. Alternative fuels anyone?  venture capitalist Khosla is the most high-profile ethanol convert in the tech world. He's pushing policies to speed up the shift to ethanol, advocating a government mandate for car companies to produce so-called ``flex fuel'' cars, or vehicles that can run on fuel that's up to 85 percent ethanol. He's also funding a state ballot initiative to slap a tax on oil extracted in California.  [San Jose Mercury News, Feb 26 http://www.mercurynews.com/mld/mercurynews/business/13967138.htm ]  Everyone is getting into the act. Microsoft billionaire Bill Gates is plowing money into a Fresno company, Pacific Ethanol. Virgin's Richard Branson has moved on this. The human genome guy, Craig Venter, is rolling up his sleeves. And you've got a host of guys here in Silicon Valley, including well known venture capitalist, Vinod Khosla, and various Stanford professors. John Doerr, of Kleiner Perkins, has talked about it, and tells us his firm is looking to make an investment.  http://www.siliconbeat.com/  Feb 25

Spook Shopping for Data.  NSA (No Such Agency) has been seen shopping in Silicon Valley for new data mining technologies, says John Markoff (New York Times, Feb 25).   Supercomputer companies looking for commercial markets have used the practice for decades. Now intelligence agencies, hardly newcomers to data mining, are using new technologies to take the practice to another level.  But by fundamentally changing the nature of surveillance, high-tech data mining raises privacy concerns that are only beginning to be debated widely. That is because to find illicit activities it is necessary to turn loose software sentinels to examine all digital behavior whether it is innocent or not. http://www.nytimes.com/2006/02/25/technology/25data.html?ei=5058&en=cbcd71b864c16e09&ex=1141534800&partner=IWON&pagewanted=all 

Got any bad stuff in your innovation? Two big paint companies' stock took a dive after a  Rhode Island jury decided that the former maker of lead paint created a public nuisance that continues to poison children.  Although DOD typically will take the higher performance despite the public hazard, the larger world will object to your selling it there.

businesses are spending much more on future-oriented investments than widely believed ...  the conventional numbers don't capture the emerging knowledge economy ... we're talking about intangibles: brand equity, the development of talent, the export of best practices.   This stuff is hard to measure.  [Michael Mandel, Business Week, Feb 13 http://www.businessweek.com/magazine/content/06_07/b3971001.htm  ]

American Superconductor got another order its PowerModule-based wind turbine generator control systems. An Austrian firm will incorporate AMSC's stuff in systems it sells to Australia, Canada, China, Japan, Scotland, and the USA.  [Mass High Tech, Feb 22]

Bubbles are good ... it was too much, too soon. In 2001, just 5% of the country's fiber-optic capacity was being used. Wholesale prices plummeted .... Still, the nation had been wired. US schools, governments, libraries, and corporations all now enjoy fast Internet connections. Today, about 40% of Americans have high-speed access at home, and the price of long-haul broadband has fallen by 75% in the past five years. ... as long as you are not trying to make money as the bubble blower. [Daniel Gross, Wired, Feb 06 http://www.wired.com/wired/archive/14.02/bubbles.html  ]

Displaytech  http://www.displaytech.com/company/index.html  says it makes and sells microdisplays with superior image quality for electronic viewfinders in consumer digital still cameras, camcorders, and mobile communication devices.  It has had 25 Phase 2 SBIRs over two decades as it grew from Mark Handschy as the lone employee in 1985 to fifty today. Which is about a $12M investment if we ignore Phase 1s.   If the company really is selling at a profit and paying taxes, the government could count it as an SBIR success and start counting how much return that it and all the others have made to either the Treasury or the economy.  No "success story" blather by bureaucrats, please; just count the money.  Like Displaytech's VCs are doing.

Hundreds of new U.S. power plants are planned in the next few years, says Jill Jusko in Industry Week, Feb 21 http://www.industryweek.com/ReadArticle.aspx?ArticleID=11475 . But.  Typically, only a third of announced plants get built, says the Edison Electric Institute, and the new ones don't expect to reduce the cost to consumers because they will use tried and true technology. Everybody demands power but fossil fuel costs are rising and there hasn't been a nuclear plant started for 32 years. At least the costs of power from a fossil fuel plant is predictable. With nuclear, delivered power costs are a complete guess. If your next SBIR proposal is about electirc power, put some realism in the commercialization section in case any knowledgeable government official might notice. 

A new high-capacity material for super-efficient batteries from MIT/SUNY Stony Brook  The computer model says it could cut the weight of battery packs for plug-in hybrids by four or five times (whatever that phrase means) and allow speedier charging. Much R&D and hope remain.  http://www.technologyreview.com/NanoTech/wtr_16384,318,p1.html

Supply side economics for renewable energy. The Bush administration cuts budget and people at the renewable Energy Lab while touting reaching national energy independence with renewables. Rep. Mark Udall (news, bio, voting record), D-Colo., co-chairman of the House Renewable Energy and Energy Efficiency Caucus, said the government has funded only one-third of the money the 2005 energy bill authorized for renewable energy and energy efficiency. http://news.yahoo.com/s/ap/20060221/ap_on_go_pr_wh/bush  Must be an election year. Oops, Bush said it was a budget mistake, not a plan, that zeroed out the people. 

Whaddya Want From a State? Kimball said Massachusetts has a difficult time competing with other states because land is scarce, wage costs are high, and the regulatory environment is unfriendly.  ''What we do have in Massachusetts is the deepest, broadest, and most diverse economy in technology innovation and manufacturing of any region in the US," he said. [Boston Globe, Feb 21] Which is more important to an R&D business: smart people or cheap living? Massachusetts is starting another new program - Massachusetts Business Connect - to make big firms, especially in other states, aware of the resources hidden in small Massachusetts companies.

In a decade HP Labs have shrunk from 1,400 employees to 600.  The way corporate research labs run has been changing in other ways. More of them are partnering with customers, competitors and universities rather than toiling away at new technologies all by themselves in locked labs, as many did 20 years ago. ``That's the trend now, to reach out to others to acquire knowledge,'' Larson said. ``Because they can't do it all themselves. No one can afford to cover all bases of knowledge to compete in the global marketplace. So they have to acquire it from outside resources.''  [Nicole Wong, San Jose Mercury News, Feb 21 http://www.mercurynews.com/mld/mercurynews/business/13923100.htm ]  Sounds like an opportunity for small R&D companies as outsource suppliers of smart ideas.

brighter, cheaper compact fluorescent lamps (CFL ) as prices have dipped to the $5 range from $10 or $15, but that's still more than an incandescent bulb that can be had for 25 cents. ....  "This package saves you $118 in energy cost per bulb," "Lasts 7 years guaranteed," and "Lasts 8 times longer than standard bulbs." [Thomas Sheeran, St Louis Post-Dispatch, Feb 21 http://www.stltoday.com/stltoday/business/stories.nsf/story/D19BEAF5FCF36B4D8625711C0012F6D6?OpenDocument ] Great long term economics still has to convince consumers to pay more up front to save energy expense later. Remember, though, that consumers have an inherently high discount rate and don't connect their electric bills very well with their lighting habits.

