Miscellaneous Stories 2004-05

Stories that earlier appeared in Nelson's News 
Note 1: Carl Nelson Consulting, Inc is not an investment adviser and may hold a financial interest or client relationship in companies discussed.
(Note 2: Carl Nelson Consulting does not endorse these companies or organizations or their activities.) 
Looking for other older stories? Visit the archives


After years of investing in technology companies that supply businesses, they are paying lofty sums to fund dozens of consumer-focused start-ups that do everything from connecting digital devices in homes to making games for cellphones. Many venture capitalists will be out in force at next week's Consumer Electronics Show in Las Vegas, hoping to get an inside track on the next gadget that could turn into an investment opportunity.   [Rebecca Buckman, Wall Street Journal, Dec 29]

A handful of futuristic chip-making technologies at the atomic scale have been added to an industry planning effort that charts the future of the semiconductor manufacturing industry every two years.  The transition to a post-silicon era is forecast in a report called the "International Technology Roadmap for Semiconductors," . [John Markoff, San Francisco Chronicle, Dec 29]

BearingPoint also advises startups to seek out non-government opportunities because demand for security technologies is equally high in the private sector. ... 19 startups in Maryland’s Chesapeake Innovation Center, the nation’s first incubator of homeland security technologies. Opened in June 2003, the CIC works with the National Security Agency and companies like BearingPoint and Northrop Grumman to develop search-and-nail technologies

Correct last year forecasts:  Nobody will make money on Wi-Fi, but it will become ubiquitous anyway:  part of a list published in January by PBS tech pundit Robert Cringley, ..  Because it costs practically nothing to set up a Wi-Fi hotspot, no one will pay much to use it. As a free app, though, it's still enormously popular. ... Cringley said he will publish a review of all his 2005 predictions in January. [Wired, Jan 06]

Three technology giants have banded together to provide researchers at the University of California-Berkeley with $7.5 M to help entrepreneurs make their innovations available to as wide an audience as possible.  Google, Microsoft and Sun Microsystems each will contribute $500K a year over the next five years to fund research at a new UC-Berkeley lab.  The Reliable, Adaptive and Distributed systems Laboratory, or RAD Lab, will be staffed with six UC-Berkeley faculty members and about a dozen computer science graduates.   The goal is to create technologies that can help Internet entrepreneurs or inventors more easily make growing services available to hundreds of thousands or millions of users, said David Patterson, UC-Berkeley professor of electrical engineering and computer sciences and founding director of the RAD Lab.  [Michael Bazeley, San Jose Mercury News, Dec 15]

the stem cell scandals remind us that the technological road to growth is long and far more uncertain than it seems. New technologies, even the most promising ones, are hell to get working, and even harder to make commercially viable. History is littered with great ideas which turned out to be dead ends--and there's no way of predicting ahead of time which ones those will be.  [Michael Mandel, Economics Unbound blog, Business Week, Dec 17]

Doug Engelbart invented computer networks, time sharing, graphical user interfaces, and the mouse--all while driving to work one day in 1951. Really.  [I, Cringely, Dec 9  http://www.pbs.org/cringely/ ]

Feynman's room at the bottom is indeed vast, but it has limits. Right now, micro-technology prospers by jamming ever more transistors into strips of silicon real estate as little as 1,000 atoms wide. That's close to the quantum limit for normal transistor function. For nanotech dreams to come true, that real estate must narrow further, sacrificing function along the way. And the narrowing itself, at some point, becomes impossible. Atoms are positively shrink-proof, so when transistors shrivel to the one-atom limit, Moore's Law as we know it will hit the end of its silicon rails.  [Russell Seitz reviewing tow new nanotech books, Wall Street Journal, Dec 16]

To compete in a global economy, you simply must maintain the low-cost producer status. Do you save local jobs today knowing that it could mean the end of your company tomorrow? The same holds true for the pensions and lifetime medical benefits that are strangling the competitiveness of U.S. businesses. The economics are clear, but what about moral and ethical considerations?  [Al Schultz, CEO, Valassis Communications, Industry Week, Dec 16]

Innovation  doctor Ignaz Semmelweis achieved a dramatic reduction in deaths by insisting that doctors wash their hands between autopsies and obstetrical examinations. But other doctors refused to believe that their own hands transferred disease. Besides, they grumbled, hand-washing was far too time-consuming. widely ridiculed and eventually fired. ...   similar opposition to his proposed reforms, which involve a far greater use of computers by doctors. As in 19th-century Vienna, many doctors today cannot believe that their inability to retain today's vast medical knowledge in their heads is harming patients,  ... Dr Weed, who turns 82 this month, is the embodiment of indefatigability, devotion and determination. He has spent more than three decades devising software that matches a patient's symptoms and health history against an exhaustive catalogue of computerised medical knowledge.  ...  Websites  Dr Weed founded the Problem-Knowledge Coupler Corporation in 1982. A 1999 report by the Institute of Medicine examined the frequency of medical errors. A study by the National Committee for Quality Assurance attributed 57,000 deaths per year to a lack of best-practice care. RAND Health has published a number of studies on informatics and technology. Medline indexed 3,672 articles on coronary heart disease in 2004.     [The Economist, Dec 8  http://www.economist.com/printedition/PrinterFriendly.cfm?story_id=5269189]

Technology spending by enterprises this year will exceed the peak level of 2000, said Mark Zandi, chief economist for Moody's Economy.com, who noted that consumers have picked up much of the slack for high-tech vendors in recent years.  ''Businesses are flush with cash," Zandi said. ''They're looking for ways to expand. The equipment they invested in for Y2K is rapidly deteriorating.  [Robert Weisman, Boston Globe, Dec 12]  Good news for SBIR companies that actually make commercially useful products; no news for those who want to be just government contractors.

now as many tech blogs as stars in the sky, only a tiny fraction of them matter. .... The easiest way to follow this world is via a useful blog-tracking service called tech.memeorandum ... Another site, blogniscient.com, offers a similar service   [Lee Gomes, Wall Street Journal, Dec 7]

Executives at any big medical-device company launching a critical new product know two things in their bones. One: Those new devices can generate such powerful profits that it seems to rain money. The other: Weather is changeable. Medical-device advances that create vast riches always face relentless competitive pressure that squashes fat profits sooner rather than later.  [Steven Syre, Boston Globe, Dec 6]

I Have the Idea, You Have the Factory .. But it is going to take more than the first wave of novel products to convince big businesses that access to the new technology is worth quite as much today as many of its entrepreneurs believe. ... materials buyers at 20 multinationals averaging 100,000 employees and $55 billion in annual revenue, 70 percent said it was their company that dictated the terms.  Lux also found other disagreements on what the ideal deal looks like. For instance, 65 percent of the small companies wanted the multinationals to pay them license fees. But only 35 percent of the big companies wanted to take such licenses. Many of them want to handle nanomaterials like the commodities they are often replacing: tell us what the product costs per unit and then ship us as much as we want. [Barnaby Feder, New York Times, Nov 16  http://www.nytimes.com/2005/11/16/business/businessspecial/16feder.html?ex=1133845200&en=05c7cc3dd7be6345&ei=5070 ]  SBIR proposals all too typically say, "The product will get x% of a fantastically growing market,:" and expect the government agency (if it cares at all) to credit the proposer with commercialization potential. Savvy reviewers will reject that claim as an indicator of market laziness in a lifestyle company.

More Globalization of Technology. AP reports that Intel is about to invest another $500 M in its Indian operations in Intel's research lab and marketing division, and half to develop a personal computer,  Meanwhile, Intel's toughest trailing competitor Advanced Micro Devices had already done a consortium deal to supply technology for a proposed $3B billion chip-making factory in India. Is this a healthy development?  Depends on your attitude toward an integrated world of markets and producers. Want cheap computers (and other electronic toys) and cheap cars?  Get a day's labor what an hour's labor costs in the USA. Is there anything the government could do, short of imposing capital controls and thus driving up the cost of everything?  It might take a more investment attitude toward seed technology with its SBIR money instead of using most of it to do what the mainline R&D programs are doing anyway to make government-use equipment and government-use knowledge. Let Congress amend the act, over the howls and shrieks of the SBIR pie-share political advocates, to require economic impact as at least an equal criterion with government utility of the technology.  Don't know how to pick winners nor evaluate economic impact? Not surprising. Let third party interest get a vote.  More Fast Track and fewer turbulence models.

 Israel has emerged as the go-to country for antiterrorism technologies. ... Israel has spawned companies selling guns that shoot around corners, software that translates dog barks into English-language warnings and lasers that can detect explosives from 100 feet away. Working their way through labs now are intelligent robotic cameras, and nanolasers and nuclear resonance imagers to detect chemical and bioweapons. ...  The global trade in antiterror gear and consulting services is expected to grow to $178B by 2015. (The U.S. accounts for half.)   [Susan Karlin, Forbes, Dec 12]

America's work force is divided into three parts: about 25% are the 'smart people' (that's you) who are educated and also have special career skills; another 25 percent are the 'walking dead,' (that's your uncle)  victims of mergers or technological change and need to acquire new skills in order to change jobs or even careers . . . and up to 50 percent are the 'techno-peasants,' (the people you need to hire) poorly educated adults with few if any special career skills," says Edwin Gordon. [Cecil Johnson, Boston Globe, Dec 4 http://www.boston.com/business/articles/2005/12/04/labor_crisis_will_put_us_economy_to_the_test/ ] And a too large part of the smart 25% are your SBIR competitors scratching out a living on low margin government set-aside contracts.

How Smart Science Gets Dumbed Down.   "Science is done by scientists. Then a press release is written by a nonscientist, who runs it by their nonscientist boss, who then sends it to journalists without a science education who try to convey difficult new ideas to an audience of either laypeople or, more likely, people who know their way around a t-test a lot better than any of these intermediaries. Finally, it's edited by a team of people who don't understand it."  Posted on www.badscience.net   [Wired, Dec 05]

Big Organizations Need Big Fuzzy Words. “The purpose of this instruction is to establish the policies and procedures of the Joint Capabilities Integration and Development System (JCIDS) … To achieve substantive improvement in joint warfighting and interoperability in the battlespace of the future, coordination among DoD components is essential from the start of the JCIDS process. That process will establish the linkage between the joint concepts, the analysis needed to identify capabilities required to execute the concepts and systems delivering (them) … New solution sets must be crafted to deliver technologically sound, testable, sustainable and affordable increments of militarily useful capability. JCIDS implements the evolutionary acquisition approach to capability development … All capabilities shall be developed, tested and procured to leverage the unique capabilities of other DoD components.” [a Joint Chiefs of Staff directive]

They want a hole.  Earlier this month, Coca-Cola announced that it was pulling the plug on Vanilla Coke. The news made headlines, but in fact, most new products are doomed to an early death. Of the 30,000 new consumer products launched each year, over 90% of them fail. ... Why? ... prevailing models of segmentation and brand building. Carving up markets by product, price point or customer type often causes marketers to deliver products overloaded with unwanted features or designed to improve on a product or appeal to a demographic profile -- but not necessarily real customers. ... professor Theodore Levitt used to say: "People don't want to buy a quarter-inch drill. They want a quarter-inch hole!"  [Christensen, Cook, and Hall, Wall Street Journal, Nov 29]

a quotation from Mr Drucker What is our business? Who is our customer? What does the customer consider value?  While that might work well for large business in the short run, it does not work for innovators developing something for which there is no present customer. 

The MIT VCPE Club invites you to the 8th Annual MIT Venture Capital Conference, "Capitalizing on a Flat World,"at the MIT Tang Center on Saturday, December 3rd. This year's conference explores how to take advantage of the new ways that businesses create, communicate, and access data-rich content from anywhere, at any time. The keynote addresses will feature Jim Champy, Chairman of Perot Systems' Consulting Practice; and Jeremy Allaire, former CTO of Macromedia, Inc. and founder of Brightcove, Inc.

Underlining the challenge, Romney said leaders of one technology firm in Massachusetts anticipated that 90 percent of its skilled labor would be in Asia in 10 years. He also pointed to statistics that show the United States graduating only 4,400 mathematics and science PhDs each year compared with 24,900 math and science PhDs for greater Asia. [Stan Gibson, eWeek.com, Nov 16 http://www.eweek.com/article2/0,,1888019,00.asp ]

Drucker Speaks:   From "The Five Deadly Business Sins," Oct. 21, 1993: The first and easily the most common sin is the worship of high profit margins and of "premium pricing." … GM's troubles -- and those of the entire U.S. automobile industry -- are, in large measure, also the result of the fixation on profit margin. By 1970, the Volkswagen Beetle had taken almost 10% of the American market, showing there was U.S. demand for a small and fuel-efficient car. A few years later, after the first "oil crisis," that market had become very large and was growing fast. Yet the U.S. auto makers were quite content for many years to leave it to the Japanese, as small-car profit margins appeared to be so much lower than those for big cars. The lesson: The worship of premium pricing always creates a market for the competitor. And high profit margins do not equal maximum profits. Total profit is profit margin multiplied by turnover. Maximum profit is thus obtained by the profit margin that yields the largest total profit flow, and that is usually the profit margin that produces optimum market standing. [excerpted Wall Street Journal, Nov 14]

By 2010, Kurzweil said, computers will begin to disappear, instead becoming embedded in the environment and into materials such as clothing and eyeglasses. Images will be written directly on human retinas ... "2029 is where technology really gets interesting because we'll have had all of this exponential growth taking place over the next 25 years," said Kurzweil. By this time, computation will move from the device and become Web-centric. "There is going to be a worldwide mesh consisting of tiny devices, nodes in clothing and in the environment, each sending and receiving their own messages, as well as passing on other peoples' messages,"  [Kevin McLaughlin, CRN, Nov 16]

The hope is that solar dishes will one day make electricity for less than 10 cents a kilowatt hour, which is about what it costs to make electricity at modern, gas-fired power plants at today's fuel prices and less than half the cost of making it with photovoltaic panels. [Rebecca Smith,Wall Street Journal, Nov 17] All the grand plans for Ambitious plans to cover two big swaths of California desert with solar dishes will come to naught unless and until they can get the unit cost of power down to competitive levels. And large government subsidies merely transfer the extra cost from the taxpayer's utility bill to the taxpayer's tax bill (unless deficit finance can go eternal).

It is no coincidence that domestic manufacturing started to lose its global competitive edge when the Old World craftsmen who had immigrated to the U.S. decades earlier began to retire from the workforce. But craftsmen just like them are still alive and well -- and working -- in Europe, in Japan, in Korea and elsewhere. They know quality, and they see no reason why they should ever have to settle for anything less.  American manufacturers who ignore this most basic principle of global business do so at their peril. When they trim engineering, R&D, quality-control and personnel budgets to save a few bucks up front, they are being penny wise and Pound/Euro/Yen foolish [Marc Gottlieb, Industry Week, Nov 2]

The WSJ's StartupJournal features a post about the current state of the venture ecosystem and VCs appetite for more mature companies - those with established products/services, growing revenues and clear direction - Later-Staged Companies See More Venture Funds.  This certainly isn't news but rather further confirmation of a trend that started soon after the melt-down in early 2000 when the adults regained control of the purse strings. ... That said, now seems to be like a pretty good time to be starting companies and seeking funding.  The project I'm actively working on has already had a series of meetings with VCs who would not otherwise consider seed stage investments. [Drakeview (a blog), Nov 11]  If you're an entrepreneur looking for capital for a new idea with future market appeal, you probably need both the money and the adult business supervision of a VC. If that's the case, SBIR is probably a diversion and a distraction of dead end money.

Value Line, a ratings advisory, touted ATMI (Sep 05)  as a key supplier of materials for copper wafers, and paying off its debt. It is still trading at 30+ PE

2006 could be the year when everything flips back." The macro backdrop is good for tech spending, but there will be a shift, which has already begun, from the consumer to businesses," asserts Mark Zandi, chief economist at West Chester, Pa.-based Economy.com   [Eric Savitz, Barron's, Nov 14]

Inventors have always held a special place in American history and business lore, embodying innovation and economic progress in a country that has long prized individual creativity and the power of great ideas. In recent decades, tinkerers and researchers have given society microchips, personal computers, the Internet, balloon catheters, bar codes, fiber optics, e-mail systems, hearing aids, air bags and automated teller machines, among a bevy of other devices. [Inventor  James] West stands firmly in this tradition - a tradition that he said may soon be upended. He fears that corporate and public nurturing of inventors and scientific research is faltering and that America will pay a serious economic and intellectual penalty for this lapse. A larger pool of Mr. West's colleagues echoes his concerns. "The scientific and technical building blocks of our economic leadership are eroding at a time when many other nations are gathering strength," the National Academy of Sciences observed in a report released last month. [Timothy O'Brien, New York Times, Nov 13] Government is wasting its innovation structure - SBIR - that could nurture some of the better innovators by doing just what the other corporate entities do - sponsor incremental advances by lifestyle companies for present uses. 

Nuclear winter is over in the high-tech job market. Software developers, design and systems engineers, network administrators and others are finding companies with a slew of openings eager to make offers and willing to negotiate better pay and benefits. [Jane Larson, Arizona Republic, Nov 13]

Since the small-cap cycle began in 1999 -- a span over which the S&P Smallcap 600, as noted, rose more than 100% -- the Russell 2000 has gained only 54%. [Rhoda Brammer, Barron's Nov 14]

Start-ups also are becoming easier to build without venture cash because entrepreneurs can now outsource programming chores to cheap, offshore engineers. ... Some [internet] entrepreneurs can now get their start-ups off the ground for less than one-10th of what it used to cost.  [Rebecca Buckman, Wall Street Journal, Oct 31]

Opinity has created a service that lets web sites and users get information on a person's reputation, even if that person use several pseudonyms, [news.com, Nov 9]

A small, but growing number of people think that a looming shortage of drinking water constitutes a much larger crisis. Water consumption is doubling every twenty years, but the supply isn't growing at the same rate, according to Kevin McGovern, chairman of venture firm McGovern Capital, quoting U.N. statistics. [news.com, Oct 25]  It is a tech opportunity. The supply is adequate and fixed by nature, but raising the useful supply is a matter of handling and treatment of nature's bounty - just an opportunity for cheap tech (or in the US and Europe for modest cost tech).

Startups are hot -- again. Valuations are nuts -- again. Fortunes are being made -- again. Signs of the renaissance are popping up everywhere. Venture capital is flowing more profusely than it has since the late 1990s; money invested in early-stage startups could top $1.5 B this year, up 50% from last year and almost double 2003’s figure. More significantly, the average seed investment, $4.4M , is three times what it was a year ago and larger than it was in 2000. That means that VCs are valuing startups at higher levels than at the height of the boom.  [Michael Copeland, Business 2.0, Nov 05 http://www.business2.com/b2/web/articles/0,17863,1119656,00.html] Unfortunately for most SBIR companies, the government is unlikely to be the early seed money that gets an idea to VC seed stage. Government wants either sound incremental science or a product that has no huge profit appeal.

Where do you see the most exciting pockets of innovation? All over the map: On the one hand, in terms of stuff you can see, [it's] in the Web. And with the build-out of broadband and mobile, there's the build-out of new, huge Web startups. [There are] huge rates of change, and businesses are continuing to build out Web applications. You go into any company, and the number of new Web sites is just staggering. ... We've entered a phase where a lot [that was] invented in the 1990s is being deployed at a massive scale. That stuff is all accelerated and we're at the beginning of a 10-year wave of deployment. [Marc Andreessen, quoted Business Week, Oct 10]

Innovation Alarm. decisive action is needed now, says the NAS about US slippage in innovation. In 2001, U.S. industry spent more on tort litigation than on R&D. The solution(s), more money of course: increase the national investment in basic research by 10% each year over the next seven years; 25,000 new, competitive four-year undergraduate scholarships;  tax incentives for innovation (tax policy as incentive for everything good leads to a complicated tax structure); Read the report  http://books.nap.edu/catalog/11463.html   [SSTI, Oct 25]

In line with NAS's worry about a shortage of smart engineers, High-tech talent may soon be in short supply again, says Robert Weisman  [Boston Globe, September 18] about The buzz at the Society for Information Management symposium   One college dean (who doesn't have to meet company payrolls and profit targets) went so far as to advise employers to Hire talented technology workers whenever you find them, even if you don't have a specific job opening

Forbes's annual list of the best 200 small companies included three SBIR companies: Cerdayne (for the third straight year) , SurModics (for the sixth straight year) , and II-VI (for the third straight year).  

Great when you got 'em. Like oil prices for Texas,  high-technology wages and venture capital can hurt  areas [like Boston] disproportionately during economic downturns.   In the long run, though, Gittell's and Sohl's study drew criticism from one venture capitalist, Carl Stjernfeldt, a partner at Battery Ventures in Wellesley, who said a venture-fueled economy is better for a region over a complete economic cycle because it introduces innovation and new industries.  [Robert Weisman, Boston Globe, Oct 24 http://www.boston.com/business/technology/articles/2005/10/24/the_downside_of_high_tech_wages_venture_capital/ ]  The economic trick is to for the public sector to use the boom wealth to diversify, something private money has no need of since it can merely re-deploy to profitable places. Ask the south Asian economies how fast capital can re-deploy.

"The biggest problem innovative companies have is legitimacy," says Phil Anderson, director of the International Centre for Entrepreneurship at the Singapore campus of the Insead business school. "No company will succeed just by being better and cooler. They need to have a technology that solves a burning problem, one that makes customers whip out their checkbooks."  [Kristi Essick, Wall Street Journal, Oct 24] And getting a customer to adopt your product sure beats pleading the government for another year of R&D support to keep the idea alive until some market awakens. And if the government were smart (please!), it would cut off long term life support for innovations as an incentive to either make something of it or look for some other line of work.

