Thirty Massachusetts life sciences companies have been awarded a total of $23.9 million in tax incentives by the state in an effort to spur job creation. The awards range from as much as $5.85 million to as little as $55,000. The companies receiving the awards have committed to creating nearly 1,000 new jobs in the Commonwealth over the coming year. ... Last year, the program's first, the state awarded $24.5 million to 26 companies that pledged to create 800 jobs in the state. As of June 30th, those companies had created around 400 jobs, according to the state's Life Sciences Center. [DC Dennison, Boston Globe, Dec 22] That's $24000 per job created IFF the recipients create the 1000 jobs. Last year's cost per actual job was about $70000. What do you think should be the state's limit on amount spent per job created? Or is it all sound-bite politics anyway and that real economics don't matter? And if so, how many federal programs do the same thing, only bigger? SBIR firms taking the money are: BIND Biosciences, Cytonome, Merrimack Pharmaceuticals, Organogenesis, Vertex Pharmaceuticals.
Connecticut officials said that legislation passed in May has now spurred $72 million in venture dollars that will be invested in at least 25 small businesses in the state. [James Connolly, Mass High Tech, Dec 30, 10]
Good Ol' Texas Politics. Gov. Rick Perry on Thursday announced a $4.5 million investment of taxpayer dollars in a friend's company more than two months after the award became a campaign issue. Perry acknowledged the investment in Convergen LifeSciences (Austin, TX; no SBIR) a company that is led by David Nance, an Austin entrepreneur . Nance has donated money to Perry's campaigns, and the governor has appointed him to state advisory boards. The grant is the second-largest awarded to an individual company from the Texas Emerging Technology Fund, managed by the governor's office. [Laylan Copelin, Austin American Statesman, Dec 30, 10]
Facing a $24 billion budget shortfall, the [Texas] Legislature is expected to debate whether to continue economic incentives, such as the technology fund, and whether [Gov]Perry should continue to manage hundreds of millions of dollars in incentives. Critics have accused Perry of using the incentives to reward friends and donors. The Emerging Technology Fund has allocated more than $188.5 million to 128 early-stage companies and almost $170 million to match grants or boost research at Texas universities. [Laylan Copelin, Austin American Statesman, Dec 30, 10] Seen any reports on the ROI from the fund aftewr the handouts made good political moments.
The Democrats promised to find nearly $110 billion in waste to fund their pledges. Next year's budget identifies only $3.6 billion in such cuts, bringing total cuts over two years to $12 billion, or less than 1% of annual spending. [Wall Street Journal, Dec 28] No, this is news from Japan that talk about cutting waste is a lot easier than actually doing it.
Not in this Congress. The House punted SBIR re-authorization into the next Congress although the Senate passed another of its versions that the House SB Chair doesn't like. SBIR Insider Rick Shindell reports likely activity by the White House especially about the science community's fear of getting hit for the proposed greedy increase from 2.5% to 3.5%. The whole deal sounds like the old adage: if a policy isn't working, try more of it. We shall see how the Tea Party deficit hawks like this subsidy program.
Voters are cynical about all of them and want every program cut except the ones they benefit from. [ David Brooks, NYT, Dec 17]
The lame-duck Congress ended by punting this fiscal year's federal budget downfield to March 4 for the new Congress to settle. In the interim, generally, the departments will spend at the same rate as last year. But that could affect what the agencies do with their SBIR since they would hate to put one more penny into it than mandated. And with the partisan feud over spending threatening to become an all-out impasse when the Republican majority takes control of the House in January, such temporary spending measures, and the crunch they cause, may continue indefinitely. [David Herzenhorn, New York Times, Dec 21] Stand by for steady political blather about spending cuts until the public realizes how many things they won't be getting any more.
NO new SBIR law. Yesterday's posting of a new law was correct only in that HR2965 was passed. But not the real SBIR bill, only a carrier for an unrelated matter. Regrets.
The US House of Representatives voted overwhelmingly yesterday to establish a new Rapid Innovation Program within the Defense Department. The mission of the program will be “to accelerate the fielding of technologies developed pursuant to Phase II Small Business Innovation Research Program projects, technologies developed by the defense laboratories, and other innovative technologies (including dual use technologies).” The measure now goes to the Senate which is expected to approve it in the next few days. Alchemist blog, Dec 18] No structure or money yet, and the Tea Party deficit hawks could make funding tough.
A $2 million [New York] state-sponsored pilot [Upstate Regional Seed Fund] was approved Thursday by the Empire State Development Corp. to provide investments in high-technology startup and emerging companies. .... created by Linden Oaks-based Excell Partners Inc., which will invest the grant funds. Excell Partners, a non-profit formed in 2005 through an agreement with the University of Rochester Medical Center, has invested $2.4 million in 21 new companies since its inception. [Thomas Adams, Rochester Business Journal, Dec 15]
Want a touch of chaos? a Constitutional amendment that would allow a vote of the states to overturn any act of Congress. After half the states' representatives enact a law, two-thirds of the states could band together to repeal it. And the effect on investment from never knowing where any law stands? Ah well, it's conservative action time again to overturn the Constitution whenever they don't get their way on policy. The good news is that they haven't succeeded yet with any of their radical schemes, just attracted campaign contributions.
our country's leadership has taken the easy route and has demonstrated still further that there will be no meaningful movement on our burgeoning deficit. The bond vigilantes smell blood, recognize this inertia and are demanding a price to be paid in much higher interest rates. [Doug Kass, thestreet.com, Dec 15]
New SBIR Law. The Senate passed HR2965, the
House's version of SBIR Reauthorization, which makes it the new SBIR
law. Total SBIR money rises as do award "limits" for both phases;
prohibits an agency from issuing an SBIR or STTR award if the award
size exceeds established guidelines by more than 50%; Requires federal
agencies to conduct solicitations of Phase II SBIR and STTR proposals
without any invitation, pre-screening, pre-selection, or down-selection
process between the first and second phases; lets NIH use 18% of
its money in VC funded companies, and 8% for other agencies; Makes
permanent DOD's Commercialization Pilot Program ; Requires DOD to set a
goal of increasing the number of Phase II contracts that lead to
technology transition into DOD programs of record or fielded systems;
Authorizes the head of each federal agency other than DOD to set aside
up to 10% of SBIR and STTR funds for further technology development,
testing, and evaluation of SBIR and STTR Phase II technologies.;
directs agencies to self-evaluate their SBIR programs and the GAO to
evaluate as well.
[Tea Party success will be] a damper on hopes that the next Congress will deliver on a long-promised expansion of federal spending on research and education outlined in a 2005 National Academies' report that has been embraced by both parties. Innovation? The only reference to "innovation" comes as part of a passage in the Pledge on how "excessive federal regulation … hampers innovation and postpones investment in the economy." In other words, get the government off our backs so that the private sector can do its thing. [Science, Nov 26] Get ready to duck the axe.
More Minneapolis Snow Job. A group of science and technology boosters plans to ask state lawmakers for $10 million next year to fund start-ups and increase entrepreneurship in Minnesota, according to a draft of its recommendations. The Minnesota Science and Technology Authority formed earlier this year and will make recommendations to the legislature next month on ways to improve the state's climate for science and technology. The group's formation comes at a time when state officials are concerned about early-stage funding for start-ups and support for innovation. ... would include $1.25 million for the authority's operations, $2 million in a Technology Commercialization Fund, $2 million for an Advanced Entrepreneur Program, $4 million to support [SBIR] grants and $750,000 for an internship program. [Wendy Lee, Minneapolis Star Tribune, Dec 15] Hope springs eternal for government intervention in a re-write of Minnesota Project Innovation that was canned some years ago? What are these states using as a metric for the return from such intervention, since they regularly start, stop, and re-invent the same thing? But the political benefits are too much to resist for the announcement of doing something that sounds hopeful, and a ribbon-cutting photo-op.
AAAS will sign on to an amicus brief for a case scheduled to be heard by the U.S. Supreme Court next year. The case, Stanford v. Roche, appeals a ruling by a court of appeals that casts doubt on the rights of universities and the federal government alike to inventions arising from hundreds of billions of dollars in federal funding. The decision would allow rights in federally funded patents to be disposed of through private contracts between researchers and third parties (for example, companies), rather than according to the Bayh-Dole Act, which establishes a presumption that ownership is allocated to the university or other nonprofit institution hosting the research. AAAS joins almost two dozen universities, higher education associations, and the U.S. Department of Justice in opposing the appeals court ruling. [AAAS, Dec 8] The old principle that whoever pays for the work owns the right to patent is under attack. One practical problem is that some universities don't see much value in hurrying to patent because they are not (yet) profit-driven creatures. And if the universities lose the fight, why would not SBIR companies lose the same way to individual employees doing federally funded R&D?
Sound bite management is back. In an online video employing contemporary technology to follow in the footsteps of the late Senator William Proxmire's (D-WI) famous "golden fleece" awards, Rep. Adrian Smith (R-NE) has launched a "You Cut Citizen Review" asking viewers "to identify wasteful spending that should be cut and begin to hold agencies accountable for how they are spending your money." Rep. Smith's first target is the National Science Foundation, and he provides a helpful link to NSF's award search page and suggests keywords such as "culture," "media," "games," and "stimulus" that viewers might use to identify and report "wasteful" grants. An article in USA Today compares Smith's exercise with past congressional attempts to ridicule NSF grants on the basis of incomplete information. [AAAS, Dec 8] Looking always for programs with weak political sponsors regardless of the merit of the program.
Obama chose Forsyth Tech to unveil a theme aides say he will
emphasize in 2011: The United States must take steps to regain its
economic edge in the world market. Even in difficult budget
times, Obama said, the country needs to invest in education and
innovation. [Rob Christensen, Raleigh News & Observer,
Dec 7] Great warm fuzzy political speech stuff, but the devil is in the
details. In a deficit and program cutting era, just what is he
proposing for government action? Dribbling more opportunity away in
federal agency self-serving in SBIR? A renewed NIST handout program
that the free-market Republicans hate?
Freezing and delaying The lame duck Congress says it will freeze most budgets and roll everything FY11 into another catch-all. For SBIR "winners" that could mean funding delay since the departments put SBIR way down on the priority list and convert any funding uncertainty into an SBIR hold action. And when the new Congress convenes, expect war on feel-good Democratic programs.
When politics comes first. In 1892 William Jennings Bryan, later the Democratic presidential candidate, declared: “The people of Nebraska are for free silver and I am for free silver. I will look up the arguments later.” [The Economist, Nov 27]
[Simpson-Bowles] was a formula for changing government without a
philosophy of government. For years, it was assumed that a rapidly
growing economy could pay for added programs. The result was the
careless use of government for almost anything that made a good slogan
or could support a lobby. The underlying economic assumptions were
overly optimistic. ... If we keep the expedient morality of perpetual
programs - so that nothing fundamental can ever be abandoned - then
Europe's social unrest could be a prelude to our own [Robert
Samuelson, WashPo, Dec 6] Can you think of any programs with
optimistic ideals and little to show as an economic return?
[Robert Samuelson, WashPo, Dec 6] Can you think of any programs with optimistic ideals and little to show as an economic return?
the chairs of the National Commission on Fiscal Responsibility and Reform has released a draft list of proposals to reduce the federal deficit. The proposals include drastic cuts to the federal government's economic development agencies, including the elimination of the Economic Development Administration (EDA) and the Hollings Manufacturing Extension Program (MEP), as well as the merging of the Department of Commerce and the Small Business Administration (SBA). The commission also has proposed funding cuts for research into fossil fuels, defense and private sector space flight. [SSTI, Nov 19] Stand by for weeping and gnashing as sacred cows are offered up and declined. Remember that every program has stout defenders.
DoD lacks complete data on the number of technologies commercialized and therefore cannot determine the return on its space-related SBIR investment, finds a report by the GAO. To meet space-related technology needs, DoD invested $5 billion, or approximately 11 percent of its total SBIR budget, on space-related Phase I and Phase II contracts over fiscal years 2005-09. However, the GAO report finds that DoD does not have a complete picture of contract awards and does not know how effectively it is commercializing SBIR technologies. Specifically, DoD is lacking complete data on Phase III and is inconsistent in recording and defining commercialization. Further, the report finds DoD does not require the services and components to track and report the data. The report offers three short- and long-term recommendations to overcome the challenges, including collecting data on all SBIR technologies that transition into DoD acquisitions or commercial-sector products or services. Read the report ... [SSTI, Nov 17] Even though everybody involved has excuses, the real problem is Congress which never told the Executive Branch that it really cared about SBIR beyond getting the specified money to the small businesses. As a result, DOD and the others have no incentive to spend money and people fostering commercialization. collecting data, and measuring performance. So it's not quite fair to send the auditors to discover the obvious and then carp about deficiencies. Anyway, as DOD gets squeezed in the deficit battle (if Congress can ever get beyond talk about deficit), SBIR follow-on and dual-use will sink to even lower priority.
"Despite the clear limitations of existing federal innovation programs, they remain important to our national economic competitiveness," according to a new report from the Center for American Progress. In Silos of Small Beer, authors Maryann Feldman and Lauren Lanahan examine the efficacy of federal innovation programs on the regional economic development of the eastern Midwest region that includes Pittsburgh, Cleveland, Akron , and Youngstown. The authors found "an ecosystem of innovation entrepreneurship that is emerging and vibrant, but also fragile, requiring the sustained efforts of local, state and federal agencies." However, a problematic relationship exists between high-performing, local innovation programs and federal programs because of programmatic limits (e.g., mission, funding, capabilities) and the "siloed" nature of these programs. [SSTI, Nov 17]
Grab a government lifeline. Given the difficulty of starting a company from scratch, and how economic activity is generated today, you can start to see why, if you were a rational market actor, you would be trying to get a piece of the government action. [Morris Panner, WaPo, Nov 17]
The [Deficit] Commission's suggested discretionary cuts include a number of R&D-related programs; for example, reducing the Department of Defense's Research, Development, Test & Evaluation (RDT&E) program budget by 10 percent ($7 billion in FY 2015), canceling the Hollings Manufacturing Extension Partnership, cutting fossil fuel research, eliminating private sector funding for spaceflight, [AAAS Policy Alert, Nov 17] Alerts and alarms going off all over Washington as Tea Party idealists prod for less government. Financial reality still has not yet struck, just the pigs targeted to be pork chops.
The program New Mexico started to reclaim its "job growth engine" has $400 million, about $250 million of which is allocated to venture capital funds, said [Brian Birk of Sun Mountain Capital], whose firm manages that and several other state programs. "We've attracted about $1.7 billion of other peoples' money to the state and created over 4,000 jobs that have an average salary of $77,000," Birk said. [Kathleen Gallagher, Milwaukee Journal Sentinel, Nov 11] Beware politicians claims of jobs created; ask how many such jobs last more than five years.
Cut? What? If these [Republicans] were all put into a room on penalty of death to come up with how much they could cut, they couldn't come up with $50 billion, when the problem is $1.3 trillion. [David Stockman, Oct 31]... If Republicans were really serious about cutting spending, they had a golden opportunity after 2002, when they controlled all the levers of government in Washington. The result was the most reckless expansion of government spending and debt in two generations. [Fareed Zakaria, , Time, Nov 4] Soon, abstract deficit cutting must become serious bleeding looking for a scapegoat.
CT Gov.-elect Dan Malloy (D) developed a roadmap focused on innovation and entrepreneurship. He would develop a fund using close to a billion dollars in unused research & development tax credits to leverage new research and advanced manufacturing space, and encourage the participation of state and municipal pension funds to augment the initial investment. [SSTI, Nov 3] In the interstate competition for high-tech industry, how many understand how profitable technology gets started and nurtured. Any politician running for office claims to know and have the answer.
FL Gov.-elect Rick Scott (R), a health care executive and Navy veteran, proposed a seven-step economic plan that he says would create jobs and allow Florida to become a job creation model for the nation. In seven years, the 7-7-7 economic plan aims to create 700,000 jobs and generate $74 billion in state GDP, $41 billion in higher personal incomes, and $1 billion in total state revenues as a direct result of increased economic growth. [SSTI, Nov 3] Keeping Florida green with wishful thinking.
IA New-old governor Branstad aimed at eliminating what he refers to as excessive government interference in new job creation by requiring a small business jobs impact statement for any new administrative rule in Iowa. Branstad also would sunset all regulations affecting job creation and retention and replace the state's current economic development agency with a public-private partnership tasked with promoting and marketing the state to attract new investments and jobs. [SSTI, Nov 3] Anybody expecting rule of law in Iowa should consider that Iowa voters removed three judges by affirmation vote failure for ruling for same sex marriage. Said one of the candidates, It's we the people, not we the courts.
Meanwhile, all over the country, the Tea Party wants government to get out of such business altogether. They think they are going to re-write the Constitution and 200 years of development of government. Just by snapping their fingers and shouting platitudes. [SSTI, Nov 4]
Federal financing of science research, which has risen quickly since the Obama administration came to power, could fall back to pre-Obama levels if the incoming Republican leadership in the House of Representatives follows through on its list of campaign promises. .... research and development at nonmilitary agencies — including those that sponsor science and health research — would fall 12.3 percent [Kenneth Chang, New York Times, Nov 3]
Massachusetts got its share of the handouts as biomedical firms landed 546 federal grants and tax credits, totaling $126 million, as part of a "therapeutic discovery" program created as part of the omnibus health care reform package. [Boston Globe, Nov 3] More pork as a legislative lubricant.
North Carolina's portion of the Affordable Care Act grants, about $36million, will be divided among more than 150 companies. [Raleigh News & Observer, Nov 3]
The University of Texas will be opening a research laboratory to entrepreneurs to develop life sciences technologies and evaluate the potential to turn them into products. ... Biotech entrepreneurs, including those from outside the university, will be able to reserve space in the wet lab to work on their projects. The entrepreneurs will retain all rights to their intellectual property. [Austin American Statesman, Oct 29]
What are prospects for government spending on useful R&D? Republicans want to cut spending drastically (on politically weak programs) and they hate market assistance programs (except for large corporations who can afford lobbying with money). Which means that programs like TIP and SBIR enter another danger zone.
Rick Shindell SBIR Insider says SBIR 2.0 is an initiative by the SBA and the federal agency SBIR program managers to modernize and streamline the SBIR program. You can (and should) read the entire description of the program as listed on the SBA's web site at www.sba.gov/sbir2/ In his newsletter, Shindell ID's one of the dilemmas with SBIR: there are lots of SBIR companies in Texas as a comment on how the House member from Texas would view SBIR. Just what does he mean by an SBIR company ? One reason that SBIR has little return to show is that so much of the money and attention go to companies that live on SBIR or merely use it as a revenue filler by doing federal R&D of no particular future. The SBIR community with political voice is not companies who have never heard of SBIR and want a chance to use it for economic innovation; the community is merely companies who know how to capture its money without regard to any larger national goals.
wiredmikey writes "Launched by the CIA in 1999, In-Q-Tel's mission is to identify and partner with companies developing cutting-edge technologies that serve the national security interests of the United States. In-Q-Tel has invested an undisclosed sum in Silver Tail Systems, an emerging online fraud prevention and analytics company, an investment they say enables them to offer powerful technology companies in the U.S. intelligence Community and further protect the Nation's assets." [slashdot.org, Oct 27]
China said on Thursday that it will not use rare earths as a diplomatic "bargaining tool", in response to challenges against its management of the vital metals. It also said measures to restrict the exploitation, production and export of rare earths are in line with World Trade Organization (WTO) rules. [Wang Xing, China Daily, Oct 29]
even though he has more faith in government than most Americans, he will relentlessly oppose programs when the evidence shows they don’t work. [David Brooks, New York Times, Oct 29] If Obama is indeed data-driven, what would be his attitude toward SBIR? Has it succeeded, and if so, on what criteria? Does GAO count with its "result not demonstrated" finding?
TR: If energy research is underfunded by $11 billion, what is a better approach to funding new energy technologies? Bill Gates: It's not a problem that lends itself to a Manhattan Project-type approach. It has to be low cost and usable in different circumstances. You can't just get a bunch of smart people together and know which path they should go off and pursue. Actually, it's amazing that that worked for the Manhattan Project. [Technology Review, S/O10]
Last week Albert Teich, director of AAAS's Science and Policy Programs, joined three other witnesses in testifying before the House Subcommittee on Research and Science Education on NSF's Science of Science and Innovation Policy, noting that the impact of S&T Policy has proved to be "just as unpredictable as basic research in physics, chemistry, or life sciences." Written testimony and an archived copy of the webcast can be found on the Committee's web site. [AAAS, Sep 29]
Hearing the hoofbeats. The American public, already skeptical of free trade, is becoming increasingly hostile to it. The ire has clouded prospects for approval of pending free-trade pacts, and prompted concern among U.S. businesses reliant on the rest of the world for growth. [Sara Murray and Douglas Belkin, Wall Street Journal, Oct 4] The short sighted attitude of the SBIR world is contributing its negligence to the competition for world economic influence. The agencies want to do only stuff for their immediate benefit and the beneficiary companies don't want any economic criteria to ruin their picnics on the decks of the Titanic. So, they resort to protectionism as if the world competitors would sit for it.