The Clueless Manifesto Here's to the clueless ones. … Cluelessness is underrated.  It's the newbie who does something he didn't know was supposed to be impossible.  It's the naive guy asking the one dumb question any clued-in person would diss.  And it's that question that leads to the answer no expert would have found.  Discussion: Scobleizer  [http://tech.memeorandum.com/  ]

It's Different This Time? I believe what Rudi Dornbusch said: that when highly intelligent and respected economists begin evolving plausible theories that--this time--the trade deficit is sustainable, that is the time to start running for the hills, because the crash is near. Posted by Brad DeLong  February 21,  http://www.j-bradford-delong.net/movable_type/Index.html

Another Foolish SBIR Idea. One politician, who represents the municipality that once had the highest SBIR rake-in per capita, wants to put a higher, but absolute, ceiling on the amount of SBIR awards: $145K for Phase 1 and $1010K for Phase 2.  The apparent idea is the political goal of passing out more awards to uncompetitive life-style companies. The economic impact would cut SBIR's ROI even farther than the present uncalculated but minuscule rate as co-investment opportunities decline. The idea is foolish and pandering, because the number of awards can always by kept constant by keeping the average award within a desired range. A few really good projects with $5M and a little less for mediocrities that won't have any economic payback anyway. Little matter though, since the bureaucratic agencies show enthusiasm for variation. What's $20K less for another turbulence model?  Legislative language at  http://www.zyn.com/sbir/articles/Section_9j-hr4694-proposed.pdf .  The SBIR advocates, led presently by SBA's former chief advocate, keep looking for ways to get more money with no payback evaluation.

No matter, the SBIR game will go on since no appropriations battles are needed and since the administration doesn't seem to mind the inefficiency enough to get take on small business politics. Platitudes and handouts will continue. Join the party for your piece of the pie.

CVD Diamond Walks Again. A USA startup calling itself "Group4 Labs... an extreme materials company" ... made its public debut with a unique GaN-on-diamond wide bandgap semiconductor wafer. Group4's initial product is called Xero Wafer and what they've done is place their GaN epilayer less than 0.5 nanometers away from a synthetic diamond substrate. Details are in the company news release ... Group4 Labs is wholly owned by its founders and employees, has no institutional investors, and is self-funded by its sales activities, corporate R&D partnerships and government contracts. [Compound Semiconductor, Feb 15] Maybe the company sits atop the grave of Crystallume.

Prizes for a few. NASA wants comments from competitors and partners on how to structure its upcoming prize program for stuff like spacesuits and controllable vehicles. Its first concern might be a way to keep the politicians out of it, for if the prizes are often enough, the hand of politics will find an entry. http://prod.nais.nasa.gov/cgi-bin/eps/synopsis.cgi?acqid=118924 Just one sentence in NASA's appropriation could poison the whole incentive. Prizes of a few million are a great investment that gets the ideas pursued without big government money and management.

Stump the Scholar. SciGuy http://blogs.chron.com/sciguy/ seeks interesting and illustrative science problems. Example: Houston needs a mountain. It needs to be 1 mile high, with a square-mile flat top. In August when it is 95 degrees at the base of the mountain, what will the temperature be on the top of the mountain? Also, how many square miles will the footprint for the mountain encompass?    SCIGUY'S BLOGROLL Science blogs:  Effect Measure    HealthLawProf  Molecular Torch  New Scientist  Responsible Nanotechnology  Science Musings   Slashdot  WorldChanging

As fossil fuel prices rise and government subsidizes solar energy building, the supply of silicon can't keep up with demand. Electronics measure silicon by the square inch but solar panels by the square foot. And the alternate photo-voltaic materials are astronomical in price, however more efficient than silicon. In 2006 the solar industry is on track to use more of the silicon, known as polysilicon, than the entire semiconductor industry, [AP, Feb 17 http://www.mercurynews.com/mld/mercurynews/business/13898781.htm  ]   On the Net:  Hawaii Solar Energy Association: http://www.hsea.org/;  Solar Energy Industries Association: http://www.seia.org/  ;  Semiconductor Equipment and Material International: http://www.semi.org/  ;  Hemlock Semiconductor Corp.: http://www.hscpoly.com/

Live on Arrival. Even though the free-market, big business Bush White House sent a budget with zero ATP and half the MEP, the Congress will not go along, especially since the governors want the money to keep flowing. It's just a perennial game of a weak statement of principles with no intent to actually veto the eventual appropriation. Ken Jacobsen of Manufacturing and Technology News (Mar 3) reviewed the tired bidding. Are they worth doing? Well, at least, unlike SBIR, the architects have to prove the economic value for which ATP has employed up to 71 equivalent full time people. It takes a lot of paper shufflers to keep a handout program handing out. 

Call it Start-Up Management 2.0. In high-tech hot spots like California's Silicon Valley, Boston and Austin, Texas, venture-capital investors are going back to basics: They're monitoring the start-up companies they fund more closely than they did during the technology boom and trying to foster better management practices. In the late 1990s, many start-ups didn't get attentive care and feeding from their investors, since even poorly managed companies could launch successful initial public stock offerings and make venture capitalists rich.  [Rebecca Buckman, Wall Street Journal, Mar 13]

SpeechGear (Northfield, MN)'s solution is a software suite -- the only one of its kind, Palmquist said -- that provides near-instant translation of anything users to see, hear, say, read, write or type. ... The units cost about $5,000 each and can be configured to translate more than 200 languages, including Arabic, Korean, Chinese, Japanese and Russian. The company also sells software for PDAs that translate one language pair, say German to English, for $69.95 ... While the Navy and Marines have been the primary customers so far, Palmquist is aiming SpeechGear software and tablet computers at other clients, such as police, hotels, restaurants and retailers. ...  Government contracts have provided money for research and development and, along with sales to the military, have accounted for the bulk of SpeechGear's revenue, Palmquist said. [Larry Werner, Minneapolis Star Tribune, Mar 13  http://www.startribune.com/535/story/300024.html  ]  Near $2M in Navy SBIR.