A House Divided: Manufacturing In Crisis Gone are the days when U.S. manufacturers united to compete against the likes of Germany and Japan, pumping out high-quality goods under the protective shelter of the world's most vibrant economy. Today, amid liberalized trade and widely available cheap labor, manufacturers have turned against one another, threatening to topple a house built upon the pillars of ingenuity, productivity and competitiveness. ... While all manufacturers face the same lopsided trade policies, surging prices for raw materials and relentless competition from China and other low-cost markets, small manufacturers get squeezed the hardest. ... it is big versus small, especially when it comes down to where manufacturers stand on the U.S. government's trade policy, which often favors the big multinationals at the expense of the little guys [Doug Barthomolew, Industry Week, Nov 1 http://www.industryweek.com/ReadArticle.aspx?ArticleID=10849 ]

Clarity Towards All. How to Make Your Business Plan the Perfect Pitch http://www.business2.com/b2/web/articles/0,17863,1096845,00.html

The northern tip of Ireland is too cold, cloudy, and strewn with boulders to grow much of anything beyond Christmas trees, and the bogs are too soft to support cattle. But it does have wind, which a Dublin-based startup called Airtricity run day and night on a steady 16-knot breeze. Together the machines produce 12 megawatts of electricity, powering about 8,000 homes in the area. More important for the Herrons, they generate an annual royalty of roughly $55,000. And because of its unique wind characteristics, the property has appreciated as much as 100-fold, making the erstwhile shepherds multimillionaires. [Business 2.0, Aug 05  http://www.business2.com/b2/web/articles/0,17863,1083187,00.html ]

Brains beat dollars.  More isn't always better when it comes to corporate spending on research and development, says Booz Allen who found the companies that spent proportionately greater sums than their industry peers didn't enjoy greater revenue gains or better profits. ... once a minimum level of research and development  spending is achieved, better oversight and culture were more significant
factors in determining financial results.
The conventional wisdomers cry "foul" : a professor of finance at Georgetown University, says the time period examined is too short to catch companies whose results might have benefited from past R&D spending.  [GARY MCWILLIAMS, Wall Street Journal, Oct 11]

MIT Tech Review has a new feature Alarm:clock is a daily news site that evaluates privately-held technology startups in the areas of hardware, software, the Internet, and wireless communications. One industry overview and one company profile by alarm:clock's editors come to Technology Review every Wednesday by special arrangement. http://www.technologyreview.com/articles/05/10/wo/wo_101905burke.asp?trk=nl

It's tempting to overstate the significance of all things Google, and it has been overstated, many times. We have seen much of this movie before -- the nearsighted geek outlining the technology-enabled, blue-skied future that's ineradicably linked with that geek's business. (Although it most plausibly starred Bill Gates, many other actors auditioned during the dot-com boom.) [Jon Fine, Business Week, Oct 24]

Little is required to ensure political quiet in the American scientific community. A bit of annual growth in government outlays for research, presidential medal-pinning ceremonies in the Rose Garden for revered elders of the profession, and expressions of respect for science produce a wonderful tranquillising effect on the endless frontier. With rare exceptions, this combination has prevailed for most of the collaboration between science and government that began during World War Two. [Daniel Greenberg, London Review of Books, 9/2/05]

America's technological gap is shrinking. American retains its innovative lead, and no country comes near America's quota of miracle startups and world-beating entrepreneurs. Yet China and India are churning out an army of well-educated scientists and engineers, and both countries are showing remarkable technological and entrepreneurial creativity. International testing confirms U.S. declines in math and science. A new OECD report shows the U.S. as eighth and ninth respectively in the share of its people between ages 25 and 34 who have college and high school diplomas. It was first and second by those measures 20 years ago. [Fred Kempe, Wall Street Journal, Oct 17]

Patent War. Pay up in 30 days or face an expensive court battle, the letter not so subtly warned, adding that Clorox, Kellogg, Kodak, Gillette, BMW, Eli Lilly and other firms had all paid Solaia's licensing fees. ... Troll firms "have no assets. They don't innovate. They have no R&D. They have no activity to speak of other than writing letters and demanding large checks," said Paul McDowall of the Minnesota Intellectual Property Lawyers Association. [Dee DePass  ddepass@startribune.com, Minneapolis Star Tribune, Sep 27] A group of Minnesota firms, led by General Mills, got together, put their nine in-house patent attorneys to work and went to court. 

the [MIT Tech Review] R&D Scorecard shows that worldwide corporate spending is picking up (Big Spenders), but that the gains are unevenly distributed (Where the Growth Is). The biggest advances are in the life sciences, which also happen to be among the most research-intensive industries (Innovation Sectors): 2004 R&D spending among the biotech companies on the list shot up by an average of 69% over the previous year. 

Several solar startups with innovative new technologies, including Nanosolar and Konarka, have recently received venture-capital funding. Miasol is looking to make solar power cost-effective by using thin-film manufacturing techniques, avoiding the expensive processing that silicon-based solar cells require. Miasol enjoys great buzz thanks to a $16M investment from the superstar VC firm Kleiner, Perkins. However, its competitor Nanosolar has also recently raised $20 million. It remains to be seen whether these new types of solar cells are generating investments based on the general promise of cleaner energy or whether they are commercially feasible technologies able to compete with existing and well-entrenched silicon-based photovoltaics.  [MIT Tech Review, Sep 05]

The majority of venture firms don't do that well. The bottom half generally don't make any money at all. So most investors try to put their money with the top 25 percent of performing funds.  [Matt Marshall, Seattle Times, Sep 5]

Despite economic uncertainties, corporate plans to increase spending on technology gear remain on course this year, with analysts saying such outlays in the U.S. will rise as much as 7% over 2004. [Donna Fuscaldo,Wall Street Journal, Aug 25]

How much further can you push silicon's efficiency?  Today's standard commercial module converts about 12 percent of the sun's energy into electricity. The record in a laboratory is 24.9 percent, so there's plenty of room for improvement. Our highest-performing commercial module today is 18 percent efficient, meaning roughly 50 percent more power for a given area than the industry standard. We've been able to put all the electrical contacts on the back of the cell, which eliminates what's known as shading. [Spencer Reiss, MIT Tech Review, Sep 05]

[Greg] Kostello is one of a growing number of entrepreneurs who are experiencing first hand how much faster and cheaper launching a company is today, compared with even five years ago, thanks to the ever-decreasing cost of hardware and steady improvements in open-source software. [Eric Hellwig, MIT technologyreview.com, Aug 12]

In our study of supply chain innovation, we found that only a small percentage of companies recognized their suppliers as a source of innovation, and even fewer bothered to measure their value. What's most perplexing about this myopia is that the innovation derived from the supply chain is typically the least costly and least risky investment, and often the fastest to market.  [Business Week, Aug 22]

The market for venture-backed companies jumped 46% to a four-year high in the second quarter, says Robert Weisman (Boston Globe , Aug 13).  The 45 companies disclosing their purchase price in the first quarter were sold for a total of $4.2B. ... Nationally, about one-third of disclosed deals in the first half of this year returned more than four times the investment of venture capital firms and their limited partners, the new data show. Another third either recouped the investment or returned up to four times invested capital. In the last third, companies sold for less than the total venture investment.

An $8 Threat.  Logan International Airport is trying to block Continental Airlines Inc. from providing free wireless Internet access to its frequent fliers -- a service for which the airport charges a daily $7.95 fee -- calling it a threat to safety and security. ...  Massport told the airline it could route its wireless signals over Logan's WiFi signal, at a ''very reasonable rate structure.".. An FCC spokesman said the complaint is the first of its kind involving WiFi access at airports. [AP, Aug 5]

Their niche involves " lending money to some companies with no profits and no revenue.  Durham, N.C.-based Square 1 Bank plans to serve VC firms and their companies. [Melissa Allison, Seattle Times, Aug 5].

"The battery that you're getting in your laptop today is about 20% more powerful than the battery you were getting three or four years ago," said Donald Sadoway, an MIT professor of materials chemistry and a specialist in battery design. So why do our laptops peter out midway through a coast-to-coast flight? Because the laptops keep getting faster processors and bigger color display screens, not to mention those DVD drives.  "All of these new enhancements in computer performance are requiring greater performance from the batteries," Sadoway said. "It's almost like an arms race."  [Hiawatha Bray, Boston Globe, Aug 3]

The idea that innovation will ensure continued U.S. economic well-being is open to challenge as scientific and technological skills build in countries such as China and India, according to Harvard economist Richard Freeman.  Large increases in the number of scientists and engineers in
the large developing countries “creates the possibility” of what Freeman calls “human resource leapfrogging” of American innovation.
  [Ken Jacobson, Manufacturing and Technology News, Jul 25  http:// WWW.MANUFACTURINGNEWS.COM] Thanks to Jeff Bond at amtonline.org  Having dispensed with Japan Inc, the worriers now focus on India Inc and China Inc. Not to worry: when those countries start making big money we'll send them our financial engineers to show them the magic of "voodoo economics".

More Chinese Competition.  Early-stage investors are plowing money into China, and often posting permanent staff here, despite concerns about political instability, tight controls on capital and a dearth of local management talent. U.S. financiers say huge domestic demand for high-tech gadgets and sophisticated technical gear in China is hard to ignore, particularly when it spawns genuine local innovation in fields such as telecommunications and semiconductor design -- not just "me too" technologies riffing off Western products.   [Rebecca Buckman,Wall Street Journal, Jul 28]  Can the USG contribute to fostering capital investment in domestic companies? Yes, of course. It could target its SBIR handout at market-driven early stage technology companies who could be investment candidates once some of the highest technical barriers are reduced to manageable size. If you want to judge whther the USG is actually doing anything like that, look at the list of projects funded by Navy and MDA, for example. Project after project that only a government could love and that will draw zero capital interest after Phase 2.

Incremental Hyperspectralism. With a single 30-minute flight, scientists can use hyperspectral-imaging equipment to produce data that would take hundreds of field workers on foot weeks to assemble  ...  Hyperspectral imaging is far from new and has been used for military and other purposes  [Chelsea Deweese,Wall Street Journal, Jul 28]  A brand new idea that has been thoroughly tested - the conservative dream. Just right for military SBIR to refine and improve with little risk that anything startlingly new would be discovered. The Navy's recent list of Phase 1 SBIRs has five competing hyperspectral projects. DOD's SBIR database lists 250 SBIR awards since 1990 for hyperspectral anything with some double-size Phase 2 awards. One ten-person company has hauled in about $6M of hyperspectral SBIR, enough to explain to company's entire business. Have the DOD companies had any noticeable economic return, say tax payments on profits in this cottage industry, from all that "investment"?  Who knows? Nobody connected with SBIR seems to care, and every agency can find plenty of excuses to avoid the question. 

A decade ago, Netscape went public, blasting the Web into everyday life. Wired Aug 05  http://www.wired.com/wired/archive/13.08/intro.html  has an interesting re-cap of those ten years.

Crank. Con artist. Blithering ignoramus. Dishonest hack bent on corrupting the education system.  The certain, usually too young to have much sophistication, have no patience for opposing views.  George Gilder has had his opponents over his years of opining about society and technology (The Microcosm). Now he's attracting brickbat for championing Intelligent Design, the content-free idea that somewhere out there is an alternative theory to evolution. [story by Joseph Kahn, Boston Globe, Jul 27  ]

Two Steps Forward, One Back?

Leaders such as Motorola and IBM have embraced nanomaterials, but by spending less on R&D, the U.S. manufacturing sector could be stumbling in the race for more innovative products, says John Teresko [Industry Week, Aug 1, http://www.industryweek.com/ReadArticle.aspx?ArticleID=10514] From 1995 to 2001, China, South Korea and Taiwan increased gross R&D spending by about 140% while the U.S. increased its investment by only 34% and more than two-thirds of U.S. R&D was in applied research.In patent growth, the number of U.S. patent applications for innovations originating in Asia increased 789% while U.S. patent applications for homegrown technology grew only 116%Silicon Valley just went on sale, at 2% off, for anyone in China looking to buy companies here.  revaluation of the yuan doesn't only make Chinese imports slightly more expensive for us. It also makes everything in the United States slightly cheaper for buyers in China. [Mike Langberg, The Mercury News, Jul 26]  And with a growing pile of US$, what's a country to do?

Less Is More, according to HP's new CEO as he plans to cut 10% of the company's lab force. It says it is it's shifting the focus of the labs toward projects that offer a higher potential for a return on investment which is code for shorter focus on immediate markets. The future?  Maybe that's why CEO Hurd couldn't resuscitate NCR in his last job. Satisfying current customers risks becoming obsolete when your competitors innovate around you.

Get Creative!  How to build innovative companies. Top innovators: 3M, Apple, Microsoft.

Organizing for Commodity Business.  Even in a growing economy with a recovering technology sector, high-tech companies from Hewlett-Packard Development Co. to Teradyne Inc. continue to pare their payrolls in response to falling technology prices . ... a new calculation by technology companies that they can no longer count on predictable business cycles and must restructure their organizations  ... The average selling price for a microprocessor powering personal computers or routers has plunged to about $50 from about $500 five years ago. [Robert Weisman, Boston Globe, Jul 20]

What's the Next Big Thing in Technology? The Winners: Flat-Panel Televisions: Mobile Email: Business Intelligence Software: Satellite Radio.  The Losers: Fiber to the Home: The Digital Home: Radio Frequency Identification: WiMax. [Eric Savitz, Smart Money, Jul 24]

Fewer Americans are earning doctoral degrees in science and engineering,... American governmental spending on R&D in the physical sciences, math and engineering has slipped from 0.25% of the gross domestic product (GDP) in 1970 to 0.16% in 2003, according to the Alliance for Science & Technology Research in America (ASTRA). Meanwhile, China is steaming in the opposite direction. China nearly doubled its output of science and engineering Ph.D.s between 1996 and 2001, ... And in the six years between 1997 and 2002, national and local governmental spending on research in China doubled, to approximately $9.9B. On top of that, multinational corporations have been racing to set up research centers in the country and China's own industrial titans are now plunging into R&D, realizing they have to have their own technology to compete in global markets.  [Randall Parker, futurepundit.com]  Should the USG do anything about it? Well, maybe. One thing it might do to get more innovation for the tax dollar spent is target SBIR (a mere $1B a year) to companies with both entrepreneurial spirit and technology with future market potential. For two decades the agencies have been allowed to fund whatever they please, and they do not please to look to any goals except their own R&D programs. Want to do more than slurp up SBIR money? Get involved in efforts like The Task Force on the Future of American Innovation.    Can We Selectively Shut Off Immune Responses?  Two of a special collection of articles published beginning 1 July 2005, Science Magazine and its online companion sites celebrate the journal's 125th anniversary with a look forward -- at the most compelling puzzles and questions facing scientists today. A special, free news feature in Science explores 125 big questions that face scientific inquiry over the next quarter-century.  BishopBerkeley writes "Nature has an interesting nugget about the second meeting of the Image and Meaning Initiative which was held at the Getty Museum in Los Angeles. It is about the use of graphics in presenting scientific data. I am also a big advocate of using nice graphics in scientific presentations, but I also agree with Felice Franel, the founder of I-M, that not all images are meaningful scientifically. In fact, one encounters (and I am ashamed to admit that I have published) images that look nice but have no scientific import at all. One very cool Harvard physics professor, Eric Heller, produces wickedly beautiful (and meaningful) images of quantum mechanical models. These images have made the covers of Science and Nature, and are featured in his online art gallery, which was reviewed in the New York Times in 2002." And of course, any mention of graphic information should not go by without a big shout out to Edward Tufte.  [slashdot.com, Jul 4] 

MUMBAI, India--One of the critical ingredients for the $100 computer is probably in your garage.  In about three months, a little-known company called Novatium plans to offer a stripped-down home computer for about $70 or $75. That is about half the price of the standard "thin clients" of this kind now sold in India, made possible in part by some novel engineering choices. Adding a monitor doubles the price to $150, but the company will offer used displays to keep the cost down.  [Michael Kanellos, CNETnews.com, Jun 29]

Profits Without Jobs.  In the last three years, profits at the seven largest companies in Silicon Valley by market value have increased by an average of more than 500 percent while Santa Clara County employment has declined to 767,600, from 787,200. ... just as low-skilled manufacturing jobs fled the region starting in the 1970's, now software jobs are also leaving.  [John Markoff and Matt Richtel, New York Times, Jul 3]  Politicians will need something to assuage the people without jobs who vote,. Profits which do not vote are only good for shareholders which the unemployed won't be for long.  

German automaker Volkswagen recently offered a peek behind the locked doors of its Palo Alto lab.Inside, engineers are creating dashboard instrument panels that change on command to instantly offer needed information. They're perfecting auto glass that goes from clear to dark in two seconds. They're working with local companies like Palm to connect smart-phones to the car via Bluetooth to allow drivers to make calls using verbal commands or the car's buttons. And those are only the projects they can talk about. ``The basic idea is to bring the Silicon Valley to Volkswagen,'' said Carlo Rummel, executive director of Volkswagen of America's Electronics Research Laboratory. That's why his lab is full of local hires, not German engineers shipped in on temporary assignments.  [Matt Haumann, San Jose Mercury News, Jun 27]

from the no-thinking-zone deptDaniel Dvorkin writes "A New Scientist article details the claims of Jonathan Huebner, a Naval Air Warfare Center physicist, that the rate of technological innovation is actually decreasing, not increasing exponentially as some people believe. Huebner says that there are now fewer 'important technological developments per billion people' than at any time since the 17th century! I'm far from convinced, but it's an interesting and thought-provoking article." From the article: "He says the rate of technological innovation reached a peak a century ago and has been declining ever since. And like the lookout on the Titanic who spotted the fateful iceberg, Huebner sees the end of innovation looming dead ahead."  [slashdot, July 2] The usual optimists throw the usual stones at pessimism. Actually, why is it pessimistic to say that any given rate of innovation must continue or accelerate in response to gazillions of R&D money thrown at scientists and engineers by taxpayers? One driver is the constant political demand for real economic growth and the idea that per capita GNP must continually accelerate  What disaster, other than unemployed scientists, would happen if the taxpayers stopped cranking the S&T employment machine and let our revered capitalism work its magic?  

Killer Instinct writes "Ever wonder how ice melts? Until now, scientists could not explain why ice cubes in your drink melt. They've known the basics, but the details remained elusive. A breakthrough new study, announced yesterday, supports a leading theory that melting starts when the fundamental structure of matter begins to crack. Melting is considered a basic phenomenon in physics. An understanding of how it works is crucial to gaining a firm grasp on the physical world."  [slashdot, July 2]

Blog Away Smartly. You can start your own blog for free with www.Blogger.com to reach the other 50M regular blog readers. But, a few warnings: don't trust everything you read in blogs; no blogs wherein you trash the company you work for or your boss. [story Houston Chronicle, Jul 4] .

"Imagine that you're a company with a copyright and you see a company coming out with a technology you don't like because it's challenging your business model," ...  a second way to stop the innovation is just to litigate. Look what happened to ReplayTV: I... it had to fold the company because the legal standard then was so uncertain that you had to get to trial before you could resolve the case.  ... What you're going to see is innovation that's channeled in ways the copyright owners can agree to, or channeled in ways that avoid any kind of possibility of this kind of litigation. That has already had its effect in the Valley, and already money has shifted into places which will avoid any conflict with the copyright holders. Why buy a lawsuit when you can buy a new innovation that doesn't get you a lawsuit?  [siliconvalley.com, Jun 30]

watch the attitude of capital and the grown-ups who used it.  ... The sheer consistency of its behavior - it never does anything but seek the highest return ... If capital is moving in some new direction, it is because financial incentives, not capital, have changed.... [During and after the 90s IT boom]  The smartest capitalists were no longer the ones who did the big deals with established companies on Wall Street. They were the ones who did little deals with the companies that threatened the established companies. [Michael Lewis, Next : the future just happened, 2001]

In "The Flight of the Creative Class," [Richard] Florida revisits the idea that a community's economic health is dependent on the three T's -- technology, tolerance and talent. On a scale dubbed the Creative Index, which measures a community's creative economic strength and potential, the Twin Cities rank 10th.  [Jim Buchta, Minneapolis Star Tribune, Jun 27]

Some basic research surprises. what kind of basic research have gotten the big increases over the past three decades or so? I used NSF data adjusted for inflation


Federal obligations for basic research


change, 1970-2003



Life sciences










Physical sciences





Environmental sciences





Math and computer sciences









Social sciences






Overall economic growth












All numbers are inflation-adjusted



[MichaelMandel, Business Week blog, Jun 22]

The tech sector isn't just rich. It's filthy, stinking rich. 80 tech companies on that [S&P] list generated $229 billion, ... The trouble is, few tech companies are doing anything exciting with all that loot. ... With the tech downturn still fresh in their minds, relatively few business leaders have regained the sense of boldness that goes hand in hand with making advances in new technologies, products, and markets. [Steve Rosenbush, Business Week, Jun 20] 











the combination of venture capitalists favoring later-stage startups and the continuing trend of large corporations investing less in speculative research is creating an innovation vacuum, according to some experts. "The effects are pretty ghastly," says Lita Nelsen, director of MIT’s Technology Licensing Office. "Large corporations have become less and less invested in early-stage research. They buy it from little companies. And if there’s nobody to get the little companies started, we’re getting it at both ends."  But despite the hazards of the game, " venture capital is still a way to make enormous riches," says Josh Lerner, a professor of investment banking at the Harvard Business School. Still, there's never enough money.  But where will the next generation of innovative technologies come from? No one should forget that the search technology behind Google was developed by Sergey Brin and Larry Page as part of an NSF-funded Stanford University digital-library project. [MIT Tech Review, Mar 05] 

DDT, CFCs, asbestos, leaded gasoline ... and nanomaterials  ... bring various unintended consequences of initially promising technologies, notes Fred Krupp and Chad Holiday (WSJ, Jun 14). We need to make sure this assessment takes place now for today's "next big thing" -- nanotechnology. With the right mix of voluntary corporate leadership, coordinated research, and informed regulation, we can reap the benefits of this promising technology while reducing the likelihood of unintended consequences. Companies doing nanotech might take extraordinary precautions with the materials.