Can't afford prudence any more. The State of Wisconsin Investment Board is considering putting more money from the big state pension fund into top-performing venture capital funds on the coasts and, as part of that move, trying to steer money toward investment opportunities in the upper Midwest. [Kathleen Gallagher, Milwaukee Journal Sentinel, Sep 28]
The small-business bill signed into law by President Barack Obama Monday eliminates capital-gains tax for investors who put money into qualifying startups. The change will likely benefit angel investors, high net-worth individuals who back technology startups, but it’s unclear whether the tax break will actually spur more individuals to put money into more companies. [Mass High Tech, Sep 28] No matter, any bill that connects small business with tax cut is a political winner. No one will check results later with any view to program evaluation.
Buying jobs. Wausaukee Composites (Cuba City, WI; no SBIR) will get $1.5 million in state assistance for creating 200 jobs ... to help Wausaukee build and equip an addition to its manufacturing plant that makes wind-turbine components ... The company is a subsidiary of Sintex Industries, headquartered in India. [Rick Barrett, Milwaukee Journal Sentinel, Sep 22] Globalization and state assistance to private companies.
Clusters in vogue. The Wisconsin Entrepreneurs' Network, which provides resources and expertise to entrepreneurs, plans to partner with the Defense Alliance of Minnesota, a group that concentrates on developing defense technologies. The partnership is part of a Small Business Administration loan that will result in creation of an Advanced Defense Technologies cluster. [Don Walker, Milwaukee Journal Sentinel, Sep 24]
The University of Wisconsin-Milwaukee's plan to develop a science campus and a tech-oriented business park in Wauwatosa has won approval for up to $12 million in city financing. ... Innovation Park will generate property tax revenue for the city once the debt is paid off, while also creating jobs, McBride said. [Tom Daykin, Milwaukee Journal Sentinel, Sep 22] Hope in debt springs eternal as several cities around the country wallow in insolvency from great schemes gone sour. What happens to these schemes if the federal government retrenches on spending as a groundswell rises against government?
Evaluation of Handout Programs. the Maine Technology Asset Fund (MTAF) is a competitive award program, funded by Maine state bond proceeds, that builds capacity and infrastructure to support R&D projects leading to significant economic benefits across the state. The MTAF program has completed two successful rounds of competition and executed contracts for $46 million to 25 projects, leveraging $69 million in matching private investment and federal and philanthropic grants. The program will award another $7 million in October 2010. [SSTI, Sep 22] The state borrowed $50M to fund a variety of entities and its biannual report details how much it gave out and how many employees the firms have and how much they paid in taxes. But nowhere does it calculate a Return on Investment for the taxpayers who supplied the money to repay the debt. And nowhere does it show a control group of similar firms who got no handout. The problem with all these handout programs, SBIR included, is a lack of capital investment standards for the taxpayers' dollars. But since the beneficiaries like the money and the politicians can be seen doing something for small business technology, all is well at least politically and the charade will continue.
N.C. State University has its own stimulus plan for the lackluster state economy: a new initiative to double the number of private companies it spins off every year, and to boost by 50 percent annually the amount of grants and contracts its faculty and staff win to fund research. NCSU will open an "innovation hub," where companies can come to gain access to expertise and technology that university researchers are developing, and where faculty and staff can get support to market their technologies or create new companies based on their work ... planned to create a $2.5 million fund for grants to university researchers to use after they have made discoveries with practical applications. These grants would help to pay for things such as prototypes and market research to bridge the gap between lab and marketplace. [Jay Price, Raleigh News & Observer, Sep 18] There's a place for SBIR to look for opportunities to fund companies and technologies with a future. But the federal agencies have no incentive to actively seek investment opportunities; they are organized to receive proposals over the transom and to throw back yes-or-no answers from committees.
SBIR Insider notes the Senate and House Armed Services Committees will consider if they should just take the DoD SBIR program into their own hands and bypass these clowns in the House small biz committee.
even if the $100 billion plan [research tax credit for businesses] is approved, it won't begin to address the fundamental question of how to turn that research and new technology into U.S. jobs and renewed prosperity. ... said Robert Atkinson, president of the Information Technology and Innovation Foundation, a nonpartisan think tank. "We're pretty much the only country with the illusion that we're not in competition with the rest of the world." [Don Lee, LA Times, Sep 13] A neutral observer [no one connected to the US innovation or political system] should conclude that USG programs for "competitiveness" or "technology" or "commercialization" are merely political creatures, not effective economic strategies. "Let's spend $100B on tax relief for companies" is followed shortly by "re-elect me." In the minor leagues of such political schemes is SBIR which hands most of its money to mediocre companies doing government R&D.
More DFAR pages. [DOD] announced more than 20 changes in purchasing procedures intended to rein in the ballooning cost of weapons systems and make military ships and planes more affordable. ... will give preferential treatment to suppliers with good cost-control records and will require more competitive bidding for service contracts [Christopher Drew, New York Times, Sep 15]
The government may resume funding of embryonic stem cell research for now an appeals court said, but the short-term approval may be of little help to research scientists caught in a legal battle that has just begun. [AP, Sep 9] The appeals court only said that it wasn't as certain of the eventual outcome as the trial judge.
Leaders available. Tightened spending at the Pentagon is unsettling the defense industry, with Lockheed Martin announcing Wednesday that one-quarter of its executives had applied for buyouts as the company cut costs. ... Boeing would cut the number of executives in its military aircraft business by 10 percent ... Northrop Grumman recently announced plans to close troubled shipyards [New York Times, Sep9]
Handout programs always sound better than they produce. The Texas Enterprise Fund, which backs major economic development projects in the state, has fallen short of the job creation targets claimed for it, according to a report released Wednesday by watchdog group Texans for Public Justice [Austin American Statesman, Sep 9] Public fund handouts, including SBIR, are just acts of faith with no intention of honest accountability. The only thing SBIR can count for sure is the amount of money handed out.
SBIR saved for next Congress. Fred Patterson (SBIR Coach) reports that Congress has decided to punt the SBIR re-authorization past the election to the next Congress which convenes in Jan 2011. If the party control changes in either house, expect no quick action as the Republicans grope for the handles with which invent a governing plan other than the being against everything for the past four years. Remember that if it doesn't look like anarchy, then it's not democracy.
The Kauffman Foundation, which studies entrepreneurship, argues that the productivity of federal funding for R&D, in terms of patents and licences, has been falling for some years. Funding is spread too thinly. It would yield better results if concentrated on centres of excellence, but fashionable chatter about the “knowledge economy” stirs every congressional backwoodsman to stick his fingers into the university pie. [The Economist, Sep 2] As long as every state has two senators, we will have fair-sharing for the flyover states. National competitions like SBIR (in principle anyway) don't have much appeal in Nebraska.
Expedited Transition of Propulsion Modeling & Simulation Capability $1.2M Phase 2 STTR A multivariate interface/data structure for insensitive munitions (IM) applications, technology and hazards/effects analysis can facilitate transition of propulsion modeling and simulation (M&S) capability. Expected benefits are reduced testing and overall acquisition cost and increased safety margins. etc, etc. A million plus is tons of money for computer modeling that will make the government smarter. It's a sign that MDA has more SBIR money than it ever wanted (which is none), that it has an immediate need for its urgent programs, and that it has no desire to use it for growth in US innovation. Computer modelers are everywhere in America and need no government handouts to spur innovation in a low capital barrier to entry industry. And anyone wanting a piece of the MDA SBIR pie must find ways to appeal to immediate application of its tech to MDA development/procurement. Unfortunately, the outsiders have almost no way of penetrating the public information screen to find out what those perceived needs are. Advantage to companies already in the know.
Good news and bad. As the world's economies rebound, governments are investing heavily in innovation and research infrastructure. Australia and Ireland, for example, will fund significant investment in national innovation strategies. Australia will commit $1.1 billion to develop national clusters in targeted sectors, and Ireland will attempt to become the "innovation hub" of Europe. [SSTI, Aug 26] If government is doing it. we have less to fear from foreign innovation.
NIH announced Tuesday that it has suspended funding new human embryonic stem cell research and that all federally funded experiments already underway will be cut off when they come up for renewal if a new court order is not overturned. [Washington Post, Aug 25]
A U.S. judge blocked the federal government from funding research involving human embryonic stem cells, a surprise blow to one of the most promising yet controversial areas of current scientific research. .... said it violated a law first passed in 1996 prohibiting federal money for research in which an embryo is destroyed. [Wall Street Journal, Aug 24] Stand by for science v. religion battles between those who want to understand life and those who already know unknowable answers. Economically, it gives the social conservatives a chance to divert attention from basic economic policy questions for which they have no good answers. Note that the ruling applies only to federal funding which is running about $100M a year. The California group spends $250 million annually on stem-cell research, with some 30%-40% of the money directed to embryonic stem-cell research. "California may be the only safe haven now, at least temporarily, for human stem cell research," said Dr. Snyder.
Obama administration officials are considering overhauling 26 troubled federal technology projects valued at as much as $30 billion as part of a broader effort by White House budget officials to cut spending. Projects on the list are either over budget, haven't worked as expected or both, say Office of Management and Budget officials. ... The U.S. government spends about $80 billion annually on technology systems. [Amy Schatz, Wall Street Journal, Aug 23] But the prez can't forget that there are 535 competing technology experts in Washington. The same 535 that act as Secretaries of State and Defense.
Iran said it has built an armed aerial drone. The announcement came a day after a ceremony to roll out Iran's first nuclear power plant, as Tehran continued to defy international pressure over its military ambitions. Western analysts brushed off the drone news as saber rattling. ... The weapon's effectiveness is in question amid doubts Iran could guide such a drone over long distances. [Wall Street Journal, Aug 20] For diplomatic purposes it doesn't have to actually work; it just needs to sound like it might work.
Pawns. Obama is urging Republican Congressional leaders to stop blocking a bill aimed at helping small businesses hire more people. [AP, Aug 219] Meanwhile, the Republicans blame the Dems for hurting small biz with the death tax. Unfortunately, both sides treat small biz as a symbolic pawn in their great chess game for power while small biz lobbies to extract the maximum handouts.
Fair and balanced. News Corp., owner of the Fox network, Fox News and newspapers including the New York Post and The Wall Street Journal, gave $1 million in late June to the Republican Governors Association, making it one of the largest corporate donors to the GOP group this election season. ... News Corp. spokesman Jack Horner said the contribution was intended to promote the company's core beliefs [Wall Street Journal, Aug 18] We should remember that most newspapers were invented as political organs, and that claims like "fair and balanced" are mere puffery. A Pentagon official said he is withholding a contract from Lockheed Martin over concerns about problems with a missile interceptor [Terminal High Altitude Area Defense, or THAAD] that is a centerpiece of the Obama administration's missile-defense strategy. [Wall Street Journal, Aug 18] Not just the Obama administration; anti-missile defense is a long standing program going back to the 1950s and supported by every President since missiles were invented.
"As Americans, we're all going to have to cut back and take less," said Lois Profitt, a 58-year-old small-business owner and political independent from Chesterfield, Va. ... "It's a brutal predicament for politicians because the rhetoric of deficit cutting is enormously popular, but the details are incredibly unpopular," said Matt Bennett, a vice president at the Democratic group Third Way, which has polled extensively on the issue. [Jonathan Weisman, Wall Street Journal, Aug 17] Meanwhile, elsewhere in Virginia - what's ours is ours, what's yours is negotiable - as Democrats and Republicans oppose closing a military command and cutting civilian contracts around the Washington Beltway. [Washington Post, Aug 17]
The Greenwoods (SBIR consultants) warn that Grants.gov was a noble experiment to standardize the grant proposal submission process. It is complicated, it is cumbersome, and despite several years of revisions and massaging, it continues to have odd and unexpected idiosyncrasies and peculiarities that few normal people understand.
Home cooking breaks deal. Great public fanfare on preliminary agreement with China last fall to build the world's largest solar-power plant in the Mongolian desert. But now, Chinese competitors in the solar business have complained openly about the U.S. company, First Solar, getting such a lucrative contract. A planned June 1 date to break ground has been missed. Government officials from the Chinese region of Inner Mongolia, where the plant would be built, say they plan to open the project to competitive bidding. [Keith Richburg, Washington Post, Aug 13, 10]
Need, want, deserve a government subsidy? In the rich world the record shows, again and again, that industrial policy doesn’t work. ... Governments rarely evaluate the costs and benefits properly. .... Not all such money is wasted, of course. The internet and the microwave oven came out of government-led research .... Few quarrel with the need for governments to help business with straightforward “horizontal” measures, such as research and development or fostering high-tech skills. But there is no accepted framework for “vertical” policy, favouring specific sectors and companies. But, never mind efficiency, the public funds have an odd habit of flowing towards politically connected projects. [because] None of this excites politicians as much as donning hard hats and handing out cash in front of the cameras. [The Economist, Aug 7]
Economic-stimulus funds for scientific research are becoming a political target for Republican skeptics who say they have identified some grants as evidence of wasteful spending. ... [Two prominent Senators] have criticized a range of stimulus spending as failing to address what they say is the immediate priority of creating jobs in the U.S. [Louise Radnofsky, Wall Street Journal, Aug 12] "Waste, fraud, and abuse" is any spending that benefits someone else.
Companies seeking grants from Texas's Emerging Technology Fund can begin applying Oct. 5. Twenty-six Austin-area companies have received a total of $41 million. [Austin American Statesman, Aug 11] We're still waiting to hear an auditable economic gain beyond the companies getting the money and the politicians approving the "investment". Just like SBIR.
Stimulus of war. Steady paychecks and a growing flow of Pentagon dollars pushed average pay in North Carolina's two largest military communities [Fayetteville and Jacksonville] beyond bigger metro areas like Charlotte and Raleigh. .... Federal figures showed seven of the country's top 10 metro areas for greatest growth in personal incomes were powered by military paychecks. [Raleigh News & Observer, Aug 11]
A white paper from the Wisconsin Technology Council (WTC) lays out a plan to increase access to capital for Wisconsin entrepreneurs, create new workforce development strategies, improve the state's infrastructure and business climate, and implement technology development and transfer strategies. Another report calls for greater coordination and streamlining of Wisconsin's existing programs through the creation of two new entities with a statewide reach. Both papers include extensive recommendations for the state's efforts to make capital available to startup businesses. [SSTI, Aug 5] Hand out spending and call it capital, and re-organize. Two years later, change everything again. If the elements for private capital investment aren't present, the state government will wind up with just a budget hole.
Twenty-six members, spanning university presidents, investors, serial entrepreneurs, and nonprofit leaders, were appointed to the National Advisory Council on Innovation and Entrepreneurship announced yesterday by Commerce Secretary. The group will support President Obama's innovation strategy by helping develop policies that foster entrepreneurship and identifying new ways to take ideas from the lab to the marketplace to drive economic growth and create jobs. ... Read the press announcement [SSTI Weekly Digest, Jul 14] Maybe this group will say that direct government funding of companies doesn't have much track record to recommend it beyond scratching a political itch to be seen doing something.
Meanwhile, A new state agency to promote innovation and job creation in New Jersey was established by Gov. Chris Christie earlier this year. Envisioned as a hub for all economic development activity, the New Jersey Partnership for Action consists of three interconnected organizations to promote the state's incentives and resources, develop pro-growth policies, and assist businesses in navigating government programs [SSTI Weekly Digest, Jul 14] Let's guess that the latest Republican poster boy will find that cutting business taxes is the best growth remedy.
The U.S. Justice Department has issued a press release announcing that former University of Wisconsin geneticist Elizabeth B. Goodwin has pled guilty in federal court to fraudulently submitting a grant progress report containing falsified data that misrepresented the progress of genetic research at the lab she directed. She will be sentenced in September and faces a maximum penalty of one year in prison and a $100,000 fine. [AAAS Policy Alert. Jul 14]
More fantasy. The DOE announced $188 million to small businesses in 34 states to develop technologies with a strong potential for commercialization and job creation. More fantasy that government funded tech work will lead to job creation. The winners list is riddled with the usual suspects that have been living on SBIR for at least two decades, and economic return won't come from SBIR just because the awarding agency says it will. For political purposes, the federal agencies claim doing good work on commercialization and spinoff without much in the way of economically intelligent analysis. Show us some hard evidence, like third party co-investment or a great economic track record from those winners with previous SBIR experience. Otherwise, it's just DOE satisfying its own objectives for knowledge.
Massachusetts highest court has upheld a tax break for a Bedford start-up in a long-running dispute whose outcome could help reduce costs for companies seeking to design and launch new products in Massachusetts.The Supreme Judicial Court found that the state’s Department of Revenue wrongfully denied Onex Communications Corp. a manufacturing tax break for materials it purchased for its first product, a kind of super chip used to transmit large amounts of data. The state had argued that Onex had not yet finished making any of its chips and therefore did not qualify as a manufacturer under an 80-year-old law that grants tax exemptions to encourage those companies to expand here. [Casey Ross, Boston Globe, Jul 31]
On the basis of the belief that better education in Soviet Russia contributed to Sputnik, federal money poured into the American higher education system, making it a key component in the battles of the cold war. These policies the creation of new government agencies, further increases in state-sponsored R&D, and expansion and restructuring of higher education—had enormous influence on America's political, social, and cultural trajectory during the cold war. [Asif Siddiqi, Toward a Global History of Space Exploration, Technology and Culture, Apr 10] Now that the programs and agencies have beneficiaries and administrators, they are seen as a sine qua non for tech progress.
[OMB] released their annual joint memo to agency heads last week titled "Science and Technology Priorities for the FY 2012 Budget." The memo reiterates the President's long-term goal for investment in R&D to reach 3% of GDP, and encourages agencies to pursue transformational and multidisciplinary approaches aligned with six "challenges and areas to be strengthened." [AAAS, Jul 29] More money for pet projects; more fantasy revenue to pay for it.
Pamper the little darlings. both sides are noisily clamoring to prove their support for a critical constituency: America's small-business owners.... "Helping small businesses, cutting taxes, making credit available. This is as American as apple pie," Obama said. "Small businesses are the backbone of our economy. They are central to our identity as a nation. They are going to lead this recovery." Republicans are blocking action on the bill in the Senate ... "They've hit small business with a sledgehammer and now they're going to go around and say they're picking up some of the pieces," said Sen. Judd Gregg (R-N.H.), dismissing the small-business initiative before the Senate as "tinkering at the edges." [Lori Montgomery and Michael Shear, Washington Post, Jul 29] The winning formula is clear: clear the deficit but don't raise anyone's taxes nor cut anyone's handouts. Until the voters grow up to real math, there's no reason to expect the politicians to act like adults.
SBIR Insider Rick Shindell implores small businesses to call their local, regional or state office [of members of Congress] to invite them to visit your business. Let them know how important the SBIR program is to you, your business, and potential new jobs. Programs such as SBIR that help keep or add employment for good wage paying jobs, are usually popular with the politicos. But the only companies who would have a direct interest in SBIR are the SBIR junkies who lives on the program. Many of the worthwhile beneficiaries haven't been born yet and the new innovations worth funding haven't yet been invented. The political arguments being offered are the standard stuff of vested interests keeping government money flowing to present beneficiaries.
the Obama administration has championed giving loans and awards to innovative companies through programs such as the Department of Energy's ARPA-E. But it is not a simple journey from funding these programs to actually creating jobs.