Mississippi Polymer Tech www.parmax.com is being bought by an international chemicals and pharmaceuticals group in Brussels. MPT founder Bob Gagne was "enthusiastic", but then Bob has been enthusiastic and dogged since the early SBIR days of his polymer in California where the parent Maxdem still resides. Was SDIO's seed SBIR critical? Well we bureaucrats who needed all the success stories we could get will say so; if nothing else, it helped Bob do what he probably would have done without SBIR only slower . Entrepreneurs find a way. If today's SBIR managers want companies that will do something good after SBIR, they should look for the many Gagnes out there. Only when they exhaust the supply of Gagnes should they fall back on good science and engineering by good scientists and engineers needing  a job.

The Sound of Money. Clarity Technologies was bought for $17M cash last year by an English firm, Cambridge Silicon Radio http://www.csr.com/home.php , the leading Bluetooth provider.  Clarity grew out of Gail Erten's tiny IC Tech http://www.ic-tech.com/ (Okemos MI), winner of several Phase 2 DOD software SBIRs, crediting an AF $1.3M contract and a BMDO 1997 signal conditioning SBIR as the seeds.  Clarity says it is a leading provider of software and services for improving the audio quality and performance of voice-based communications systems and products. It also claims $28M in business and investments.

Looking for more stories that emerge from SBIRs? Try MDA's superb tech applications bulletin www.mdatechnology.net which is still unfortunately like standard government TA blurbs - heavy on the technology and light on the economics. But then there a lot of lawyers lurking to pounce on misstatements of what can only ever be speculation on future markets. Better safe than sued, or called before Congress to be yelled at in election year showtime. 

Big Bait, Big Fish.   Frank Wolf (R-VA) wants NSF to find (mostly) private sources  to fund a $1B prize for an energy independence idea. Can you imagine the NSF academics deciding who has a billion dollar idea?  Peer review to the max? The political appointees? Maybe the Nobel Committee. Anything to avoid the leadership burden of convincing the voters that there is no free lunch in energy. What if voters had to first explain entropy  ...

Write for scanners. Jakob Nielsen (no known relation) www.useit.com/papers/webwriting says on-line readers don't; they scan. And when you write SBIR Phase 1 proposals, think likewise. If you were a federal tech reviewer who had 50 proposals and a day, how would you triage down to the best three or four for serious study?  Some other Fast Company suggestions for web writers -like you: www.contentious.com ; www.cluetrain.com; www.netpress.org/careandfeeding.html

lately, tech companies are relying increasingly not on electrical or software engineers to drive their stock prices but on financial engineers. They have little choice. Revenue growth has fallen to around 10% a year, half the rates of the go-go '90s. That slowdown has turned tech shares into laggards. [Business Week, Mar 20]

R&D Competition. Small US firms that expect to R&D for US companies have a new competitor. companies such as Procter & Gamble Co., Motorola Inc. and International Business Machines Corp., among many others, have been investing to expand their Chinese R&D operations to develop products for the global market. [Kathy Chen and Jason Dean, Wall Street Journal, Mar 13] Which should incentivize the SBIR of the mission agencies to reach for more dual use R&D. But don't expect DOD and NASA to look beyond their noses.

On the bright side, Information-technology spending among corporations is seeing a slow and steady acceleration, [Wall Street Journal, Mar 13]

Patent Auction. Patent holders and potential buyers will gather at a tony San Francisco hotel, where Ocean Tomo LLC, has organized a two-day event that will culminate in live bidding to sell 430 patents. [Wall Street Journal, Mar 9]

Ruling: Corning, the world's biggest maker of liquid-crystal display glass, won a court ruling that may force SRU Biosystems to stop selling an optical sensor used in drug development. [Boston Globe, Mar 9]

Tableau Software was named "most promising new company" at the WSA's industry-achievement awards, an annual event hosted by the Seattle-based technology trade group.  .. also won most promising new technology award for VizQL; its database interaction language lets users interpret information visually. Tableau was developed by a computer-science professor at Stanford University, and received $5 million in first-round funding in 2004. ...No record of any SBIR ...  DatStat, a Seattle company developing research-management software, won the business product of the year award for its online survey program DatStat Illume. ...  NPower , a national network of 12 non-profit groups that give technology assistance to other non-profits, won the "technology for the greater good" award. [Kim Peterson, Seattle Times, Mar 9]

blazing data transfer  IBM has created a technique that will let computer networks share and transfer data about six times faster than they can now.  In what they dubbed ``Project Fastball,'' IBM researchers were able to transfer 102 gigabytes per second -- what they called the equivalent of downloading 25,500 songs from the Internet in a single second -- at the Lawrence Livermore National Laboratory in Alameda County. The previous data transfer record was 15 gigabytes per second, according to IBM. [San Jose Mercury News, Mar 9]

Affinergy (Research Triangle Park, NC) raised $3 M in its second round of VC.  The biotechnology company will use the money to expand its partnering activities and begin developing proprietary products. It will add five scientists this year. The Duke University spin-off is developing coatings for medical devices that enable biological and nonbiological surfaces to stick together. [News and Observer, Mar 9] No SBIR.

Small businesses, we are told, are the fountainhead of job creation and the engine of economic growth, responsible for two-thirds of all new jobs created in the U.S. .. Small Firm Idolatry, says Veronica de Rugy (of free-market AEI)  [Forbes Mar 13]  In our new entrepreneurial economy it is not small businesses per se that are important but flexible, innovative risk-takers.  ... It's time to abolish the SBA and get rid of subsidies aimed at small business. .. instead ..low tax rates, low levels of regulation and a stable legal structure that protects property rights. Size doesn't matter.  Good news and bad news: SBIR already has the flexibility to subsidize only innovative market-driven firms but systematically ignores it. Why? The people making the decisions have NO incentive to advance innovation; they have only a great incentive to buy what they want for their government program.  http://www.forbes.com/columnists/forbes/2006/0313/034.html?_requestid=5142

Cold Fusion Just Sounds So Good. Purdue University is investigating allegations that a scientist thwarted his colleagues' efforts to test his claims of producing nuclear fusion in tabletop experiments ...  Seth Putterman, a professor of physics at the University of California, Los Angeles, who received a $350,000 grant from the Defense Department to try to reproduce Taleyarkhan's findings, said he has been unable to do so. [Rick Callahan, AP, Mar 9]  Researchers all over the landscape have been finding apparent energy anomalies for at least a decade but no cold fusion finding has yet been validated by being reproduced in an independent lab. DOD has even done several SBIR Phase 1s to explore apparent net energy gains from unknown mechanisms.

Native Textiles will close its doors, eliminating the last 26 jobs at the Queensbury (way upstate NY) knitting plant. One of the last remnants of an industry that abandoned its Northeast home decades ago when both labor and electricity were cheaper in Dixie.

One Republican Congresscritter observed that  Congress does two things well: nothing and overreacting," he said. "We're into phase two in the port ownership debacle and the 218-year struggle for power among the three branches of government. Today's lead Wall Street Journal editorial makes its typical argument: executive power for Republican presidents.