So that impending downturn in the semiconductor industry we've heard so much about during the past few months? Probably not gonna happen, say the folks at the Semiconductor Industry Association (SIA). This year, at least. The SIA on Wednesday reversed its previously pessimistic forecast, saying the global chip business is expected to grow 6 percent this year. It now estimates that the industry will see $226 billion in revenues in 2005. The trade organization last November had predicted a flat year and sales of $213 billion. "The market is getting stronger," said SIA President George Scalise. "We have a forecast that says we are going to have a very good year and two or three more ahead." What's driving the SIA's newly discovered optimism? Stronger demand for cellular telephones, personal computers, digital televisions and digital cameras. [JOHN PACZKOWSKI, Silicon Valley.com, Jun 9]  And how much longer can people buy cellphones and other digital toys with equity loans on inflated house prices? When will the music end?

Not Enough to Read?  Technorati tracks just over 11 million blogs worldwide, but the actual number of bloggers is probably much lower, given that many people maintain multiple blogs under a single blog hosting account, or have blogs at several locations such as LiveJournal, TypePad, and Blogger. My blog count of three doesn't even include the pseudo-blogs that go along with my accounts at places like Bloglines and Wallop. [Wade Roush, MIT Tech Review, Jun 8]

The Six Million Dollar Man was overpriced. Slap in a Medtronic implantable heart monitor, Parkinson's-busting neural stimulator, spinal fixator, and blood-sugar sensor, and you're probably under a million, all-in. Headquartered in Minneapolis, Medtronic is at the forefront of extending human physiology through technology, with sidelines in image-guided surgery systems, defibrillators, and the like. A heady 18% growth rate led to 2004 sales approaching $10B, of which nearly 22% was profit. The posthuman gold rush is on.  Challenge: Get back to being the first responder. Medtronic ceded that position behind competitors Boston Scientific and Johnson & Johnson in developing drug-coated stents used to prop open arteries.  Opportunity: Get people hooked up to the Internet - literally. A national health information network that gathers real-time data from devices in patients' bodies could change medicine forever.  [Wired, May 05]  

Behold the disruptive innovation! An entire industry can putter along for decades, steadily improving its products, services, and bottom line - only to be suddenly eviscerated by people from nowhere using simple, inexpensive, profoundly powerful techniques....HBS guru Clayton M. Christensen has described this theory of industrial extinction in several books. ... I searched for the stupidest, most dysfunctional US industry I could find. ... Health care has every quality Christensen lists as dangerous: crippling regulation, overcharged customers, enraged victims with deep grudges, unnecessary goods and services, and a massive base of underserved wretches. ... [Bruce Sterling, Wired, May 05]

Great Hope, Great Wait.  Since researchers first mixed together genes from two species more than a quarter century ago, biotechnology companies have promised to revolutionize the pharmaceutical industry  ... The biotechnology industry lost a combined $6.4B last year ... The industry's total accrued loss since its birth in Silicon Valley in the mid-1970s is more than $45B. ... [Peter Drucker once observed that the computer industry never made money as an industry.]  A handful of biotechnology companies have indeed hit it big after modest beginnings, making their initial investors wealthy. ... "It's a crazy industry to invest in," said John McCamant, a biotechnology investor ... Biotechnology remains a money-losing, niche industry of 1,400 companies that employ about 183,000 workers nationwide. By contrast, Wal-Mart employs 1.7M workers itself and its annual revenues rival the entire biotech industry's annual sales. ... [Paul Elias, MIT Tech Review, June 1 Someday, some will get rich. In the meanwhile, innovative companies will continue to live off someone else's money to pay for the interesting science work.

Big Money for Small Stuff. Nanotechnology research and development funding almost doubled to more than $10B in 2004 from the previous year. Most of the increase was driven by a big jump in corporate and private funding, which grew by 160%, while government and academic research outlays on nanotech R&D increased by a vigorous, but less outstanding, 37%. Japan led the way, with expenditures approaching $4B; the United States, however, was not far behind, with spending of about $3.4B. [Stacy Lawrence, MIT Tech Review, June 05]

Toronto, Helsinki, and Melbourne.  the themes of [Prof Richard] Florida's latest book, ''The Flight of the Creative Class: The New Global Competition for Talent", which contends the United States is about to lose the race for the world's best talent. The reason: Our open society, which has allowed people and ideas from all over to flourish, is closing under post-9/11 immigration policies and an intolerant Christian right. ... rising cosmopolitan cities, like Toronto, Helsinki, and Melbourne, Australia, are poised to snatch this talent away [Robert Gavin's review, Boston Globe, May 22]  Gavin finds Florida's thesis filled with specious arguments and overly reliant on anecdotes. 'brain drain" into the US has been slowed by recent immigration/terrorism fears but religious right interference with science is probably limited to the Bible belt red states which were never leaders in US science and technology anyway.  The distribution of government open competition R&D funds gives one clue where the creative talent lies - in the blue states of open discourse and civil liberties. 

Michael J. Ross writes ... U.S. IT managers are struggling with reduced budgets. Yet apparently many believe that the sector will regain its past glory and blistering growth rates. According to experienced IT consultant Erik Keller, it's not going to happen. He presents his case in Technology Paradise Lost, published by Manning Publications, whose user group representative kindly provided me with a copy of the book for review."  the rest of Ross's review[slashdot, May 19] 

 Walter Hewlett was right.   Just about everything that made HP a giant came not from its mainstream businesses, but from those "hobby" projects that turned out to be world-beaters: LEDs, desktops, scientific and business calculators, minicomputers, printers -- even employee Steve Wozniak's little "hobby" that temporarily got away, the PC. If HP can't keep those projects in-house, then, as Dave Packard did, it should give the teams some money, send them off, and buy their businesses back when they have something great to show. ... For 60 years, HP was synonymous with the highest quality, service and integrity. These days, when people think of HP what comes to mind is a corporate soap opera, forgettable PCs, and flimsy plastic printers. HP calculators, because of their durability, were once the dream of every college kid. Today? The last description I heard of an HP printer was . . . (sorry, this is a family newspaper).    [Michael Malone, Wall Street Journal, May 19] Malone also says buy Agilent because the spin-off child kept the HP way as the parent lost it.  

Partly inspired by California's energy crisis -- and the fact that Mr. Rodgers had spent $1 million after subsidies to install a solar panel on the roof of Cypress's headquarters -- he wrote Mr. Swanson a personal check for $750,000. "I thought the time for solar had happened," recalls Mr. Rodgers.  [Jim Carlton, Wall Street Journal, May 19] Has your company got the kind of story that will convince other TJ Rodgerses to open their checkbooks. If not, why not? Do you know anyone who could write such a check? Or do you spend your time schmoozing government technocrats for another R&D service contract? 

Among the definitions from The Devil's Dictionary by Ambrose Bierce:  Tariff - A scale of taxes on imports, designed to protect the domestic producer against the greed of his consumer. ..... Achieving free trade is like getting to heaven. Everyone one wants to get there, but not too soon.  [borrowed from the Adam Smith Institute] 

How Much Longer? Since 1990, income for the median American household has risen only 11% after adjusting for inflation, while median household spending has jumped at 30%, according to an analysis by Economy.com. How could the typical family afford to spend so much? Median household debt outstanding leaped by 80%.  [Bob Davis, Wall Street Journal, May 17]  If you are developing, or hope to develop, something that can be sold in quantity, you have to be concerned with how long the consumer can afford to keep buying at the rate your market studies project. If consumers slow buying, manufacturers slow making. 

As [Mike] Ciminera sees it, the entrepreneurial role in the aerospace industry can develop in several ways. Sometimes, technology innovation leads to pivotal demonstrations that result in government's issuing requirements for a new system. The key is to let individuals or small teams run as fast as they can with adequate funding to create technological change.  Mike is a classmate from eons ago who then spent 40 years with Grumman. The idea of encouraging innovation was the rationalization that the SBIR inventors used to get an an arbitrary allotment of government R&D spending. Unfortunately, the government mostly ignored Mike's advice as it got enmeshed in procurement procedures that suited a bureaucracy. Then it compounded the error by shunting small high tech ideas from open competition into SBIR where the procedural rules took needless precedence over search for and exploitation of interesting new ideas. In the interest of program standardization, mediocre ideas got too much money and great ideas got too little.  

The Semiconductor Industry Association predicts zero growth this year and the big capital spending splash in 2004 means excess capacity after another 12% rise while PC and cellphone growth slow. [Eric Savitz, Smart Money, May 05] When everyone already has one, growth depends on their throwing them away to buy new ones for whatever reason.  

 the fiber glut is as bad as ever. researchers estimate that about 85% of the fiber lines in the ground in the U.S. still are "dark," . Even the fiber that is being used isn't close to having its full capacity exploited. In fact, less than 5% of the total transmission capacity of all the fiber lines is being put to use .... some of the fiber-optic network companies have continued to operate instead of going away Meanwhile, technological advances keep boosting the capacity of the fiber that already is in use. And while millions of Americans now have high-speed Internet connections and use bandwidth-hungry applications such as online video, no new data-heavy "killer application" has arisen to sop up the excess capacity of those high-tech lines.  [Shawn Young, Wall Street Journal, May 12]

"Nothing happens until somebody sells something" attributed to "Red" Motley who began his career selling manure in Minnesota, says Paul Sturm (Smart Money, Apr 05)  That rule does not mean that companies who sell R&D services to the government in sheltered programs like SBIR are getting anywhere. 

Stories Were Too Good to be True?  SiliconEntity writes "Wired Online has been forced to correct dozens of stories in the wake of disclosures that reporter Michelle Delio may have fabricated quotes. Wired has published over 700 stories by Delio since 2000, and in a review of 160 of the most recent ones, 24 were found to have quotes that could not be confirmed. Several of the Wired stories being questioned were discussed on Slashdot, including Spyware on My Machine? So What?, Minniapple's Mini Radio Stations, The Masters of Memory Lane, and probably many more. Wired is not the only one to get burned; MIT Technology Review and InfoWorld have also had to retract or alter stories written by Delio."  [slashdot, May 10]

Let me guess: Your idea is the best thing since sliced bread. When Otto Rohwedder dreamed up the idea of selling sliced bread in 1912, however, all he got was a lot of carping and naysaying. How difficult was it to slice bread? And everyone knew that bread, even loaves of it, got stale quickly; in slices, it would spoil in a matter of minutes.  It took Mr. Rohwedder, a jeweler by trade, 16 years to produce a machine that could both slice and package the bread to prevent it from being exposed to air. Then he had to beg a Missouri baker to offer it for sale.  [Cynthia Crossen, Wall Street Journal, May 9]

Revolutions Come Slowly.  "What worries me is, where is the gold rush?" asks Grant. At best, he says, utilities are lukewarm in their interest in HTS products. Several times in the past, Grant argues, electric utilities have backed off even from new technologies that were widely expected to cost less in the long run. "You're dealing with an industry that is very lethargic and doesn't adopt new technology very easily," he says. Daley agrees: "We're dealing with a regulated industry. It's not as easy for them to make investments [in new technology]."  [Robert Service (not the Yukon poet), Science, Apr 15] 100 times the current at 100 times the price, plus the risk of new technology also makes a big barrier. The SBIR and other government plunge into HTSC in the late 80s has not yet produced a revolution. 

Tech Transfer Opportunity.  Microsoft is opening its research vault for the first time to venture capitalists and entrepreneurs, starting a program to transfer some internally developed technology to small companies in exchange for royalties or ownership stakes. The move is part of a broader bid by Microsoft to better capitalize on its $7 billion research-and-development budget. [Todd Bishop and John Cook, Seattle Post-Intelligencer, May 5] a remarkable steo for Microsoft, which has long hoarded its intellectual property. "Suddenly it becomes, 'Do I go to Sand Hill Road, or do I go to Redmond?' '' Richard Doherty, research director of the Envisioneering Group, told the Mercury News. "We think they have opened up the floodgates.''   [siliconvalley.com, May 5]  But remember one rule of venturing: it's better to have second-rate technology and first-rate management than vice-versa. 

[Intel] CFO Andy Bryant told Bloomberg News that chip demand is so high at the moment that they can barely keep up. [San Jose Mercury News, May 5] Should be great news for SBIR companies that have actual useful semiconductor process products, like ATMI (in whatever form it finds itself after selling some of its businesses). 

High tech can be a great business.  The Six Million Dollar Man was overpriced. Slap in a Medtronic implantable heart monitor, Parkinson's-busting neural stimulator, spinal fixator, and blood-sugar sensor, and you're probably under a million, all-in. Headquartered in Switzerland and Japan, Medtronic is at the forefront of extending human physiology through technology, with sidelines in image-guided surgery systems, defibrillators, and the like. A heady 18 percent growth rate led to 2004 sales approaching $10 billion, of which nearly 22 percent was profit. The posthuman gold rush is on. [Wired, May 05]  What is the government doing with its SBIR to nurse more Medtronics into competitive life? Why should anyone expect the government to know how to nurse infant Medtronics? The government knows how to have meetings, invade foreign countries, and pass out money to all and sundry voters and contributors. Capitalism builds companies. 

One wonders for whom these hapless souls blog. Why do they choose to expose their unremarkable opinions, sententious drivel and unedifying private lives to the potential gaze of total strangers? What prompts this particular kind of digital exhibitionism? The present generation of bloggers seems to imagine that such crassly egotistical behavior is socially acceptable and that time-honored editorial and filtering functions have no place in cyberspace. Undoubtedly, these are the same individuals who believe that the free-for-all, communitarian approach of Wikipedia is the way forward. Librarians, of course, know better.  -- -Indiana University Dean and Rudy Professor of Information Science Blaise Cronin  [silicon valley.com, May 4]   

Research, particularly in the physical sciences and engineering, is the foundation of our innovative economy. It has spawned the transistor, fiber optics, integrated circuits, wireless communication, liquid crystal displays, lasers, the Web, the GPS, hybrid automobiles and medical technologies far too numerous to list. With these new technologies have come new, high-wage jobs. MIT alone -- faculty, alumni and staff -- has created 5,000 companies in the last 50 years. When an innovation is found, the U.S. entrepreneurial spirit is quick to develop, produce and market it, creating new jobs and revenue. [Norm Augustine & Burton Richter, Wall Street Journal, May 4]

George Gilder's "The Silicon Eye" (Atlas Books) traces the history of [Glenn Reynolds, Wall Street Journal, May 3]  Reynolds has a second life beyond law professor as the well-known blogger InstaPundit 

"Ever wonder why Michael Faraday, steam engines, Ezra Cornell, the Van de Beurses family and the Edison Effect were so important to today's computer business. Andy Kessler has a free download of a PDF of his new book, How We Got Here: A Slightly Irreverent History of Technology and Markets. It's a James Burke-style connect-the-dots of events and people from 1642 to this morning. Kessler's site takes you through a "poor man's DRM" process to get your very own PDF." Yeah, yeah - DRM. But the PDF/book is worth reading for understanding the history to tech. [slashdot, May 2] Disclaimer: I have not yet read it. 

a major undercover investigation of stolen computer hardware and software in Silicon Valley, recovered $480 million in property and put nine people behind bars ... undercover agents posed as brokers in a seamy underworld of illicit computer wholesalers, authorities said. Sometimes the line was blurred between legitimate business and illegal activity in the so-called gray market for technology goods, they said [Karl Schoenberger, San Jose Mercury News, Apr 30]

Commoditization of Technology.  Carr hasn't backed off from his assertion that information technology is becoming a commodity. In a new article, appearing in the spring issue of MIT Sloan Management Review, he contends that corporate data centers -- founts of technology-driven strategy in the 1990s -- soon may disappear.  In their place, Carr argues in ''The End of Corporate Computing," will be large-scale utilities that will sell information technology services to businesses -- much as central electrical generating stations supplanted the water wheels and individual generators that powered manufacturing plants a century ago.  [Robert Weisman, Boston Globe, May 1]

Nobody ever got fired for buying IBM. But IBM said it had difficulty closing deals at the end of the quarter, a sign that big tech companies are having a harder time selling to corporate clients. [Wall Street Journal, Apr 14]  Such buyer reluctance can't be good for small firms either. 

Got a great new LCD idea? It better be cheap. Market research firm Displaysearch expects manufacturing costs for LCD panels to drop by 62 percent in the next four years. Count in the natural price erosion in the industry and $100 17-inch displays suddenly appear on the horizon. [Wolfgang Gruener, Tom's Hardware Guide, Apr 13]

T.J. Rodgers, CEO of Cypress Semiconductor, is a die-hard free-market libertarian whom you wouldn't expect to be an environmentalist. But now that a Cypress division has figured out a way to deliver cheap electric power with silicon-based solar cells, Rodgers doesn't mind saying that he's as green as they come.  [Dean Takahashi, San Jose Mercury News, Apr 2]  Actually, libertarians do not oppose environmental protection. They  merely oppose government methods that impose dirigiste solutions when workable market solutions are available. 

Hundreds of small public companies are leaving the stock markets, which can leave shareholders in the dark about the firms' financial health. The trend has picked up since Congress toughened rules in 2002, amid corporate accounting scandals. "Dark" firms remain public but delist from an exchange or market and no longer file quarterly and annual reports with the SEC. [Judith Burns, Dow Jones, Apr 3].  Owning stock in dark firms is a gamble best left to insiders who know the truth of the company's economic situations 

The fundamental outlook for technology as a whole has improved slightly since the beginning of the year. After a robust 2004, growth prospects remain modest in key end markets like corporate information technology (IT), consumer electronics and personal computers, and we've made only minor changes to our forecasts. [SG Cowen (broker), Barron's, Mar 31]

Everyone Shall Have Blogs. One of the better sites we've found is the Undollar Digest (www.undollars.com). ... another investing blog that's meatier than most investing blogs, and whose subject matter is a bit different, but is potentially very helpful to the serious investor. The AAO Weblog (www.accountingobserver.com/blog) is authored by Jack T. Ciesielski, .... focuses on the corporate behavior is Monty's Bluff (www.montysbluff.com)  ... very complex, capable technical analysis sites, which have only gotten better. ChartFilter (www.chartfilter.com) ... An abbreviated version is available free. You can get better fundamental screening at no charge from sites like MSN Money (moneycentral.msn.com), ... Perhaps no Website space is seeing more innovation than search engines. We looked at Answers.com ... [Theresa Carey, Kathy Yakal, Barron's, Apr 4]

Silicon Valley is doing a lot of hand-wringing these days about a coming engineer shortage. .. The U.S. now ranks 17th world-wide in the number of undergraduate engineers and natural scientists it produces, they point out; that's down from 1975, when the U.S. was No. 3 (after Japan and Finland). ..  [Venture capitalist Promod Haque] chuckles about a recent dinner conversation with his college-age daughter, who he hoped would go into engineering just as he did. "She said, 'Dad, I'm not going to take any more computer-science classes, I don't want to go to India to get a job.' " [Ann Grimes, Wall Street Journal, Mar 29]

Americans are investing more money, publishing more scientific papers and winning more patents than anyone else in the quickly growing field of nanotechnology, according to the first comprehensive federal report on the science.  [Rick Weiss, Washington Post, Mar 28

Ten, Maybe Fifteen Years. Nanotechnology structures will almost certainly be needed on integrated circuits once CMOS scaling reaches its logical limits, but don't expect molecular devices like carbon nanotubes and nanowires to appear on chips for at least 10 years. .. One problem in assessing nano research's importance to microelectronics is the sometimes slippery definition of nano-technology. "It's a very broad buzzword," said Robert Doering, senior Fellow at Texas Instruments Inc. "What's called nanotechnology today depends on what you're trying to advertise, sell or get funding . for." ...  "Fifteen years is a more reasonable horizon." [Richard Goering, EE Times. Mar 28]

Even if nanomaterials are relatively safe while embedded in larger products, it will be important to find out how they will affect the environment and human health after those products wear out, said David Rejeski of the Woodrow Wilson International Center for Scholars, which is studying that issue with Yale University scientists. "Who knows what happens when you grind this stuff up, incinerate it or it goes into a landfill?" Rejeski asked. "These products may be safe in the tennis racket, but all products become obsolete at some point" -- if nothing else because they go out of fashion. "Those teal-colored nanopants are going to be out of style next year," he said, only half-joking. "Then what?"  [Rick Weiss, Washington Post, Mar 28] Plastics were also viewed as the future. Have we yet learned to deal with the volume of discarded plastic? 

Hybrid Cars Will Depend on Silicon. "Twenty years ago no engineers imagined they'd have power transistors at the price, efficiency and capabilities we have now," says Zommer. "Our engineers have been able to ride the coattails of the fantastic improvements in tools, quality of silicon and manufacturing [of the computer chip business]." In the coming decade look to companies like Cree and Infineon-and likely the Japanese-to deliver transistors built on diamondlike silicon carbide, propelling another ten-fold improvement in both power density and price. [Peter Huber, Forbes, Apr 11] Thanks in some part to bleeding edge government programs like SDI in the 80s and 90s that invested in futuristic things like GaAs, GaN, CVD-diamond, and electronic silicon carbide. 



[Moore's] law seems safe for at least another decade—or two to three chip generations—which is as far as he has ever dared to look into the future. As things are made at scales approaching individual atoms, he says, there will surely be limitations. Then again, the law has often met obstacles that appeared insurmountable, before soon surmounting them. In that sense, Mr Moore says, he now sees his law as more beautiful than he had realised. “Moore's Law is a violation of Murphy's Law. Everything gets better and better.” [The Economist, Mar 26]

Matthew Nordan, at Lux Research, the nanotechnology consultancy in New York, sees an impending war over patent infringements where lawsuits will be flying. The areas most likely to be affected are carbon nanotubes and quantum dots. IBM, for example, holds a key bit of intellectual property on a method of producing carbon nanotubes. The company is rumoured to have more lawyers than engineers working on nanotechnology. But for the moment there is no point in anyone suing, because nobody has yet made any real money from these nanoparticles.  [The Economist, Jan 1, 05]

How Big is Small?  "In America, 500 employees is not a small business in most industries," says Lloyd Chapman, president of the Petaluma, Calif.-based American Small Business League advocacy group. His group is pushing to have the standard dropped back to 100, where it was in the mid-1980s. Last summer, the SBA proposed restructuring the size standards, but a backlash of criticism led it to withdraw its proposal. An estimated 34,000 small businesses would instantly have lost their status. .. Go to www.sba.gov/size and click on "What's New in Size Standards." The SBA will also be holding public hearings on the issue around the country later this year.   [Gwendolyn Bounds, Wall Street Journal, Mar 22]

THE PROBLEM: Stretching start-up capital to last through an unpredictable federal approval phase for your product. ... THE SOLUTION: "We divided this into a two-headed plan," he says. One part of the business will work on the cancer treatments requiring FDA approval. Another part will sell straightforward over-the-counter products. "In a short time frame, they can be generating revenue," he says. ...Provectus entered into a sales and marketing program with Legacy Marketing Inc., turning over the product to people more expert at supply-chain management and dealing with chain stores. It's now in more than 504 stores.   [Paulette Thomas, Wall Street Journal, Mar 22]  One solution is to pretend that the product needs more R&D instead of marketing, and go for SBIR. Be careful, though, that SBIR subsidy doesn't become the track to eternal R&D and government dependency. 