Government to compete with industry. A government program focusing on rare diseases has launched five pilot projects that are taking the NIH in a new direction: developing drugs. The NIH Therapeutics for Rare and Neglected Diseases (TRND) program was established last year with $24 million of funding. ...will work together with scientists, advocates and others to do the required research and testing on drugs before a compound can be tried in humans in a clinical trial. Promising new drugs discovered through basic research often flounder during this stage. [AD Marcus, Wall Street Journal, Jul 24]
NIH has contracted with Foresight Science and Technology to perform Technology Niche Analyses (TNAT) for 100 NIH SBIR Phase I awardees funded in fiscal years 2010 and 2011. For each eligible SBIR Phase I project, the TNAT will assess potential uses of the technology and then provide a report that addresses the end-user needs, current and emerging competing technologies, the market dynamics, and the technology's competitive advantage. For a full description of the program, check (http://grants.nih.gov/grants/guide/notice-files/NOT-OD-10-112.html). [SBIR alerting service, Jul 16] Oh great, the government will hire a consulting firm to tell SBIR awardees how good their their technology will be in market competition. Why didn't the government think to ask the companies that before giving them the money? Actually, NIH does ask them such questions but mostly ignores the answers. Which must somehow be OK because NIH awardees are producing a lot of real commercialization.
DOE said that $30 million will be made available to qualified small businesses to support the commercialization of promising new technologies [for] projects that include developed technologies with a strong potential for commercialization and impact on U.S. manufacturing and job creation. ... up to $3 million over 3 years to research, develop and deploy new technologies. apply by Aug 4 [SBIR alerting service, Jul 16] apply by Aug 4. Oh sure, first they give SBIR to the companies that serve DOE needs and then they pretend that more money will create commercialization. Why cannot they start by giving the SBIR money to great ideas and market-driven companies, instead of making lemonade from the best mediocre lemons? Because feeding DOE programs comes first and the SBIR law gives them unilateral authority to fund anything at any small company they please. DOE won't worry about the problem because Congress doesn't care enough to hold them accountable for SBIR results.
What's more popular than corn? after receiving subsidies for 30 years... The once-popular ethanol industry is scrambling to hold onto billions of dollars in government subsidies, fighting an increasing public skepticism of the corn-based fuel and wariness from lawmakers who may divert the money to other priorities. [Martha Lalonick, AP, Jul 16] Moonshine!
I can't tell you how hard it has been for the Senate staffers to construct a compromise that they feel retains the integrity of the program, and gives some additional access to the powerful VC and BIO community. Without some sort of compromise there will be no reauthorization in this congress. Rick Shindell, SBIR Insider, Jul 15] Stay tuned for the resolution of how much VC is just right for SBIR.
Cool pork for Wisconsin. Astronautics Corp. of America (Milwaukee, WI; no SBIR) will work to develop a next-generation air-conditioning system using magnetic refrigeration technology, under a $2.9 million energy research grant funded through the federal stimulus package. ... now moving into a civilian application for the technology ... Astronautics has been conducting research into magnetic refrigeration technology for U.S. Navy ships for years, with the aid of federal funding. U.S. Rep. Tammy Baldwin (D-Wis.) has supported $7.5 million in funding in recent years, said Bill Murat, Baldwin's chief of staff. Another $4 million earmark remains pending. [Thomas Content, Milwaukee Journal Sentinel, Jul 13, 10]
Is SBIR popular? Did you ever notice that when government programs are labeled “popular,” it is always by their beneficiaries, e.g. "for the second time in two years, the state universities are weighing whether to limit or even get rid of the popular AIMS scholarship, which waives tuition and fees for thousands of college students." Since most similar government programs consist of giving people something of value for free or at least for a below-market price, aren’t they always going to be popular with their recipients? ... The only meaningful definition of “popular” vis a vis a public program should be “popular with those who fund it.” [Warren Meyer, coyoteblog.com, Jul 12]
We’ve been mired in debates over macroeconomic models recently. But maybe the real issue is how we are going to light a fire under the country’s loners, its contrarians and its narrow, ambitious outsiders. [David Brooks, New York Times, Jul 13] If the big mission agencies keep shuffling SBIR money to safe performers, the disruptive innovation of the outsiders will continue to depend solely on the private sector. Which is fine by the agencies since they never wanted or believed in SBIR from the beginning.
a Sustainable Defense Task Force of defense analysts that has recommended $1 trillion in spending cuts over the next decade. ... stopped production of the ultra-expensive F-22 fighter jet, cut back on some missile-defense programs he thought unrealistic, and killed an Army combat vehicle considered out of sync with today's counter-insurgency warfare. The reaction in Congress: revolt. [Gerald Seib, Wall Street Journal, Jul 9] Basic criterion: a good defense program is one that puts money in my district.
Opponents say Congress, which is deeply divided on the issue, should have responsibility for regulating greenhouse gases. [Science, Jun 18] Congress has enough knowledge for politics and law, but detailed science? Those "opponents" don't want government to regulate anything, except abortion and unions.
NSF released the beta version of a new Research.gov, a website designed to provide information by state, congressional district, and science field on research sponsored by NSF and certain other federal agencies. ... to promote transparency and highlight outcomes and impacts of agency-funded grants. Currently, NASA, the Army Research Office, and the National Institute for Food and Agriculture are also providing selected services on the website. [AAAS, Jun 30]
The Obama administration has forced [Emcore, based in New Mexico makes components for fibre optics and solar panels] to abandon a planned joint venture with China’s Tangshan Caofeidian Investment Corporation because it believes the tie-up would threaten national security. ... the second time in less than a year that the administration has sought to block a transaction involving a Chinese company because of security concerns. [Stephanie Kirchgaessner, Financial Times, Jun 29, 10] If China can't use American money to buy American assets, why should they take it or keep it? Are we still the big dog that makes the rules?
Hope and money aren't enough. Mr Kissinger added that fighting the Taliban until it was reduced to impotence “would take more time than the American political system would permit”. [Daniel Dombey, Financial Times, Jun 29, 10] Congress always wants something by the next election cycle and lectures the generals on strategy.
Policy and job turmoil. Workers at Bastion Technologies (no SBIR) and elsewhere are caught in a growing conflict between Congress, which has banned NASA from canceling any part of Constellation, and agency leaders who have directed program managers to scale back their work while preserving the parts that would fit into the new space policy proposed by President Obama. [Kenneth Chang, New York Times, Jun 26] The usual Congressional response: cut the deficit somewhere else. NASA SBIR junkies could feel the pinch also. Somewhere, somehow, lots of folks have to lose jobs if the deficit finance is to be fixed without raising revenue (not on our watch, say the Republicans).
Patenting still foggy. The Supreme Court on Monday loosened the limits on the kinds of inventions that are eligible for patent protection in a case that was closely watched for its impacts on innovation ... rejected a lower court's reasoning that only inventions involving machinery or physical "transformations" are eligible for patents. ... Although the court was unanimous in rejecting the claims of the inventors in the [business finance method] case, the justices differed over why, issuing three separate opinions that sparred over what types of inventions should be eligible for patent protection. [Pete Whoriskey, Washington Post, Jun 29]
Breast-beating time again. Pentagon officials said Monday that they plan to try to cut as much as $100 billion over the next five years out of the billions of dollars spent annually in buying weapons systems and other services from outside contractors. [Dana Hedgpeth, Washington Post, Jun 29] As the Pentagon staffers regularly write to themselves, "in these times if limited resources," .... Look for more fantasies about "cost saving" as members of Congress protect their local industries.
Dems at commercialization, again. DOUGLAS P. HART, a [MIT] professor of mechanical engineering who sold his last start-up for a tidy $95 million, is already on to his next big thing. On Tuesday, he expects to lock up $1.5 million in funding for his new start-up, Lantos Technologies. ... developed a 3-D scanner that it hopes will streamline the current generation of earphones and hearing aids by precisely fitting them to the dimensions of the ear canal, right up to the eardrum.... able to bring his hearing aid concept closer to reality with $50,000 in backing last year from the Deshpande Center for Technological Innovation, an M.I.T. entity originally funded by two private investors, Jaishree Deshpande and her husband, Gururaj. ... A proposal from the Obama administration would experiment with all of this by allocating $12 million among several institutions next year in what proponents hope will be a continuing effort to support and study proof-of-concept centers. If successful, supporters say, universities could spread the model faster. But the idea represents a shift in thinking about the federal government’s role in stewarding the more than $50 billion it gives to university researchers annually. Until now, that money has been for the discovery, not commercialization, of scientific breakthroughs. [Bob Tedeschi, New York Times, Jun 27, 10] Can the federal government do commercialization decently? Probably not! Where is any evidence that it ever succeeded with its host of programs? After nearly three decades of SBIR, for example, where's the economic evidence of success? Government understands science and technology, but not business, and has no incentive for agencies to succeed at business. The political cycle also works against any long-term plan as whenever the Republicans own the White House, the commercialization programs get canned. Then when the Democrats regain and re-start them, the cycle repeats. Despite the theory that SBIR was intended to supplement private R&D, the DOE beneficiaries don't want to contribute anything to post-SBIR development. In a White Paper on Phase III, the SBTC writers want DOE to waive normal cost-share rules for contracting with mainline DOE funds. Apparently the SECEnergy has the authority to waive the cost-share and the governing statue exempts SBIR anyway. The two paragraphs on the subject don't delve into whether the department's insistence on cost-share has actually prevented any contract, whether the Secretary has issued any detailed guidance, and whether such insistence made good sense in light of SBIR being only a supplement. Ah well, DOE asked a lobbyist for a solution and get the natural answer - send us more money. One solution for DOE is to choose a better class of company for its SBIR awards. If it wants post-SBIR success, pick companies most likely to be pointed in that direction. Look beyond the criteria of "scientific and technical merit" and realize that there is a wide choice among companies with about the same technical merit.
Russia's [President] Dmitry Medevedev visits Silicon Valley for the first time, eager to reinvent his country's outmoded, oil-dependent economy - and lure talent and money from the high-tech capital..... knows he needs to attract some of the best minds and investors in the United States. [Nataliya Vasliyeva, AP, Jun 23] Why would smart people and capital go where there is no rule of law and no protection for private property?
what is the best way for governments to boost innovation? Sensibly if predictably, the OECD urges investment in education, research and “knowledge-supporting infrastructure” (such as broadband internet networks and smart electricity grids). Skimping on this while money is tight, says the agency, will cause growth to suffer in the long term. ... If governments want to see a blossoming of clean technology, therefore, they should use taxes to put a price on environmental externalities (such as carbon) rather than coddle pet technologies. [The Economist, May 29]
What Good Did It Do? NIH, in cooperation with other federal agencies, launched an initiative to monitor the impact of federal science investments in universities, called “Science and Technology for America’s Reinvestment: Measuring the Effect of Research on Innovation, Competitiveness and Science,’’ or STAR METRICS. One key effort will be to count the number of people whose salaries are paid by federal grants — a seemingly simple task that is currently impossible because of the way grant data are collected, said Julia I. Lane, program officer with the National Science Foundation’s Science of Science and Innovation Policy program. “We basically don’t have any way of knowing who is touched by science funding,’’ Lane said. [Karen Weintraub, Boston Globe, Jun 21] What a convenient story for SBIR advocates: if NIH can't quantify program benefits, how could a program as diverse as SBIR? Just keep sending money as having faith.
Political Economy. Russia’s wheat farmers are undercutting America’s, increasing Russia’s global market share from 0.5% in 2000 to 14% today, while the share of US farmers fell from 26% to 19%. Senators from farm states are beginning to demand help for their constituents — subsidies, or bilateral trade deals with wheat-importing countries. [Irwin Stelzer, The Sunday Times, Jun 20] Never mind deficits when the farmers want subsidies. Or when small business wants an advantage.
The speech — ending with the words “Let us therefore brace ourselves to our duties, and so bear ourselves that if the British empire and its Commonwealth last for a thousand years, men will still say, ‘This was their finest hour’ ” — has resonated ever since. ... Seventy years ago, on June 18, 1940 [John Burns, New York Times, Jun 18]
The Portland Development Commission has chosen five prominent business leaders to help launch a seed fund for regional startups, aiming to boost to the city's entrepreneurial class. [Mike Rogoway, The Oregonian, Jun 4, 10]
On writing grant applications, Mandala Biosciences’ (San Diego, CA; $800K SBIR) Larocca adds, “My advice is to be passionate. You have to be able to write your grant in a way to make it sound exciting.” [Bruce Bigelow, signonsandiego.com, Jun 8]
it takes two politicians to change a light bulb (one to change it, another to change it back again) [Eamonn Butler, Adam Smith Institute]
pour large sums of money at the problem. The United States is badly lagging in basic research on new forms of energy, deepening the nation’s dependence on dirty fuels and crippling its international competitiveness, a diverse group of business executives [American Energy Innovation Council] warn in a study to be released Thursday. The group, which includes Bill Gates, the co-founder of Microsoft; Jeffrey R. Immelt, chief executive of General Electric; and John Doerr, a top venture capitalist, urges the government to more than triple spending on energy research and development, to $16 billion a year. And it recommends creation of a national energy board to guide investment decisions toward radical advances in energy technology. [John Broder, New York Times, Jun 10]
The Patent Office said yesterday that it has signed a two-year deal with Google to provide bulk downloads of patent and copyright data to the public. Google will provide the service at no charge to the government or to users of the data. [Hiawatha Bray, Boston Globe, Jun 2]
Enlisting support from industry, policymakers and academics, Gov. Deval Patrick unveiled an initiative to help the state's manufacturers evolve with changing technology, adopt new innovations, and grow their operations through a new multi-tiered loan program. The Advanced Manufacturing Initiative is a public-private collaboration designed to maximize job creation within the manufacturing sector, which added more than 19,000 jobs last month, according to the governor's office. A new loan program from MassDevelopment will offer up to $50,000 for planning loans and up to $500,000 for growth initiative loans to reduce interest rates on real estate and equipment lending to manufacturers allowing companies to pursue expansion opportunities [SSTI, May 26]
The Obama Administration has released guidance on a new tax credit for medical research conducted by small biotech businesses. Claims for the credit could total $1 billion. Eligible companies must apply by July 21. [AAAS, May 26]
A paper by MIT physicist Ted Postol and Cornell physicist George Lewis published in Arms Control Today analyzed the reliability of the interception capability of the Pentagon's SM-3 antimissile and found that the success rate of the program was 10-20 percent, far lower than previous government reports. The Pentagon criticized the analysis as "flawed" and "inaccurate". [AAAS, May 26]
The United States wastes at least $6.4 billion each year in "forgone innovation" - legitimate technologies that cannot get licensed and start-ups that cannot get funding - because of backlogs and dysfunction at the U.S. Patent and Trademark Office, the agency that's supposed to protect and encourage innovation in America. [John Schmid, Milwaukee Journal Sentinel, May 22]
Every society develops a layer of complexity to deal with a new problem but eventually the solutions beget more problems in non-linear ways we cannot foresee because we have such a poor understanding of the dynamics of the system into which we deploy them. The persistent short-term thinking of governments and the public mean we will lurch from crisis to crisis. It is precisely because our solutions beget more problems that we are forced to innovate. The fact that we can develop solutions to problems we create through our previous solutions only tells us we are not especially good at creating sustainable solutions. [commenter super_critical, The Economist, May 15]
U.S. trustbusters have set their sights on Silicon Valley, with a growing number of investigations targeting possible anticompetitive behavior by technology companies. Now they are having to deal with potential witnesses using blogs to blurt out details of inquiries. [Wall Street Journal, May 21]
Small life-sciences companies in the U.S. will soon get details, expected to emerge in the next few days, of a federal program that will give a $1 billion boost to the industry. .... The funds will come in the form of tax credits, or as a grant for the many unprofitable companies, covering 50% of project-development costs in 2009 and 2010 for companies with fewer than 250 workers [Thomas Gryta, Wall Street Journal, May 21]
New seeds near Ground Zero. the Varick Street incubator, run by the Polytechnic Institute of New York University with help from the New York City Economic Development Corp., is one of five that the city has founded with hopes of nurturing a robust start-up culture. ... "there are no garages in New York…you start out of your living rooms or bedrooms," Mr. Mody said. [Joseph de Avila, Wall Street Journal, May 20]
Planning to plan. Minnesota Science and Technology Authority was established to develop and implement a comprehensive strategy for growing the state's economy through investments in science, technology and innovation. [SSTI, May 19]
Prescribing for Others. Taking matters into his own hands. Mike Pence, the House GOP conference chairman, is on the forefront of the deficit-reduction campaign—for the European Union. He is drafting legislation that would require the Treasury to vote against any IMF assistance to euro-zone nations until every member of the broader European Union has brought its debt-to-gross-domestic-product ratio below 60%. [Wall Street Journal, May 14] How about getting his constituents to belly-up to deficit reduction at home?
Potentially opening the way to greater freedom in stem cell research, the U.S. patent office has reversed a key decision that enabled a Wisconsin research foundation to maintain patents on all embryonic stem cells used for research within the United States. ... But the Wisconsin Alumni Research Foundation said it would challenge the ruling [Dean Calbreath, San Diego Union Tribune, May 4]
Dilemma. Illinois lawmakers were in disarray Thursday as they groped for stopgap measures to address a $13 billion deficit equaling nearly half of the state's general-fund revenue. The state faces one of the nation's worst budget crises. … little appetite for drastic spending cuts. An income-tax increase is going nowhere … And California officials said this week that April personal income tax-collections lagged projections by 30% [Amy Merrick, Wall Street Journal, May 7] Prime candidates for drastic cuts are programs with long term (if any) payoff and few active political defenders. The good news at the federal level is that politicians can pass out money to small business without making any voters mad since SBIR taxes only federal agency programs.
voters approved a four-year, $700 million bond to extend funding for the Ohio Third Frontier initiative through 2016. Established in 2002, the initiative offers programs for emerging and established high-tech companies, including grants for pre-seed funding, research initiatives, product development and commercialization. [SSTI, May 5]
The Massachusetts Life Sciences Center, the quasi-public agency that seeks to promote the life sciences industry in the Bay State, said that is now accepting applications for the 2010 Life Sciences Tax Incentive Program. [Boston Globe, May 4, 10]
Montgomery County [MD (DC burbs)] Council's unanimous approval of a plan to spur creation of a $10 billion, 17.5 million-square-foot center for bioscience research. .... The county is home to almost 300 biotech companies and institutions [including NIH], ... " in a highly competitive industry. We had to do something to really up the ante," [said one council member] [Washington Post, May 5] And where will $10B come from in America's richest county?
the Office of Science and Technology Policy (OSTP) and the Office of Management and Budget (OMB) issued a memorandum on standardized Research Performance Progress Reports for federal grantees, to be universally applied across federal agencies so that "researchers spend less time managing paperwork and forms" and more time on research. Details of the new standards are posted on the NSF web site, and federal agencies have nine months to post implementation plans. [AAAS, Apr 28]
To remain the world’s pre-eminent nation, the U.S. is going to have to develop energy sources that are plentiful, clean and don’t enrich the worst people on earth. That means in the short term, the U.S. has to unleash the tens of billions of dollars of potential energy investments now being pent up by uncertainty and regulatory hurdles. To make a difference in the long term, the U.S. is going to have to invest more and differently in energy research and development. ... It’s clearly going to take legislative action to catalyze private investment and to increase federal research to where it should be — about $25 billion a year, according to Mark Muro of the Brookings Institution. It’s going to take some equivalent of the Pacific Railroad Acts to kick this into gear. [David Brooks, New York Times, Apr 30]
Visible cost, invisible benefits. Issue 1, a ballot proposal, would allow Ohio to issue $700m of bonds to finance research and development, the so-called “Third Frontier” programme. ... Voters, however, have reason to be wary of spending and empty promises. It is unclear that they will support a vision that is, for most, still hazy. ... The programme spends nearly $58,000 for each new directly created job, though the state points out that increased tax revenue outweighs these costs. A bigger challenge, however, is that few Ohioans feel that Third Frontier has affected them. [The Economist, Apr 29] What if SBIR were put to a direct public vote? Even Congress doesn't want to vote on it. Two decades of federal agencies serving themselves and of beneficiaries suppressing economic evaluations have guaranteed the invisibility of results other than temporary jobs. And even those jobs were taken from other citizens.
Don't cut us. The federal government wants to save taxpayers billions of dollars by reducing spending on crop insurance [below last year's $3.8B] after years of big profits [26% last year] by insurers , Oh no, say the beneficiary farmers and insurers. And even if insurance is reduced, vice president of government relations for the National Farmers Union, said any savings should be put back into other risk management tools for farmers [Steve Karnowski, AP, Apr 28] Another group with a fair share attitude that keeps government spending rolling. Meanwhile, Bernanke said the USG. needs a quick plan to cut the deficit. The aggies response: cut deficits but not farmers. SBIR has a similar response: More is better!