A healthy increase in venture-capital funding of medical-device companies has helped lift overall investments in life-sciences industries, even as biotechnology deals have tailed off.  [Wall Street Journal, Mar 8 http://online.wsj.com/article/0,,SB114178928805492250,00.html?mod=djemHL  ]

Ceradyne suffered an 8% hit to its stock [today], as an analyst suggested the supply of body armor for the U.S. Army was nearing its peak and could possibly decline. ... Shares of Ceradyne were recently off $4.07 at $53.40 on volume of 4.5 million shares, versus average daily turnover of 830,400 shares. [Henry Sanderson,  Dow Jones Newswires, Mar 8]

Gong! At a recent Silicon Valley conference, two dozen Internet start-ups presented business plans to an "American Idol" style panel of judges, who gave advice on whether the ideas, cool as they might be, could become the basis for a business.  
http://online.wsj.com/articles/portals?mod=djemPJ  Ridicule sells tickets.

In The Better World Project, launched [recently] by AUTM, readers can learn the stories behind the Google™ search engine, Honeycrisp apple, V-chip, cochlear implant, Habitrol® nicotine patch and other products used in health care, environmental protection, agriculture, safety and 16 other fields.  ...  Both The Better World Report and Reports From the Field are fully searchable via an online database that is soon expected to include stories from Europe, Asia and Australia. Print copies of the reports, the online database, and licensing success stories from the United Kingdom are available at http://www.betterworldproject.net.

IBM disclosed Wednesday that it is moving all of the design and development of its vaunted business consulting offerings to the fast-growing country. [Paul McDougall, Information Week, Mar 8] The loss of another source of business for small US high-tech firms should bring the SBIR pleaders to Congress's handout window again with another empty cockamamie story.

Tech entrepreneurs. Several Web sites selling made-to-order Trojan horses to hackers have been shut down, the two cooperating security companies who led the investigation said .. while ...  A university systems engineer who said a Swedish hack-my-Mac contest was too easy closed down his own challenge Tuesday, and said that even after 4,000 log-in attempts and two denial-of-service attacks, his Mac mini remained untouched.  [Gregg Keizer, Tech WebNews, Mar 8].

The Future Success of Small and Medium Manufacturers: Challenges and Policy Issues is a follow-up to a 2001 report on the importance of SMMs during the height of the 1990s prosperity boom. Since that time, a major recession has occurred causing many shifts in the manufacturing industry.  The report identifies two important trends that are shaping the future of SMMs. First, large manufacturers are increasing their dependence on suppliers of parts as they streamline their operations to increase productivity. This has been positive for many SMMs, the report indicates, as they have expanded businesses into areas formerly owned and operated by large manufacturers. On the flip side, however, the pressure to reduce prices is passed down the supply chain with the burden of cost reduction and innovation falling on SMM suppliers. The second trend is the development of increasingly sophisticated production in developing countries, which has toughened the landscape for SMMs. In order to stay competitive, SMMs have to offer value to their customers that low-cost overseas competition cannot match, such as proprietary, high-technology products, a willingness to customize, and fast turnaround times, the report states.  ... available at: http://www.nam.org/s_nam/bin.asp?CID=202515&DID=236457&DOC=FILE.PDF  Links to this paper and more than 3,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/  [SSTI, Mar 7]

Planning to sell to the world? "Be prepared for a time commitment. World-class status isn't achieved overnight and cannot be purchased. It must be earned on the shop floor through extensive training and application of improvement tools. Four to five years of practice is required to fully understand what it means to be world-class and to be a 'true believer' in the continuous improvement tools. Many buried issues will be uncovered."   -- The HON Co. -- Cedartown Plant, Cedartown, Ga

NSF's biennial Science and Engineering Indicators (nsf.gov/statistics/seind06) features analysis, statistics, and tables on everything from academic research spending to zoo attendance.  http://www.sciencemag.org/cgi/content/full/311/5765/1228

www.evolvingexcellence.com: A blog on lean enterprise leadership from the editors of Superfactory. [Industry Week, Mar 8]

.A committee of the National Academy of Sciences has warned that 'the vitality of Earth science and application programs has been placed at substantial risk by a rapidly shrinking budget.'.. For its part NASA says that tight budgets force it to cut funding for all but the most vital programs. 'We simply cannot afford all of the missions that our scientific constituencies would like us to sponsor,' NASA administrator Michael Griffin told members of Congress when he testified before the House Science Committee February 16. [ScuttleMonkey on Slashdot.org, March 07, smooth wombat writes]  "vital" includes politically inspired Mars missions as Presidents try to sound grand. 

For a discussion of research funding in the new federal budget, musings about scientists' public image, or a host of other opinions,  cosmicvariance.com

Green for Green.  A record $502 M in VC was invested in green technology companies during Q4 2005 in North America, according to the Cleantech Venture Network (downloads press release).  This investment represented a 59.8% increase over Q4 2004. [siliconbeat.com, Mar 8] 

Albany Molecular Research bought Hungarian firm ComGenex which combines chemical synthesis and computational chemistry to create drug-like compounds.

from the power-to-go dept.prostoalex writes "AVC and Antig Technology will demo a production-ready fuel cell for laptops next week on CeBIT trade show. According to PC Magazine, 'the CD-ROM size fuel cell will fit within the media bay of a notebook PC, replacing the drive with additional battery power.' The fuel cell battery will last 8 hours."  [hardware.slashdot.org, Mar 2]

Ibis jumped 10% Tues Feb 28, 06 without benefit of news announcement.

Want Your "innovative" Technology Accepted?  Rondrin writes "CNN has an article detailing a $9 billion loophole in the tax code to spur synthetic fuel development. Unfortunately, spraying coal with pine tar qualifies. From the article: 'The wording is so bland and buried so deep within a 324-page budget document that almost no one would notice that a multibillion-dollar scam is going on. Not the members of Congress voting for it and certainly not the taxpayers who will get fleeced by it. And that is exactly the idea.'"  [politics.slashdot.org, Mar 2] Get yourself a majority party pork merchant.

The constitutionality of a popular tax credit used by most states to lure and retain businesses will be challenged today before the US Supreme Court. [Sacha Pfeiffer, Boston Globe, Mar 1] Interstate competition, as old as industrialization, for economic activity invites large tax incentives to corporations with jobs. Critics of corporate tax incentives argue that they have become lavish giveaways that businesses have not only come to expect, but have learned to manipulate by playing states off one another. ... But many economists say most tax incentives have little or no effect on economic development, and that taxes generally don't affect companies' decisions on where to locate. As a result, they say, states would be better off encouraging development by investing in education, technology, and infrastructure. Not many SBIR-class companies get into such questions sin ce they start and stay where the founders and the angel investors live.