Think you can divine people's fickle tastes in technology? Try your hand at the Tech Buzz Game, a new simulated market in which participants attempt to predict the future popularity of gizmos by buying and selling pretend "shares" in each.  This joint experiment created by Yahoo Research Labs and the O'Reilly Media group lists a bunch of technologies O'Reilly editors deem important and lets gamers buy and sell virtual shares in each. The value of a make-believe portfolio rises or falls on the popularity of gadgets or concepts "purchased," with popularity determined by how many people search for them online at Yahoo. [Leslie Walker, Washington Post, Mar 20]  Unless you understand consumer psychology, stick to technology that sells itself on economic grounds to other companies. Unless, of course, you only want to sell to government.

The Russell 2000 Index fell all five sessions of the week, with Friday's decline coming despite an upbeat outlook from technology titan Intel. Semiconductors and other technology stocks dropped although the world's biggest chip maker raised its forecasts for first-quarter revenue and profit margin. In the past, such a missive from the tech giant practically could be counted on to send the market higher, but seemingly some of the company's influence has waned. "Clearly Intel used to be a bellwether, but it's taken a back seat to things like oil," said Ken Werner, managing director of trading at Merriman Curhan Ford. [Karen Talley, Wall Street Journal, Mar 14]
Five Years On, Still in the Dumps. The info-tech boom of the late 90s was a fun ride. But, not unlike 1929-1934. Adjusted for inflation, the Nasdaq 100 is off about 70 percent from its peak. That performance is quite similar to the one turned in by the Dow industrials in the first five years after 1929, and worse than the performance of the Nikkei 225 after 1989. [Floyd Norris, New York Times, Mar 13] Which explains why most of the SBIR-funded IPO companies are struggling to even stay listed. SBIR did its job with companies like Cree and ATX in providing seed funding for technologies that would attract serious investors after the technical terror was dispatched. 
The forecast for entrepreneurs during the next few months? It'll be raining -- cash. the first half of 2005 could usher in the biggest flurry of financing the technology world has seen in years. [Michael Copeland, Business 2.0, Jan 26] Copeland sees a $13B overhang that VCs have sitting idle. 
Funding for science and technology research in the United States is in trouble. ... this crisis in federal funding ... Current cuts in basic-research support could not, in many ways, come at a worse time.  [TR Staff and Freelance Writers, MIT Tech Review, Mar 05] Crisis? Weep and wail over a few percent less than what the science community has come to depend on. And they cannot make any economic argument for any specific number or baseline since basic research is an act of faith. Come to think of it, SBIR has the same attitude; only their law doesn't allow salami slicing of a few percent in annual appropriations when the country and government have deficit crises and big-talking politicos.   
An Unintended Tax. A representative example of Internet specialty funds, the Munder NetNet Fund, ''received $5.7 billion in gross inflows from November 1999 through April 2000 -- just as it was hitting its peak," reports the research firm Morningstar Inc. Total assets of the fund at last report stood at $786 million. Still, all this calamity did have a positive side. As entrepreneurs of the new economy burned through the money they received from speculators, it wasn't wasted. They engaged in a kind of survival-of-the-fittest battle that helped to build the Internet. With all the damage that was inflicted, the US economy and investors as a group are much better off now. ... To anyone who took a beating in the boom-bust cycle, it may come as meager consolation to be told the losses went for a good cause. [Chet Currier, Boston Globe, Mar 13]

Even when incumbent companies clearly recognize the importance of a new technology, they may find it extremely difficult to adopt. RCA, General Electric and other consumer-electronics companies of the 1940s and 1950s weren't blindsided by the invention of the transistor. They spent billions trying to fit the new technology into their floor-model radios and televisions. Early transistors could not be employed in high-fidelity systems. They just weren't good enough. But early transistors were good enough for small, cheap portable radios, and they gave high enough fidelity for 1950s rock 'n' roll. Transistor-radio pioneer Sony made its first big money selling such radios to teenagers -- who previously couldn't afford radios at all. After a few years of reinvesting the profits, however, Sony and other companies developed transistor technology to power small televisions, then color TVs and even high-fidelity audio equipment.  [Tom Donlan. Barron's, Mar 14]

Intel and Microsoft have gone from the disrupters to the disrupted in just half a generation. They gave personal computers to people who didn't even know they needed them; now it costs them billions to bring out a new generation of computer-chip factories -- or rebuild an operating system to meet changing market demands for security. Surely this is an opportunity -- for custom-chip manufacturers and Linux software collaboratives if not for Intel and Microsoft, which have so much invested in the continuation of Pentiums and Windows.  [Tom Donlan. Barron's, Mar 14]

R&D Jobs: Who Stays, Who Goes? Parametric Technology, a Needham MA. producer of collaborative design software for 31,000 clients worldwide, commissioned a study of a typical R&D workforce of a typical electronics company. It concluded that about 30% of the jobs were "portable," meaning companies could shift them offshore. ... Wipro's (an Indian company) Paul believes anywhere from 40% to 60% of an electronics company's R&D jobs can be farmed out overseas. One thing that's clear: R&D jobs may not stick around, but outsourcing them will. [Pete Engardio, Business Week, Mar 21]  Unless the US wants to resort to gross protectionism, jobs will move to where they make the most economic sense. What should government do about R&D job migration?  It might start by shifting SBIR funding to companies most likely to produce economic growth innovation that could also be used by federal mission agencies. Of course, it has had that unused option for two decades now and shows no sign of seeing the larger US picture. Sadly, the SBIR advocates are dominated by the idea of getting federal money earmarked to their clients regardless of the national economic impact. What's good for them must be good for everyone. 

Paul Graham has posted a new essay on his website on how to start a startup. According to him 'You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.' How difficult can that be? So go start them startups. [woginuk, slashdot.com, Mar 10]

Silicon Inertia. I will admit to being a skeptic to these things for replacing digital silicon, We've got a cumulative couple of hundred billion dollars invested in R&D, said Gordon Moore. April 19 will mark the 40th anniversary of an article he wrote for Electronics Magazine that first sketched out the idea of Moore's LawHow many GaAs computers do you use?   Other Moore thoughts: Computers, as they are built now, will never think like humans. China is going to be a major fact of life for the United States. Progress in the industry may also slow to the point where the number of transistors on a chip, which let designers increase performance and/or integrate new capabilities, double only every three to four years. [Michael Kinellas, CNET News.com, Mar 9]

if you look beyond the valley's world of hurt, you'll see almost everything promised to consumers during the bubble years has come to pass. The changes brought by the boom didn't always happen in the ways envisioned by over-eager entrepreneurs and investors. But e-commerce really works. We're making better-informed buying decisions and finding new ways to save money, whether we shop online or in conventional stores. Even the most maligned idea from the rubble of the dot-com frenzy -- selling pet supplies online, an idea pursued by a half-dozen start-ups that all failed -- is now an unremarkable reality. [Mike Langberg, San Jose Mercury News, Mar 8]

Weak Dollar, Stronger Foreign Competitor. Britain's BAE Systems PLC, by acquiring United Defense Industries Inc. of the U.S. for $3.97 billion, seeks to establish a major trans-Atlantic defense company. ... the largest foreign acquisition of a U.S. defense company ... would put BAE Systems almost on par with U.S. defense giant General Dynamics Corp. in the increasingly lucrative field of so-called land systems ... UDI, based in Arlington, Va., makes the sophisticated Bradley family of armored fighting vehicles and a range of other military systems, including howitzers and guided missiles, and provides ship-repair and modernization services [Wall Street Journal, Mar 8]

Leaders of high-tech companies said Tuesday the US risks losing its competitive edge without significant new investments in education, research and development and the spread of broadband technology. ... high-tech lobby TechNet, .. represents about 200 high-tech leaders, including Microsoft, Intel , Cisco, and HP.  [AP, Mar 8]

Just as they did during the technology bubble, investors still tend to chase technology when the market is hot and to dump it when the market faces head winds. To the amazement of many burned in the tech collapse, technology stocks have played a prominent role during much of the current bull market -- often leading the gains during periods of strength and leading the pullbacks during periods of softness.... Although foreign analysts have become more cautious on the outlook for the technology business, he says, U.S. analysts' forecasts are suspiciously high. He sees technology stocks facing a prolonged slump as investors gradually adjust their expectations and begin treating most big technology stocks more as commodity producers than as the wave of the future. ... The zaniness that characterized 1999 and the early months of 2000, when shares of untested companies built on blue-sky expectations could skip 30% higher on the slightest scrap of news, for the most part doesn't exist any longer, says Doug Kass of the hedge fund Seabreeze Partners. [Wall Street Journal, Mar 7]

The Boom Is Back?  WALL STREET'S BULLISHNESS toward semiconductor stocks neared unanimity last week. ... But don't fret about future buyers. I found a bear. Wells Fargo Securities has only six Sell ratings on the 182 stocks covered by its analysts. Every one of those Sells comes from the firm's chip analyst, .."I feel totally out of step right now," admits LaFountain ... "Everyone talks like they've learned the lessons of the year 2000, but the dollars are being invested like it's 2000," he says.  [Bill Alpert, Barron's, Mar 7]. 

Gower, Carbon, and Houston. Bob Gower, president and chief executive of Carbon Nanotechnologies, said that of the 30 patents the company holds related to carbon nanotubes, about a dozen will give it a lock on what he and others expect to become a multibillion-dollar market. ... NSF predicts there will be a $1T global marketplace for goods and services using nanotechnology by 2015. ... "But nobody's come out with a breakthrough application yet based on their patents." ... Most of the legal wranglings won't kick in until nanotubes start making money. But for whoever's left standing, the possibilities could be endless. [John Roper, Houston Chronicle, Mar 6]  Gower gets around the Houston carbon business: a former Sinclair Oil and ARCO executive, and CEO of Lyondell Petrochemical (Ranked #270 on the Fortune List) Nanotechnology will save huge amounts of energy in manufacturing by arranging individual atoms precisely to produce the desired product.  ... [ANDREW P. COLEMAN, Houston Business Journal, June 1, 2001]  

As easy as falling off a blog. ROBERT SCOBLE, known in the blogosphere as “the Scobleizer”, ... Scoble is also an employee of Microsoft, the world's largest software company, where he holds the official title of “technical evangelist”. Those two roles are intertwined. It was his blogging prowess that led to his job, and much of the job consists of blogging. ... Inspired in part by Mr Scoble's success, executives at other companies—so far, mostly in tech—are starting their own blogs. [The Economist, Feb 12] Blog with Scoble

it turns out alchemists were just a few centuries ahead of schedule. Today, in sparkling labs equipped with powerful microscopes, scientists on three continents are promising dramatic new materials and medicines that would make alchemists proud. This work takes place in the realm of nanotechnology, industry's tiniest stage. ... Now it's time to start cashing in. Throughout 2005, companies large and small will be rushing more nano-based products from labs to the marketplace. But in a potential replay of the asbestos saga, industry must squelch fears about the effects of the particles in the body [Stephen Baker and Adam Aston, Business Week, Feb 14]

IBM spends over $5B a year on R&D. It earns over $1.2 by licensing intellectual property (IP) protected by patents.  ... Ironically, for years Microsoft took no active interest in patenting its technologies, relying instead on much looser “trade secrets” protections. But that has recently changed. Bill Gates, the software giant's chairman, says that obtaining patents is now a priority. The firm even hired Marshall Phelps, who masterminded IBM's patent strategy, to develop its licensing business. ... Microsoft spends around $6B a year on R&D   [The Economist, Feb 19]

The VCs are doing the lemming thing again -- this time they're all rushing to invest in online consumer technologies. The result is a whole lot of similar VC-funded companies, all facing some very tough odds. Take search technology. ... social networking ... online advertising ... digital media networking or tools for mobile blogging.  [Matt Marshall, San Jose Mercury News, Mar 1] Like cellphones, the wholly connected society. And the perfect crutch for commercial-phobic SBIR managers who need a credible excuse for ignoring the spillover aspect of SBIR. 

Even if firms are raising money again, it doesn't necessarily mean they'll be dispensing more money overall to start-ups. Many of the new funds are smaller, and firms are likely to spend them prudently over several years, after winding down their old funds. No massive ``overhang'' is about to cascade in, Heesen cautions.  [Matt Marshall, San Jose Mercury News, Feb 1] But no VC will invest in a company whose technology and attitude do not make a profitable business with a high ROI. Sweet technology that a government SBIR manager loves is only good enough to get a government handout, NOT enough to get serious business money. 

Goldman pegs this year's corporate tech spending growth at 4-5% -- less than half the double-digit gains of the 1990s. Thus, technology is now a cyclical play; it is not the sector du jour. "I'm looking for growth anywhere I can find it, but I'm beyond tech," says David Readerman, a senior analyst for Marsico Capital Management in Denver. "It might be in the energy patch," he adds. [Mark Veverka, Barron's, Feb 28]

Parts of the tech business probably will generate faster profit growth than most other industries in the months and years ahead. But while many tech stocks have been beaten up in the past few years, they still trade at prices that look expensive. The average technology stock trades at a price of 60 times its expected 2005 earnings, much higher than the average price/earnings ratio of 16 for companies in the Standard & Poor's 500-stock index. [Greg Zuckerman, Wall Street Journal, Feb 27]  SBIR, such stats are irrelevant since minusculy few companies are public and the government is loath to fund companies that have prospects of attracting public capital. 

"If we had the current restrictions back in the 1950s, Andy Grove might not have gotten into this country," William T. Archey, president of the electronics association, said ... a troubling report Losing the Competitive Advantage? released last week by the American Electronics Association. The report argues that the US standing in technology is slipping, and that the nation is in danger of losing its advantage in fields it has long dominated.  [Robert Weisman, Boston Globe, Feb 20]

Keeping in Touch aybarbara@gmail.com writes "According to this article, the Panera Bread chain of Bakery/Cafes (think Starbucks that bakes their own bread) is the largest provider of free WiFi in the US. Their web site says, " There are currently 573 Wi-Fi enabled Panera Bread bakery-cafes, from California to Virginia. More are added every day." (Even my retired dad takes his barely-used laptop over there so he can get free refills on coffee.) Their full list of hotspots ." [slashdot, Feb 17] The WiFi freebie apparently works as Panera sales were up 35% in the latest quarter. 

One box to rule them all: That home entertainment and gadget boom that's been such a blessing to the tech industry? Enjoy it while you can, because in a few years the consumer electronics industry as we know it will implode, according to Eli Noam, professor of economics and finance at Columbia Business School. Noam's premise is that the growth in chip power and the drive toward convergence will eventually lead to few devices that do more things and ultimately to a single device that handles all of a home's digital entertainment and communication needs -- a device that will inevitably become a commodity. [siliconvalley,com, Feb 16] 

Money Talks. Roger McNamee, one of Silicon Valley's most kinetic and serial investors, has started a blog called The New Normal. Says Roger, Wake up and smell the coffee.  This is not your father’s economy. ... It’s a bright, fresh world full of opportunities. 

Motorola's VC arm aims to boost its investments to more than $100 million this year, betting on technologies including automotive electronics, high-speed wireless communications, and advanced optical systems. [Deborah Cohen, Reuters, Jan 24]  If NASA and the military ever wanted real innovation, they could nurture the types of tech innovations that biggies like Moto would pick up and develop into governmentally useful systems. Why won't they do it? Because the payback period is far longer than the horizon of political appointees who do not invest their own money. 

After declining steadily for three straight years, investments in venture capital increased year-over-year for the first time since the technology-stock bust, according to year-end figures for 2004 released today. Heartening to entrepreneurs, the data also show that investments in early-stage start-up companies, the lifeblood of the venture industry, picked up, too. [Ann Grimes, Wall Street Journal, Jan 21] Now if the government would just co-operate by using SBIR to fund technologies with VC appeal, we could get somewhere with nurturing American technology. 

[Intel CEO]Barrett: We are at a crossroads in this nation. We can continue to lead, or we can fall behind. .. cuts to the NSF budget reflect a larger and potentially devastating trend that will have consequences for U.S. competitiveness: a decline in the government's contribution to basic research, which has fallen 37% as a percentage of GDP over the past 30 years. ... The Internet, fiber optics and MRIs are all products of basic research carried out in university or government labs. Intel and the U.S. high-tech industry wouldn't be the world leaders we are today if it weren't for this publicly funded research done over the past four decades.  [Patricia Panchak, Industry Week, Jan 1

This generation of startups is more organized and aggressive than ever. ... Many are battle-tested veterans of several ventures. ... getting to market with real products much more frugally -- and amazingly, even faster -- than bubble-era "fast companies" did. By offshoring some research and development and marketing on the cheap at trade shows, ... open-source software costs almost nothing, and it can run on dirt-cheap PCs and servers. ... going global from day one  [Robert Hof, BusinessWeek,com, Jan 7]

The sector's relentless increase in productivity lends validity to polymath Peter Drucker's belief that manufacturing is following the lead of agriculture by becoming so capital-intensive that it will eventually employ a relatively insignificant share of the labor force. [Gene Epstein, Barron's, Jan 10] Since capital invests in things, it should have a big appetitive for technology that improves productivity - or better (worse) replace skilled labor. Instead of selling government on some government gizmo that might later be sold to industry, find something that industry wants (really wants, not just your fantasies) and get government to help pay for the development. The second course has the prospect of a long sales life, while the first has a sales life no longer than the government contract. If there were serious sales life in SBIR projects, the government would be trumpeting the stories with quantitative studies instead of pretending that data is the plural of anecdote.

Walking Wounded to Recover? Neal St Anthony, finance pundit for the Minneapolis Star Tribune trawled the local stock pickers to find the best long-shot bets among the walking wounded stocks.
Most of the five-year losers hail from the technology and telecommunications industries, which have been plagued by low demand and too much capacity since the go-go days of the late 1990s. Pemstar (PMTRE). engineering and contract manufacturer for IBM, Motorola, Medtronic and other major companies suffered the usual tech diseases: disappointing results, accounting issues and the tech slowdown. But he says: financial reporting issues should be cleared up soon 
ADC Telecommunications (ADCT). This telecommunications darling-to-dog sees a painful restructuring over the past three years, through which ADC divested 15 money-losing businesses and refocused on its now-profitable core, was capped in 2004 by a profitable acquisition that should help ADC grow faster and with wider profit margins. That justifies a $5-per-share target price in 2005, or roughly 25 times projected fiscal 2006 earnings. • Stellent (STEL). With expectations of a return to profitability in the current fiscal year, supporters of the content-management software maker say it should rise as it gains traction against weaker competitors that have slipped off a very icy, money-losing road for the past few years.
FSI International (FSII) is an industry-cyclical stock that makes equipment for use by semiconductor manufacturers but that has returned minus-16.5 percent annually to shareholders for five years. FSI seems to be well-positioned for any acceleration of semiconductor-capital equipment demand uptick because of improved products and because it counts nine of the top 10 capital spenders as customers, Should anyone buy such techie stocks? Who knows. But the common thread in these recommendations is that small tech company fortunes will improve as the tech industry sells more stuff to somebody, anybody at a profit. The suckerfish are riding on the shark and hoping the shark succeeds.  The tech companies that depend on  solely on SBIR handouts at least don't have to worry about the general economic climate since they depend only on small-biz politics and agency love of government contract work. 

Opinion: The high-tech industry needs to set aside small-time battles and focus on key areas such as copyright issues, outsourcing and tax policy. ...   it's time for tech to go beyond small politics—the quick fight here, the small battle there—and take on the responsibility of being what it says it is: an economic powerhouse of jobs, ideas and prosperity. [Chris Nolan, eWeek, Dec 30] No matter what would best serve American innovation, the SBIR lobby will still fight to keep a steady flow of sheltered money flowing to the run-of-the-mill R&D service companies. They will do their best to keep SBIR from being an economic powerhouse and to be merely a pork program with earmarked money against even the agencies' druthers.  