The USA.gov Web site, which serves as a virtual front door for thousands of citizens accessing government services, is undergoing a comprehensive redesign to encourage more public interaction. ... already installed new search tools that are 10 times as fast as the old ones and that suggest popular phrases as users type in keywords ... considering adding mobile applications to its site [Washington Post, Apr 28]
The biggest threat to Democracy comes from the People when they start believing they can demand more and more public services from government while simultaneously demanding ever decreasing taxes. The end result is debt slavery. [commenter, The Times, Apr 28]
The Senate passed a bill to extend SBIR until July 31, says SBIR Insider Rick Shindell
The CIA announced a five-year strategic plan that would invest heavily in new technologies to combat nontraditional threats such as cyber attacks from overseas and gain better intelligence on rogue states. ... Officials said the agency would boost the technology budget by tens of millions of dollars. [Siobhan Gorman, Wall Street Journal, Apr 27] No, CIA has no SBIR, but it does have a VC - In-Q-Tel.
The giant federal deficit and debt—the subjects everybody loves to talk about but nobody likes to do anything about ... Don't expect much to actually happen this year, an election year in which political leaders will grow increasingly allergic to making hard decisions. ... Most political will in Washington is devoted right now to prevailing in this fall's midterm election, Looking for the culprit? Try the mirror. Nearly everybody in America expects more from government than taxpayers will pay for. [Gerald Seib, Wall Street Journal, Apr 27] And if you think more SBIR is a great idea, look in the mirror again.
Washington's habit of spending today the money it hopes to collect tomorrow is getting worse and worse ... The short term looks awful, and the long term looks hideous. Under any likely scenario, the federal debt will continue to balloon in the years to come. .... Whether on taxes, entitlements, military retooling, financial reform, energy policy or climate change, Washington is mired in a political enmity that makes tough decisions nearly impossible. [Joel Achenbach, Washington Post, Apr 25] The SBIR advocates have an answer - more for us!
Subsidy. Massachusetts is giving A123 Systems a $5 million forgivable loan in return for creating 250 jobs and expanding operations for making large batteries that connect to the electricity grid. [Boston Globe, Apr 22, 10] Companies with jobs exploit inter-state competition to pull in government subsidies.
Free Access means fewer archival journals. Committees in both the House and Senate are reviewing the Federal Research Public Access Act (H.R. 5037 and S. 1373). The bill would require agencies with research budgets of $100 million or more to provide online access to research manuscripts stemming from federal funding within six months of publication in a peer-reviewed journal. The bill gives individual agencies flexibility in choosing the location of the digital repository for this content, as long as the repositories meet conditions for interoperability and public accessibility and have provisions for long-term archiving. [AAAS, Apr 21]
Spend Today, Pay Tomorrow. America’s fiscal picture is even worse than it looks. The non-partisan Congressional Budget Office just projected that over 10 years, cumulative deficits will reach $9,700bn and federal debt 90 per cent of gross domestic product – nearly equal to Italy’s. Global capital markets are unlikely to accept that credit erosion. If they revolt, as in 1979, ugly changes in fiscal and monetary policy will be imposed on Washington. [Roger Altman, Financial Times, Apr 19] Meanwhile of course, beneficiaries of government handouts scream for more. Are there any adults out there?
NIST-TIP (the re-named ATP program that the free-market Republicans hated) is seeking proposals for high-risk, high-reward research projects $25 million in first-year projects in "Manufacturing and Biomanufacturing: Materials Advances and Critical Processes." http://www.nist.gov/tip/cur_comp/index.cfm or http://www.nist.gov/tip/.
As the dust settles on healthcare reform, Stewart Lyman helped show readers one of the overlooked elements of the new law that will provide a windfall of tax benefits for biotech companies. [Luke Timmerman, Seattle Times, Apr 15, 10]
Tax Before Profit. BioBehavioral Diagnostics (no SBIR) raised millions of dollars in venture capital and invested heavily in its technology to get its medical device to market. Now, with revenues just beginning to roll in, the six-year-old start-up faces another hurdle as it reaches for success: a new federal tax that will take a cut of every sale it makes. ... developed a system that tests for attention deficit and hyperactivity disorder, is an example of why Massachusetts business and political leaders worry about the medical device tax, recently enacted as part of federal health care reform. The 2.3 percent excise tax, which takes effect in 2013 to help finance the expansion of coverage, will be levied on sales, not profits, [Boston Globe, Apr 14, 10]
Once a Program, Hard to Change. experts say U.S. manned space travel will likely be grounded for years longer than previously expected. The [NASA] Florida summit comes amid an escalating battle between the White House and Congress over the fastest and least expensive way to revitalize the space program. Mr. Obama has been pushing ambitious plans for start-up companies to ferry astronauts into space on private rockets. Congress, meanwhile, is bent on defending NASA's traditional rocket and spacecraft programs, which the Obama administration wants to kill. Meanwhile, China's manned space program aims to leapfrog the U.S. by deploying advanced spacecraft and in-orbit refueling systems as early as 2016, when American astronauts still may be relying on rides on Russian spaceships. [Andy Pasztor, Wall Street Journal, Apr 15] The reality is that a lot of things have to be cut, because the public won't tolerate big tax increases. Look for much pontificating.
Jobs Today or Pensions Tomorrow? Maine is diverting money from its pensions funds to speculate in creating jobs today. a new Innovation Finance Program that allows the Maine Public Employees Retirement System to invest its pension funds into venture capital funds, in an effort to boost venture activity and spur innovative startup growth in the state. [Mass High Tech, Apr 14] Whatever happened to fiduciary responsibility wherein the pension fund has only one mission - providing secure funds for tomorrow's pensions? Venture activity is interesting and sometimes rewarding, but risky beyond a standard of prudence for public pension funds. And sub-optimizing by directing the venture funds to Maine startup enterprises adds even more risk. The future pensioners should object to such political shenanigans that pretend to create local jobs.
Betting on Government as Commercial Customer. Both Boeing and Lockheed were stung during the last burst of optimism for the commercial space business about a decade ago. They invested several billion dollars — Lockheed to develop its Atlas V, Boeing for the Delta IV — in the hopes that the huge market for commercial satellites would supplement their traditional business of launching American military spy satellites. The market did not materialize, and what business there was went to European and Russian rockets that were cheaper. With the United Launch Alliance, Boeing and Lockheed Martin share costs and profits equally. The joint venture now operates in the black, but the companies did not recoup their original investments, and much of the infrastructure they built remains underused. [Kenneth Chang, New York Times, Apr 12] Government is about to lose its cachet as a honey pot as the deficit hawks gain traction.
Russia’s rich scientific traditions and poor record of converting ideas into marketable products are both undisputed, cited as causes for the Soviet collapse and crippling dependence on mining and petroleum. Not surprisingly, then, its leaders look longingly at Silicon Valley. ... [a new town is intended to incubate scientific ideas using generous tax holidays and government grants until the start-ups can become profitable companies. ... an effort to blend the Soviet tradition of forming scientific towns with Western models of encouraging technology ventures around universities. Skeptics see a deeper strain of Russian tradition: trying to catch up with the West by wielding the power of the state. ... conceived by the Commission on Modernization, deep within the Kremlin bureaucracy ... still a thriving tradition of government crackdowns on private business with capricious enforcement of the tax laws [Andrew Kramer, New York Times, Apr 9] Government going to create innovation? Look at the economic record of SBIR for expectations as government serves itself.
$150K and 1000K. The SBA announced new "limits" for SBIR awards. SBIR winners cheered, as should the agencies. SBIR wannabes can't tell whether it matters or not. The practical effect is that the agencies will continue to do whatever they please because no loser can make a certain case of damage and SBA has no teeth.
Small Business in R&D. NSF released an InfoBrief last week highlighting indicators of U.S. R&D performance by the size of the performing company. From 2003 to 2007, small businesses (less than 500 employees) increased their share of U.S. industrial R&D investment from 17.9 to 18.7%. Over the same period, they increased their investment in R&D from 3.1% of sales revenues to 8.6%, while medium-to-large companies saw their percentage of R&D investment decrease from 3.6 to 3.4%. [AAAS, Mar 24]
Since the federal agencies want to spend their SBIR money on life style companies that make the government smarter, let's hear Tim Kane suggest, We've long advocated here at the Kauffman Foundation for something like a Startup Visa, a program that would grant citizenship to migrants who want to (and are able to) create new firms and jobs in America (but be sure to read this counterpoint). [growthology.org blog, Mar 23]
Tim Kaine also says, conventional wisdom assumes a linear link between more R&D spending and more innovation. What about entrepreneurs? Most startups I know don't have an R&D budget -- the whole company is a tech gamble! How can government officials measure that? They can't. [growthology.org blog, Feb 25]
The Administration wants your opinion. is interested in working with all stakeholders (including universities, companies, Federal research labs, entrepreneurs, investors, and non-profits) to identify ways in which we can increase the economic impact of Federal investment in university R&D and the innovations being fostered in Federal and private proof of concept centers (POCCs). ... This RFI is designed to collect input from the public on ideas for promoting the commercialization of Federally funded research ... should be sent to NECGeneral@who.eop.gov with the subject line ‘‘RFI Questions.’’ Deadline. Apr 26. [http://www.gpo.gov/fdsys/pkg/FR-2010-03-25/pdf/2010-6606.pdf ] Be sure to tell them they should push more money your way and cut your taxes. Otherwise they won't think you're serious about capitalism. The serious R&D people could also say that if SBIR cannot prove that it does a better job of economically useful innovation than the rest of the agency budget, that the money should go back into the general agency R&D pool. Prove, not just blather platitudes.
Enduring Myths. Elect me for tax cuts and job growth! [The candidate] called for incentives to bring American jobs back from overseas. That includes creating what she called “jobs for Americans zones” where business in targeted geographic areas would receive a 10-year “tax holiday” for facilities brought back from abroad and a five-year one for startups and expansions. also proposed lowering the tax rates for businesses that reinvest overseas profits in creating jobs and purchasing equipment in the United States. [John Marelius, San Diego Union Tribune, Apr 1] If all that worked and didn't involve blatant protectionism, they would have been done long ago. Of course, Republicans genetically see tax cuts as the universal solution to any public dilemma. And every party is for job growth, good job growth with great pay and benefits. But the world is too competitive to allow infinite good American jobs at America's standard of living. To get good jobs we have to raise productivity (which reduces total jobs) and out-innovate the foreign competition. Unfortunately, passing out government money for pretend innovation of no economic portent simply raises the national debt for no gain. Come on voters, give us politicians based in reality and admit that we have to pay for the free lunch of the last three decades.
A Funding Proposition for SBIR. It’s hard to imagine a more naked example of rent-seeking than this one. A group representing Arizona hospitals is pursuing a ballot initiative that would tax the state’s high-income earners to help pay the health-care tab for the state’s neediest kids and adults. The Arizona Hospital and Healthcare Association expects to file paperwork for the initiative later this week, aiming for a place on the November ballot. It asks voters to raise the state income-tax rate 1 percentage point on income exceeding $150,000 per individual and $300,000 per couple. The association estimates the initiative would raise more than $140 million each year to pay for health insurance for low-income children and adults, graduate-school medical education and reimbursement to hospitals that care for the poor. In other words, the government will take the money and hand it over to hospitals to do the things they are already doing. [Warren Meyer, coyote.blog, Mar 30] Oh wait! That's how SBIR is already funded: rich agencies get taxed to spend money on a political class to do what the agency would do anyway.
If there has been a theme to the Obama administration’s disparate domestic policies, it has been to invest more in public goods. The administration has increased spending on schools, highways and scientific research and tried to play a more active role in energy policy and health care. “They’re all a necessary part of the network of what makes market economies work,” Timothy F. Geithner, the Treasury secretary, told me recently, “and we have not been good enough about doing them in recent years.” [David Leonhardt, New York Times, Mar 28] Music to the ears of beneficiaries of public handouts.
Maybe Innovation, Maybe Here. The new $232.3 million N.C. Innovation Fund plans to take a multipronged approach to investing in businesses with a North Carolina connection. ... Although the fund's primary focus is making money for the pension fund, it also aspires to support economic development in the state. [David Ranii, Raleigh News & Observer, Mar 24] What'll it be? Home cooking or fiduciary responsibility to the pension fund? Haven't we learned enough about the meager ROI from government investment in innovation? When politics "invests", it's mostly for votes. Any politician been caught investing his own money in the schemes after proper laundering?
Collection Outruns Analysis. flow not only exceeds capabilities to interpret and exploit the data, the GAO told lawmakers, but probably soon will exceed the bandwidth available to carry it to ground stations. Service peculiar collection jealously guarded, shortage of language capability on the ground and in the US, Army won't share until 2014, Marines don't even have a sharing date. [Walter Pincus, Washington Post, Mar 23] Technology advancing faster than human system can absorb.
‘How big of a bong is he smoking?’ Seeks $5 Billion (With a “B”) from Feds to Support VCs ... “Tom’s approach [is] to have the federal government fund VCs,” Roth wrote in an e-mail in response to my query. “I proposed that the private sector fund early stage (pre VC) and that the federal government would match at the same terms and conditions as the private sector.” [Bruce Bigelow, San Diego Union Tribune, Mar 22] Isn't a fair-share for VCs as compelling as a fair-share for SBIR companies whom VCs wouldn't touch? If economic gain from innovation is the objective, why not help the most likely to get there? Not to worry; no VC worth the money wants to tangle with government as a partner.
Where's the Innovation? From the empty BioValley site in Malaysia to the many [SBIR]grants won by DC-area firms that produce few real innovations, the pattern is depressingly familiar. ... The big winner of the Department of Energy's battery funding orgy, A123 Systems, spent about a million dollars on Washington representatives from 2007 through early 2009. ... The only sure way to prevent political and other pressures from distorting public efforts to boost innovation is to look carefully at which firms private investors think are viable. By focusing on supporting firms that have raised matching funds, public officials can boost innovative entrepreneurs far more successfully. [Josh Lerner, MIT Tech Review, Mar/Apr 10] Josh has been watching SBIR from its beginnings, first at GAO, then at Harvard's School of Government, and now as professor of investment banking at HBS. In the same issue, James Surowiecki of the New Yorker reviews Lerner's latest book Boulevard of Broken Dreams: When Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed - and What to Do About It . Perhaps Nydia Velazquez's staff has been reading Lerner seriously and sees no compelling reason to repeat the last two decades of SBIR. Perhaps also the SBIR advocates could come up with a new story that promises some decent ROI for the public dollars being poured into life-style companies beyond job for the boys.
Here We Go Again. Meg Whitman will "root out fraud" and "cut wasteful spending." Carly Fiorina wants to eliminate "the billions of dollars of waste and bloat that sits in our federal budget." Ho-hum. Is it campaign time again? ... One fact Whitman doesn't mention is that California's government workforce is already among America's leanest -- the ratio of state employees to population is the third lowest in the country, according to 2008 figures from the U.S. Census. [Michael Hiltzik, LA Times, Mar 21] Does it work? It's a way to claim government efficiency without making anyone mad. Does it ever happen? Only to programs with politically weak advocates. But there are few such programs after decades of accretion of government benefits for "all shall have prizes." Just count all the SBIR defenders, for example, and listen to their passionate speech with claims as vague as cutting waste, fraud, and abuse.
Defensive Maneuvers. Shifts in Chinese policy are making it harder for foreign companies to succeed and suggest Beijing is reassessing the liberalization it made when it joined the World Trade Organization in 2001. [Andrew Browne and Jason Dean, Wall Street Journal, Mar 17] Meanwhile, Do Like We Do. A bipartisan group of senators on Tuesday introduced legislation aimed at forcing the Obama administration to take action against China over its currency policy, reflecting growing anger on Capitol Hill over the issue. [Corey Boles and Shayndi Raice, Wall Street Journal, Mar 17] The Chinese view is that we dug ourselves into a hole and we want them to do likewise. And since isolation is better politics than cooperation and responsibility, our politicians haste to make speech. All the while, our angry Tea Party citizens want us to do extreme austerity which would raise the value of the dollar and make our trade balance even worse. Be careful what you wish for.
But giving up earmarking would not be "in the best interests of the Congress or the American people," [the Senator]added, because some earmarks had produced outstanding results." [RJ Smith. Washington Post. Mar 15] Sound familiar and hollow? It's the same argument being made for SBIR. If your child spent 10% of allowance on books and 90% on candy, should you increase the allowance to get more books?
House Democratic leaders banned budget earmarks to private industry, ending a practice that has steered billions of dollars in no-bid contracts to companies and set off corruption scandals. [New York Times, Mar 11] Senate not so enthusiastic.
End of an Era. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more. [Stephen Olmacher, AP, Mar 14] Now Congress has to find more revenue than it appropriates rather than less as it invades the trust fund of nothing but IOUs.
President Barack Obama laid out plans Thursday to help U.S. businesses double their export sales and add what he said would be 2 million more jobs at home during the next 5 years. [Stephen Thomma, McClatchey Newspapers, Mar 12] Domestic politics. Every elected national leader wants to increase exports in what classic mercantilism treats as a zero-sum game. Since America's main competitive industrial asset is technology innovation, and our leaders won't tolerate lowering wages, net exports aren't going to grow unless American continually hones that edge. In that spirit, among baser political motives, SBIR was supposed to be a small engine. But after two decades plus, there's little evidence that it is coming close to even a net gain over doing nothing about steering federal R&D toward economic goals. No matter, the mini-battle over SBIR is purely political now.
Corporate Welfare? SBIR Insider Rick Shindell reports in high dudgeon that House SB Committee Velazquez said, Without the participation of venture-backed companies, the SBIR program has become little more than corporate welfare for marginal companies who are unable to secure external market-based funding. Shindell counters that, This statement is not only an outrage, but is untrue and ignorant! Velazquez is debasing thousands of small businesses and SBIR projects that have provided significant results, more often than not resulting in innovations exceeding that of any other sector including large business and academia. SBIR success is universally acclaimed by numerous sources, including extensive studies by the U.S. General Accounting Office (GAO) and the National Research Council of the National Academy of Sciences, not to mention many other countries that are now emulating the program. The bad news for SBIR advocates is apparent agreement among the Committee with the chair's opinion. Says Shindell, There were no objections nor amendments so the document was approved/passed by unanimous consent with only a few committee members present. While only Velazquez knows what's really motivating her, taking on the myth that small business is America's economic savior is pretty brave stuff. Perhaps the SBIR advocates can reflect that their two decades of opposition to economic evaluation of SBIR has finally come to haunt them. Stay tuned for developments.
Fund Us, or Else. Britain will suffer decades of economic decline if the next government cuts science spending to help to contain the £178 billion national debt, an influential panel of researchers, business leaders and former ministers warns today. [Mark Henderson and Suzy Jagger, The Times, Mar 9] The same argument made by every beneficiary in S&T. How's a Congress to decide how much for whom is enough for a reasonable return? Who's going to argue against science since no one has a vested interest in less funding?
Senators Kerry and Lugar introduced a bill (S. 3029) that would provide a new type of visa to allow foreign entrepreneurs to enter the U.S. The proposed EB-6 visa would allow foreigners to enter the U.S. for two years if they can secure at least $250,000 from U.S. investors in support of a start-up venture. This proposal builds upon the EB-5 visa program, which allows foreigners to enter the U.S. if they invest at least $1 million of their own money in a new venture which creates at least ten jobs. [AAAS, Mar 5]
Science Wins One. A prominent [religious] conservative lost his seat on the [Texas] state education board, a shift that weakens the board's powerful social conservative bloc. ... to challenger Thomas Ratliff, viewed as a moderate, on the board that shapes what millions of students read in textbooks. [Wall Street Journal, Mar 4]
But Religion Soldiers On. South Dakota Legislature Considering Resolution on "Balanced" Teaching of Climate Change.By an 18-17 vote, the South Dakota State Senate passed a concurrent resolution on the teaching of climate change in public schools, urging that the subject be taught in a "balanced and objective manner" and stating that the debate on global climate change is "subject to varying scientific interpretations." The Senate amended an earlier resolution (HCR 1009) that passed the state's House of Representatives 36-30, which had included a recommendation to include in classroom instruction discussion of "a variety of climatological, meteorological, astrological, thermological, cosmological, and ecological dynamics that can effect [sic] world weather phenomena and that the significance and interrelativity of these factors is largely speculative." The bill now returns to the House. [AAAS, Mar 5] "Balanced" apparently includes superstition, holy scripture, faith, and astrology.