Microsoft offers an new set of Web-based applications: Office Live, www.officelive.com, free during the beta period. WSJ's Walt Mossberg, who gives it an OK with need for improvement, says he made a very basic Office Live test site for a fanciful fake company at www.waltwsj.com.

Ethanol Valley. Following the smell of money, Silicon Valley VCs are looking into ethanol - during working hours. Unhappily for the prospects of making money in a VCs time frame, ethanol as a fuel still depends on government subsidy from a fickle government. Alternative fuels anyone?  venture capitalist Khosla is the most high-profile ethanol convert in the tech world. He's pushing policies to speed up the shift to ethanol, advocating a government mandate for car companies to produce so-called ``flex fuel'' cars, or vehicles that can run on fuel that's up to 85 percent ethanol. He's also funding a state ballot initiative to slap a tax on oil extracted in California.  [San Jose Mercury News, Feb 26 http://www.mercurynews.com/mld/mercurynews/business/13967138.htm ]  Everyone is getting into the act. Microsoft billionaire Bill Gates is plowing money into a Fresno company, Pacific Ethanol. Virgin's Richard Branson has moved on this. The human genome guy, Craig Venter, is rolling up his sleeves. And you've got a host of guys here in Silicon Valley, including well known venture capitalist, Vinod Khosla, and various Stanford professors. John Doerr, of Kleiner Perkins, has talked about it, and tells us his firm is looking to make an investment.  http://www.siliconbeat.com/  Feb 25

Spook Shopping for Data.  NSA (No Such Agency) has been seen shopping in Silicon Valley for new data mining technologies, says John Markoff (New York Times, Feb 25).   Supercomputer companies looking for commercial markets have used the practice for decades. Now intelligence agencies, hardly newcomers to data mining, are using new technologies to take the practice to another level.  But by fundamentally changing the nature of surveillance, high-tech data mining raises privacy concerns that are only beginning to be debated widely. That is because to find illicit activities it is necessary to turn loose software sentinels to examine all digital behavior whether it is innocent or not. http://www.nytimes.com/2006/02/25/technology/25data.html?ei=5058&en=cbcd71b864c16e09&ex=1141534800&partner=IWON&pagewanted=all 

Got any bad stuff in your innovation? Two big paint companies' stock took a dive after a  Rhode Island jury decided that the former maker of lead paint created a public nuisance that continues to poison children.  Although DOD typically will take the higher performance despite the public hazard, the larger world will object to your selling it there.

businesses are spending much more on future-oriented investments than widely believed ...  the conventional numbers don't capture the emerging knowledge economy ... we're talking about intangibles: brand equity, the development of talent, the export of best practices.   This stuff is hard to measure.  [Michael Mandel, Business Week, Feb 13 http://www.businessweek.com/magazine/content/06_07/b3971001.htm  ]

American Superconductor got another order its PowerModule-based wind turbine generator control systems. An Austrian firm will incorporate AMSC's stuff in systems it sells to Australia, Canada, China, Japan, Scotland, and the USA.  [Mass High Tech, Feb 22]

Bubbles are good ... it was too much, too soon. In 2001, just 5% of the country's fiber-optic capacity was being used. Wholesale prices plummeted .... Still, the nation had been wired. US schools, governments, libraries, and corporations all now enjoy fast Internet connections. Today, about 40% of Americans have high-speed access at home, and the price of long-haul broadband has fallen by 75% in the past five years. ... as long as you are not trying to make money as the bubble blower. [Daniel Gross, Wired, Feb 06 http://www.wired.com/wired/archive/14.02/bubbles.html  ]

Displaytech  http://www.displaytech.com/company/index.html  says it makes and sells microdisplays with superior image quality for electronic viewfinders in consumer digital still cameras, camcorders, and mobile communication devices.  It has had 25 Phase 2 SBIRs over two decades as it grew from Mark Handschy as the lone employee in 1985 to fifty today. Which is about a $12M investment if we ignore Phase 1s.   If the company really is selling at a profit and paying taxes, the government could count it as an SBIR success and start counting how much return that it and all the others have made to either the Treasury or the economy.  No "success story" blather by bureaucrats, please; just count the money.  Like Displaytech's VCs are doing.

Hundreds of new U.S. power plants are planned in the next few years, says Jill Jusko in Industry Week, Feb 21 http://www.industryweek.com/ReadArticle.aspx?ArticleID=11475 . But.  Typically, only a third of announced plants get built, says the Edison Electric Institute, and the new ones don't expect to reduce the cost to consumers because they will use tried and true technology. Everybody demands power but fossil fuel costs are rising and there hasn't been a nuclear plant started for 32 years. At least the costs of power from a fossil fuel plant is predictable. With nuclear, delivered power costs are a complete guess. If your next SBIR proposal is about electirc power, put some realism in the commercialization section in case any knowledgeable government official might notice. 

A new high-capacity material for super-efficient batteries from MIT/SUNY Stony Brook  The computer model says it could cut the weight of battery packs for plug-in hybrids by four or five times (whatever that phrase means) and allow speedier charging. Much R&D and hope remain.  http://www.technologyreview.com/NanoTech/wtr_16384,318,p1.html

Supply side economics for renewable energy. The Bush administration cuts budget and people at the renewable Energy Lab while touting reaching national energy independence with renewables. Rep. Mark Udall (news, bio, voting record), D-Colo., co-chairman of the House Renewable Energy and Energy Efficiency Caucus, said the government has funded only one-third of the money the 2005 energy bill authorized for renewable energy and energy efficiency. http://news.yahoo.com/s/ap/20060221/ap_on_go_pr_wh/bush  Must be an election year. Oops, Bush said it was a budget mistake, not a plan, that zeroed out the people. 

Whaddya Want From a State? Kimball said Massachusetts has a difficult time competing with other states because land is scarce, wage costs are high, and the regulatory environment is unfriendly.  ''What we do have in Massachusetts is the deepest, broadest, and most diverse economy in technology innovation and manufacturing of any region in the US," he said. [Boston Globe, Feb 21] Which is more important to an R&D business: smart people or cheap living? Massachusetts is starting another new program - Massachusetts Business Connect - to make big firms, especially in other states, aware of the resources hidden in small Massachusetts companies.