Wha'happ'n Transmeta? Transmeta announces new "business plan-morphing" technology: Transmeta, which got a lot of attention when it jumped into the low-power processor market with its code morphing Crusoe chip back in 2000, is going through a serious identity crisis. With its original market in mobile computing largely gobbled up by Intel's Pentium M chips, Transmeta is considering getting out of the silicon business entirely and focusing on licensing its chip designs and power-saving technologies. "By modifying our business model to focus more on our licensing opportunities, leveraging our substantial IP portfolio and our R&D capabilities, we would expect to reduce our cash needs substantially and to improve our results for our shareholders,'' said Transmeta CEO Matthew Perry (working hard on his post-"Friends" career). [siliconvalley.com, Jan 6] 

It Matters How You Say ItPsychological research shows a statement made one way can be reassuring, but frightening if made in a different, yet mathematically equivalent, way. People react more to 1-in-100 risk than to a 1% risk, though the two are identical. "If I say, '1 in 100,' people imagine the numerator. Who is the one? There's more of a feeling of reality," says psychologist Paul Slovic, president of Decision Research, a Eugene, Ore., risk-research outfit. [David Wessel, Wall Street Journal, Jan 6]

Ultrawideband is not the only technology from the 19th century being dusted off for the 21st. William Grove built the first working fuel cell in 1845; the technology is now being readied to power a new generation of hydrogen vehicles. Researchers at Los Alamos National Laboratory in New Mexico have proposed using an update of 1816’s Stirling engine to power future space probes. And what are text messages if not a modern take on the telegram?  [Tom Standage, MIT Tech Review, Jan 6] Ideas are everywhere but they get nowhere until they can compete on price for the function. Only 1% of patents ever produce a commercial winner, says Harold Evans in his new history of innovation, They Made America

Selling Chips Is Too Tough. Transmeta, the mobile-processor manufacturer that has lost millions of dollars over the past four years, is seriously looking at getting out of chips. Transmeta will complete a "critical evaluation of the economics of its current business model of designing, developing and selling x86-compatible microprocessor products," the Santa Clara, Calif.-based company said in a statement. Instead of making and selling processors, the company would instead focus more of its energy on licensing chip technology to third parties. [Michael Kanellos, CNET, Jan 5]

Raising venture capital is an endless arm-wrestling match. Seasoned entrepreneurs enjoyed the upper hand in 2004. Good business plans were hard to find, either because of unskilled management or because too many other competitors were making the same play. Startups that did demonstrate solid management talent and innovative market opportunities had VC investors pounding on their doors. [Matt Kelly, Mass High Tech, Jan 4]

The small business optimism index reached 107.7 in November. This level has been seen only once before, in the third quarter of 1983. Real GDP growth topped 7% for five consecutive quarters beginning with the second quarter of 1983. [David Malpass, Jan 3] 

2004 was a milestone because, according to the Semiconductor Industry Assn. (SIA), sales of chips for consumer devices were greater than sales for corporate gear for the first time in industry history. Yes, in 2004, the consumer became king in chipland. ... It means the health of the chip sector will be tied more to macroeconomic forces such as oil prices and interest rates than to the state of corporate capital spending. It's also the latest sign that the industry's balance of power continues to shift to Asia as Chinese and Indians become major consumers of technology. [Business Week, Jan 10]

Silicon Valley entrepreneurs and venture capitalists are grappling with China's rapidly expanding market and economy. Most see it as an opportunity, but Don Valentine, partner at Sequoia Capital, predicts a massive bubble burst sometime within the next few years. Confusing information, governmental whim, and weak contracts are serious drawbacks.  [Silicon Beat, SJ Mercury News, Dec 24]

Long-term unemployed (12 months or more) as % of total unemployed, 2002 
OECD data from today's [Wall Street Journal] OpinionJournal. Link posted by Steve Antler, EconoPundit

This fall, the Center for Public Integrity, a nonprofit, nonpartisan research group in Washington, said that 30% of all defense-contract money reported as going to small businesses and special minority-owned businesses ended up with top defense companies from 1998 to 2003. ... While the government missed its 23% total small-business award goal for several years running, the SBA announced earlier this year that the Bush administration had met the 2003 target and called it a "victory for America." [Gwen Bounds, Wall Street Journal, Dec 28]  SBA's Office of Advocacy is expected to release a report on the problem today. 

Essinger's book imaginatively proves a key point: ''The progress of a new technology, far from following a clear, logical track, is generally a haphazard and even messy affair. Its success or failure will depend on a complicated web of dynamic, complex factors such as practical necessity, financial pressures, political considerations, and the personal needs and prejudices of the would-be inventor and of everybody else whose decisions affect the inventor's progress."  His tale of cultural, economic, and personal factors that enable ideas to become real tools makes this book a welcome addition to the literature of innovation. [Tom Ehrenfeld reviewing Essinger's new book Jacquard's Web. Boston Globe, Dec 26]

Up by half, but only half enough, and still too dear. What's more the newest versions don't do as well as the earlier generation. Seattle's experiment with GM hybrid buses shows that predictions of tech performance often fall far short of the promised numbers. [Matthew Wald, New York Times, Dec 26]  Why isn't a 60% rise in fuel economy good enough? Because the meager savings won't pay for the high capital investment of super-buses. Simple economics often overlooked by techies promising great rewards from their latest greatest idea. Moral: get your economics right. The only saving grace in bad prediction for SBIR proposals is that the government often doesn't know either and wants to believe your numbers irrespective of their truth.  

America and its spendthrift consumers are still the bedrock of the world economy. But they spend borrowed money. .. America has been lucky so far because it is able to borrow in its domestic currency. ... What would happen to domestic interest rates were there to be a run on the currency?  [Buttonwood, The Economist, Dec 14]  Perhaps Dickens's Mr Micawber has re-appeared as America - something will turn up. Perhaps, the capitalist ideal of Adam Smith's pursuit of self-interest delivers our continued prosperity, but Smith considered capitalism in a welfare state where the power of government and large business adds a new dimension. Perhaps also continued technological innovation will relieve the financial pressure by creating new American industries. But that seems unlikely with programs like SBIR where Smith's self-interest and government's political self-interest combine to pour what will soon be $2B into self-interested companies with no economic prospects past the last government dollar of subsidy. Those self-interested companies combine into organizations to influence the self-interested politicians to keep the handouts coming with no economic accounting. But until economic accounting influences where government puts the SBIR money, we are all Mr Micawbers

prostoalex writes "Folks at Silicon.com posted a list of tech headlines that you won't see in 2005. Read about spam volume decreasing, Sun revenues soaring, Longhorn operating system delivered on time and bug-free and other news you're unlikely to see in the papers." [slashdot.com, Dec 25] Nor are you about to read of any federal agency favoring Phase 2 SBIRs that have the greatest potential of private third party financing during or afterwards. You may still see Navy awards that have Navy mainline follow-on or simultaneous commitment but those projects are not likely to have a lot of innovation for economic growth.  

Are you happy now that you have high speed internet, mobile telephones, global interconnectedness, cheap air fares. instant food, telecommuting, eBay,  among the other delights of the "modern" age?  Apparently you are hard to please. if you ask Americans how happy they are, you find that they’re no happier than they were in 1946 (which is when formal surveys of happiness started). In fact, the percentage of people who say they’re “very happy” has fallen slightly since the early 1970s—even though the income of people born in 1940 has increased, on average, 116 percent over the course of their working lives. [James Surowiecki, MIT Tech Review, Dec 24] It should have been easy to be happy in 1946: we won the really big war without suffering a single shot at home, war-time forced savings were coming out of the mattresses as industry geared up to make endless stuff, nylons and penicillin were being embedded in society, the Depression was over and jobs were plenty. 

Making History. A tour through manufacturing's recent history reveals clues of what's to come. By Patricia Panchak,  the first installment of a special series as IndustryWeek marks its 35th anniversary. The series will explore the most significant events, trends and people in manufacturing in the past three decades. ... Entire industries -- computer memory chips, most consumer electronics, shoes, apparel and textiles -- had migrated overseas, and new industries began to take their places. ... within the U.S. factories started their migration from the Midwest and Northeast toward the right-to-work states in the South. ... the creation of an entire alphabet soup of regulatory agencies -- OSHA, EPA, EEOC, ERISA -- ultimately forced manufacturing executives to play a greater role in public policy making,

everybody talks about R&D, but it really isn’t about “R,” and it [innovation] really isn’t about “D,” it’s about the “&.”  --- Lewis Branscomb, 2004

Immigrants and first-generation Americans are disproportionately represented in our institutions of higher learning, especially in the fields of science and engineering. Nearly half the engineering, math and computer science Ph.D.s working in the U.S. are foreign born. Some 60% of our top students in science and 65% in math are children of immigrants. [Steve Forbes, Forbes, Dec 13] 

Only 24% of consumers know what fuel-cell vehicles are, but 52% say they are likely to buy one next time they're in the market for a new car... There is a catch to the enthusiasm for fuel cells, which convert hydrogen to electricity without producing pollution. Respondents said they are willing to pay only $1,269 extra for the still-developing technology, a fraction of the current cost, which some automakers estimate is 10 or more times that of a conventional vehicle [Rick Popely, Chicago Tribune, Dec 19] Almost every sweet new technology has the same barrier, nice but attractive only near the present price for the same function. SBIR proposers who forecast great acceptance of their new idea must account for the price barrier if they are to be credible. On the other hand, the other competitors for the government buck are likely to be just as blind and the government indifferent. Want to beat those competitors in the commercialization section? Price the competing technologies in your forecast. 

Inc. magazine last week crowned Burt Rutan 2004 Entrepreneur of the year for his methods of developing the space ship that won the $10M prize without "an army of engineers and billions of dollars in government moneyThe magazine lauded Rutan for relying on a small team, angel financing, free-wheeling management, a willingness to take big risks and a belief that serious profit lay ahead. [Seattle Times, Dec 20]

Rutan did have a couple of heavyweights behind him: His mission was paid for by Microsoft co-founder Paul Allen and Virgin America's Richard Branson. 

Purchasers of nanomaterials such as nanotubes, fullerenes, and nanoparticles frequently fail to get what they pay for, a new report by Lux Research warns. [Rick Mullen, C&E News, Dec 20]

Pumped up by fresh financing, hundreds of richly backed startups today are angling to come public or find corporate dance partners....  Takeovers of start-up companies jumped 13% in the first nine months of 2004, but purchase prices rose 59.7%, according to Thomson Venture Economics. [CONSTANCE LOIZOS, Barron's, Dec 20]

Until recently, just about every device with a cord or a battery under the Christmas tree came from a company based in Japan, China or somewhere else overseas. Now, something surprising has happened in many sectors of the consumer electronics business: U.S.-based companies are on top. Dell Inc. and Hewlett-Packard Co. clearly dominate the personal-computer industry. [Bob Keefe, Cox News, Dec 19] PDA, TiVO, plasma TV, ...

Standard & Poor's Ratings Services believes 2004 will prove to have been a year of moderate overall growth in global technology spending, with a percentage increase in the mid-single digits. And the outlook for 2005 is for more of the same. ... software and services should continue their fairly steady, gradual climb. [Business Week.com. Dec 17]

CLYDE, Ohio (AP) -- On today's farm, tractors and combines are bigger, faster and smarter. Soil tests and topography maps give farmers more information. Crops are more resistant to disease and pests. The result: Farmers are producing record crops despite using less land. Some say the economics of farming -- low prices for grain and livestock -- are pushing farmers to produce more and expand operations while forcing smaller farmers out of business. Others contend it is technology driving the revolution. [John Seewer, MIT Tech Review, Dec 16]  USDA SBIR is thus using small tech business to drive small farmers out of competitiveness. Did the politicians intend such a consequence?  

Q: Will China buy the rest of IBM?  A: Most likely. [Sun CEO Scott McNealy]

Say good-bye to the days when a lone genius in a garage could invent something that changes the world. Early in the 21st century, it's the very nature of innovation that has changed: it's happening faster, it's more open and collaborative, and outdated concepts around tightly controlled intellectual property are giving way to a more enlightened emphasis on sharing intellectual capital. [IBM] Naturally, IBM would not believe that an individual could invent something that changes the world. But IBM is right, sort of, in that a big thing won't happen until a big business forms around it. SBIR dreamers often forget that point in their story of why the government should sponsor their idea(s). 

The virtual demise of Bell Laboratories, the longtime icon of American inventiveness, and the fact that nothing has emerged to take its place should be seen with alarm. The United States' share of its own industrial patents has fallen steadily over the decades and now stands at 52 percent. [Erich Kunhardt, professor of physics and dean of the School of Science and Arts at Stevens Institute of Technology, NY Times, Dec 14] Kunhardt, who did research for Star Wars back when it cared about science, wants professors to be rewarded for inventing and patenting. But that won't happen until university patent offices get into full gear. 

The last few years have been nothing short of terrific for most banks. Earnings surged across the board. But BusinessWeek notes that the party may be ending. One reason is costs. Technology expenses are rising 6% per year, just as costs for a host of other items move northward. [Fierce Finance, Dec 2] When you go to sell your technology, to real people not to government techies, what will you say about the cost of the bank's using your technology? 

Hurting Factory States Turn to Tech.  After seeing their factory and back-office jobs slip away permanently to China and India, U.S. states and regions are formulating plans to attract and encourage technologically innovative companies and industries, BusinessWeek writes on its Web site. Such states as West Virginia, Florida and Ohio are hoping to emulate the geographical tech winners of the 1990s like San Jose, Calif., Seattle, and Austin, Texas. But, the magazine notes, "because of the unpredictable nature of technological change, relying on innovation as an economic-development strategy is far more risky than, say, trying to attract big manufacturing operations." [Wall Street Journal, Dec 6]

Rockets Away.   The storied Rocketdyne Canoga Park CA plant  where the engines were designed and built that launched Americans into space and took man to the moon will be sold to a mall developer. Just what we need in new technology - another giant mall. Estimators say the site is worth $1M and acre for industry and $2M for a mall. Unhappily, malls do not build economies, industries do. A nation of shopkeepers does not grow rich

Opening a new frontier in outsourcing, pharmaceutical companies overwhelmed by the rising cost of creating drugs are turning to China to conduct research and development. They are finding highly educated scientists who work for a fraction of what their Western counterparts are paid, as well as vibrant and growing biotechnology businesses. And they are beginning to sink significant amounts of money into deals that will further boost China's capabilities. [Laura Santini, Wall Street Journal, Nov 22] American hegemony in R&D is slipping. Educated Chinese will do it cheaper and more foreigners are being denied entry to become the grad students who stay in the US brain system. One group of truants who shy from contributing is the federal R&D mission agencies who disdain dual-use technology development. These classic sub-optimizers proudly announce the right answer to the wrong problem.  In a related development, China's government is considering establishing a new venture fund of as much as one billion yuan ($122 million) a year to support start-ups in the country's burgeoning semiconductor industry. [Jason Dean, Wall Street Journal, Nov 26]  Maybe the Chinese government will have the same "success" as the US government in corporate welfare. Every yuan of misallocated capital in China is a plus for US companies. 

Our own feeling is that probably bearishness on the dollar is a tad too rampant at the moment -- the foreign-exchange speculators and every hedge fund on the face of the earth are effectively short -- and a rally of some sort is in the offing. But if there's anything governments are good at it, it's debasing their currencies, so once a rally runs its course, the buck's descent isn't apt to stop here. [Alan Abelson, Barron's, Nov 29]

Singh's use of jargon may not be the only reason his company, Nano Interface Technology Inc., of Lorton, VA has yet to land the $6M it seeks, but it probably hasn't helped, he said. ... Last week, attendance at a day-long boot camp for entrepreneurs swelled to almost 300, up from about 170 a year ago. ... The biggest mistake entrepreneurs make during venture pitches is hyping the size of their potential market or plans for revenue growth ... As for Singh, whose company sells a nanotechnology product that acts as a protective coating for knee and hip implants, he's simplifying his slides and planning a trip to meet with investors in San Francisco.  [Ellen McCarthy, Washington Post, Nov 25]  The same rules apply for the commercialization section of your SBIR proposals. Although most such sections are ignored by the feds, you have to be prepared for the occasional serious reader who can see through hype or business ignorance. 

Most university technology-transfer programs lose money. They earn less from royalties than they spend on patenting inventions and promoting them to private businesses. Very few inventions disclosed at universities ever achieve a significant market impact. Of every 100 inventions disclosed, about 80 are patented and fewer than 40 are commercialized. Only about one-half of 1 percent generate significant sales. .. And it's not that they don't try:  Before 1980, U.S. universities applied for about 250 patents a year. In 2003, they applied for about 10,000. In 1980, 25 to 30 universities had offices for technology transfer. Today more than 1,200 do. In many cases, their budgets are substantial. The University of Minnesota's technology transfer department, for example, has 21 full-time employees, up tenfold in the past 20 years.  [David Morris, Minneapolis Star Tribune, Nov 28] Few ideas make it from brain storm to sales storm And even few of those generate enough profit to be called a good investment. But strangely, the system goes on and the country gets richer. Why? There are so many ideas and so many optimists that the well publicized ROI from the few successes keeps the game going.  Is government helping? Not much with direct subsidies of companies with ideas in programs like SBIR and ATP. In SBIR, government merely helps itself to the knowledge with little effort to foster innovations that will produce an eventual decent ROI. 

it's a dead ringer for March-early-April 2000! Back then, everybody was blue-sky optimistic and Investors Intelligence's survey showed, for example, on April 14, 2000, 56.9% of advisers were bullish. Last week the bullish proportion was an even larger 57.1%. What more do you have to know? [Alan Abelson, Barron's, Nov 29]

Sell Your Customer an Advantage.  What rational business buyer would pay a premium to take a chance on an unproven technology? .., plenty of companies are willing to do just that. For these companies, early adoption isn't a choice, it's a necessity: They say that jumping out front with the latest innovation makes it possible to constantly improve customer service, boost sales and maintain an edge over competitors. ... experienced early adopters say:
• Clearly identify the business value of the innovation; don't get enamored of technology for technology's sake. • Test the technology in a well-defined pilot program designed to see whether it works and to fix obvious flaws.  • Roll out the technology gradually to the larger organization, so that problems can be solved before the whole company uses it.
[Michael Totty, Wall Street Journal, Nov 15] 

Buy (North) American. Phoenix-based Suntron Corp. has been awarded a four-year military contract to make aerospace and defense products at its Tijuana plant. The contract could open the door to future opportunities, a company news release said. Suntron provides vertically integrated electronics manufacturing services and solutions. [Arizona Republic, Nov 13] 

Here's the biggest lie that entrepreneurs and venture capitalists tell themselves: We've learned our lesson. Silicon Valley's start-up culture thrives on boundless, even reckless optimism. The majority of new technology companies fail or break even at best. The odds of starting the next eBay or Google, while better than winning the lottery, are extremely slim. Entrepreneurs and VCs are often very good at recognizing new market opportunities capable of supporting two or three companies, then forming 10 or 20 or 30 companies in response -- resulting in a lemming-like rush to financial oblivion. Yet somehow the system works, better than any other approach to capitalizing on new technology. And the system continues to work better in Silicon Valley than anywhere else in the world. [Mike Langberg, San Jose Mercury News, Nov 19]

The third annual Best of Small Tech Awards is Small Times Magazine's ultimate annual performance review of the people, products and companies in micro and nanotechnology. After rigorous evaluation by nearly 30 industry leaders and experts, Small Times editors present 31 winners and runners-up who represent the best work and biggest successes in the categories of product, company business leader, researcher, innovator, advocate and lifetime achievement.   

Simply put: innovation isn’t what innovators do; it’s what customers, clients, and people adopt. Innovation isn’t about crafting brilliant ideas that change minds; it’s about the distribution of usable artifacts that change behavior. Innovators—their optimistic arrogance notwithstanding—don’t change the world; the users of their innovations do. [Michael Schrage, MIT Tech Review, Dec 04]

Clear Picture of Summer Brownouts. Plasma flat screens, for example, still cost $2,000 or more apiece, and they use up to five times as much electricity as CRTs. They’re such energy hogs, in fact, that global adoption of plasma TVs could increase electrical demand noticeably,  ... If half of California’s 12.7 million households replaced their CRTs with plasma displays, the state’s electrical usage would grow by 7.6 billion kilowatt-hours annually, an increase of about 1.3 percent. Supply-and-demand projections from California’s state energy commission show that during hot summers, the extra demand from these plasma screens alone could eat up much of the state’s reserve generating capacity. [MIT Tech Review, Dec 04]

Hey, It's Great Technology. celerityfm writes "Warning: Deploying Verizon's new Fiber To The Premises (FTTP, see previous) in YOUR neighborhood may involve geysers of raw sewage spewing onto your front yard or sinkholes opening and swallowing moving vehicles. Well, Hillsborough County, host to one of the first FTTP trial sites, has ordered Verizon to stop deployment of FTTP until they can figure out how to stop creating sinkholes that open up under minivans with children inside. No word on whether SBC is having similar problems with their fiber roll-out."  [Slashdot, Nov 17]

The United States is shooting itself in the foot on this issue in some ways, panelists said. Policy makers have made missteps that are hurting the country's competitiveness in the global technology arena, panelists said. One problem is an immigration policy that sends foreign students at American universities back home after they graduate with top engineering degrees. "When you graduate with a Ph.D. from Stanford, you have to go home," Doerr said. "We should stamp a green card to that diploma."  [Alorie Gilbert, CNETnews.com, Nov 16]  Interesting idea - keep the good ones. But Doerr's useful runs counter to three prevailing Southwest US sentiments: immigrants might be terrorists, immigrants depress good jobs, and immigrants despoil OUR culture.  Alternatively we can educate the good ones and send them back to compete with us from their home country, or a more welcoming global competitor. But then, maybe we think we are invulnerable with unlimited resources to do things like invade foreign countries whenever and for whatever reason we like. 

Summary: For 50 years, the United States has maintained its economic edge by being better and faster than any other country at inventing and exploiting new technologies. Today, however, its dominance is starting to slip, as Asian countries pour resources into R&D and challenge America's traditional role in the global economy. [Adam Segal, "Is America Losing Its Edge?", Foreign Affairs, N/D04]

No Industry Lasts Forever. For more than a century, that simple process combined with the Pittsburgh region's geography and demography to create a powerhouse industry for the production of glass. Western Pennsylvania supplied glass in all its forms, from big and utilitarian to tiny and artistic, to a huge market (80% of the country's glass).  It made many people rich, gave several generations a livelihood and spurred scientific and artistic innovations that were used in and outside the glass industry.  Then came paper cups, Prohibition (destroyed the bottle market for beer and spirits), the Great Depression (people cut back on luxury items), plastic, aluminum (pop top cans) and foreign competition (it costs Lenox $13 to produce a goblet that can be produced for $3 or $4 elsewhere). [Lillian Thomas, Pittsburgh Post-Gazette, Nov 15

... even as the number of applications soars at patent offices around the world. America's patent system has “become sand rather than lubricant in the wheels of American progress”, argue Adam Jaffe and Josh Lerner in a new book, “Innovation and its Discontents: How our broken patent system is endangering innovation and progress and what to do about it” (published by Princeton University Press). The world's patent system remains splintered along national lines, yet the system's defects are felt everywhere.  [The Economist, Nov 13] 

Global Software, Global Employment. If Microsoft isn't American, who is? But not even Gates can resists the lure of siting its operations in lower cost places. Now it will double the size of its new place in Hyderabad, India even though The company insists that most of its work will continue to be done in Redmond. ... Still, Microsoft has also suspended work on a second local campus, in Issaquah, and last month it gave up more than half the land it had reserved for that project. [Seattle Times, Nov 12] 

... gallium arsenide. For years, this exotic material was promoted in the press as a replacement for silicon in integrated circuits, with proponents touting its superior speed. But gallium arsenide is expensive, and Moore’s Law had long since trained the computing market to expect continual cost reductions, not increases. In this case, a careful analysis of the hype versus the economics would have nudged innovators back toward silicon or toward niches where gallium arsenide might be worth its significantly higher cost. In fact, that’s exactly what happened: gallium arsenide has become a key material in high-speed chips for cell phones and other telecommunications devices. [Michael Schrage, MIT Tech Review, Oct 04] 

Mark Zandi, chief economist at Economy.com, figures that 2004 has been the best year for the global economy in almost two decades -- and agrees that for technology spending, this is about as good as its going to get for a long time to come. Zandi thinks growth in technology spending over the next decade will average about 6% a year, just a tad above expected long-term GDP growth. That's not terrible, but it is a far cry from the double-digit gains experienced in the bubble years, and well below the growth that tech stocks likely will require to hold onto their premium valuation over the broad market.  [Eric Savitz, Barron's, Nov 15]

A legend to exit. Andras Grof (a.k.a Andy Grove) will leave Intel's board in the spring as part senior management descends to the next generation. [Industry Week, Nov 12]  He is the last of the three founders of Intel and employee Number One. Intel is also no longer the Moore's law company it was for 30 years ago as demand for higher PC chip performance plateaus.  