Need Government Support? Viktor Petrik shows off what he describes as his discoveries: a cell that generates electricity when you breathe on it. A new way to produce silicon for computer chips from fertilizer waste. A filter that cleans the toxins—and the color—from red wine. "This is real, serious science here," he says ... He has won some high-level support. United Russia, the ruling party, regularly gives him prominent roles in events on innovation, while officials including Boris Gryzlov, the speaker of Russia's parliament and No. 2 in the party, have publicly endorsed his products ... Mr. Petrik's detractors say he's the latest in a long history of false experts who owe their success to their ability to fool people in power. Says Petrik critic Rostislav Polishchuk, a member of the pseudoscience commission: "Russia is especially vulnerable to this." [Gregory White, Wall Street Journal, Mar 5, 10] Give cold-fusion another whirl and invoke your US Representative.
Political Help Claimed. NeuroDx Development (Bensalem, PA; no previous SBIR) received a $143,000 SBIR to continue its development of improved diagnostic tests for children and adults with brain injuries and diseases. ... “This grant supports the vital research that NeuroDx is conducting to help those suffering from this brain condition, as well as supporting employment in this cutting-edge field,” said U.S. Rep. Patrick Murphy, D-Bucks, who helped the company secure the funding. [Philadelphia Business Journal, Mar 1, 10]
calls for the Small Business Administration to help business owners find willing lenders and, as a last resort, issue the loan directly. While this provision passed a House vote in October, the direct-lending provision has an uncertain future as it awaits consideration from the Senate. ... The president, in his response, said that the SBA "does not have the infrastructure to go all across the country in every region and process loans." He added that creating a direct-lending system would make a "massive bureaucracy." .... If businesses are being told 'no' because they are not creditworthy and lenders won't make the loan with a 90% SBA guarantee, why should the taxpayers do it with a 100% guarantee?" says Jonathan Swain, an SBA representative [Emily Maltby, Wall Street Journal, Mar 4]
Medicare vs Moonshots. NASA chief Charles Bolden has asked senior managers to draw up an alternate plan for the space agency after members of Congress indicated they wanted to reject a White House proposal to hire private companies to ferry U.S. astronauts into orbit and beyond. In an internal memo viewed by The Wall Street Journal, Mr. Bolden ordered officials to map out "what a potential compromise might look like" to satisfy critics on Capitol Hill. By calling for an alternative plan, Mr. Bolden threatened to undercut White House efforts to get its proposed NASA budget through Congress. [Andy Pasztor, Wall Street Journal, Mar 4]
Florida's efforts to boost its biotechnology sector may not be paying off as quickly as originally hoped. ... $449 million invested through the Innovation Incentive Program has yet to result in industry growth in counties where the program's grantees have their facilities. ... suggests that the state's lack of early-stage capital for biotech startups may be contributing to the sluggish pace of development. [SSTI, Feb 24] Government "investment" always sounds good, until ROI time comes. In R&D particularly, the sci-techs have more interest in good science than in economics and profit.
SBIR Insider Rick Shindell fulminates on the House's old-trick blatant attempt to get all its pet SBIR ideas into law by default as a rider on the "must pass" jobs bill. Says Rick: virtually unlimited majority ownership and control of small businesses by VC syndicates; no limitations on the overall percentage of award dollars made to these larger entities; elimination of mandatory phase I (allows direct to phase II); allowing and encouraging "Jumbo Awards", award amounts with no ceilings, only loose guidelines not requiring justification (makes possible $10B, $20B or more awards,); allowing earmarking of SBIR award dollars; only 2 year reauthorization (contributes to continued destabilization of the SBIR program but acts as a fund raising mechanism for incumbent house members, bipartisan at that); no allowance to raise the SBIR allocation (Senate raises from 2.5% to 3.5% over 10 years). There are many additional issues beyond the scope of this article. For those who believe SBIR is the greatest advance since sliced bread, Rick goes on the repeat the usual arguments for SBIR.
NIH is proposing to expand its definition of human embryonic stem cells, enabling the university researchers it finances to work with cells derived from a very early human egg. The proposal will benefit several academic researchers and a company, Advanced Cell Technology (Santa Monica, CA and Worcester, MA; $500K SBIR) , that has filed a request with the FDA to test a treatment for macular degeneration, an eye disease. If approved, it would be among the first clinical tests of embryonic stem cells, which were first discovered in 1998. [New York Times, Feb 20, 10]
Last month the Department of Defense (DOD) asked SBTC to come up with a list of possible improvements to make the DOD's SBIR program more efficient. The parameters for SBTC's recommendations were that the improvements had to be non-legislative and could be quickly implemented. To address this issue, SBTC formed a committee of about 16 small businesses that have had experience working with the DOD SBIR program. After coming up with a number of good ideas, the committee whittled the recommendations down to five main topics. 1) The Office of the Secretary of Defense (OSD) and the Director of Defense Research and Engineering (DDR&E) should direct DOD to prioritize the use of SBIR technology in acquisition programs. 2) Simplify and streamline the SBIR contracting process. 3) Provide incentives and rewards to government organizations and prime contractors for successful transitioning and commercialization of SBIR technology. 4) Educate DOD contracting, management, and technical personnel. 5) Increase SBIR allocation in the DOD from 2.5 percent to 5 percent, and implement scheduled 1 percent increase in SBIR transitioning funding immediately, rather than over 10 years. [SBIR Alerting Service, Feb 19] In other words: lobbyists say give our clients more money (from somebody else's wallet), and pay more attention to their whining. I suppose that's responsive to DOD's request if they adopt a twisted idea of efficiency, which should mean more output per unit of input. If they really wanted efficiency (instead of just more money) they would recommend picking companies and ideas with a future. None of those recommendations would make any efficiency from a rocket plume model project, and passing out money faster to the wrong places won't help efficiency. How about starting with: 1) give some experienced VCs and financially successful SBIR business execs a voice in selections and project structures; 2) toss out every year the bottom some percent of companies with no financial success after an SBIR technical success; 3) give a specified portion of the money to managers who will go for, and be willing to measured and rewarded by, economic success from tech success for a military objective; 4) institute some kind of structure that forces every successive SBIR for a company's technology to meet a steeply progressive requirement for third-party co-investment. Anyway, if DOD were serious about efficiency, it wouldn't be asking such question of lobbyists.
Since Marc Stanley is retiring, ... NIST is seeking qualified applicants for the director of the Technology Innovation Program (TIP). ... to support, promote, and accelerate innovation in the United States through high-risk, high-reward research in areas of critical national need [SSTI, Feb 16] Applicant needs steady nerves to withstand Republican free-market drumbeat.
Replenishing the Innovation Incentive Fund and investing in space industry, public research, and green energy technologies are among Gov. Charlie Crist's FY11 budget recommendations to grow the state's innovation economy and establish Florida as a pre-eminent global hub. ... includes $100 million for the Innovation Incentive Fund, which was established in 2006 to attract R&D companies and create high-wage jobs ... The fund was depleted in 2008 [SSTI, Feb 16]
When in doubt, re-organize. The Oklahoma Center for the Advancement of Science and Technology (OCAST) is among a list of 16 state agencies slated for consolidation in Gov. Brad Henry's budget proposal, which he says will result in cost savings of $5.3 million. Under the proposal, OCAST would be moved to the Department of Commerce, along with Aeronautics, Indian Affairs and the Oklahoma Space Industry Development Authority. Funding for OCAST would be reduced by 3 percent [SSTI, Feb 16]
Let's Have an Industrial Policy? The U.S. is down to four world leading industries: entertainment, out of Los Angeles (heavily indebted to Democrats); information technology, out of the Bay Area (likewise); energy, out of Houston (heavily indebted to Republicans); and financial services, out of New York (indebted to both parties). That's it, folks. We're otherwise second- or third-rung suppliers across the range of manufactured products—except for biotech, a small industry—and we can still (mostly) feed ourselves. ... We've never systematically used government incentives to help U.S. industry compete across the board. It's time we did, like everyone else. [John Hofmeister (formerly of big oil), Wall Street Journal, Feb 8] SBIR advocates would be for it, even though they cannot prove economic success after nearly three decades of handout. The industrial policy advocates similarly cannot prove that their ideas work better in a competitive world than free markets. Like most advocates, they believe in sub-optimizing and pretend that it's global optimizing.
even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car. [Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Jan 30] And the Republican ardor for free markets and anti-Democratic brakes will probably block any effective USG regulation to control the car. Why should the world richest nation not have the best Congress money can buy? Since TARP was of course a bonanza for fraudsters as government passed out money as fast as it could without the usual procurement type safeguards that fill the volumes of the Federal Acquisition Regulations, the TRAP IG has 77 ongoing criminal and civil investigations. To see all SIGTARP actions www.SIGTARP.gov
A Confidence Game. "Everyone is depending on sovereign and fiscal authorities to keep the music going," he says. However, because the huge government deficits eventually act to slow economic growth, "people know that eventually the music is going to stop playing." The key unknown is at what point bond markets force governments to cut back on the stimulus. The answer, Mr. Brynjolfsson says, "is purely a function of confidence." [Tom Lauricella, Wall Street Journal, Feb 8]
The Russian finance minister on Wednesday floated a new approach to catching up with the West in technology ... The government will order ministries and state companies to use more of their procurement budgets to buy products that qualify as “innovative” and that are made in Russia. [New York Times, Feb 4] A national security state going to enliven useful and advanced technology? Certainly no better than the US DOD does with its national security SBIR.
Public growth, private shrinkage. NSF, NIST laboratories, and the Department of Energy's Office of Science continue on the path to doubling their budgets. [SSTI, Feb 4] As always, scientists believe that deficit reduction beef must come from some other sacred cow. But, GSK plans to expand previous cost-cutting efforts by saving nearly $800 million more a year by 2012 than previously planned. Half of that savings will come from reducing research and development spending, which will affect its R&D hubs, including the one in Research Triangle Park [Raleigh News &Observer, Feb 5]
Ready, Set, Continue. Congress is extending non-DOD SBIR again, until Apr 30. Which, unfortunately, gives the agencies that don't like SBIR an avenue to interrupt the flow of proposals and awards.
Obama wants to offer tax credits to companies that hire new workers, a plan that drew a cool reception from Congress last month despite the nation's double-digit unemployment rate. With polls showing that jobs are Americans' top priority [AP, Jan 29] Some things the government does not do well, including stimulus by creating jobs that lasts only as long as the money. Wealth creation belongs in private hands after the government has built a safe and invigorating milieu. But until people stop rewarding their politicians with re-election for handing out public money, the inefficient machine will grind on at least at the federal level where running bills up on the national credit card is rewarded with hands on the levers of power. For a view of what can go wrong, look at Venezuela. Any program to fund private business must be done with great restraint and a structure that provides support only at critical junctures where there is a clear path beyond the barrier to privately based development. A greatly scaled down and highly targeted SBIR, for example, might - might - qualify; not the broad and loose handout of the last almost three decades.
federal deficits have only climbed to 5% of GDP four times since the end of World War II—in 1946, under President Harry S. Truman, and three years under President Ronald Reagan. Why are deficits labeled by president when the president has so little to do with it? One reason: Congresses are ID'd by a number that no one knows nor remembers. What's the number? Subtract 1787 from the year and divide by two to know that we now have the 111th Congress. Anyway the whole business of deficit is enfogged with attitudes that keep changing. The widening deficit and growing federal debt show how the political ground has shifted. During the Clinton administration, deficit concerns were pre-eminent. "Rubinomics," named for then-Treasury Secretary Rubin, said balanced budgets helped the economy flourish and kept interest rates down. By the time Vice President Dick Cheney famously said deficits didn't matter, the pendulum had swung back. Republicans passed tax cuts totaling nearly $2 trillion over 10 years and approved a Medicare prescription-drug benefit, the largest entitlement expansion since the 1960s. Now, there is a new orthodoxy. Democrats argue that fiscal discipline must be restored—but not before the nation regains its economic footing. The debate is how quickly to shift from fiscal stimulus to fiscal austerity. [Jonathan Weisman, Wall Street Journal, Jan 30]
The quasi-public agency Connecticut Innovations Inc. today released a report indicating that the 20-year-old authority has brought about a $23.80 return — measured in impact on the state’s gross domestic product — on each dollar invested in local companies. ... CI invested $152 million in 84 companies [1995-2008]. .. CI’s investments helped to create an average of 1,610 jobs each year, including 563 direct jobs and 1,046 indirect jobs. The activity also brought in more than $209 million in state tax revenue, an average of $14.9 million a year, according to the report. The report also said that CI’s investments led to an additional $1 billion in outside investments. [Mass High Tech, Jan 21, 10]
Yet Another Subsidy. The highly lucrative market for radioactive isotopes used in cancer scans and other medical procedures is at the center of a political struggle in Congress ... over the uncertain future of a $4 billion market now controlled by foreign suppliers with aging nuclear reactors .. [Markey's] bill, which the House overwhelmingly passed and the White House supports, would require the Department of Energy to provide at least $130 million to encourage the creation of domestic manufacturers of the special compounds. [Bryan Bender, Boston Globe, Jan 29] Governments are good at home cooking [protectionism] and spending public money, but terrible at wealth creation [competitive markets] and paying for the subsidies.
Over the past five years, Washington has tried to reform Social Security, immigration, health care and energy policy. All of these efforts have either failed or are close to failure — thousands of people working millions of hours and in all likelihood producing nothing. .. as each party interprets victory as a mandate to grab everything [David Brooks, New York Times, Jan 29]
Continuing Irresolution. SBIR Coach Fred Patterson reports that the House Small Business Committee has chosen not to respond to the Senate's compromise proposal, and we'll have a sixth Continuing Resolution, this one for 90-days. Since SBIR is mainly a political program, why be surprised that the politicians want to extract the most from it? And the advocates are still in angst over the $200M "stolen" by NIH in the stimulus handouts. If you're looking for a model of responsible political restraint, look to......
The board of the Massachusetts Life Sciences Center, a quasi-public agency formed to oversee the state's $1 billion life sciences initiative, today approved up to $3 million in new matching grants to small businesses in 2010. ... will focus on emerging life sciences businesses with production-ready products and high potential to create jobs in Massachusetts. It will begin accepting online applications for the grants on Feb 1 through its website, www.masslifesciences.org. [Robert Weisman, Boston Globe, Jan 27]
Pay Me Now, Or ... Debt for jobs now, settlement later. The world has issued so much debt in the past two years fighting the Great Recession that paying it all back is going to be hell--for Americans, along with everybody else. Taxes will have to rise around the globe, hobbling job growth and economic recovery. [Daniel Fisher, Forbes, Feb 8] No problem: politicians always prefer Pay Me Later when they will be out if office. We voters apparently believe the same thing because we keep re-electing them. But there are practical limits to the return on more debt: says Carmen Reinhart, a University of Maryland economist. The coauthor, with Harvard professor Kenneth Rogoff, of This Time It's Different: Eight Centuries of Financial Folly (Princeton, 2009), Reinhart has found that a 90% ratio of government debt to GDP is a tipping point in economic growth.
between 1941 and 1960, she observes, the government’s share of
R. & D. funding went up 13-fold until it supplied a whopping 64
percent of the country’s research funds
The freshly inaugurated governor reeled off a litany of new actions to increase college graduates, double the Governor's Opportunity Fund and target bioscience companies, invest in renewable energy, and provide tax credits for green job creation [SSTI, Jan 20] How will he pay for all that plus a $4B starting deficit? Don't ask, nor how all that fits into his required Republican limited government.
Aurora Flight Sciences (Manassas, VA (R&D in Cambridge, MA); $15M SBIR) to develop technology for a hot air balloon to operate on Saturn’s moon, Titan. [Brendan Lynch, Mass High Tech, Jan 18, 10] NASA and the SBIR advocates will no doubt continue to bleat about commercialization while the Centers fund R&D for outer space. The company's website does standard R&D spin for government-use stuff. It must be good stuff to get $15M and growing SBIR over twenty years from DOD and NASA. BTW: what would you consider a decent nursery period for small high-tech companies before they can compete on their own for government R&D work. What really happens is that the mission agencies won't let them compete for much of that work because the agency must put at least 3% of their outside work into SBIR. "Go get SBIR," say the agency managers to such companies.
NASA and InnoCentive, which operates a global network of 200,000 potential problem solvers, [to apply the principles of crowd-sourcing to solve the research and development problems that face its corporate customers] are collaborating to open a new NASA Open Innovation Pavilion designed to provide the public with the opportunity to solve difficult problems in human health and performance facing the US space program. ... seeking input from the public on [among others]: How to keep food fresh in space and how to develop an effective aerobic exercise program that keeps astronauts fit in space, [Boston Globe, Jan 15]
$16.56 Impact for Each State Dollar, says North Dakota. Providing strong evidence for how public investments in research and TBED pay off even on a short time horizon, a recent impact analysis calculated the total impact from the first $19.9 million North Dakota spent over the past four years for the establishment of 20 Centers of Excellence across the state. Analysts from North Dakota State University reported a combined cumulative impact of $329.5 million for the 30 months ending June 2009. The total includes both direct reported results and estimates for indirect impacts .. seven new spin-off companies were created, five companies expanded within North Dakota, and five companies expanded to the state [SSTI, Jan 13] Let me control the assumptions and the "indirect effect" and I can give you any impact you want.
Thousands of Massachusetts small business owners who have been pummeled by rising health insurance costs should see some relief under a program approved yesterday by state regulators. The Health Connector board voted to take over the administration of health insurance plans for roughly 17,000 small businesses, a task that had been handled by a private company, Worcester-based Small Business Service Bureau. The new program is aimed at the smallest of small businesses, those that employ between one and five workers. There are roughly 40,000 such employers in Massachusetts that offer health insurance to their workers, according to state figures. [Kay Lazar, Boston Globe, Jan 15]
The Government Accountability Office has recommended that the U.S. government establish a central national security budget and then set aside money by responsibilities, breaking with the current arrangement of letting departments and agencies decide how best to arrange their budgets. [Walter Pincus, WashPo, Jan 18] The investigating arm of Congress ignores the legislating arm of Congress where committee turf is guarded even more ferociously than the Executive Branch departmental turf.
The conservatives' focus on ideology, they say, is an opportunistic way of distracting attention from the mistakes of the Bush years and the role conservative policies played in bringing us to this point. To cite ideology rather than the economy in explaining the poll numbers is like analyzing the causes of Civil War without any reference to slavery or the rise of the New Deal without mention of the Great Depression. ... many, especially political independents, are upset that the government has had to spend so much and that things have not turned around as fast as they had hoped. [EJ Dionne, WashPo, Jan 18] The nation of instant gratification wants to know why the financial and economic mess isn't cured yet. T'row da bums out; bring back da odder bums?
Jobs, or else.
Polspeak Laying out her goals for the year, [NC Gov] Perdue promised to push tax incentives for small businesses and use federal training dollars to give small employers administrative support they wouldn't otherwise get. She also challenged business and education leaders to guarantee that every public school student is prepared for college or a career. .. "We're tired of business as usual." ... I am, and will continue to be, known as the 'jobs governor'." [Raleigh News & Observer, Jan 14] She's looking forward to $400M federal handout for education (while Texas declines $700M).
We are no closer today to SBIR reauthorization than we were when the House and Senate SBIR legislation was passed back in July of 2009 with conference talks starting in August. [SBIR Insider Rick Shindell, Jan 12] Rick sees a pure political stratagem by SB Chair Velazquez of two-year re-authorization which aligns with her bi-annual need for campaign contributions. But since SBIR is mostly a political handout anyway, where's the great injustice of playing both sides of it?
the N.I.H. currently prohibits its funds from being used to support the graduate or the postdoctoral training of foreign-born science students, who make up the majority of our talent pool in many fields. In addition, the N.I.H.’s conservative review panels make it very difficult for young scientists to secure funding for creative, risky basic research, once they establish their own labs. This affects senior scientists as well. [David Anderson, letter to the New York Times, Jan 13]
We are seeking submission of white papers that bring forward new and innovative science & technology ideas and/or educational programs that could support the future efforts of DoD biometrics and forensics capabilities. Details.