In a decade HP Labs have shrunk from 1,400 employees to 600.  The way corporate research labs run has been changing in other ways. More of them are partnering with customers, competitors and universities rather than toiling away at new technologies all by themselves in locked labs, as many did 20 years ago. ``That's the trend now, to reach out to others to acquire knowledge,'' Larson said. ``Because they can't do it all themselves. No one can afford to cover all bases of knowledge to compete in the global marketplace. So they have to acquire it from outside resources.''  [Nicole Wong, San Jose Mercury News, Feb 21 http://www.mercurynews.com/mld/mercurynews/business/13923100.htm ]  Sounds like an opportunity for small R&D companies as outsource suppliers of smart ideas.

brighter, cheaper compact fluorescent lamps (CFL ) as prices have dipped to the $5 range from $10 or $15, but that's still more than an incandescent bulb that can be had for 25 cents. ....  "This package saves you $118 in energy cost per bulb," "Lasts 7 years guaranteed," and "Lasts 8 times longer than standard bulbs." [Thomas Sheeran, St Louis Post-Dispatch, Feb 21 http://www.stltoday.com/stltoday/business/stories.nsf/story/D19BEAF5FCF36B4D8625711C0012F6D6?OpenDocument ] Great long term economics still has to convince consumers to pay more up front to save energy expense later. Remember, though, that consumers have an inherently high discount rate and don't connect their electric bills very well with their lighting habits.

The Clueless Manifesto Here's to the clueless ones. … Cluelessness is underrated.  It's the newbie who does something he didn't know was supposed to be impossible.  It's the naive guy asking the one dumb question any clued-in person would diss.  And it's that question that leads to the answer no expert would have found.  Discussion: Scobleizer  [http://tech.memeorandum.com/  ]

It's Different This Time? I believe what Rudi Dornbusch said: that when highly intelligent and respected economists begin evolving plausible theories that--this time--the trade deficit is sustainable, that is the time to start running for the hills, because the crash is near. Posted by Brad DeLong  February 21,  http://www.j-bradford-delong.net/movable_type/Index.html

Another Foolish SBIR Idea. One politician, who represents the municipality that once had the highest SBIR rake-in per capita, wants to put a higher, but absolute, ceiling on the amount of SBIR awards: $145K for Phase 1 and $1010K for Phase 2.  The apparent idea is the political goal of passing out more awards to uncompetitive life-style companies. The economic impact would cut SBIR's ROI even farther than the present uncalculated but minuscule rate as co-investment opportunities decline. The idea is foolish and pandering, because the number of awards can always by kept constant by keeping the average award within a desired range. A few really good projects with $5M and a little less for mediocrities that won't have any economic payback anyway. Little matter though, since the bureaucratic agencies show enthusiasm for variation. What's $20K less for another turbulence model?  Legislative language at  http://www.zyn.com/sbir/articles/Section_9j-hr4694-proposed.pdf .  The SBIR advocates, led presently by SBA's former chief advocate, keep looking for ways to get more money with no payback evaluation.

No matter, the SBIR game will go on since no appropriations battles are needed and since the administration doesn't seem to mind the inefficiency enough to get take on small business politics. Platitudes and handouts will continue. Join the party for your piece of the pie.

CVD Diamond Walks Again. A USA startup calling itself "Group4 Labs... an extreme materials company" ... made its public debut with a unique GaN-on-diamond wide bandgap semiconductor wafer. Group4's initial product is called Xero Wafer and what they've done is place their GaN epilayer less than 0.5 nanometers away from a synthetic diamond substrate. Details are in the company news release ... Group4 Labs is wholly owned by its founders and employees, has no institutional investors, and is self-funded by its sales activities, corporate R&D partnerships and government contracts. [Compound Semiconductor, Feb 15] Maybe the company sits atop the grave of Crystallume.

Prizes for a few. NASA wants comments from competitors and partners on how to structure its upcoming prize program for stuff like spacesuits and controllable vehicles. Its first concern might be a way to keep the politicians out of it, for if the prizes are often enough, the hand of politics will find an entry. http://prod.nais.nasa.gov/cgi-bin/eps/synopsis.cgi?acqid=118924 Just one sentence in NASA's appropriation could poison the whole incentive. Prizes of a few million are a great investment that gets the ideas pursued without big government money and management.

Stump the Scholar. SciGuy http://blogs.chron.com/sciguy/ seeks interesting and illustrative science problems. Example: Houston needs a mountain. It needs to be 1 mile high, with a square-mile flat top. In August when it is 95 degrees at the base of the mountain, what will the temperature be on the top of the mountain? Also, how many square miles will the footprint for the mountain encompass?    SCIGUY'S BLOGROLL Science blogs:  Effect Measure    HealthLawProf  Molecular Torch  New Scientist  Responsible Nanotechnology  Science Musings   Slashdot  WorldChanging

As fossil fuel prices rise and government subsidizes solar energy building, the supply of silicon can't keep up with demand. Electronics measure silicon by the square inch but solar panels by the square foot. And the alternate photo-voltaic materials are astronomical in price, however more efficient than silicon. In 2006 the solar industry is on track to use more of the silicon, known as polysilicon, than the entire semiconductor industry, [AP, Feb 17 http://www.mercurynews.com/mld/mercurynews/business/13898781.htm  ]   On the Net:  Hawaii Solar Energy Association: http://www.hsea.org/;  Solar Energy Industries Association: http://www.seia.org/  ;  Semiconductor Equipment and Material International: http://www.semi.org/  ;  Hemlock Semiconductor Corp.: http://www.hscpoly.com/

 

Remember that in capitalism, government does not create wealth; government redistributes wealth for public purposes.  And rarely efficiently, since the power of redistribution invites abuse. What's fair is in the eye of the beholder.

We'll Double Their Bid. The president's budget would double basic R&D in the physical sciences at some of our federal agencies in 10 years. Democrats pledge to double that funding across all agencies -- within five years.   The president has proposed no new federal investment in broadband access, but Democrats believe that high-speed, always-on broadband will create millions of good jobs. Our agenda guarantees that every American will have affordable access to broadband -- within five years. [Nancy Pelosi, House Democratic Leader] Every politician has a plan to solve problems by spending more money. None has a financial plan to pay for them. War, science. Medicare - they're all free. What a magic world!

NASA is shopping for a manager of its new VC arm, Red Planet Capital, to invest $11M the first year and then up to $20 M later by copying CIA's In-Q-Tel. Technologies to be exploited with equity investments:  Nanotechnology, Robotic, Intelligent System, High-speed networking and communication.   http://www.spaceref.com/news/viewsr.html?pid=19532 

All these agency VC plans say that agency HQ is unhappy with the results of their SBIR programs which could (and should) be funding entrepreneurial companies with good new technology. But the agency SBIR managers focus not on future potential, rather on present R&D support. They do not subscribe to the theory that seed money in useful technologies in market-driven companies will attract capital that will give the agency what it ultimately wants - useful technology developed with outside money. Instead, the managers prefer control over the details of development even if that means slow and fully paid development and under-funding at the critical stages.  This penchant for control is also the main reason why SBIR is little more than a jobs program for life-style companies to fulfill Congress's need to pay off social constituencies.