An engineering student cum VC and his wife will set up the Mark and Mary Stevens Institute for Technology Commercialization at USC with a $22M donation. Max Nikias, dean of the engineering school, says the institute will help students become technologically savvy and give USC a leg up as a research institution -- not to mention a global competitive boost.  "Technical innovation, if you get it quickly into the marketplace, creates new products and new jobs and new skills. It is the only way the U.S. economy will remain competitive," he says. [Wall Street Journal, Nov 11]  maybe USC can help do what SBIR fails at - pushing new technology into markets instead of just into government lab knowledge. 

LARTA says it has a contract from NIST to develop and implement entrepreneurial workshops for Advance Technology Program (ATP) awardees.

Entrepreneurship emerges as the new song of India Two dozen Boston VCs spent a week in India looking for entrepreneurs with business pizzazz. meetings and events every day from 8 a.m. to 10 p.m. Not service companies who compete on the basis of lower price.  Atlas's Bichara said service companies often can't grow at the rates venture capitalists are looking for. His firm is interested in Indian technology start-ups that might want to build their management team in the United States. [Beth Healy, Boston Globe, Nov 8] Global competition is everywhere. What if the Indian government even started an SBIR program that really worked at the goals that the US programs only pretends to work at? Would we call it corporate welfare and appeal to the WTO? We probably don't have to worry about India going to the WTO because there is no evidence that SBIR firms are doing Indian entrepreneurs any competitive harm. 

Thanks to the 1990s boom in personal computing and the Internet, jobs in information technology -- known as IT, or simply "tech" -- were supposed to spread the prosperity of a "New Economy" based on digital technology instead of on bending metal or stamping plastics.  But it's not working out the way many had hoped. Unemployment among tech workers, once almost nonexistent, is now higher than the overall jobless rate for the first time in more than 30 years, [Greg Schneider,Washington Post, Nov 9]

Customers complaining in public? Sue 'em, especially if they set up a website that sounds like yours and let other customers complain (even if the complainants could be verified as customers). An NC company is suing a Georgia couple for too effective complaining. [story from Seattle Times, Nov 8] Wanna complain about the government? Go ahead, they have to listen to abuse without suing. 

Big Idea Group (Manchester NH) makes money off other people's notions. In some cases he takes an idea, turns it into a product and sells it himself, paying the inventor an advance of $20,000 or so against a royalty of around 5% of wholesale revenue. In other instances he brings an idea to a manufacturer or retailer who licenses it; Collins splits advances and royalties 50-50 with the inventor.... He'd also like to do a European version of his road show. "Ultimately I'd like to have inventors anywhere in the world have a place to take their invention and get a good audience to review it," he says. "And if it was a good idea, there'd be one phone call." Straight to Collins. [Peter Kafka, Forbes, Nov 15]

The Semiconductor Industry Association..  predicting sales will remain essentially flat in 2005, rather than rise 4.2% as predicted in June. The industrywide inventory buildup in chips, it seems, is finally coming home to roost. [siliconvalley.com, Nov 4]

It is a universal belief among politicians that the economic virtue of any company or policy is determined by how many jobs it creates...   But jobs are a cost, not a benefit. The Best Small Companies would be even better for American economic health if they could produce their rapidly growing output while shedding employees. ... Gates' essential goodness is in having eliminated the jobs of a few million secretaries and file clerks.  [William Baldwin, Forbes, Nov 1] Government should intervene in the economy only for a rising standard of living, not just employment of the maximum number of Americans. 

From Steam Engine to Search Engine. Edison lit the world, expensively at first. But it was his assistant, Samuel Insull, a naturalized American and business genius in his own right, who some years later in Chicago found the way to make electricity prices fall over six decades, an incalculable boon to life and work. .. Politicians could make promises, but while government could provide the framework of freedom it could not aspire to deliver these necessities. We owe them to men like Cyrus McCormick (the reaper), Robert Fulton (steamboat), Theodore Judah (transcontinental railway), Lewis Tappan (credit rating), Sam Colt (six-gun), and Samuel Morse (telegraph). McCormick's invention, and then his revolutionary buy-on-credit marketing, enabled thousands of farmers to harvest the Great Plains and feed the world.... Innovation will continue in America. It is in the nation's DNA. But if the scope of it is not to ebb in the face of global competition -- in large part the consequence of Malcom Maclean's innovation of container shipping -- we must honor more the risk-takers who really get things done. [Harold Evans, Wall Street Journal, Nov 3] 

Who's your daddy? There's a new biography out on Fred Terman. The name probably doesn't ring a bell, but by all rights it should, because the late Stanford professor has been called the Father of Silicon Valley for his contributions in education, his fostering of ties between academia and the technology business and his mentoring of students like Bill Hewlett and Dave Packard. And just for good measure, Terman was the son of the man who invented the IQ test[SiliconValley.com, Nov 1]

All along the network's path, new technologies will be needed, starting at the chip and protocol level and proceeding up to the servers and routers that networks run on. Last but not least, there must also be innovative thinking on funding and the creation of new businesses, a prerequisite to surviving in a world where investment capital is scarce and increasingly scrutinized before it's parceled out.  [Paul Kapustka, Network magazine, Oct 25

NSBA is seeking nominations for the 2005 Small Business Advocate of the Year Award, which will be presented this spring during the organization's annual Washington Presentation. Potential award winners will demonstrate a commitment to small business advocacy, a proven history of voluntary efforts and endeavors to advance small business and improve the conditions for small business owners; success and growth as a small business owner; or any other accomplishments demonstrating merit as an effective advocate for small business interests.

The Patent and Trademark Office has taken the first step in creating a new patent classification for nanotechnology by creating a new cross-reference digest. The project is related to research and technology development at the atomic, molecular, or macromolecular level that is less than 100 nanometers and has nanotechnology properties and functions. [Minneapolis Star Tribune, Nov 1]

A Less Compelling Story. Comin's study estimated that R&D accounts for 10% to 20% of productivity's 2.3% annual growth rate since 1950. While that's much smaller than previous calculations, his number still represents a significant contribution in an era when companies are obsessive about cutting costs and improving efficiency. [Business Week, Nov 8]

We didn't see a return from the investment in a timely manner, said Intel as it pulled the plug on display chips for televisions, although it held out the prospect of a more advanced technology - later. How much later is left vague. New tech for big markets needs a really big ROI to get big companies to invest. Your sweet technology? Intel already has plenty of its own marginal economics stuff.  When you write SBIR commercialization plans to the agencies who even read them, put that sort of realism into market projections to make yourself credible. 

What's Up in Tech? Job cuts in technology jumped 60% between July and September to 54,701, .. Computer companies alone saw job cuts jump 127%.... Manufacturers in the sector are having trouble making money since they have been forced to lower prices in order to attract consumers, Challenger said. So they end up firing workers in order to maintain healthy profit margins. [Reuters, Oct 18] 

Highest Tech The Wrong Answer. Intel's 4.0 GHz Pentium 4 processor, ... won't ship at all. .. the company said it had scuttled the chip it had long championed as the savior of overworked notebooks and desktops. Rather than increasing the clock speed of forthcoming Pentium 4s, Intel plans to speed them up by boosting their cache -- to two megabytes from one megabyte. Its 3.8 GHz Pentium 4, will be the firm's fastest chip on the market for the foreseeable future. [John Paczkowski, Good Morning Silicon Valley, Oct 15]

On Forbes's annual list of the best 200 small companies: Ceradyne 8, SurModics 20, Cree 106, II-IV 108. The big winner in the poll of What quality is the most important for a successful entrepreneur? is perseverance which got twice as many votes as the closest competitor on the list of ten plus I Don't Know, None of the Above, and Could You Restate the Question. Why not more SBIR companies on the list? Only public companies qualify and the  government discourages potentially public companies from competing in SBIR. 

Want those reviewers, who know less than you about your subject, to devour your proposal instead of merely plow through it? Try writing like scientists who make it to the top of the popular reading lists. Ok, so you'll never be like the top guy Bill Bryson  A Short History of Nearly Everything. But you could bring yourself to write like Number 3 Jared Diamond Guns, Germs, and Steel. The Fates of Human Societies or number 10 Thomas Kuhn The Structure of Scientific Revolutions. See all 15 on Amazon worldwide bestsellers reported by the Economist Oct 2. Get yourself some one-syllable memorable names for your concepts: the Dawn of Life, the selfish gene, Fabric of the Cosmos, The End of Oil. You would have a long road to getting reviews like Bryson gets: This irrepressible American enthusiast whizzes us through time and space, explaining not just what we know, but how we know it. Enlightening or aggravating, according to taste. But you could aspire. 

Physics World magazine presents its candidates for the 20 greatest equations of all time. The equations are divided into two groups—those from pure mathematics, and those from physics ... from the mathematics side is my personal favorite, Euler’s equation, exp(i*pi)+1=0, uniting the five most important numbers in one simple formula. Others include the formula for the circumference of the circle and “1+1=2,” which Bertrand Russell strove mightily to prove from first principles in his Principia Mathematica--an endeavor that he maintained cost him some of his sanity. From the physics roster we have Maxwell’s equations in their vector form, Newton’s second law (F=ma), the ideal gas law (PV=nRT), Einstein’s equations, and several others, most of which carry the name of their discoverer. They’re enough to fill a book, and in fact someone has written it: Five Equations that Changed the World,  by former ABC News science journalist and Raelian clone investigator Michael Guillen. 

As the political candidates compete to insult our intelligence about employment and economics, Each month Monster Worldwide reviews more than 1,500 websites to measure employer demand for workers and online recruitment activity. A higher index indicates growth in online job availability. The Monster Employment Index reached a high for the year in September, but the rate of increase was half of what it had been in August. Will online job demand continue to rise in October? Our traders believe there is a 90% change this will happen. Tell us what you think. Begin predicting the future of business and technology.

[MIT Tech Review, Oct 14]

The X Prize Foundation and the World Technology Network announce a series of X Prizes that might include: 1. a 4-seat vehicle able to achieve 200 miles per gallon in a cross country race; 2. Construction of a pre-determined molecule by an assembler;  3.  aging reversal; 4.  a self-sufficient education facility able to operate independently and educate villagers anywhere on the planet. The WTN and X Prize Foundation seeks competitors and sponsors. 

"More and more, Sand Hill Road money is moving to India," Mr. Dham says, referring to a key location for venture capitalists in Silicon Valley. "It's clear India's time has come." ... Successful Indian entrepreneurs and financiers in Silicon Valley are discovering that going back to their roots is good business. As the U.S. technology sector has slowed, many Indians say they prefer to invest in the dynamic subcontinent rather than the mature U.S. ... "Biotech firms in Boston have to have a position in China and India now," says Hemang Dave, a Boston investor. [Ann Grimes, Wall Street Journal, Oct 14] And what role is SBIR playing in nurturing new US technologies as investment vehicles? Not much. DOD and NASA in particular seem to completely ignore growth and investment potential in favor of buying what suits their immediate technical knowledge needs. 

We'll develop hydrogen as the energy solution, says the politician. Sure, except where will we get the hydrogen?  Andrew Oswald, an economist at the University of Warwick, and his brother Jim, claim that to switch to hydrogen power for vehicles would require either covering half of California with with turbines or building 1,000 nuclear reactors. [Futurepundit, Oct 8] Note: parts of California are already covered with windmills. 

No matter who wins the presidential election, the outsourcing of technology jobs is here to stay. ... META Group Inc., a Stamford, Conn., consulting and research firm, says the outsourcing trend will grow by 20 percent per year through 2008 as more US firms focus on cutting labor costs. META estimates that 60 percent of US firms will send some technology work abroad by 2008. ... Forrester Research, a Cambridge technology consulting and research firm, estimates US employers will ship 588,000 white-collar service jobs abroad this year, up from 315,000 last year. [Diane Lewis, Boston Globe, Oct 13]  Even though the political candidates will yammer over the problem, they have no solution to a worldwide competition as other countries grow economically. Companies large and small must compete with firms all over the developed globe in places where smart people will work for a lot less than Americans. Don't look either for the federal agencies in SBIR to fund projects that improve American competitiveness; that's not in their shortsighted interests.

Moore's Law has a flip side. It goes like this: At a constant performance point, tech prices tend to drop 30% to 40% per year. Recall the Intel 486 chip? It was blazing fast in 1987. It sported a premium price to match--$750--and ran PCs costing $4,000 (about $7,000 in today's dollars). Where are those 486-class chips today? They're running BlackBerrys, Treos and the like and sell for $25. The flip side of Moore's Law is the reason China will surpass the U.S. next year in Internet users. This is what happens when decent PCs and handhelds can be had for less than $500.  The flip side of Moore's Law is the reason China will surpass the U.S. next year in Internet users. This is what happens when decent PCs and handhelds can be had for less than $500. [Rich Karlgaard, Forbes, Oct 18] 

Three test flights and ready to deploy. Not just MDA's missile defense. Brit entrepreneur Richard Branson who drove British Air nuts is launching a new service to exploit Bert Rutan's idea of space flight with a re-usable rocket that delivers the payload back to earth. Branson's new service will be called Virgin Galactic and expects to fly 3,000 new astronauts in its first five years. Fares will start at $208,000 for a suborbital flight, including three days’ training. Designs for the Virgin Galactic craft are progressing on a weekly basis at Rutan's base in Mojave, California and by early 2005 the final design for the maiden Virgin Galactic ship, the VSS (Virgin SpaceShip) Enterprise, should be signed-off. [Randall Parker,  Futurepundit (a blog), Oct 1] Maybe Virgin Megastores will offer applications. 

the global economy could be on the cusp of an age of innovation equal to that of the past 75 years. All the right factors are in place: Science is advancing rapidly, more countries are willing to devote resources to research and development and education, and corporate managers, too, are convinced of the importance of embracing change. ... this new wave of technologies is gathering force just as innovation has gone global. In the industrial countries, non-defense private and government spending on R&D has risen from 1.6% of gross domestic product in 1981 to 2.1% in 2002, the last year for which data are available. Published scientific research has increased by 40% since 1988, with the gains spread around the world.  [Michael Mandel, Business Week, Oct 11] Business Week's 75th Anniversary Issue has a long section on the Innovation Economy

Yesterday’s ideas about the future.  Between them, [sci-fi films] No Towers and Sky Captain map two very different responses to the technological and social changes Americans faced in the first half of the twentieth century – one full of laughter, the other full of hope. Both are in short supply at the moment. [Henry Jenkins, MIT Tech Review, Oct 1]

Guessing Your Market?  Forty percent of PCs shipped with Linux in the U.S. and Western Europe are subsequently scrubbed clean and outfitted with a pirated copy of Windows. In emerging markets, that fate awaits a full 80 percent of Linux pre-installs. [SiliconValley.com, Oct 1]

Venture capitalists have a pressing new question for high-tech entrepreneurs who come looking for money: What's your India plan?.... Many say they have no choice, if they want to be competitive in selling software, telecommunications equipment, and services. They can get an Indian employee for $21,000 in Bangalore or Hyderabad who would cost three or four times as much in Cambridge, Waltham or Silicon Valley. And the foreign workers are highly productive, people who manage them say. ... Tom Cole, a general partner at Trinity Ventures in Menlo Park, Calif., said there's no question that good jobs will be lost. ''It's very wrong for Americans to assume that the best jobs are here, and all the grubby jobs can be done by the rest of the world," he said. ''There are a lot of highly educated people all over the world who can do these jobs.  [Beth Healy, Boston Globe, Sep 23

The McArthur Foundation will give no-strings $500K to each of 23 people who do good stuff. Techies in the group are Angela Belcher, 37, nanotechnologist who uses genetically engineered viruses to build extremely tiny semiconductors, Joseph DeRisi, 35, molecular biologist who studies the complex behavior of genes, David Green, 48, technology transfer innovator who dreams up ways to manufacture high-quality health care products at lower costs, Daphne Koller, 36, who creates computer models to further the advance of artificial intelligence, Naomi Ehrich Leonard, 40, marine roboticist who designs autonomous underwater research-gathering machines, Vamsi Mootha, 33, physician who focuses on metabolic research, Amy Smith, 41, inventor who designs helpful technologies for people with limited resources, Julie Theriot, 36, microbiologist concentrating on bacterial infections. [Linton Weeks, Washington Post, Sep 28]  What a great incentive for creative people!  If SBIR ever wants to spawn innovation revolutions (which it apparently pays only lip service to) it could learn something from McArthur and favor creativity instead of reliability. Actually, SDIO/BMDO used to have an attitude bordering on that by funding a lot of new ideas by strangers who showed something technically new coupled with  capacity and interest in getting it into some market.  

Technologies to Watch in '05. innovations to truly arrive in the year ahead: "Cell" Microprocessor, Hard-Drive Search, Missile Defense Shield, Drug-Eluting Stents, Video Over DSL, Neuro-Imaging, Inflation Trading, Rieter Ultra Light, Rich Internet Applications, Titanium Graphite Wings. [Business 2.0, Oct 04

The Small Biz Job Creation Engine Myth. According to the Census Bureau, employment at smaller companies actually climbed more slowly than at large corporations between 1990 and 2001, the most recent year for which data is available. The number of people working at companies with 20 to 100 employees climbed to 20.3 million from 17.7 million, about 13 percent over the 11-year period. But the number of people at companies with more than 500 employees climbed to 57 million from 43 million — an increase of 32 percent.  [Edmund Andrews, NY Times, Sep 21] Politicians believe (or pretend to believe) the myth that small business creates jobs in America. Right there with apple pie, motherhood, and the flag. The high tech small biz community exploited the myth to get SBIR going and enlarged despite an almost complete lack of competent evidence that SBIR has any economically commendable results. Nevertheless, SBIR will continue because legislators don't have to fight appropriation battles over it to pay off a favored constituent group. 

In ''The Art of the Start," author Guy Kawasaki has accomplished something rare: He's written a how-to business book that is simultaneously smart, practical, and fun to read. There's lots of useful information in this book for start-up entrepreneurs. The subtitle's claim that the book is a ''guide for anyone starting anything is a bit of an exaggeration. In truth, what Kawasaki has written is an exceedingly good guide for people who want to launch high-growth technology start-ups. (In full disclosure, I once managed a program in which Kawasaki served on a team of mentors for entrepreneurs.) ... Kawasaki himself could be described as a venture capitalist dot-com survivor. Well-known for his work as a marketing evangelist in the early days of the Macintosh computer, Kawasaki in 1997 cofounded Garage.com, now Garage Technology Ventures. [Martha Mangeldorf, Boston Globe, Sep 19]

Continuing Adjustment. The U.S. information tech sector lost 403,300 jobs between March 2001 and this past April, and the market for tech workers remains bleak, according to a new report. Perhaps more surprising, just over half of those jobs -- 206,300 -- were lost after experts declared the recession over in November 2001, say the researchers from the University of Illinois-Chicago. In all, the researchers said, the job market for high-tech workers shrank by 18.8% to 1,743,500 over the period studied. [Minneapolis Star Tribune, Sep 15] No, SBIR won't do a thing to fill the hole because SBIR merely diverts money the agency would have spent anyway into less competitive companies. Only if SBIR is invested in market-shifting  technologies or in more market-competitive companies will it do any economic good. 

This changing of the guard (tech leadership) has been imposed by a force I've been writing about for the last two years--the Cheap Revolution. Technology is powerful enough so that users don't need to own the highest-priced versions to improve their lives or effect big change. ... Yes, all tech stocks are in a slump. Those on the right side of the Cheap Revolution will emerge in healthy shape. [Rich Karlgaard, Forbes, Sep 6]  If you are one of the few SBIR companies that aspires to be disgustingly rich, it is not enough to have a sweet technology. It must also make economic sense for volume buyers, not just technical sense for a risk- and publicity-shy government. 