Helping the Neighbor. Beavercreek-based UES (once called Universal Energy Systems (Dayton); Beavercreek, OH; about $40+M SBIR) was awarded a $22.7 million [USAF-AFRL] contract [for] research, development and technology transition on advanced metallic and ceramic structure materials. In September, UES snagged a six-year, $44.5 million deal to provide research and development for the nano and biological materials. [Dayton Business Journal, Dec 31, 09] in 2009, it was still getting Phase 1 SBIR awards, its 140th Phase 1 following about 40 Phase 2s. DOD's due diligence on SBIR must not include a check on whether a firm is ready to compete for mainline DOD R&R funding and thus does not need nursery funding. Did the Congress intend such situations in SBIR? Well, the Dayton Congressional delegation will certainly not be complaining about a firm parked outside the DOD gate getting a lot of contracts. What are neighbors for anyway? I do hope that the big contracts do not include consulting work on SBIR topics and selection of winners.
the federal research and development investment for FY 2010 is an estimated $150.5 billion, 2.0% more than FY 2009 [AAAS, Jan 7] any stimulus money would be extra
what should we expect to be a good return on public investment in research? A new working paper available from the National Bureau of Economic Research helps clarify the range of possible answers, though, and strongly suggests the investment is worthwhile. Reviewing studies from the past half century, the authors conclude the rates of return for R&D are "usually higher than those to ordinary capital" and social returns "are almost always estimated to be substantially greater than the private returns" - both conclusions supporting an increasing role for public research investment. ... Prepared as a chapter for the Handbook of the Economics of Innovation, the December 2009 NBER Working Paper is available for purchase at: http://www.nber.org/papers/w15622. [SSTI, Jan 6]
The Ohio Business Roundtable’s independent assessment of the outcomes and impacts from the first $473 million invested from Ohio’s Third Frontier (OTF) Program since its creation in 2003 shows the program providing an annualized return of 22 percent – and climbing. .. the report reveals product sales of OTF-funded projects already equal $440 million alone, nearly matching the state’s investment. An additional $3.2 billion of follow-on funding has been secured for OTF projects as well. [SSTI, Jan 6]
The Missouri Science and Reinvestment Act (MOSIRA) would dedicate an annual portion of new tax revenues generated by biotechnology companies to a newly-created state fund administered by the Missouri Technology Corporation. Funding would be reinvested in a wide-range of technology-based economic development programs designed to grow science and technology companies across the state. More information regarding MOSIRA is available from the governor's office. [SSTI, Jan 6]
Gov. Pat Quinn's Illinois Economic Recovery Plan .. would establish an Angel Investment Tax Credit program to allow investors making an early-stage investment in a technology startup to receive a capped credit against their Illinois tax bill. [SSTI, Jan 6]
Need an Investor? Look Abroad. Since October 2006, U.S. companies have raised more than $1 billion and have created over 20,000 jobs (directly and indirectly) through EB-5, estimates the USCIS. ... foreign investors--through the so-called EB-5 program--can snag a slice of equity and a quick-and-dirty U.S. visa in just three-to-six months; plus, unlike other immigrant visas that might expire in a few years, the EB-5 flavor promises permanent residency. EB-5 minimum requirements: a $1 million investment from a lawful source in a new or existing commercial enterprise that directly creates at least 10 U.S. jobs. Investors can put up as little as $500,000 if the company is in a rural area or in a county sporting 150% of the average national unemployment rate. [Katy Finneran. Forbes.com, Jan 6] Meanwhile, A group of technology investors is trying to make Silicon Valley friendlier to foreign entrepreneurs. The group is lobbying lawmakers for a new visa for noncitizens who want to found technology start-ups in the U.S. Dubbed the Startup Visa, it would allow entrepreneurs sponsored by a venture capitalist to come to the U.S. for two years to start their business. [Jessica Vascellaro, Wall Street Journal, Jan 7]
Command economies [think China] are good at spending money on infrastructure, less good at getting a return on capital. [Paul Maidment, Forbes.com, Dec 31] USG mission agencies do the same since they don't see their R&D as capital that should have a measured return. But then, real capital investors don't have to get elected.The economy is a complex, intricate subject. It is highly doubtful that the current crop of attention-seeking, power-grabbing legislators whose sole concern is their own re-election are equipped or inclined to tackle it in any meaningful and effective way, beyond, perhaps, reinstitution an old law [Glass-Stiegel] that they never should have rescinded to begin with. [carouzer blogging on thedailybeast.com, Jan 4]
Waltham, MA, archetypical American industrial town that looked as if they were doomed a generation ago. But Waltham is now booming thanks to its proximity to the great idea factories of Cambridge and Boston. The city is home to dozens of high-tech and venture capital firms and houses the headquarters of Global Insight, a consultancy that sells a billion dollars of economic analysis a year to American companies [Adrian Woolridge, reviewing Easterbrooks's Sonic Boom, Wall Street Journal, Dec 29]
U.S. investment in [R&D] is expected to rebound slightly next year as the economy gradually improves. Next year, after accounting for inflation, total U.S. spending on R&D is forecast to rise 1.7% [says]Battelle Memorial Institute, ..In 2009, U.S. spending on R&D fell about 3.8% after accounting for inflation, the first annual decline since 2002. [Wall Street Journal, Dec 22]
Companies want more bang from their research buck. Executives are under pressure to cut costs, but need innovative products to fuel post-recession growth. So many are protecting research spending, but scrutinizing projects more carefully and reordering priorities to favor high-potential markets like Asia and health care. .... Intel learned from a misstep in the 1970s not to skimp on R&D spending to manage costs. [Dana Mattoli, Wall Street Journal, Nov 30]
2010 is not the best year to go all-in [investing] on an industrial renaissance. There is still massive overcapacity in manufacturing in the U.S. despite plant shutdowns and layoffs. China made its own excess of productive capacity worse when it staved off an economic slump by building plants, equipment, infrastructure, and housing. [Peter Coy, BusinessWeek.com, Dec 17] No matter; American manufacturing is still holy for politicians and they will keep pushing government programs to foster manufacturing [especially in their electorates] without much regard to world competitiveness and capacity.
For the first time in 2009, non-Americans were granted more U.S. patents than resident inventors, accounting for 50.7% of new grants, according to recent data from the Patent & Trademark Office. Moreover, for only the second time in the last 25 years, patent applications fell overall in the year ended Sept. 30.... The shift reflects in part moves by U.S.-based companies to offshore R&D. [Michael Arndt, BusinessWeek.com, Dec 17] Could SBIR help? Not the way it is currently managed with the big money agencies free to look solely to their own interests in which patents and American competitivness play no part. Innovation, patents, and economic gain need a focus on new and different and potentially disruptive, not on safe incremental development.
No one has built a new semiconductor plant in Oregon in six years, and there aren't any on the drawing board. The chip industry has largely shifted overseas and Oregon has lost a third of all its high-tech manufacturing jobs since the industry's peak early in 2001 [Mike Rogoway, The Oregonian, Dec 17]
One of Evergreen Solar’s top executives, vice president of finance Mark Fidler, told investors last week that all of the solar system maker’s future expansion will be in China to make the company more cost competitive with Asian solar companies. [Mass High Tech, Dec 10, 09]
In the cradle of American innovation, workers are making career choices based on co-payments, pre-existing conditions and other minutiae of health insurance. They are not necessarily making decisions based on what would be best for their careers and, in turn, for the American economy — that is, “where their skills match and where they can grow the most,” as another Silicon Valley entrepreneur, Cyriac Roeding, says. [David Leonhardt, New York Times, Dec 16]
Regardless of the dollar price involved, one ounce of gold would purchase a good-quality man's suit at the conclusion of the Revolutionary War, the Civil War, the presidency of Franklin Roosevelt, and today." - Peter A. Burshre
Both Microsoft and Google are hoping to entice scientists by offering cloud services tailored for scientific experimentation. Examples include Worldwide Telescope from Microsoft and Google Sky, intended to make a range of astronomical data available to all. ... In essence, computational power created computational science, which produced the overwhelming flow of data, which now requires a computing change. It is a positive feedback loop in which the data stream becomes the data flood and sculptures a new computing landscape. [John Markoff reviewing The Fourth Paradigm by MSFT researchers, New York Times, Dec 15]
when your product is breaking new ground. Bo Fishback, of the Kauffman Foundation, a group dedicated to supporting entrepreneurs, [says] three steps. First, sit down with 10 potential customers and talk to them about the problem their business will untangle, to see whether they respond positively. Second, assembling a wish list of 10 people who could make you successful—professional investors, role models with successful businesses or potential partners—and contacting them for tangible support. Third, put together an advisory board of people who have been down a similar path. [Dyan Machan, smartmoney.com, Dec 11]
newscloud writes "Tech writer Glenn Fleishman compares the arguments against affordable, high speed, broadband Internet access in each home to arguments made against providing for common access to electricity in 1900 e.g. "...electric light is not a necessity for every member of the community. It Is not the business of any one to see that I use electricity, or gas, or oil in my house, or even that I use any form of artificial light at all." Says Fleishman, "Electricity should go to people who had money, not hooked up willy-nilly to everyone...Like electricity, the notion of whether broadband is an inherent right and necessity of every citizen is up for grabs in the US. Sweden and Finland have already answered the question: It’s a birthright" " [slashdot.org]
After months of hunkering down, some small companies are finding themselves ill-prepared for upticks in business. Many are short on cash or lacking lines of credit; others have eliminated staff positions or gotten rusty at networking or hustling potential clients. [Emily Maltby, Wall Street Journal, Dec 8]
Capital is not Charity. Myth No. 2: "I am going to retain control of my company." Entrepreneurs who are overly concerned about control will need to find a path to success other than venture capital. [David Young, entrepreneur.com, Dec 1] Good News: the government doesn't want any equity for its SBIR "investment"; Bad News: neither does it care whether you survive after your contract/grant.
Want Small Biz Job Creation? First, we want to make it easier for science & technology graduates to stay in the country and create companies. Second, we argue that the U.S. needs to drive job creation by opening up and making it easier for small, growing companies around the world to relocate to this country. Given the fundamental role that Kauffman research shows that young companies have on job creation, both would have be big steps towards creating a more entrepreneurial U.S. economy with more jobs. [Paul Kedrosky, growthology.org, Dec 2] Import entrepreneurs who have to sink or swim without government subsidies. They would find here the world's largest internal market, oodles of venture money, a flexible and mobile labor market, and an enterepreneuring climate.
Myth: The best way to create companies that provide jobs and wealth is to encourage business creation of any kind. ... There is little relationship between places with high rates of firm formation and high shares of high-growth companies. Moreover, a large portion of high-growth companies are older ventures. [Scott Shane, businessweek.com, Dec 4] Not to worry, though, the politicians love myths because they don't have to contradict what most voters believe.
Find a Great Partner. Although the telegraph had been pioneered by Samuel Morse in the 1840s, the innovation didn’t really take off, economically speaking, until it partnered with the railroads, at which point it became the Victorian era’s version of our information superhighway. –“How Robber Barons hijacked the ‘Victorian Internet,’” Matthew Lasar, Ars Technica [Harper's magazine.com]
While fast-growing companies have long been the main source of new jobs and innovation, this country makes it outrageously difficult for immigrants to launch new companies here. ... Foreign-born residents made up just 12.5% of the U.S. population in 2008. But nearly 40% of technology company founders and 52% of founders of companies in Silicon Valley. ... rather than saying "Come and create jobs here" we, in effect, tell them to shove off. Come back when you have a few million in sales— at which point they will be rooted elsewhere and creating jobs somewhere else. [Paul Kedrosky & Brad Feld, Wall Street Journal, Dec 2]
Powerful Adopters. China's government declared two strains of genetically modified rice safe to produce and consume, taking a major step toward endorsing the use of biotechnology in the staple food crop of billions of people in Asia. ... the world's top producer and consumer of rice [Andrew Batson & James Areddy, Wall Street Journal, Dec 1]
Efficiency and Profitability Matter. Amid a world over-capacity, US steelmakers are shutting down plants that were spared in earlier recessions, looking to create a smaller, more efficient industry. Meanwhile, Goldman Sachs upgraded the steel sector to attractive [Wall Street Journal, Dec 1]
“Small-company activity according to the N.F.I.B. is still at deep recession levels.” ... they do contribute significantly to the overall economy. The tens of millions of people who work at small concerns are, after all, customers of those big, high-profile corporations like McDonald’s, Wal-Mart and Whirlpool. [Gretchen Morgenson, New York Times, Nov 29]
"Regardless of the dollar price involved, one ounce of gold would purchase a good-quality man's suit at the conclusion of the Revolutionary War, the Civil War, the presidency of Franklin Roosevelt, and today." - Peter A. Burshre [thanks to Chart of the Day]
DeCode Genetics (Iceland) , a pioneering company that used the Icelandic population as its guinea pigs in detecting disease-causing mutations, filed for bankruptcy. .. suggests that the medical promise of the human genome may take much longer to be fulfilled than its sponsors had hoped. .. Whatever business errors deCode may have made, a principal reason for its downfall is scientific — the genetic nature of human disease has turned out to be far more complex than thought. [Nicholas Wade, New York Times, Nov 17]
U.S. entrepreneurship has been fed by a science, technology, and
innovation machine that remains by far the best in the world.
While other countries increase their spending on research and
development, the U.S. remains uniquely good at coaxing innovation out
of its research and translating those innovations into commercial
products. In 2007, American inventors registered about 80,000 patents
in the U.S. patent system, where virtually all important technologies
developed in any nation are patented. That's more than the rest of the
ElectricSteve writes "Her Royal Highness Crown Princess Mette-Marit of Norway officially opened the world's first osmotic power plant prototype on November 24. The prototype has a limited production capacity and will be used primarily for testing and data validation, leading to the construction of a commercial power plant in a few years time. Statkraft claims that the technology has the global potential to generate clean, renewable energy equivalent to China's total electricity consumption in 2002 or half of the EU's total power production" [slashdot.org, Nov 26]
ElectricSteve writes "Scientists at Cornell University report they can now use a light beam carrying a single milliwatt of power to move objects and even change the optical properties of silicon from opaque to transparent at the nanometric scale." As the article says, such an advancement "could prove very useful for the future of micro-electromechanical (MEMS) and micro-optomechanical (MOMS) systems." [slashdot.org, Nov 22]
Consider the world of "Makers," the latest by best-selling writer Cory Doctorow. This novel is set in a not-too distant future, when the creative destruction of technological change has created an economy so efficient, with profit margins so thin, that traditional companies can hardly stay in business. The inventor-heroes of "Makers" take technology to its conclusion ... They figure out a way to use three-dimensional printers to produce copies of machines and most anything else at close to no cost. [L Gordon Crovitz, Wall Street Journal, Nov 23]
Goldman Sachs, under heavy criticism in Washington for allocating over $16 billion in bonuses in the first nine months of this year, is preparing to team up with Warren Buffett’s Berkshire Hathaway — the largest shareholder in New York-based bank — to provide assistance to small businesses. .. a charitable effort from Goldman and Buffett, is designed to offer assistance — ranging from counseling to obtaining funding — to 10,000 U.S. small businesses. [Wall Street Pit blog, Nov 17]
Fraying Faith. faith in the future has motivated generations of Americans, just as religious faith motivates a missionary. Pioneers and immigrants endured hardship in the present because of their confidence in future plenty. Entrepreneurs start up companies with an exaggerated sense of their chances of success. The faith is the molten core of the country’s dynamism. ... It would be nice if some leader could induce the country to salivate for the future again. That would mean connecting discrete policies — education, technological innovation, funding for basic research — into a single long-term narrative. It would mean creating regional strategies, because innovation happens in geographic clusters, not at the national level. It would mean finding ways to tamp down consumption and reward production. [David Brooks, New York Times, Nov 17]
One question that needs to be answered is, "Where will capital come from to finance America next year?" Mr. Fink said. [Daniel Maxsey, Wall Street Journal, Nov 11]
Recessions Speed Obsolescence . ... in the music business in both eras. In the 1930s record sales collapsed, partly due to the new format of radio. Today we see the CD market down because of the recession and the new format of downloading. [(historian)Elaine Tyler May, OAH newsletter, Nov 09]
We all know what happened next. Pretty much right out of Mises's script, overleveraged banks (including Kreditanstalt) collapsed, businesses collapsed, employment collapsed. The brittle tree snapped. Following Mises's logic, was this a failure of capitalism, or a failure of hubris? Mises's solution follows logically from his warnings. You can't fix what's broken by breaking it yet again. Stop the credit gavage. Stop inflating. Don't encourage consumption, but rather encourage saving and the repayment of debt. Let all the lame businesses fail—no bailouts. (You see where I'm going with this.) The distortions must be removed or else the precipice from which the system will inevitably fall will simply grow higher and higher. [Mark Spitznagel, Wall Street Journal, Nov 7]
Merck is "actively looking" to buy biotechnology companies in the "single-digit" billions of dollars [Jonathan Rockoff, Wall Street Journal, Nov 5]
Look Around for Deadly Progress. Now that most cell phones provide navigation services, are GPS systems becoming something of the past ? ... Although more than half of the adults in North America who own a navigation device currently use stand-alone systems, Forrester Research analyst Charles Golvin said that by 2013, cell phones will dominate the market. [Krystina Gustafson, CNBC, Nov 5]
The more precise factor is not the size of businesses, but rather their age. According to the Census Bureau, nearly all net job creation in the U.S. since 1980 occurred in firms less than five years old. A Kauffman Foundation report released yesterday shows that as recently as 2007, two-thirds of the jobs created were in such firms. Put more starkly, without new businesses, job creation in the American economy would have been negative for many years. [Schram, Litan, and Strangler, Wall Street Journal, Nov 6] Such a truth should push SBIR away from established firms, especially the SBIR junkies, toward new firms and ideas. But then, any economic gain as an SBIR criterion has also proven to be a myth.
Velcroman1 writes 'Taking a cue from the Terminator films, the US Navy is developing unmanned drones that network together and operate in 'swarms.' Predator drones have proven one of the most effective — and most controversial — weapons in the military arsenal. And now, these unmanned aircraft are talking to each other. Until now, each drone was controlled remotely by a single person over a satellite link. A new tech, demoed last week by NAVAIR, adds brains to those drones and allows one person to control a small squadron of them in an intelligent, semiautonomous network.' [slashdot.org, Nov 3, 09] If you are interested in swarms, Michael Crichton published a typical Crichton sci-fi novel "Prey". Of course, the science isn't yet real.
Here's a riddle: If a scientist or engineer is laid off, does it affect gross domestic product? ... By overlooking cuts in research and development, product design, and worker training, GDP is greatly overstating the economy's strength ... There's ample evidence to suggest that companies, to reduce costs and boost short-term profits, are slashing this kind of spending, which is essential for innovation. [Michael Mandel, Business Week, Oct 29]
The California Institute for Regenerative Medicine approved $230 million in awards to fund 14 teams, typically spanning multiple organizations, as they seek treatments for specific diseases. [Thomas Kupper, San Diego Union Tribune, Oct 29]
Oregon technology enthusiast Hal Newton has a new tool for Oregon startups -- VentureMash, which begins a soft launch today. Hal's goal is to create a place where Oregon's disparate technologists can find one another and collaborate. Mash up skills, advice or funding resources. And the site also has a tool for embedding information about a startup in your site, or others'. Read more at the Silicon Florist Blog. [Mike Rogoway, The Oregonian, Oct 27]
As the industry continues to suffer from a lack of liquidity, many investment syndicates don't look as strong as they once appeared. Venture firms are under pressure to focus on the portfolio companies with the best chance of succeeding and to cut off the rest. [Wall Street Journal, Oct 28] Should it be SBIR's objective to save market-dead firms that do standard R&D, or to invigorate the young and interesting ideas?
It’s been a long, hard recession, but for Massachusetts technology companies, the end may be in sight. ... Not that a boom will occur; instead, executives speak of slow, steady growth at best. “We still see a lot of businesses that are going to continue to manage costs very closely,’’ said Emily Nagle Green, president of Yankee Group, a Boston technology research firm. ... despite higher output, the state’s digital technology companies are expected to keep right on downsizing. The research firm Moody’s Economy.com of West Chester, Pa., predicts the Massachusetts technology sector will boost production by 2.2 percent in 2010 but eliminate another 2,600 jobs. [Hiawatha Bray, Boston Globe, Oct 27]
“The velocity and volume on the Web are so great that nothing is forgotten and nothing is remembered,” says Leon Wieseltier, the literary editor of The New Republic. “The Internet is like closing time at a blue-collar bar in Boston. Everyone’s drunk and ugly and they’re going to pass out in a few minutes.” [Maureen Down, New York Times, Aug 09]
scientists at the Angstrom Laboratory at Uppsala University in Sweden have discovered green algae’s distinctive cellulose nanostructure can also provide an effective coating substrate for batteries. ... two advantages: lighter weight and much more environmentally friendly when battery components are recycled. [LARTA, Oct 21]
Bill Gates's SBIR. a growing number of young scientists, armed with ideas to fight infectious disease at the far edge of innovation, are now being rewarded in the search for a world-changing discovery. More than 70 grants awarded yesterday by the Bill and Melinda Gates Foundation showed a shift away from traditional hierarchies of science research, with graduates and post-doctoral researchers most likely to win support. ... initial grants of $100,000 from the Gates Foundation as part of its Grand Challenges Explorations programme, with the chance of follow-on grants of $1 million if their projects show success. [Sam Lister, The Times (London), Oct 21]
FORTUNE Small Business magazine and the Ewing Marion Kauffman Foundation announced today the 2009 list of the 50 best places in the United States to launch a business. Topping the list For metro areas with over 1 million population: Oklahoma City; Pittsburgh; Raleigh; Houston; Hartford; Washington; Charlotte; Austin; New York City; Baltimore. midsize cities:, Huntsville, AL ; Lafayette, LA ; Omaha, NE ; Clarksville, TN ; Peoria, IL; and small cities: Billings, Bismarck, Fargo, Rapid City, Sioux Falls. [Ewing Marion Kauffman Foundation, Oct 13]
in “The Nature of Technology: What It Is and How It Evolves,” W. Brian Arthur, an economist, reframes the relationship between science and technology as part of an effort to come up with a comprehensive theory of innovation. In Dr. Arthur’s view, the relationship between science and technology is more symbiotic than is generally conceded. Science and technology move forward together in a kind of co-evolution. And science does not lead. [John Markoff, New York Times, Oct 20]
Everyone talks about the need for innovation these days, but they especially talk about why businesses are so bad at it. Procter & Gamble recently reduced the washing power of Tide, labeled the new version "Basic," and trumpeted it as an innovation. [Adam Hartung, Forbes, Oct 16] Would DOD do the equivalent with some SBIR projects?