SBTC claims paternity of a four-year Commercialization Pilot Program at DoD that will accelerate the transition of SBIR and STTR  technologies into mainstream DoD acquisitions.  Details to follow, they say after the program was stuck into DOD's FY06 money. It is hard to find much new in the deal that wants to get more SBIR companies into DOD mainline programs. Unless the program actually gives dedicated money to DOD managers, it will just let DOD continue to buy whatever new technology it likes with or without SBIR. Looks like the devil will be in the details as Congressional staffers whisper in DOD's ear what the vague legislation means. The law joins a long line of "pilot programs" in various places to make commercial business out of new technology. Lotsa luck!

President's budget again kills the ATP, but Congress is likely to disagree again for the eighth time in the 16 year of the program. 

The Senate legislation [on American competitiveness] was based on a National Innovation Initiative, produced by a Washington think tank called the Council on Competitiveness, which is led by CEOs, university presidents, and labor leaders. Their initiative was chaired by Craig Barrett, chairman of Intel, and Bill Brody, president of Johns Hopkins University. Deborah Wince-Smith, president of the council, says these federal proposals are a critical step toward responding to foreign competition. [MIT Tech Review, Feb 9]

More for physical sciences and technology, less growth for biosciences in the soon to be irrelevant President's budget. More for bioterrorism countermeasures and pandemic preparation, but less for cancer and diabetes. The physical scientists find great virtue: This sort of governmental support is long overdue, says John Hopfield, president of the American Physical Society. "There's been a dismal history of inadequate investment in physics, computer science, and the non-biology side of R&D in this country for the last 20 years," he says.  [MIT Technology Review, Feb 8 http://www.technologyreview.com/BizTech/wtr_16301,307,p1.html ] Stay tuned, the politics has just started.

President also wants $73B for military R&D which means another healthy year for SBIR funding.  

Reward Our Friends?  Not in an election year when domestic politics reigns, as the US rejected a chance to reward Britain's going along with the Iraq gig. The Rolls-Royce engine was rejected for the newest Air Force pilot mafia toy - the Joint Strike Fighter. Even though half the jobs would be in Indianapolis.  http://www.telegraph.co.uk/money/main.jhtml;jsessionid=XZU3CGI0MMTUTQFIQMGCFGGAVCBQUIV0?xml=/money/2006/02/07/cnrolls07.xml&menuId=242&sSheet=/portal/2006/02/07/ixportal.html

More Science Budget in some places. DOE's budget request (just a rfequest) wants a 14% for the Office of Science on the path to doubling its budget by 2016.  And NIST wants to add 600 scientists. [AIP Bulletin http://www.aip.org/fyi/2006/018.html ]

DOD STTR Call.  The USAF STTR solicitation for the spring has topics from AFOSR only where they   think science, not direct applications. http://www.acq.osd.mil/sadbu/sbir/solicitations/sttr06/af06.htm .  MDA's thirteen STTR topics are harder to characterize as they seem not to emanate from a single mind, rather a mix of broad searches and explicitly military applications. http://www.acq.osd.mil/sadbu/sbir/solicitations/sttr06/mda06.htm . The Army warns that even science is so domestic that proposers must list foreign nationals and what they will do. The first topic wants basic chemistry of hypergolic liquids which are logistical nightmares requiring great care to keep the components fluids away from each other and free of impurities. http://www.acq.osd.mil/sadbu/sbir/solicitations/sttr06/army06.htm  Note: STTR has little money.

If you want DOD to support your commercial potential ideas, think DARPA which doesn't have immediate mission demands and whose role is take on tasks that frighten the conservative services.  http://www.acq.osd.mil/sadbu/sbir/solicitations/sttr06/darpa06.htm

More, More, Always More. The SBIR advocates got a provision into a Senate bill (S.2111) to grow SBIR by half a percentage point a year until it reaches 5% in five years. If 2.5% produces no net gain, redouble the effort to twice as much nothing? Oink.

The president has stolen from his father's new friend, Bill Clinton, the idea that sprinkling relatively tiny bits of money over a long list of projects creates the impression of real action. Perhaps we are lucky that the president didn't propose to spend even more on these projects, for they all share a fatal flaw: They may be little projects, but they reflect big-government thinking.  [Irwin Stelzer, Weekly Standard, Feb 13]

Colorado has an SBIR competition of sorts - for success, and on terms that the federal government should learn.  Five categories:

1. Most innovative SBIR award,
2. Most successful commercialization of an SBIR funded idea,
3. Most successful company resulting from an SBIR award,
4. SBIR Program “Rookie of the Year” award, and
5. Most successful SBIR commercialization based on technology licensed from a university or federal laboratory. [from SBIRworld.com, Feb 1]

Using the model of the widely respected Georgia Research Alliance, STAC recommends the state invest $1.5 million as match for a $6.75 million federal award from the NSF's Experimental Program to Stimulate Competitive Research (EPSCoR). [SSTI, Jan 24] Well, it's Rhode Island's money to "invest" in local recipients of a set-aside program for have-not universities in fly-over states.  If the university was not competitive enough to win grants in NSF's regular derby, why would a consolation award, granted by the politicians of  uncompetitive states be a worthy investment for Rhode Island taxpayers. Where's the compelling evidence that the state would get an economic return more than buying government bonds?  Such programs are a pork product of the 1787 compromise that gave every state two Senators. The same "fair share" argument powers SBIR for small business as EPSCOR does for small universities. But then the purpose of politics is to re-distribute wealth in ways that market competition does not.  And from where does RI think the $6.75M is coming -- heaven, Harvard? 

The cure for our [oil] addiction? Why, a government program, of course: the Advanced Energy Initiative. This new scheme would throw more tax dollars at research aimed at creating clean power plants and also cars powered by hydrogen, electricity and ethanol. Unfortunately, the past 35 years of failed presidential energy initiatives doesn't bode well for these proposals.  [Ronald Bailey, Wall Street Journal, Feb 2]  Fortunately for the President, few voters study economic history in a land of instant gratification.

Politicians are all expert in innovation, national competitiveness, and education.  They just cannot agree on the nature of the problem, and as a result on solutions.  They can, however, mainly agree on more government money for every good thing. But when 536 of them finish arguing, they break the budget. Four Senators, two from each party, have a new program, PACE which would put more money into  --- you name it. 10-percent annual funding increases in basic research - a perennial act of faith. [facts from SSTI, Jan 31] And the President has a new idea also for the old chestnut of energy independence -- his Advanced Energy Initiative, a 22% increase in DOE clean-energy research. Great plans, I suppose, except who will pay for it?  Not the four champions of new spending and not the President who wants to cut government income. Note: before expecting a rich SBIR trove from all this, wait to see what appropriations actually put more money into DOE R&D talk. 