Morgan Stanley's High Tech Index, for example, is a cool 20% or so under that early-year peak and the Philadelphia Semiconductor Index is off something like 35% from its '04 top. And even the incorrigible optimists who follow the techs have been putting out reports that while still bullish (the analysts don't want get read out of the fraternity), they are rather somewhat grudgingly bullish for these normally perfervid souls (an analogy is the way Hollywood flacks used to categorize some movies as "merely collossal"). ... Tech remains burdened by oodles and oodles of capacity, the legacy of the buying binge of the late 1990s ... Tech bulls, Fred suggests, had "better find Noah's Ark" because, odds are, they'll be hit by a deluge of negative earnings warnings and more unsettling indications of inventory glut "over the next 40 days and 40 nights." [Alan Abelson, Barron's Sep 13

The average household is now spending about 5% of its income on energy, ... that ratio was 8.2% in 1981, during the second OPEC crisis, and 5.7% in 1970, before OPEC got started. The ratio was 6.6% in 1960.  [DAVID WYSS, Barron's Sep 13]

Seven Wonders -  seven technologies that will change everything:  plastic photovoltaics to get the 22 cents per KWH down nearer the coal plant's 4 cents; mechatronic printing of parts by inkjet technology; memory drugs to reverse Alzheimers and enable instant cramming; perpendicular magnetic storage for terabytes; microfluidic testing for lab on a chip; integrated optical chips for super broadband; software radio. [Matthew Maier, Om Malik, David Pescovitz, G. Pascal Zachary, Business 2.0 magazine , Sep 04]

According to the Fed, companies outside of the tech arena have barely added to production capacity at all over the past three years. Their capacity level in June was just 0.3% above [a year ago] ...  companies are more interested in increasing efficiency, and thus boosting margins, than increasing their ability to produce. That is why tech has been at the forefront of the capital spending recovery, But stagnant capacity also suggests much of new equipment that companies put in place recently was bought merely to replace equipment that had worn out. That doesn't bode well for spending in quarters to come. [Justin Lahart, WSJ, Aug 17]

About 1,500 companies world-wide have announced nanotechnology research plans, including 19 of the corporations in the Dow Jones Industrial Average, according to an industry analysis being released later this week. ... According to a report by Lux Research Inc. of New York, government investment in nanotechnology will rise to $4.6 billion this year. North American, Asian and European economies each accounts for about a third of the spending, according to Lux. Corporations will spend another $3.8 billion on research and development in 2004, according to the findings. Mistui & Co. ... Approximately 80% of the companies pursuing nanotechnology are start-ups. [Wall Street Journal, Aug 16]

Growthink lists nine pitfalls of business plans. Some of them apply directly to commercialization strategies for SBIR proposals to the few agencies who care and know enough to evaluate commercialization potential. Most have an analog in proposing to agencies who will use your technology.  #9: Not Including Successful Companies in the Competitive Discussion; #8: Focusing Too Much on the Future; #7: Not Tailoring Management Team Biographies to the Venture's Development Phase; #6: Asking Investors to Sign an Non-Disclosure; #5: Indiscriminately Incorporating Investor Feedback into Your Business Plan; #4: Stressing First Mover Advantage; #3: Focusing Too Much on the Company's Proprietary Technology; #2: Defining the Market Size for a Company too Broadly; #1: Making Financial Projections Too Aggressive. 

companies have tended to ax "aggressive new venture programs" in favor of concentrating capital on existing discoveries that were ready to develop. One result: There isn't a huge pool of newly discovered reserves for the companies to develop now.  [Stanley Reed  and James Cooper, Business Week, Aug 30]  Although that conservatism is in the oil industry, it is also pervasive in the mission agencies for their SBIR. 

People love a good, unified explanation for the ways things are. One current favorite is the concept of disruptive technology, a coinage and concept put forth by Harvard Business School professor Clayton Christensen and explained in his book The Innovator's Dilemma. This guy has so many honors that apparently whatever he says is gospel. The concept of disruptive technology goes to the top of my list as the biggest crock of the new millennium. ... [The idea] Sounds good. The problem is that there is not one example of this ever happening. When boiled down, the notion is essentially a rewrite of the adage Adam Osborne devised to explain the mediocrity of the Osborne 1: "Adequacy is sufficient." ... One problem in our society is the increasing popularity of false-premise concepts that are blindly used for decision making.  [John Dvorak, PC Magazine, Aug 17]

many smaller American firms would have difficulty conducting their business in the case of a major attack, says a new report on corporate security. The Conference Board, a New York business organization, says most midsize companies view their spending on security as a sound investment, but a large minority sees it as an expense that must be minimized. [Jamie Herzlich, Arizona Republic, Aug 8]

How do you become a millionaire? Start with $1 billion and buy an airline [Susan Carey, WSJ, Aug 6]  Or an SBIR materials company, a baseball team, a biotech company....

Extra Light or Extra Cheap. Many cabin suppliers can offer impressive weight savings by using next-generation materials -- but at a high price. Recaro Aircraft Seating in Stuttgart, Germany, says it can cut the weight of a seat as much as 30% by substituting carbon-based composites for steel in the frame and armrests. But the composites add more than $1,500 to the cost of a seat. ``Right now, the airline industry doesn't have the cash flow to pay for this,'' says Catharina Lübke, Recaro's head of strategic marketing. [Carol Matlack, Business Week, Jun 29]  Your high-tech composite has a great weight-to-performance ratio but a terrible cost-to-performance ratio? Which is why only the government seems willing to invest in it, and then only with SBIR that creates no incentive for them to get it to market.  Note: when proposing SBIR to a government agency, especially one that takes note of commercial potential, talk about why the material is not yet ripe for private investment and how the SBIR will move it in that direction. 

In a report titled ''Innovation Networks," [Navi] Radjou explores the growth of a new market ecosystem that is adapted to respond fluidly to emerging customer wants through collaboration between companies and the global sourcing of myriad components and tasks.  The trend is well underway, and it's taking multiple forms. Some companies that once isolated inventors in ivory-tower research silos now dispatch them to spend time with customers and learn how technology can be applied toward solving their problems. Some that once hoarded their inventions now market them to other businesses. Some have joined business and university research consortiums to tackle complex technological challenges. And many are getting adept at weaving together in-house and external innovations and licensing technology wherever they can find it to quickly get a product to market. [Robert Weisman, Boston Globe, Aug 1]

One result is that innovation doesn't last very long. The iPod was certainly a sensation when it was introduced, but soon, if you want to go into the MP3 player business, you may be able to buy any number of similar ready-made models from ODMs that you can sell as your own. After all, an iPod is essentially a tiny hard-disk drive bolted to some control software.  [Lee Gomes,Wall Street Journal, Jul 19] The story is the shifting of PC design to Asia which raise the question:; if PCs, what other innovative activity can Asia expropriate from the vaunted USA innovation machine? Does government's using SBIR to serve its immediate incremental service needs waste a useful asset? 

Commoditization.  The canceling of Comdex for lack of interest says that computers have reached the penultimate maturity - commoditization -  in which price is the major basis of competition. If you are incredibly lucky, your new technology will reach commoditization after you have made world-class money.  Comdex was born in 1979, in the early days of personal computing. At its height during the late 1990s, Comdex drew over 200,000 people to Las Vegas each November, and occupied over a million square feet of exhibition space. [Hiawatha Bray, Boston Globe, Jun 24] 

The Gartner research firm has estimated that by the end of this year, 1 out of every 10 IT jobs will be outsourced overseas....  which leads to ... Scapegoating foreigners for domestic business cycles is smart politics, and protecting domestic markets gives leaders the appearance of taking direct, decisive action on the economy.  [Daniel W. Drezner, Foreign Affairs, May/June 2004] Which produces the kind of political pandering programs like SBIR that contain no effective evaluation other than counting how much money has been passed out. Ah well, we get the government we deserve when we won't understand and apply economics to politics. BUT, no matter how venal the purpose, every handout program offers a government contract to develop something you need and which the government thinks it wants. Be practical, take it if you can.  And unlike most government contract competitions, the game is relatively open to newcomers with neither political nor bureaucratic connections.  

Bursting Bubble Leaked More Air. NSF says Industrial research expenditures in the U.S. had a record single-year decline in 2002, ...  An inflation-adjusted decline of $8.6B was the largest-ever reported since the survey began in 1953. The 2002 tally, in current dollars, the largest single-year absolute and percentage reduction at $7.7B and 3.9%, respectively.. [SSTI, May 24]  The NSF data also say that the percentage of sales plowed back into R&D was about steady at 4% of the $4.9T domestic net sales of companies that performed R&D in the United States. SBIR, though, kept rolling along as the Bushies had no stomach for the politics of cutting government R&D nor of challenging SBIR's effectiveness as micro-corporate welfare. 

[Bernie] Meyerson, who heads research and development efforts for Big Blue's semiconductor group, says processor chip speed is old news. Instead, he's focusing IBM's work on other areas, such as on-the-fly reconfiguration that will let chips automatically adapt to different jobs. ... the rate of performance enhancement is becoming impacted. We simply made transistors so small that as we continue to attempt to make them smaller, it requires a huge amount of innovation to get added performance. If you were getting an improvement in technology of perhaps 30 percent a year, and suddenly that rate drops to half, the rate at which your systems improve would also drop by that amount. We revealed a strategy for the coming generations (of IBM Power) which is very, very different from the typical strategy in this industry. [News.com, Jun 8] And what is the government doing about supporting tech revolutions in chipmaking? If you judge by DOD's summer SBIR solicitation, nothing. Try finding a topic that welcomes any improvement of any size or type in chip making. 

Every tech company with global ambitions knows that it will wind up being either a partner with China's emerging tech sector or else its rival. This month, an A-list delegation of Silicon Valley venture capitalists will set out on a weeklong tour of China, hoping to network its way into the next century. People in Silicon Valley "have decided they have to do something in China, but very few have figured out what they want to do," says Dixon Doll, of DCM-Doll Capital Management.  While a number of Chinese startups have attracted U.S. investment, most American VCs have done no more than a handful of deals in China so far.  [T J Mullaney, Business Week, June 14] 

John Preston, one of the architects of MIT's profitable licensing strategy is back at MIT after a sojourn in a start-up energy company. Time's Eric Roston interviewed Preston and three other venturists (Time's Inside Business, Jul 04). Preston noted that MIT generates two inventions every day and licenses two a week, and more inventory than it knows what to do with and more than it could reasonably sell BECAUSE OF A SHORTAGE OF COMPANY MANAGEMENT.   He also noted that energy companies have a hard time getting going because Big Energy obstructs competition with high barriers to entry.  For years, John has given of his time to SBIR, especially in the 80s and 90s when SBIR had at least a few places interested in entrepreneuring companies. 

Why Big Companies Can’t Invent A leading venture capitalist says corporations are too slow and timid to capitalize on their own inventions. ...  it’s time to ask some hard questions: Does corporate research and development really work? And if it does, why are so many prestigious and supposedly well-run firms continually blindsided by competitors? The answer is, at best it’s not working well, and perhaps it just doesn’t work at all anymore. Corporations need to take a closer look at their devotion to internal research. We’re entering a new era of invention, and big companies must adapt and begin practicing invention triage—keeping only what works, fixing what can be fixed, and throwing out the rest. IBM, for instance, employs 3,000 full-time researchers yet has rarely been a market innovator. [Howard Anderson, MIT Tech Review, May 14] DOD and NASA are just like IBM - ponderous and tentative. SBIR gives them an excuse and a vehicle to find and develop innovative ideas. What a shame they act like IBM. 

Profitless Innovation.   The public bio-tech companies have a net loss of $40B and a net public investment of $100B, says David Hamilton (Wall Street Journal. May 20).  Peter Drucker maintains that the computer industry never made a dime. At least in computers, a few companies made a lot of money to offset the huge loses in the many that lost money. Warren Buffet notes the same cumulative total loss picture for airlines. For private companies, like the few SBIR companies that actually have marketable innovation. who knows what profit or loss was made. Yet the public companies continue to pour huge sums of outside money (without profits, the money has to come from the outside) into R&D with the hope that at least one of the ideas will turn into a bonanza. SBIR companies get a free ride with money because the government asks no financial reward and cares only that scientific progress is made which is good in general for the advancement of civilization.  Or so they think in their progress model that keeps the taxpayers ponying up the billions for the wonders of science.  

The ability of Americans to thrive during the next 10, 20, or even 30 years does not depend on the budget deficit or the potential exodus of a few hundred thousand jobs to other countries. Rather, our economic future is inextricably linked to our ability to come up with more technological breakthroughs that equal the Internet in magnitude. Such large-scale innovations drive growth, create new jobs and industries, push up living standards for both rich and poor, and open up whole new vistas of possibilities. ...  technology-driven growth is the poor stepchild, receiving a microscopic amount of time, energy, and money from politicians.  ... Technology represents a force for change that is profoundly threatening.
[Michael Mandel, "Rational Exuberance", excerpted in Business Week, May 17]  The mission agencies of the government have the same attitude toward programs that could deliver new technology. NASA and DOD spend a huge chunk of their SBIR money on junque that has no technological future because they DO NOT CARE about national economic growth. They squander their splendid opportunity to seed new technologies by funding stuff that serves only their need for more knowledge about what they are already doing. 

Reason Two why corporate R&D just doesn’t workus venture capitalists. We have about $100 billion just sitting on the sidelines. We often will pick out the best research teams and set them up as independent companies—something a big firm is loath to do. And we can make company founders rich beyond belief (at least that’s what we tell them). We will steal the best researchers—those with a sense of urgency and a track record—and beat the big guns to market. That is our job, and we do it well.  [Howard Anderson, MIT Tech Review, May04]  Reason Three:  Every company likes to innovate; very few companies want to execute the plan to take a development and productize it. That’s hard work. Part of the problem is the internal barriers that corporations put up, but that isn’t the real key. Show me the internal compensation system for a company’s general managers, and I will show you why its execution is just plain awful. Companies reward managers for making their numbers, not for building new businesses. Who wants to risk her bonus for an upstart technology that threatens the cash cows?  That's why SBIR doesn't work either and why it only exists because it is propped up on political stilts.  No NASA center director or military lab chief gets promoted or a big bonus because an SBIR company succeeded in any marketplace. 

Need something invented? MIT Tech Review offers a sampling of companies and organizations that exist chiefly to incubate new inventions—often for hireSarcos Research, Salt Lake City, UT; Deka Research and Development, Manchester, NH; Generics Group .Cambridge, England, Invent Resources Lexington, MA; Walker Digital Stamford, CT  Sarcos has had at least 14 Phase 2 SBIRs from DOD and NASA. 

Nathan Myhrvold opines that virtually all big corporations, even wealthy ones, lack motivation to pump money into projects outside their existing product lines. In other words, they tend to discourage invention, the often subversive effort to isolate new problems and generate unexpected solutions. “Invention is a side effect [at corporate labs], not the focus,” Myhrvold says. “Most large organizations have a mission, and invention often takes you in another direction. When it comes to mission versus invention at most companies, mission wins.” Even small companies such as Silicon Valley startups, he notes, are often loath to support invention outside their core markets. ..  “I can't outdevelop Microsoft and Oracle in databases," he says. "But I may be able to outinvent them."   [MIT Tech Review, May 04] 

Patents and Inventors as Innovation Measures?  Bunk. The world is not suffering from a lack of inventiveness. Indeed, Econ 101 teaches that when the rate of supply dramatically accelerates past the rate of demand, supply becomes less valuable; you have a glut. If the U.S. government increased the number of patents it grants by a factor of ten, do we think inventions would—on average—become more valuable? Almost certainly not. Similarly, the romantic belief that dramatically increasing the number of quality inventors will dramatically increase the number of brilliant innovations is to misunderstand both the act of invention and the process of innovation. The real bottleneck isn’t invention; it’s the inability to cost-effectively translate breakthrough inventions into marketable products. [Michael Schrage, MIT Tech Review, May 04]  The folks who want more SBIR would rather talk about invention and than innovation. If they can get government to evaluate SBIR, if indeed any evaluation is ever done, they want any measure except economic returns. They prefer to jabber about patents and inventions and science advances which say nothing about the value of the SBIR work to anyone except the company that collected the subsidy checks. 

In the end, though, “no single innovation conveys lasting advantage,” says Mr Hammer. In the toys and games business today, up to 40% of all products on the market are less than one year old. Other sectors are only a little less pressured. Innovation and, yes, invention too, have to take place continually and systematically.  [The Economist, Apr 24]

Rich Karlgaard, publisher of Forbes, notes that 5% of the total population got 33% of the new jobs in the 397 rural U.S. counties averaging 40,000 in population. Hooterville is wildly cheaper than Metropolis, as a place to both do business and buy a house.  Yet the sophistication gap between large cities and small towns is narrowing. Novelist Sinclair Lewis rose to fame in the 1920s (and won the 1930 Nobel Prize in Literature) by satirizing small-town small-mindedness, in Main Street and Babbitt. Lewis wasn't all wrong. Growing up in North Dakota, I felt cut off from the world. The 1960s didn't arrive in my town until 1973. ...  cheap overnight delivery service, cable television, USA Today, national retail chains, Internet access, cell phone coverage and broadband. New Yorker or New Paltzer, we sip from the same information hose now. 

If you want to learn about the importance of “invention” over the past 300 years, talk to the lawyers. If you want to hear about the importance of “innovation,” however, talk to anyone else. The history of invention is the story of litigation, not innovation. Don’t confuse them.... the economics of invention are profoundly different from the economics of innovation. Being “first to file” has nothing to do with being first to market. Being first to market has nothing to do with being first to profitability. Being first to profitability—and this is key!—has virtually nothing to do with how quickly, deeply, and ubiquitously an innovation spreads. In other words, there is no meaningful correlation—let alone causality—between a “successful” act of invention and a “successful” marketplace innovation. None. ...  a more Neugebauerian perspective: the technical excellence of an invention matters far less than the economic willingness of the customer or client to explore it. A customer’s readiness to innovate is what makes invention possible.   [Michael Schrage, MIT Tech Review, Apr 19] 

No innovation here, please.  The site of an innovation is not necessarily its beneficiary. Chicago architects, for example, invented the skyscraper by borrowing the steel skeleton from railroad bridges and applying it to buildings -- eliminating the limits that masonry had imposed. With the 1883 construction of the 25-story Home Insurance Building, the first to use a steel skeleton, the Chicago school of architecture rose above all others. Only specialists, however, are likely to remember Chicago's brief dominance. For as Mr. Rasenberger notes, Chicago's politicians, believing that skyscrapers "were destroying their city," passed an ordinance in 1893 banning buildings more than 10 stories high.  The ordinance immediately shoved Chicago off its perch, for New York's politicians had come to the opposite conclusion [Julia Vitullo-Martin, Wall Street Journal, Apr 15, reviewing Jim Rasenberger in "High Steel" and Deborah Cadbury in "Dreams of Iron and Steel" ]

the rising number of engineers emerging from universities in Asia and Eastern Europe, and their increasing sophistication, points to the possibility that tech companies in the U.S. and other established economies could eventually lose their dominance in chip innovation. "The attitude here is that they aren't real engineers, they aren't that good," says T.J. Rodgers, CEO of Cypress Semiconductor, a San Jose, Calif., chip company that has a 165-employee chip-design center in the Indian high-tech center of Bangalore. "Nobody should rely on that."    [Don Clark, Wall Street Journal, Apr 12]  What is the government doing to further innovation with SBIR? As little as it can get away with.. 

MIT handed out $600K to eight innovators, all MIT faculty in the School of Engineering. Maybe the government could study how MIT picks such winners, and then copy the technique in SBIR.  Any lessons learned have to be a plus.   Details. 

IT'S THE SCHOOLS, STUPID: Don't blame India. Blame the American schools. The lack of strong math and science programs are really what's driving American tech executives to look offshore for employees, according to a report from the American Electronics Association. A Wired story takes a deeper look at that angle. The AeA also says that outsourcing as a phenomenon has been widely exaggerated, and isn't as serious a problem as we think it is. In fact, the AEA says, outsourcing is "the least important variable in the decline of high-tech jobs."  [Megan Ballinger, Wall Street Journal, Mar 25]  Can the federal government do anything about more math and science and serious students?  Political blather isn't a solution. Oddly, the free-market, smaller government Bushies fall into the old trap of inventing federal programs to fix local problems. If a problem needs just money, see the government. For all other means, look somewhere else - like in the mirror. 

Can Silicon Valley compete in a true global economy? Once, this would have seemed like a foolish question. No more.  The valley, and America as a whole, had enormous competitive advantages for decades. But conditions have changed in dramatic ways -- such as the composition of the global workforce and emerging entrepreneurialism in other places.  [Dan Gillmor,  San Jose Mercury News, Mar 14] Does (should) government have a direct investment role in adapting the American economy to a more competitive world? Few argue against government support for basic research and technology education. But direct investment in private companies attracts a lot of controversy. Programs like ATP, that free-market conservatives love to kill, do invest directly to foster commercial product development. SBIR, by contrast, invests little in anything commercially profitable. Except the old BMDO which once had a dual-use focus, and DARPA which shows some sign of true tech advance.  Not because of any great free-market idealism, but because bureaucrats in mission agencies have little incentive to help any objective beyond their own immediate programs. 

Nanotech feeding frenzy interrupted for a commercial message  -make a saleable product or die (or live in government life support). The 1800 feeders at the Nanotech 2004 frenzy in Boston were triple two years ago. The government feeders should realize that government has a short attention span for specific technologies - it could go back to hydrogen fuel cells at any notice- although it won't pull the plug on anything in an election year.  One useful rule: if Intel (or such like) won't buy it, it will become a ward of government. 

What is it about electrical engineers? These guys just can't get along. A group of them brings a wonderful new technology to market, and another equally brilliant band creates another way of doing the same thing. It's the customers who end up sorting things out by voting with their dollars. And heaven help the consumer who backs the loser. [Hiawatha Bray, Boston Globe, Mar 22]  And what should be the government policy about such competition? Seed every infant competitor and then stand aside while the market decides the ultimate winner. Does the government have a good vehicle for doing so? Yes, SBIR. 

More Euphoria.  No one wants to believe that the [semiconductor] cycle has maxed out. So soon? In fact, year-over-year revenue growth bottomed in August 2001 and has been climbing fairly steadily since. The time to sell semis is when all the companies are reporting good news, when margins are high and when you can't swing a mouse without hitting a bullish analyst. { J Eisinger, Wall Street Journal, Mar 18]

Competitive Edge Of U.S. Is at Stake In the R&D Arena .... The one thing America can't afford to outsource in the global economy is superiority in innovation. That hasn't happened yet. But if U.S. politicians don't do more to bolster education, it could. [John Harwood, Wall SAtreet Journal, Mar 17] If they cannot do algebra by the tenth grade, they may well be doomed to lifetime innumeracy and the inability to hold a job with high-tech content. An innovation-dependent economy needs numerate thinkers at every level in the food chain, from consumers to inventors. No, that does NOT mean more PhDs in S&T, nor more government handouts in science research for too many PhDs being produced. 