June 1896: A 32-year-old, having left his parents’ Michigan farm to become an engineer and go to work for the greatest inventor of the age — Thomas Edison — has gotten restless again. He has decided he wants to get in on the invention of the automobile, a new kind of machine most Americans have never yet heard of. He has been putting one together in the shed behind his house. ... Henry Ford, and his first automobile ride launched a career that rivaled Edison’s own. [Frederick Allen, Saturday Evening Post, Se/Oc09] When there were no government innovation programs.
“This will be a technology-led recovery,” said Edward Yardeni, an economist and investment strategist. “And the improvement we’re seeing from the technology companies suggests the recovery has legs.” [New York Times, Oct 16]
Think Hartford. Greater Hartford has scored a victory in the endless stream of best-this and best-that lists, coming in at No. 5 among large metropolitan areas in CNNMoney.com's ranking of 50 Best Places to Launch for small-business startups. The listing, led by Oklahoma City, followed by Pittsburgh, Raleigh and Houston, is based on a wide range of demographic and economic data, including the Hartford region's calling cards — wealth and education. The actual success of small firms is not among the measures. [Dan Haar, Hartford Courant, Oct 14]
Fully Disinterested? Editors of some of the world's top medical journals will soon begin to demand more stringent, uniform reporting of conflicts of interest by researchers. The requirements will go beyond existing disclosure rules at many medical journals to include items such as financial relationships involving spouses, partners or minor children. Also required will be disclosure of nonfinancial conflicts, such as religious and political affiliations. Such disclosures are used in medical journals to alert readers to potential biases in research. [David Armstrong, Wall Street Journal, Oct 14]
In a telling comparison with the pharmaceutical industry, Daniel Kammen and Gregory Nemet of UCal, Berkeley, pointed out that in the early 1980s energy companies as a whole were spending more on R&D than drug companies; by the mid 2000s pharmaceuticals were investing 10 times more than the energy industry. [Clive Cookson, Financial Times, Oct 13]
Rather than steel or concrete beams, the [Maine bridge] structure consists of 23 graceful arches of carbon- and glass-fiber fabric. These are 12-inch-diameter tubes that have been inflated, bent to the proper shape and stiffened with a plastic resin, then installed side by side and stuffed with concrete, like giant manicotti. Covered with composite decking and compacted soil, the arches support a standard gravel-and-asphalt roadway. ... Little costly F.R.P. material is used — it serves largely as a shell for the concrete, which is cheaper. The tubes help protect the concrete from de-icing chemicals, potentially reducing maintenance costs, and no internal rebar is needed. “It’s exoskeleton reinforcement,” Dr. Dagher said. [Henry Fountain, New York Times, Oct 13]
The Innovation Cure. Despite seeing its revenues fall by 23% in the last quarter of 2008 compared with the last quarter of 2007, Intel is continuing to invest heavily in innovation. Craig Barrett, the company’s former boss, insists, “You can’t save your way out of a recession; you have to invest your way out.” P&G is launching its biggest expansion in its 170 years, opening 19 new factories around the world and investing heavily in new ideas, despite disappointing recent results. IBM is holding a series of “innovation jams” designed to squeeze ideas out of its employees. [Schumpeter, The Economist, Oct 3]
Keynes’s disciples are right that their prophet’s visions go far beyond the stimulus packages with which his name is now associated. But it is much less clear how these ideas should be applied to the realities of contemporary economic policy. Beyond a broader faith in governments’ role, the question of “What would Keynes have done?” is surprisingly difficult to answer. [The Economist, Oct 3] As dozens of self-describer experts pronounce: the answer is simple just ..... blah, blah. blah. Unlike physics where a problem once solved stays solved, economics deals with adaptive players who make new rules as they go. Individuals, firms, financiers, and politicians all jockey for self-interest in ways that math modelers cannot yet capture.
Crusader for Syntactic Disambiguation Exprobrates Banks' Labored Locutions. Over the years, Ms. Maher and her group have battled police agencies, expansion planners at Heathrow Airport, and the "frequently bizarre language" of the European Union. (At issue: phrases such as "unlock clusters," "subsidiarity" and "sector-specific benchmarking.") ... Ms. Maher grew up poor and often hungry in Liverpool and didn't learn to read until she attended night school at the age of 15. ... a woman came up to her waving a letter "with minuscule print" about her mortgage and asked for help understanding it. Ms. Maher said it had so many footnotes, asterisks and crosses, "it looked like a game of snakes and ladders and you needed a magnifying glass." [Sara Schaefer Munoz, Wall Street Journal, Oct 6] Writers of bloated SBIR proposals could use some of Ms Maher's help. In general Anglo-Saxon words tell the story better than Latinate words: "prove" beats "successfully demonstrate".
Underwhelmed by Internet companies at the recent TechCrunch50 bash, one Silicon Valley pundit posted a rant with this headline: "Memo to Startups: You're Supposed to Be Changing the World, Remember?" My two cents: For world-changing potential, clean tech and biotech are the sectors to watch. [Scott Harris, San Jose Mercury News, Oct 1]
Life-sciences companies face a funding squeeze as pharmaceutical giants consolidate and financial markets cool toward biotechnology start-ups, industry leaders said yesterday. ... In the past, drug development was funded by venture capital firms and other private investors in biotech and medical technology start-ups, but such backers have become discouraged by increasingly longer development cycles and a dearth of initial public offerings during the current economic downturn, executives said. [Robert Weisman, Boston Globe, Oct 2]
Harvard professor Josh Lerner will join us to discuss his upcoming, provocatively titled book, Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed-and What to Do About It. Lerner asked: when has governmental sponsorship succeeded in boosting growth, and when has it fallen terribly short? In his presentation he will provide valuable insights into why some public initiatives work while others are hobbled by pitfalls and offer suggestions for how public ventures should be implemented in the future. A discussion of the implications and opportunities [SSTI, Oct 1]
After struggling to sell cutting-edge products to utilities, technology companies are sensing better times ahead with the influx of $4.5 billion in federal stimulus funds for so-called smart-grid projects. ... That has opened up a sizeable sales opportunity for a host of tech companies, ranging from giant Cisco Systems Inc. to closely held Tendril Networks Inc. Some tech companies are beefing up staffs to pursue smart-grid projects, while others are helping utilities apply for the grants, the first of which could be doled out as early as next month. [Rebecca Smith, Wall Street Journal, Sep 28]
InnoCentive was spun off as an independent start-up three years later. It is based on a simple idea: if a firm cannot solve a problem on its own, why not use the reach of the internet to see if someone else can come up with the answer? Companies, which InnoCentive calls “seekers”, post their challenges on the firm’s website. “Solvers”, who number almost 180,000, compete to win cash “prizes” offered by the seekers. Around 900 challenges have been posted so far by some 150 firms including big multinationals such as Procter & Gamble and Dow Chemicals. More than 400 have been solved. [The Economist, Sep 19]
The Lilly Endowment has awarded a $7 million grant to support the creation of the OrthoWorx initiative. ... based in Warsaw, will work to support the growth of the orthopedics industry through educational and community efforts in the Kosciusko County region. ... Warsaw dubs itself the "Orthopedic Manufacturing Capital of the World." The city is home to leading orthopedic-implant makers Zimmer Holdings, DePuy Orthopaedics (part of Johnson and Johnson) and Biomet, as well as dozens of supporting businesses. Life sciences and orthopedics account for about 10,000 of the more than 40,000 jobs in Kosciusko County. [Daniel Lee, Indianapolis Star, Sep 24]
Is Commerce just in time? Where will the next wave of interesting start-ups come from? For the past four decades, that answer has been a no-brainer. Past performance, however, is no guarantee of future results. Based on the competitiveness of companies playing the technology-driven innovation game, one could imagine an entirely different answer to the “next wave” question over the next half-century. The Information Technology and Innovation Foundation has released a report benchmarking innovation and competitiveness for 36 counties (pdf). While the focus of the report is EU/U.S. differences, I found two items of particular interest: first, while the United States leads the European Union in innovation-based competitiveness, it ranks sixth overall; and the U.S. ranks last in terms of its preparation to capitalize on the next wave. [Robert Wuebker, creative class blog, Sep 13]
this recession is taking a particularly heavy toll on business creation, as sources of small-business funding dry up and would-be entrepreneurs become more risk-averse. When entrepreneurs do launch businesses, they are hiring fewer employees on average. The trends threaten to damp growth in jobs and economic output for years. ... Businesses in their first 90 days of life accounted for 14% of hiring in the U.S. between 1993 and 2008, according to the Bureau of Labor Statistics. [Cari Tuna, Wall Street Journal, Sep 28]
[PNNL's Gary Yang and colleagues] have discovered that adding graphene to titanium dioxide for use as electrodes in batteries improves performance over standard titanium oxide by a factor of three. [Darren Quicj, gizmag.com, Sep 23]
The writers of the 18th century, like our own, were apt to believe that if an assertion was repeated often enough, it would come to rank as a self-evident truth. – Dorothy Marshall, Eighteenth Century England.
Buy or be bought. That appears to be the new mantra for the Massachusetts life sciences industry, where the strengthening economy and rising stock market have sparked a small wave of acquisitions. Yesterday alone, Waltham’s Inverness Medical Innovations Inc. agreed to purchase a Seattle company, while Cambridge’s Biogen Idec Inc. launched a hostile tender offer for a California company. With another biotech company, Sepracor Inc. of Marlborough, agreeing earlier this month to be sold to a Japanese pharmaceutical giant, the scramble for merger partners is on. [Robert Weisman, Boston Globe, Sep 22]
Call or write Starbucks, for example, to propose they use your patented robot barista, and you will be discouraged from submitting your proposal. If you insist on submitting anyway, you must sign an agreement that the idea belongs to them—with no compensation for you. Starbucks, like other companies with such policies, says it isn’t simply being standoffish. These firms are trying to avoid copyright infringement lawsuits, and they don’t want to hire staff to sort through proposals. But in Cincinnati Once cloaked in secrecy and suspicious of outsiders, P&G was formerly dubbed the Kremlin on the Ohio by its employees, but now “we want to be on your speed dial,” says Jeff LeRoy, external relations manager. It set up an external-ideas program in 2001: Last year P&G received 3,740 submissions, and it currently has 1,000 contracts under the program, some involving millions of dollars. [Dyan Machan, Smart Money, Mar 09]
The luster is returning to Silicon Valley's economy even while much of California is likely to stay stuck in recession through next year, according to a report released today by a California economic research team. [San Jose Mercury News, Sep 17]
According to the Fed, household net worth increased in Q2 mostly from increases in stock holdings [calculatedrisk blog, Sep 17] We should remember that valuation of wealth in stock, or home or any other marketable commodity, depends wholly on the assumption that no one except a tiny, tiny fraction tries to sell.
The good news is that the U.S. is at or near the cutting edge in most of the emerging product areas. Indeed, the new wave of high-tech devices hitting the market is the payoff from billions of dollars in taxpayer-funded research at federal and university science labs stretching back to the 1960s, when the applications were but glimmers in the eyes of futurists. Now the bad news: Unless the U.S. can magically resurrect its manufacturing base, the good-paying jobs from these breakthroughs will be offshore. [Pete Engardio, Business Week, Sep 19]
Last spring, Capital Factory, a new tech incubator launched by a team of Austin entrepreneurs, chose five startups to take part in an intensive mentoring program. ... On Wednesday, the five startups — chosen from a pool of 300 applicants — made their debut ... On the roster: Cubit Planning, which provides data services to engineering firms; Famigo, which develops mobile games that allow families to play together. SpareFoot, which offers an online marketplace for storage space; HourVille, which has created an online marketplace for services by the hour; PetsMD, a Web site with online services for pet health [Lori Hawkins, Austin American-Statesman, Sep 10]Not exactly a line-up of companies with tech ideas that could create new industries. But then, federal government programs that pretend to create new tech aren't doing much good either.
nuur writes "Researchers at the Australian National University have developed a new form of optical memory that allows random access to stored optical quantum information. Pulses of light are stored on a kind of 'optical conveyor-belt' that is controlled with a magnetic field. By manipulating the magnetic field, the conveyor-belt can be moved, allowing the recall of any part of the stored optical information. The research is published in Nature." You'll probably know after reading the abstract linked whether you'd be in the market to pay for the whole thing [slashdot.org]
The United States has lost its place as the world's most competitive economy, according to a survey released Tuesday, falling behind Switzerland mainly because of the financial crisis and accumulated fiscal deficits. The survey, which combines opinions of over 13,000 business executives with economic statistics and government regulations, put Switzerland in first place and dropped the U.S. to second place. [Eliane Engeler, AP, Sep 8]
Oregon, facing the fourth-highest unemployment rate in the nation, has stepped up its campaign to lure clean-technology companies in an effort to pull itself out of the recession. The Oregon Business Development Department's network of about 45 economic-development officials has more than doubled the time spent reaching out to clean-tech companies since 2008, said Bruce Laird, clean-tech recruitment officer in the department. [Ryan Knutson, Wall Street Journal, Aug 28]
Only on Subsidy. Spain's hopes of becoming a world leader in solar power have collapsed since the Spanish government slammed the brakes on generous subsidies. ... Factories world-wide that had ramped up production of solar-power components found that demand for solar panels was plummeting, leaving a glut in supply and pushing prices down. Job cuts followed. [Angel Gonzalez and Keith Johnson, Wall Street Journal, Sep 3] SBIR mills are looking for the same sine qua non subsidy on the pretense that they are creating innovation. Wanna buy a bridge?
Need Rare-Earths? Think Mongolia. China's moves to tighten control on the mining and export of a class of metal ores called rare earth are aimed at attracting high-tech manufacturing to Inner Mongolia, and not at dominating the market, a senior Chinese official said. ... China produces more than 90% of the world's output of the metals. .... the call for high-end manufacturers to set up shop in Inner Mongolia may raise many of the same concerns as export restrictions by signaling that China intends to keep more of its rare-earth resources at home. [Chuin-Wey Yap, Wall Street Journal, Sep 3]
An employment report from Automated Data Processing showed the private sector shed jobs in August at a faster rate than economists had been expecting, hurting investors' willingness to buy small-cap stocks -- considered the equities market's riskier investment -- ahead of the government's monthly employment report due Friday. .... the ADP report showed small and medium-size businesses cut more than twice as many jobs as large businesses, [Donna Kardos Yesalavich, Wall Street Journal, Sep 3] The convenient political myth that small business is a great job engine tells only half the story. Search the SBDC website, for example, for any recognition of the whole story. But then we don't hold lobbyists to a standard of the whole truth.
according to a study released Wednesday by Forrester Research, a marketing firm based in Cambridge, Mass., a shift has taken place. What used to be the pursuit of a few has become decidedly mainstream. We’re all gadget geeks now. ... “America is becoming a digital nation. Technology adoption continues to roll along, picking up more and more mainstream consumers every year.” [Jenna Wortham, New York Times, Sep 2]
Need an upbeat story of entrepreneuring? See Julie and Julia even though the two entrepreneurs are both cooking and writing.
The University of New Hampshire has been seeding the local networking landscape with young workers for more than 20 years through its InterOperability Laboratory, but the network equipment testing facility has also influenced the launch of a handful of New Hampshire-based technology startups. [Rodney Brown, Mass High Tech, Aug 28, 09]
Price Matters. The biofuels revolution that promised to reduce America's dependence on foreign oil is fizzling out. Two-thirds of U.S. biodiesel production capacity now sits unused, reports the National Biodiesel Board. Biodiesel, a crucial part of government efforts to develop alternative fuels for trucks and factories, has been hit hard by the recession and falling oil prices. [Ann Davis and Russell Gold, Wall Street Journal, Aug 27]
The Massachusetts Biotechnology Council issued a snapshot of the Bay State's biotech industry and estimated that local biotech companies and research institutions employed nearly 46,000 people last year. In 2001, that head-count number was just over 30,000, said the council [Chris Reidy, Boston Globe, Aug 26, 09]
A new technique makes it possible to print flexible arrays of thin inorganic light-emitting diodes for displays and lighting. The new printing process is a hybrid between the methods currently used to make inorganic and organic LEDs, and it brings some of the advantages of each, combining the flexibility, thinness and ease of manufacturing organic polymers with the brightness and long-term stability of inorganic compounds. It could be used to make high-quality flexible displays and less expensive LED lighting systems. [Katherine Boruzac, MIT Tech Review, Aug 20]
a new glue, which has the sticking power to adhere to bone, could one day help orthopedic surgeons fix difficult breaks, researchers announced today at the American Chemical Society conference ... Russell Stewart, lead researcher and biomedical engineer at the University of Utah, found his inspiration for the glue in the tiny sandcastle worm. [Lauren Gravitz, MIT Tech Review, Aug 18]
we expect smart phones, and iPhones specifically, to continue to drive the new technology secular growth cycle over the next five to seven years. Smart phones will drive new technology adoption and change user behavior around technology. Therefore, those companies that supply into smart phones are particularly interesting in this cycle. A relatively less well-known company, TriQuint Semiconductor, is a supplier to Apple's iPhone. It makes Radio Frequency semiconductors for three markets: handsets, networks and military. The percentage of revenues earned in the handset market has been increasing sequentially, from 48% of revenues five quarters ago to 65% this past quarter, driven by the growth in smart phones and 3G. [Darcy Travlos, Forbes, Aug 19, 09]
A growing body of evidence suggests that doctors at some of the nation’s top medical schools have been attaching their names and lending their reputations to scientific papers that were drafted by ghostwriters working for drug companies — articles that were carefully calibrated to help the manufacturers sell more products. ... Senator Charles E. Grassley, an Iowa Republican who has led a long-running investigation of conflicts of interest in medicine, is starting to put pressure on the National Institutes of Health to crack down on the practice. [New York Times, Aug 19]
Researchers have demonstrated the smallest laser ever, consisting of a nanoparticle just 44 nanometers across. The device is dubbed a "spaser" because it generates a form of radiation called surface plasmons. The technique allows light to be confined in very small spaces, and some physicists believe that spasers could form the basis of future optical computers just as transistors are the basis of today's electronics. [Katherine Bourzac, MIT Tech Review, Aug 17]
Nanotechnology: Coming soon to a product you use. Long the stuff of hype and occasional hysteria, nanotechnology is quietly merging into modern life, its minuscule particles infused in an array of products, ranging from stink-proof socks to life-saving cancer medications. [Boston Globe, Aug 18]
Long the stuff of hype and occasional hysteria, nanotechnology is quietly merging into modern life, its minuscule particles infused in an array of products, ranging from stink-proof socks to life-saving cancer medications. The technology today underlies some $200 billion worth of workaday items, some prescribed by doctors but most sold directly off retail shelves. From a gleam in the eye of a few far-seeing scientists, nanotech has leapt with little fanfare to shopping centers and workplaces. [Boston Globe, Aug 17]
Technology is transforming innovation at its core, allowing companies to test new ideas at speeds—and prices—that were unimaginable even a decade ago. They can stick features on Web sites and tell within hours how customers respond. They can see results from in-store promotions, or efforts to boost process productivity, almost as quickly. The result? Innovation initiatives that used to take months and megabucks to coordinate and launch can often be started in seconds for cents. .... Companies will also be willing to try new things, because the price of failure is so much lower. That will bring big changes for corporate culture—making it easier to challenge accepted wisdom, for instance, and forcing managers to give more employees a say in the innovation process. [ERIK BRYNJOLFSSON And MICHAEL SCHRAGE, Wall Street Journal, Aug 17]
A new type of nanowire electrode developed by materials science and engineering professor Yi Cui at Stanford is a step toward that goal [of litium ion batteries in electric vehicles]. ... discussed in last week's Nano Letters, can store six times as much charge as the graphite electrodes in current lithium batteries [Prachi Patel, MIT Tech Review, Aug 14]
self-healing paint coatings and polymer materials. Now researchers at the Fraunhofer Institute for Manufacturing Engineering and Automation and the University of Duisburg-Essen in Germany have come up with a metal coating that may be able to repair itself after sustaining damage. The self-healing metal can be electroplated, which opens up applications in construction, car manufacturing, and other industries that use or manufacture steel machines. [Prachi Patel, MIT Tech Review, Aug 10]
Innovation Centers are where Big Blue reaches out to affiliated tech companies to find ways that they can expand sales together. ... IBM is pushing hard to strengthen its ties to smaller companies, including software developers, systems integrators and resellers, in a down economy. The giant computer maker says it will spend about $2.5 billion this year on such activity. [Kirk Ladendorf, Austin American Statesman, Aug 17]
Quicker access. “Metcalfe’s Law,” named for electrical engineer Robert Metcalfe, says that networks grow in value exponentially with each new user. The biggest network in the world is the Internet; and thanks to the advent of cheap, Web-enabled cellphones, the Internet is about to see its “jump point”: the arrival of two billion new users from the developing world, nearly tripling its size. Now consider what may happen with faster computation speeds and global broadband wireless coverage, which means full access from anywhere on the planet, anytime. What counts here is not the sheer size of the Internet, or the richness of the experience, but the life-altering access to any information we need, delivered with unprecedented sophistication, almost instantly. [Tom Hayes and Michael Malone, WSJ, Aug 11]
Capitalism is the most open, creative, and dynamic economic system ever devised, and for over two centuries it has been successful in generating a long and sustained period of technology-driven economic growth, in the course of which a large and growing portion of humanity reached living standards beyond the wildest dreams of anyone alive even during the Industrial Revolution of the eighteenth century. But capitalism must always and everywhere be understood in a political context, because there never was or will be a politics-free system of markets and production, and politics remains central to capitalism’s development and survival. ... Baumol, Litan, and Schram, much like Reich, worry about the power of bad entrepreneurs to defend their special interests and turn their energies and ingenuity into redistribution. [Joel Mokyr, Technology and Culture, 2009] Politics also remains central to government subsidies that pretend to foster capitalism while merely shoveling money to favored constituencies. Don't we need more SBIR? Or would less actually be more if the federal agencies could thereby be induced to actually devote a tiny SBIR tax to disruptive innovation?