Too Much Hydrogen. Experts say too much funding is going into hydrogen at the expense of near-term technologies. [Kevin Bullis, Technology Review, Jan 31 http://www.techreview.com/NanoTech-Devices/wtr_16217,303,p1.html]  The experts want their piece of the pie, and/or a bigger pie that favors their research more than a single minded devotion to hydrogen that won't pay off for possibly decades. Too bad, hydrogen has such great political appeal since it's ultra clean and pretends to be cheap once developed.  Besides, the AAAS says that energy research is down (inflation adjusted) from the mid-1980s, and conservation research is down 16%. Almost all energy research got killed, because nothing you could do research on could possibly beat oil at $20 a barrel. But why would an administration bought by the oil industry support spending that would reduce the influence of oil?

Growth, Demand, Supply, and Government.  Isn't it just simple economics? With plenty of government subsidy, solar power has grown 30% a year for the last six years. But without an equal subsidy for the silicon for the cells, growth in 2006 may be down to only 5% from 50% in 2004. US makers ceded the silicon market for microelectronics to foreign competitors years ago. A typical government ploy:  Germany promises more than 55 cents per kilowatt hour for power from anyone with solar panels. [story from John Carey, Business Week, Feb 6, 06] Why doesn't everyone jump on the wagon? Because it would come to a quick economic halt when the government subsidy stops, and who can predict what politicians will do?

Too much baggage for the cart. Before you engage in developing something for the the military, remember that what the Army wants today is not what the Army will want after you get halfway through development. Lockheed just re-learned that principle as the Army cancelled the newest spy plane contract because the plane couldn't carry all the new baggage that the Army wanted to keep adding. [see Jonathan Karp, Wall Street Journal, Jan 26]

Uh, oh, dirty word - commercialization.  After gazillions of USG dollars developing advanced aircraft, Boeing fear indictment for using technology and know-how developed for secretive military programs in making the newest commercial jet. engineers refused to sign forms declaring that the 787 program is free of military data. ..  So they conducted fresh tests [of plasticized carbon-fiber tape] to prove a result they already knew. [Dominic Gates, Seattle Times, Jan 22] But if it is military sensitive technology - which it is if DOD says it is - it cannot be exported (or even whispered in the ear of a foreigner). Which raises the ticklish question of whether repeating the discovery by an independent test changes its restricted status. Fortunately, few SBIR companies will get embroiled in such arcana because DOD doesn't often let small companies work on such secrets. But SBIR companies have to be wary that anything they do for the military could be declared restricted post facto, and in an extreme case taken entirely from them by any of the many Pentagon paranoids.

AAAS has urged the White House and Congress to take strong steps to sustain American innovation by investing in high-risk, breakthrough research and by improving science education at all levels. [Gilbert Omenn, President AAAS] No advice on where the more money is to come from, as usual for beneficiaries. Good and bad news: George Bush shows little sign of listening to advice from anyone except his political advisors and his big business contributors.

Company A got an Outstanding Phase III Transition attaboy from a company that sells commercialization advice for getting a $1M+ contract to supply DOD with an SBIR product through an unnamed DOD prime contractor. The facts: Company A got a DOD Phase 2, part of which was sub-contracted to the unnamed prime, the same contractor that will incorporate Company A's stuff into a DOD weapon. Company A's history shows at least $7M in DOD Phase 2 awards 1997-2003 (award data trail the actuals by as much as two years) plus another $0.7M in Phase 1s.  Who won in this deal? The prime got credit for using small business while getting money from the subcontract (which could have been as high as half the Phase 2). DOD and the consulting company pat each other on the back for commercialization "success". The SBIR advocates tell Congress about SBIR success, and the local Congress member will be happy to tell the constituents what a great job SBIR is doing. DOD gets to use SBIR for its ordinary R&D work. The consulting company burnishes its "record" of success. DOD and the company will claim innovation, as they would for any work that met the legal definition of R&D even though the abstracts of Company A's awards read like standard R&D. If you were an investor, what would you think your rate of return was if you invested $8M and got only the government-allowed profit rate from a $1M sub-contract?

Want to compete with SBIR rookies? Try NIST whose latest list of Phase 2 winners, only seven awards as the free market Republicans try to gut ATP altogether, had a total of only 12 previous awards and four of the seven had none. Compare that average past awards with the mission agencies who go back over and over to the same firms some with more than a hundred Phase 2s.  What that means is that NIST is not buying for the government users, rather it is applying economic criteria (even if by government bureaucrats) by which extensive government experience may actually be a negative. Would you believe the commercialization story of a company that has had bunches of SBIR with no commercialization?  One of the new NIST awardees quit an SBIR company in the early 90s to form his own company in the same technology area and got a get-started Phase 2 from - you guessed it - BMDO. Today he is still small but sells products http://www.parallax-x-ray.com/  .

Perhaps Foster-Miller can claim a huge contribution to a few people getting quite richer. QnetiQ, the British firm that bought FMI went public (floated shares) which brought a tidy profit to Carlyle Group which got an 800% return in three years on a $42M investment. The other big winner was 300M GBP for the British Treasury which owned 56% of QnetiQ. Which raises the old question of whether it is good for government or the firm for the government to own equity in a private firm as some have suggested for SBIR and other tech investment programs. If capitalism is to work its magic on the economy, government has to stay out of economic decisions. Politicians' dealing in pork barrel handouts doesn't suggest much faith in their economic judgment.

Schwein is German for government investment.  The German government says it will "invest " 25B euros in transport and research over the next four years as a means of "kick-starting" growth. Sure. When a politician invokes investment, look for the wiggly pig. No matter how many economists argue "market failure", when it comes to actually passing out the money, look for political payoffs. Not at all unlike SBIR's fanciful talk about investment as the agencies fund ordinary R&D while the Congress praises the program that pays off a loud constituency. And where will the Germans get the new money? Better not to ask. Germany has the same problem that the US does in deciding where to "invest" government money. If government chooses the beneficiaries, only government criteria will dominate, and there is no good evidence that government criteria work for investment in the private economy.

Unneeded ships built in Mississippi ARE critical national defense, just ask any Mississsippi Congresscritter. Senior Pentagon officials had hoped to incorporate conclusions of massive internal review in 2007 spending plan. But the review is moving slowly amid bureaucratic inertia and resistance from lawmakers protecting pet programs.  [Wall Street Journal, Jan 13, 06]

Although DOD schedules Friday the 13th for proposals, the SBIR law prohibits bad luck since DOD MUST pass out all its SBIR money to somebody Bad luck for the many will be balanced by good luck for the few. Note: if your luck is all bad, it's not luck.

NSF seeks input from the science and engineering community as it starts work on a new strategic plan that will guide its efforts through FY 2011. Comments by January 20.http://www.nsf.gov/about/performance/input.cfm