Speaking of prognostics...  Visionaries get things wrong because they concentrate too much on the technology, and fail to take into account the way it is shaped by social forces as it spreads. Indeed, it would seem that the more wrong the original vision, the more important the technology. Perhaps the ultimate example is the internet: its power derives from the fact that its original architects, Vinton Cerf and Bob Kahn, made no assumptions at all about the ways in which it might be used, and so placed very few constraints on its development. To be sure, this “no vision” vision is not much help when it comes to raising venture capital or attracting buyers for a new gizmo. But it is a powerful reminder that the ultimate yardstick for a successful technology is how well it is accepted in the marketplace—not how well it conforms to the original vision of its proponents. [The Economist, Mar 11, 04]  Yet the government wants to hear your prognostic - how your innovation will improve the world - even though it intends to ignore such rantings (except that if they pick it, they will rant about it themselves later in "success stories".  The government people who pick winners have little or no idea of how innovation plays out in economic markets.  You can help yourself by making them think they do. 

Diamonds on the Way... Again.   Another news article on the promises of diamond has the same expert quotes that appeared 15 years ago.  SDIO's SBIR program funded a lot of explorations in CVD diamond as the Navy funded a lot of university research. It was a healthy mix: research funding for the basics and SBIR funding for the leaps into use. We expected most to fail, which is the way SBIR can most efficiently be used to get the progress that is implied (but mostly ignored) in its objectives. Two companies succeeded by at least going public with a credible process; unfortunately credible does not mean economic and the companies went bust. But by the mid-90s the enthusiasm faded and only a couple of Phase 2s have been awarded since and then for relatively modest applications. Could it come to life again? Not until the prospects improve of getting the cost down to something competitive with other methods of heat conduction. On the other hand, government cares little about cost, or much about commercialization, so perhaps some dreamy-eyed politician will resurrect it as a technology du jour for job creation. After all, job creation schemes don't have to work, they only have to sound good.  Meanwhile, Diamond Redux. CVD diamond has a new name - nanotech. Show us the profits, the skeptics shout. Nanotechnology will amount to nanoprofits, they say as they tick off a list of technologies from artificial intelligence to virtual reality that looked cool in the lab but have foundered commercially. But such voices were all but drowned out last week at Nanotech 2004, the industry's largest conference. And why not? The economy is rebounding, investors are interested, and last year President Bush signed a bill to invest nearly $3.7 billion for nanotech research in the coming years. [Justin Pope, Associated Press, Mar 14]  The politicians are leaping in - a sure sign of a coming economic failure. If it were economic, the free-market screamers could leave it alone, even in a contested election year. 

Corporations continue to spend carefully in key areas where their money does the most immediate good, like computer security, while cutting back on other areas like storage networking. "[Corporations] remain very cautious and cost-conscious," says Shannon Reid, co-manager at the Evergreen Strategic Growth Fund.  [Eric Fleming, Barron's, Mar 11]

The cemetery for seers has a huge section set aside for macro forecasters.  [Warren Buffet, Mar 04]

As Robert Hof, a tech writer for Business Week, noted, U.S. tech workers "must keep creating leading edge technologies that make their companies more productive — especially innovations that spark entirely new markets." The same tech innovations that produced outsourcing, he noted, also produced eBay, Amazon.com, Google and thousands of new jobs along with them.  This is America's real edge. Sure Bangalore has a lot of engineering schools, but the local government is rife with corruption; half the city has no sidewalks; there are constant electricity blackouts; the rivers are choked with pollution; the public school system is dysfunctional; beggars dart in and out of the traffic, which is in constant gridlock; and the whole infrastructure is falling apart. The big high-tech firms here reside on beautiful, walled campuses, because they maintain their own water, electricity and communications systems. They thrive by defying their political-economic environment, not by emerging from it. [Tom Friedman, NY Times, Mar 7]  If the government cared about sparking anything, it would use its SBIR to seed the firms exploring disruptive technologies, not the ones that service present technologies. Nurture risk instead of avoiding it. 

Grey in the Rainbow.  The recent spending on networking equipment boom has had a large component sold to the government and not to private business as capital investment. "If you look at the bright spot over the last two years it really has been the government business, because the government has had money to spend," a spokeswoman for Cisco, Kim Gibbons, said. "We have seen that business grow and continue to grow." From August to January, Cisco's sales to the federal government increased 23% from a year earlier... And the growth in government technology spending is leveling off. The president's proposed budget for the 2005 fiscal year projects technology spending at $59.8 billion, a rise of 1 percent from 2004. So only an increase in corporate technology spending can generate the growth that investors in Cisco and other networking companies appear to be expecting.  [Alex Berenson, New York Times, Mar 2] Just like in SBIR, sales to the government do little toward building an economy that creates jobs and future investment. 

The Serious Seven: Tech Trends for 2004 by Rohit Shukla, Larta VOX Publisher.  1. Outsourcing: More and often;  2. Device Convergence: More but no magic bullet; 3. Internet Telephony: More and here to stay; 4. The Open Source Movement: More and finding its stride; 5. Digital Media: More Sharing, and difficult to contain; 6. Life Sciences: More uncertainty; 7. Nanotechnology: More is not always better[LARTA, Feb 27]

The innovation of outsourcing itself could be the most controversial development in the technology industry of the decade. Figuring out how to work with and stay ahead of the outsourcing wave will require an enormous amount of—you guessed it—innovation.  [Eric Lundquist - eWEEK, Feb 27]


Computer-chip manufacturers are expecting a strong year, saying their factories are nearly full and hoping that the situation will soon lead to higher prices.  Semiconductor companies with strong presences in Arizona gave that upbeat outlook this week at investment firm Goldman Sachs' Technology Investment Symposium 2004 held in Phoenix. [Jane Larson, Arizona Republic, Feb 26]  Good news for good SBIR firms who actually sell technology to industry; no news for companies who sell only R&D to the government 

Enviro-Friendly Power? NIMBY.  The culturally conservative residents of upscale residential development don't want those UGLY solar panels on their neighbors' roofs. In Florida, as many as 50 homeowners associations a year try to keep residents from putting solar panels on their rooftops, despite a state law that forbids them from imposing such restrictions, say attorneys for the solar industry....In California, where the nation's solar movement has gained the most ground, as many as 20 communities have enacted laws making it harder to install the systems.   production of solar energy in the U.S. by all sources has jumped more than tenfold since 1993, to about 300 megawatts, or enough to power about 300,000 homes, according to estimates by industry officials  [Jim Carleton, Wall Street Journal, Feb 25]   Another consideration when estimating the market power of new technology. Some will always reject it just on the basis of its different looks. 

A Lesson for Innovators. It Ain't Easy. A decade ago, pharmaceutical companies announced a revolutionary new way of finding drugs. Instead of relying on scientists' hunches about what chemicals to experiment with, they brought in machines to create thousands of chemical combinations at once and tested them out with robots. The new technology was supposed to bring a flood of medicines to patients and profits to investors. Today, some leading chemists are calling the effort an expensive fiasco. Machines churned out chemical after chemical that didn't produce useful results. And chemicals that seemed promising often turned out to have big flaws that traditional testing might have caught earlier on. Some drugs couldn't dissolve in water or be turned into pills, for example. [Peter Landers, Wall Street Journal, Feb 24] It is also tempting for SBIR proposers to wax visionary in their "commercialization strategy" in hope that the government will believe the story. Good news and bad news: the government "believes" most of the stories. The bad part is two-fold: bad ideas drive out funding for good ideas, and self-deception infects too many proposers who wind up spending a great opportunity cost and government money to gain nothing useful. For companies who only want the jobs that come from spending Other People's Money, it is no loss. For companies who strive for efficient use of their own capital, each dead-end SBIR erodes the capital base. Is covering the overhead worth it? 

Adam Kolowa, CEO of Parasoft, got himself in print in the Wall Street Journal (Feb 24) with Outsourcing Is Not the Enemy.   Like economist Mankiw, Kolowa asserts that outsourcing is not only inevitable, it is beneficial. And not just in his specialty - software. Parasoft had one Phase 2 SBIR in the mid 90s, from BMDO. In 2001, Kolawa won the Los Angeles Ernst & Young's Entrepreneur of the Year Award in the software category The company claims to sell a complete line of Automated Error Prevention tools to improve the quality and reliability of your applications.

Old Home News.  Biotech company Clinomics Biosciences will relocate from its current location in Pittsfield, Mass., to Watervliet, according to Charles Gargano, chairman of Empire State Development. The move is expected to bring 40 jobs to the area.  Clinomics, which works in the area of biological characterization of human genes and proteins used in pharmaceutical and life-science research,  a subsidiary of U.K.-based drug discovery company CyTomyx PLC, is moving out of an incubator in Pittsfield, Mass. It will locate in 4,000-square-feet of space in the Rensselaer Polytechnic Institute incubator in Watervliet. [Richard D'errico, Business Journal, Feb 18] So what?  Watervliet and RPI were my incubators. That area, that started out as the eastern end of the famous Erie Canal that cemented New York as the favored US harbor, was well depressed by the Depression and didn't start to recover until the 60s.  RPI's huge expansion since the 50s has led to research parks, science and engineering edifices, and an anonymous $360M donation recently. In the six years 1996-2001 the Capital District area has had at least (SBA data are typically two years behind) 57 Phase 2 SBIRs in 31 firms. Three firms really learned to play the game: Interscience, Mohawk Innovative Tech, and X-Ray Optical. 

New Research Opportunity. Can't get SBIR? Try the private sector. Boston Scientific  plans to build a $50M R&D facility in Minneapolis that will employ about 600 people by 2008.Minnesota politicians are salivating, "This is a governor's dream come true," Pawlenty said. "Governors salivate over how to attract and grow high-paying, high-tech jobs." Most of the new jobs at Boston Scientific will be scientists engaged in research[Janet Moore, Minn Star Trib, Feb 19] Why Minnesota? The huge medical industry centered there. Think Mayo and Medtronic. 

Innovations eventually reach their economic end.  LEANDER, TX The maker of AstroTurf has filed for bankruptcy protection and is going out of business, AstroTurf, the first artificial playing-field surface, was introduced in 1966 at Houston's Astrodome. Southwest Recreation, which entered the artificial turf business in 1989, bought AstroTurf Industries Inc. in 1994 from St. Louis-based Balsam Corp., which also filed for bankruptcy.  [Assoc Press, Feb 19] Two classes of important consumers disliked it; football players didn't like it because they got more injuries and slippings, and baseball players, the world's most conventional people, disliked the new bounces. It also hurt artificial turfs that baseball and football teams built different stadiums. 

15% of working Americans in 2002 had founded a business within the preceding 42 months.  One escape from productivity de-employment is to be the receiver of the outsourced business. The downside is do-it-yourself pay and benefits. 

 What should the United States be doing that it isn't?  [Craig Barrett speaks to Business 2.0, J/F04] Isn't it the job of politicians to protect the uneconomic present. 

A host of start-up chip manufacturers, many of them backed by foreign investors and headed by Taiwanese executives, are flooding into the country and beginning to create the core of a domestic high-tech sector. ... "We already make many of the world's computers and cellular phones," says Xu Xiaotian, an official at China's Ministry of Information Industry who heads the China Semiconductor Industry Association. "This will be true in semiconductors as well."  [Jason Dean, Wall Street Journal, Feb 17]  In a decade or two we'll hear the same hand-wringing over Chinese dominance as we heard in the 80s over Japanese dominance of electronics. What is the government doing to nurture infant new technologies to replace dependence on semiconductors? As little as possible? Even though Congress invented an excuse for agencies to invest in really new stuff, the agencies mostly serve their short term interests in SBIR. But when the hand-wringing comes, no one will notice the opportunity missed.  

And industries are spending the kind of money that uses new technology- capital investment. Capex was up 14% in the second half  '03 and experts expect the trend to continue in 04 as profits are good and the capability ot spend on capex has never been greater, says the chief investment strategist at Wells Capital Management.  

Fred Hickey's High-Tech Strategist shows clearly and convincingly [that] There's no ... cheap semiconductor stock. Period. What Fred did was list the 18 stocks that make up the Philadelphia Semiconductor Index, known among its millions (hundreds of thousands? thousands?) of feverish fans as SOX. As he notes, the total market valuation of the 18 chip issues is nearly half a trillion smackers -- not exactly chump change even these days....  "Even using the optimistic analysts' estimates for 2004 earnings," Fred comments, "these stocks are nearly two times higher than their historical averages. Using the less volatile price-to-sales ratios, these stocks are 2.5 times higher than historical valuations. It would take a 61% decline to reach 'normal' levels."  The biggest end market for the chip makers, he observes, is PCs: a market where global revenues last year were flat and which has seen a staggering $51B in revenues vanish over the past three years. The second biggest market is consumer electronics, where U.S. sales grew 2% last year and may rise all of 4% this year. The third biggest market is cell phones, which, despite (or because of) abnormal growth last year, is beset by price cutting and saturation.The semiconductor industry, Fred recounts, has experienced negative growth for the past three years and 1% annual growth over the past eight years.  [Alan Abelson, Barron's, Feb 16]

Forrester Research in a frequently cited study, predicted in late 2002 that 3.3 million services jobs in America would move offshore by 2015, about 500,000 of them in computer software and services.For all the alarm that report generated, a shift of that size over the next 11 years would be small, given that the American labor force has more than 130 million workers and normally creates and destroys millions of jobs every few months. [Steve Lohr, New York Times, Feb 15]

They don't call it venture for nothing. After an interlude of caution coming off the dot-com binge, venture capital firms are again bellying up to the table, raising new funds and laying down bets on technology entrepreneurs.  [R Weisman, Boston Globe, Feb 9, 04]

With [Intel] planning to spend about $4B annually over the next few years to advance research into chip dynamics, the results could have massive implications on everything from PCs to consumer electronics. Chips manufactured with any of these new technologies promise to be a 100 times faster than those on the market today, opening up the door for mass production of tiny devices featuring voice recognition, artificial intelligence, and other hot new technologies. That's good news for whoever gets there first -- and Intel may be in the lead. [Cliff Edwards , Business Week, Nov 3, 03]  Face it, in R&D, money matters. Intel invested huge sums in developing breakthrough technology. Meanwhile, the government has poured billions of SBIR money into projects that have no hope of breaking through anything, And the SBIR advocates want to restrict its investment to companies that have no hope of attracting the kind of entrepreneurial money that could actually make a technical advance come true before the Intels do it for themselves. Instead they want to bar companies that have substantial VC investment from getting any SBIR money. 

MANY American computer programmers complain that they're losing their jobs to lower-paid workers in India, starts Virginia Postrel [New York Times, Jan 29] in discussing technology jobs, especially software. But, she says, the major source of job reduction is technology improvements driven by productivity. The politicians, of course, in an election year will pontificate about jobs and will want to promote programs to save American jobs. It's mostly electioneering hot air. Just like the hot air swirling around SBIR advocates - bleating that SBIR creates jobs. Baloney! As long as SBIR merely funds government service contracts, it creates no more jobs than any other government program dollar. Jobs that last only as long as the contract. A government-paid job at Boeing is neither better nor worse than a government-paid job at any SBIR mill. Neither creates any future economic activity that would support permanent job gains. Only SBIR projects that seed new technology in entrepreneurial companies can have any permanent effect. 

7. Nanotechnology: More is not always better.  The field has burgeoned, mainly due to heightened interest by people looking for the "next big thing." When a company changes its name to create a dubious "nano" identity, is it time to head for the hills?  The hype shows no sign of abating. Fortunately, many people are increasingly skeptical, as spam invades their mailboxes announcing the flavor of the day, yet another conference on nano-this-that-and-the-other. The truth is that this is perhaps the most revolutionary trend in modern science. ...  Fortunately (because otherwise we'd have nothing but froth from Wall Street), the federal investment in R&D and allied activities in nanotechnology grew dramatically at the end of last year, culminating in the passage of a remarkable piece of legislation that will mandate multi-agency attention to nanotechnology, while keeping track of the ethical issues involved. .... Investors, meanwhile, should not be venturing where angels fear to tread, or at least, not until after the angels have done their good deeds. Too much of a good thing is still too much, and this is a good thing.  Company to Watch:  Nanosys. [LARTA, Jan 26, 04]

Big schemes; no revenue. Sound like e-commerce in the 90s? It's nanotechnology in the 00s. Some of the biggest gains in the stock market are coming from the littlest things lately. ...  a group of companies racing to develop nanotechnology, which uses tiny particles to create and improve all kinds of products.  Nanotechnology favorites such as Nanogen Inc., Nanophase Technologies Corp. and Veeco Instruments Inc. all have doubled, tripled or more during the past year, even though they have no earnings and, for the most part, minimal revenue. [G Zuckerman, Wall Street Journal, Jan 20]

Real tech will flow again.  Now that corporations have finally joined consumers in buying computers, the incentives for the Intels of the world to adopt new technology have improved. That means good news for innovators like ATMI and Cree, two firms that started with a healthy dose of SBIR and graduated to profitable growing companies with lots of public capital. In contrast, the SBIR firms that rely on government contracts for improving government's knowledge will see no trickle-down of  the upsurge. But, says  Bill Alpert [Barron's, Jan 19],  wise, wizened investors should now begin pegging their own target prices for selling their tech stocks into the coming year's good news.

Are we in the midst of a technology recovery? That depends . . . on the technology.  The InternetHOT: E-commerceNOT; EntertainmentHOT: Digital music stores and players; NOT: Music file sharing. TelecommunicationsHOT: Voice over Internet protocol; NOT: Traditional optical networking. SemiconductorsHOT: Microchips; NOT: Athlon 64 chips. [Hiawatha Bray, Boston Globe, Jan 19]

The clamor for innovation is rising. With the economy on the mend, and companies scrambling to boost their sales, the call has gone out for new ideas. But, truth be told, ideas are plentiful. For businesses, the hard part is choosing the right ones, turning them into products or services, and bringing them to the marketplace before their competitors do. ... "One mistake a company often makes is the guy with the idea is given the task of bringing it to market," Sirkin noted. While a few versatile visionaries might be able to pull that off, most would be well advised to turn over the ideas to the executors, he said.  [R Weisman, Boston Globe, Jan 18]

Glad to see more and more hotels with high speed Internet? Bring your own equipment. Ethernet cards and adapters for the Ethernet systems, and wireless PC card for the wireless systems. Which one does the hotel have? Don't expect to find the answer on the website and don't expect anyone who deals with customers to know any technical answers. I have good experience with only two hotel chains: Marriott and Wingate. 

Listening to customers is a cardinal rule for today's business executives. But retired MIT professor John J. Donovan thinks they'd be better off leading customers. "Customers are limited to what they know," said Donovan, chairman of Cambridge Executive Enterprises, a management training and consulting firm. "And when you ask them what they want, they'll ask you to support what you're already giving them . . . That's today's business. It's not going to keep your company going tomorrow."  [R Weisman, Boston Globe, Jan 11]   If you're a small high tech grasping for SBIR contracts to some job the government wants done, keep trying to get the government to see that it is not a static world. Remember that many government offices are in denial about change. 

How the rise of experimentation changed our view of the world around us.  THE SCIENTISTS: A History of Science Told Through the Lives of Its Greatest Inventors.  By John Gribbin   His latest book takes us on a rollicking and intellectually absorbing ride through the last 500 years of Western science. [Reviewed by Marcia Bartusiak, Washington Post, Jan 11]

Things are percolating once again in the tech sector -- though it doesn't yet feel like a fully caffeinated recovery. For the last few years, there was widespread skepticism that innovative technology would ever again have much of an impact on business and in society at large. Some questioned whether start-ups could hope to challenge entrenched tech giants, and whether venture capitalists and other investors would ever see a return on their capital.  [Scott Kirstner, Boston Globe, Jan 12]  SBIR junkies needn't worry about the commercial tech market because the government will be buying tech from SBIR as long as SBIR exists, which looks like forever. The junkies only worry about the political market. . 

Intel will invest $200M in new companies developing new technology of course for Intel's business lines present and future. It will take a small piece (it says) in start-ups building hardware and software for use in consumer electronics and such. Will Intel be competing with the government for seeding the best technology? Nah! The government doesn't care about economic success of the technology it funds. 

The World Economic Forum lists its 40 most innovative world companies. Good news: 18 of them are in the US. Last year the US had 27 of the top 40.  The Indian part of Cisco and Intel have filed 1000 patent applications in the past two years. What is the government's response with its so-called high innovation SBIR program? Contract after contract to the companies that are technically competent but commercially dead. Why? There is NO INCENTIVE for any federal agency to favor high innovation in market-driven companies. No bonus, no stock options, no piece of any economic pie, and no interest from Congress to create any incentive. 

In 1989, Bethlehem Steel was voted one of the best-managed companies in the United States. Twelve years later it went bankrupt, and in 2002, in an event as ironic as it was symbolic, the Smithsonian Institution bought the Bethlehem steel plant to convert it into the National Museum of Industrial History.  The story serves as a poignant reminder that the relentless forces of technology and competition threaten even the most formidable of businesses. The story also holds particular relevance for Minnesota because companies as diverse as Lawson, Medtronic, St. Jude's, Seagate Technologies, Imation and Xcel Energy might be rendered obsolete by exponential technological advances.  [Jack Uldrich, Minneapolis Star Tribune, Jan 5. 04]

Fred Blanton is the classic entrepreneur.  He's a dreamer who leaps from one enterprise to another, an eccentric inventor who likes to say he "never really held an honest job."  The 51-year-old has been in the flower business, installed decorative lighting and now he sells windmills for a living.  "I've made money, and I've lost money," he said. "I've worked seven days a week until 4:30 in the morning. But at the end of the day, I'm the one in charge." ... Undaunted by his son's reaction [against entrepreneuring]  Blanton himself decided to learn everything there was to know about windmills and set Adam up in business. In no time, Blanton was running a successful windmill dealership, USA Windmills.  ... Waxing poetic, Blanton explains that "about 80 percent of my customers don't use the windmill to pump water; it's more some romantic tale or nostalgic memory of a bygone era that people want to own." ... Blanton says he is disappointed his son did not choose to join him in the windmill business venture but instead accepted a job as a computer support technician. [A Y Rasch, Houston Chronicle, Jan 4]

helping small high-tech companies get from idea to market