Researchers at the Lawrence Livermore National Laboratory have sealed silicon-nanowire transistors in a membrane similar to those that surround biological cells. These hybrid devices, which operate similarly to nerve cells, might be used to make better interfaces for prosthetic limbs and cochlear implants. They might also work well as biosensors for medical diagnostics. [Katherine Bourzac, MIT Tech Review, Aug 11]
Good news! Corporations are wringing more out of workers! Productivity rocketed at US companies in the second quarter, hitting its highest point in almost six years. [Investors Guide Daily, Aug 11]
a new microfluidics chip, which mimics the actions of one of the cell's most mysterious organs, may help change that. Researchers at Rensselaer Polytechnic Institute have created the first artificial cellular organelle and are using it to better understand how the human body makes heparin. [Lauren Gravitz, MIT Tech Review, Aug 5]
Jobless workers in Silicon Valley are giving up on the region's dominant technology industry and trying to switch to other fields, as the area's unemployment rate spikes above the national and state average. [Pui-Wing Tam, Wall Street Journal, Jul 31]
And [advocates say] small businesses create all the new jobs, .... On closer inspection, however, most of that isn't true. For starters, small businesses don't create all the new jobs. Job creation goes on at firms of all sizes, with much of it coming from relatively few companies that start small and get big rather fast. The percentage of Americans employed by small business has increased only modestly over time. [Steve Pearlstein, Wash Post, Jul 29]
An Oregon State University researcher who developed a non-toxic adhesive for kitchen cabinetry says he has found a way to use wood fibers to make car tires better for the environment. Microcrystalline cellulose -- a product that can be made easily from almost any type of plant fibers -- can partially replace silica as a reinforcing filler in the manufacture of rubber tires, says Kaichang Li, an associate professor of wood science and engineering in the OSU College of Forestry. [Dylan Rivera, The Oregonian, Jul 21]
Cisco is feeling so confident that it is even planning a new integrated hardware/software platform (Cisco Unified Computing System) that puts it in direct competition with its former strategic partners, IBM and Hewlett-Packard, for control of the multibillion dollar business of equipping the thousands of data centers run by large corporations. Meanwhile, Cisco has had no major layoffs during this economic downturn and made no salary cuts. .... Now Cisco has kicked into high gear as the world enters what Mr. Chambers calls “Internet 2.0.” This Internet 2.0, Mr. Chambers says, will be all about pervasive video and collaboration tools. It will power the social networking Web world to even greater heights. Much more importantly for our economy, it will “drive productivity by 2% to 3% per year,” he says. [Michael Malone, Wall Street Journal, Jul 25]
Silicon Valley's unemployment rate soared in June to a record 11.8 percent as the region was hit by a loss of 2,600 manufacturing jobs, at least half of them in the high tech industries that make up the region's core employment sector. [San Jose Mercury News, Jul 17]
The universities have been essential in this [nanotechnology] development process. In some cases, they make direct equity investments in start-up companies. Other times, universities grant licenses to their research and give small companies access to expensive laboratory equipment in return for user fees. And some universities have set up incubators where small companies develop technological products and processes. [James Flanigan, New York Times, Jul 16]
Boston Scientific, St. Jude Medical, Medtronic and three smaller companies are accused of offering illegal kickbacks to encourage doctors to use their medical devices for unapproved uses. All of the companies market surgical ablation devices, which use extreme microwave heat to destroy diseased tissue. [New York Times, Jul 16]
A standard bicycle pump is all that's required to power a DNA purifying kit, designed by Catherine Klapperich and her students at Boston University. The thermos-size device, dubbed SNAP (System for Nucleic Acid Preparation), extracts genetic material from blood and other bodily fluids by pumping fluid through a polymer-lined straw designed to trap DNA. A user can then pop the straw out and mail it to the nearest lab, where the preserved DNA can be analyzed [Jennifer Chu, MIT Tech Review, Jul 10, 09]
The solar-power industry, which was flying high just a year ago, spent the first half of 2009 announcing layoffs. Some big solar-power projects were shelved. ... installations in California were down 60% in the first quarter compared with the year before. One reason for the pullbacks is the plunge in natural-gas prices. [Keith Johnson, Wall Street Journal, Jul 9, 09]
Regional Technology Development Corp. of Cape Cod is teaming up with the Marine Biological Laboratory in Woods Hole to promote and create a market for the laboratory’s work. The goal is to translate scientific discoveries into business opportunities. [Boston Globe, Jul 8]
Researchers at the University of California, Berkeley, have made a new kind of solar cell by growing an array of upright nanoscale pillars on aluminum foil. They make bendable solar cells by encapsulating the entire cell inside a transparent, rubbery polymer. The design, the researchers suggest, could lead to solar cells that cost less than conventional silicon photovoltaic [Prachi Patel, MIT Tech Review, Jul 6]
Cross-national evidence also suggests that investment in science, while often successful, is not a guarantee of short-term economic growth and job creation. The U.S. experience of the past decade, in which more than three quarters of post-1995 increase in productivity growth could be traced to science investments(10), was not duplicated in all other countries. ... massive investments in university and government research institutes had little short-term impact on Japan's economic growth and "demonstrates that science, technology, and innovation policy cannot compensate for adverse framework conditions (e.g., dysfunctional financial systems)" [Julia Lane, Science, Jun 5]
General Electric will build a $100 million manufacturing technology center in Michigan that eventually will employ about 1,200 workers. [AP, Jun 27]
UC Berkeley plant scientist Chris Somerville said it is already technically feasible to convert the entire cellulose content of perennial grasses into biofuels. ... at about $10 per gallon ... and it could be eight years or so before large-scale production becomes economical. [Tom Abate, SF Chronicle, Jun 26]
Cooley Godward & Kronish's John Hession: For those biotech companies who have the cash reserves to remain independent and self sustaining, licensing deals will continue to drive growth. For the less fortunate, “exits in extremity” may be the new watchword. [Mass High Tech, Jun 26]
Biotech firms need a new burst of innovation in fields like diagnostic testing and biofuels production to adapt to a changing marketplace, a veteran biotech financier said. .... "I'm afraid that innovation is declining. We're losing it at a time when we need it the most," Stelios Papadopoulos said in the opening address of the BioEconomy Summit. Papadopoulos, chairman of the Bay Area biotech firm Exelixis and one of the industry's original investment bankers, said biotech did well in the past by developing novel medicines. [Tom Abate, SF Chronicle, Jun 26]
Total Cost Matters. A growing number of companies are moving beyond the usual considerations of labor and raw material costs in deciding where to produce goods to calculate the "total cost of ownership." That means tallying expenses associated with things such as storage and delays. By this light, the so-called China price, which always seemed to be at least 40% below U.S. costs on everything from bedroom furniture to telecom gear, isn't so low. In fact, China's once-formidable edge in manufacturing has all but disappeared in some industries, according to a new study by Southfield (Mich.) firm AlixPartners, which researches and consults on outsourcing. [Pete Engardio, Business Week, Jun 15] NB: the same total cost criterion applies to sweet technology. No amount of government sponsored "commercialization" classes will make a too-dear technology competitive. We put technologies into a capitalist, profit-centered marketplace, not in an R&D contest.
there's growing evidence that the innovation shortfall of the past decade is not only real but may also have contributed to today's financial crisis. ... With the hindsight of a decade, one thing is abundantly clear: The commercial impact of most of those [1990s] breakthroughs fell far short of expectations .... the gains in health as a whole have been disappointing, given the enormous sums invested in research ... With far fewer breakthrough products than expected, Americans had little new to sell to the rest of the world. Exports stagnated, stuck at around 11% of gross domestic product until 2006, while imports soared. That forced the U.S. to borrow trillions of dollars from overseas. [Michael Malone, Business Week, Jun 15] Borrow, spend, borrow, spend, borrow, .. crash.
On the one hand, it appears that the sky is falling yet again. Science is caught up in a competitive arms race for funding, universities are driven by internal and external forces to enter into questionable relationships with the for-profit sector, scientists’ integrity buckles under pressure and, in short, as Daniel S. Greenberg puts it, “much is amiss in the house of science.” On the other hand, despite this general mayhem, scientists as a group demonstrate altruism, work with the best intentions toward scientific progress, and maintain a collective sense of ethical responsibility. Such is the two-handed perspective that dominates Greenberg’s Science for Sale [Melissa Anderson, Issues in S&T, Winter 09]
MIT chemical-engineering professor Karen Gleason and MIT postdoc Sreeram Vaddiraju have developed a process that aims to solve the problems of high fabrication costs and instability for OLEDs while still maintaining their flexibility. Gleason's solution is a hybrid light-emitting diode, or HLED. The device would incorporate both organic and inorganic layers, combining the flexibility of an OLED with the stability of an inorganic light-emitting material. [Ann-Marie Corley, MIT Tech Review, Jun 15]
Society will never be able to control the large-scale consequences of its actions, but the realization of the imperative for sustainability positions us at a critical juncture in our evolutionary history. [Michael Crow, Issues in S&T, Winter 09]
Private, federal and state investments at the University at Albany’s College of Nanoscale Science and Engineering have topped $5 billion, the college reported today. Employment at Albany NanoTech, which is 10 years old this year, has also exceeded the 2,500-mark. That’s the number of scientists, researchers, engineers, students and faculty that now work at the 800,000-square-foot complex. With an average salary of $81,000, those numbers translate to an annual payroll of $202 million. [The Business Review (Albany), Jun 9]
researchers at MIT have integrated a collection of light sensors into polymer fibers, creating a new type of camera. Yoel Fink, a professor of materials sciences and engineering and the lead researcher on the project, notes that a standard camera requires lenses that are usually rigid and heavy. A camera made from fibers, however, could be lightweight, robust, and even foldable. Although Fink admits that the applications aren't yet well defined, he suggests that such a fiber-based camera could be used in a large foldable telescope or integrated into soldiers' uniforms. [Kate Greene, MIT Tech Review, Jun 17]
The U.S. needs a clear strategy to remain a competitive leader in industry and other sectors of an economy in crisis, business leaders told a national summit ... Although industrial policy is often equated with protectionism, Ford and other speakers said the U.S. needs to be tougher with trading partners to maintain prosperity. .... co-chair Andrew Liveris, chairman and CEO of Dow Chemical Co., called for "a modern-era industrial policy, one built for the 21st century [Rob Lever, Industry Week, Jun 16] Industrial policy usually involves subsidies to uncompetitive companies - aka corporate welfare. The SBIR world, of course, is calling for even greater subsidy than it already gets bacause any subsidy worth having is worth doubling.
IBM Research is beginning an ambitious project that it hopes will lead to the commercialization of batteries that store 10 times as much energy as today's within the next five years. The company will partner with U.S. national labs to develop a promising but controversial technology that uses energy-dense but highly flammable lithium metal to react with oxygen in the air. [Katherine Bourzac, M IT Tech Review, Jun 11]
A recent working paper published by the Federal Reserve Bank of Philadelphia finds that local human capital is the most important variable in explaining why some regions patent at higher rates than others. Authors Gerald Carlino and Robert Hunt conclude that the education level of the local workforce is directly related to its innovative activity. While the paper itself does not connect patents to economic growth, it comes on the heels of another article, published last year by Carlino and Albert Diaz, that found a connection between local patenting activity to local employment numbers. Together, the articles suggest that investments in local human capital can be an effective strategy in spurring local innovation and creating jobs. [SSTI, Jun 10] "What Explains the Quantity and Quality of Local Inventive Activity?" is available at: http://www.philadelphiafed.org/research-and-data/publications/working-papers/2009/wp09-12.pdf
a business competition that will assist Massachusetts-based startups with a combination of cash and coaching from local technology industry professionals. ... the MassChallenge Venture Funds Competition, has been funded by a mix of public and private funds. Winners will be required to establish headquarters in Massachusetts and create at least five jobs in the state. Award recipients will receive approximately $50,000 cash prizes towards launching their businesses and will be authorized for additional seed money upon securing matching funds from outside investors. [DC Denison, Boston Globe, Jun 11]
Pew researchers counted 68,200 businesses and 770,000 jobs across the United States tied to clean energy as of 2007, according to the most recent data. Texas ranked second to California in both jobs and clean-energy businesses. [Kirk Ladendorf, Austin American-Statesman, Jun 11]
Driven by advances in technology and increases in manufacturing scale and sophistication, the cost of PV has declined at a steady rate since the first solar cells were manufactured (3). For example, in 2000, solar cells typically used 15 g of expensive, highly refined silicon to generate 1 W of power. By comparison, SunPower Corporation's modules currently use only 5.6 g/W. [Richard Swanson (SunPower Corp), Science, May 15]
Half a decade after its arrival on the scene, graphene is showing staying power. Last year, researchers churned out some 1500 papers on graphene. The number of Google searches on the topic rivals the number for carbon nanotubes. [Robert Service, Science, May 15]
Now the chemical giant DuPont is reporting the development of long-lasting organic-display materials that can be printed cheaply over large areas, much like ink. DuPont says that these materials can be used to make cheaper high-end displays with existing equipment, and the company says that it is in talks with display manufacturers to bring them to market. [Katherine Bourzac, MIT Tech Review, Jun 5, 09]
In his study, Dr. Kuklo, who has not responded to repeated interview requests, reported that a bone-growth product sold by Medtronic, called Infuse, performed “strikingly” better than the traditional bone-grafting technique used to heal soldiers’ shattered shin bones. ... Medtronic financed some of Dr. Kuklo’s research and travel while he was at Walter Reed and hired him as a consultant in August 2006 .... forged the signatures of Dr. Andersen and other Army doctors on his study and never showed it to them before it was published. [Barry Meier and Duff Wilson, New York Times, Jun 6]
Millionth Word. It is not known which the millionth word will be, but those on the brink of entering the language as finalists for the one millionth English-language word include "zombie banks", or those banks that would be defunct without government intervention; the pejorative "noob", referring to a newcomer to a given task or community, as in "She's a complete noob to guerrilla gardening"; and "quendy-trendy", meaning hip or up-to-date. [Simon Winchester, telegraph.co.uk, Jun 6] What an expressive language! Use a new word today.
The silicon chip, the Internet and global trade were accelerants to the renaissance of entrepreneurial capitalism that began in the late 1970s. Around the world the story line was familiar: New products, services, distribution paths and business models would appear out of nowhere. They would damage the old and slow. The global consultant McKinsey & Co. summarized this effect in a famous 2005 paper called "Extreme Competition." This study suggests that top companies, across all industries, fall out of leadership at a rate that is three times greater than it was 30 years ago. [Rich Karlgaard, Forbes,
Jun 5 is the 50th anniversary of my graduation in Chemical Engineering from Rensselaer in the dying days of charts, graphs, and slide rules.
One Price of Innovation. "We should stop pining after the days when millions of Americans stood along assembly lines and continuously bolted, fit, soldered or clamped what went by. Those days are over. . . When the U.S. economy gets back on track, many routine jobs won't be returning--but new jobs will take their place. A quarter of all Americans now work in jobs that weren't listed in the Census Bureau's occupation codes in 1967." [Robert Reich, TPM Cafe blog May 29]
Some 60% of new cancer drugs are developed in the labs of biotech firms, many of them startups. But this has been a year of living miserably for the biotech industry, and hundreds of these cancer-focused companies are close to folding as investors flee, stock prices sink to near-nothing, and operating cash dwindles. [Catherine Arnst, Business Week.com, May 28] As many as half of publicly traded biotech companies have less than 12 months' worth of cash left, analysts say. Unless the capital markets free up soon, many won't survive. "It's more dire for many companies than we've ever seen," says Joseph Pantginis, a former drug researcher who is now a biotech analyst at Merriman Curhan Ford Group, an investment bank. But amid the carnage are plenty of bargains for patient investors—companies that have advanced successfully through some or all required clinical trials to bring new drugs to market. The key is to find biotechs with products promising enough to attract funds from larger pharmaceutical companies or medical venture capital funds. [AAron Pressman,, Business Week.com, May 27]
Schumpeter's Moment We continue to be in the middle of a frightening economic drama, one that is putting the core tenets of modern capitalism at the center of the global debate. That is an important debate to have, considering that the fundamental assumptions of modern economics -- that governments have appropriately designed counter-cyclical tools, that central banks are omnipotent, that the business cycle has been tamed and that our securities markets have finally rationalized risk -- have been shattered. Is this the moment the Austrian economist Joseph Schumpeter had envisaged when he spoke of "creative destruction"? (Source: Wall Street Journal) Click here to read the full article. [Investors Guide Weekly, May 29]
The role of economists is to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable. -- Milton Friedman 2002
Sweet Technology, Sour Price. Paul Yock, head of the bio-design laboratory at Stanford University, which develops medical devices, argues that medical-technology giants have “looked at need, but been blind to cost.” Amid growing concern about runaway health spending, he thinks the industry can find inspiration in India. .... Unlike the hidebound health systems of the rich world, he says, “in our country’s patient-centric health system you must innovate.” This does not mean adopting every fancy new piece of equipment. Over the years he has rejected surgical robots and “keyhole surgery” kit because the costs did not justify the benefits. Instead, he has looked for tools and techniques that spare resources and improve outcomes. [The Economist, Apr 18] One of the (many) problems with letting government mission agencies nakedly decide SBIR "investment" is that agencies ignore the technology's cost barrier to economic adoption.
The prototype OLED could emerge as an ultra-efficient light source for displays and general lighting, says Sebastian Reineke, who led the research at the Institute for Applied Photophysics, in Dresden, Germany. The long-term goal is to fabricate the device using conventional low-cost roll-to-roll printing. [Duncan Graham-Rowe, MIT Tech Review, May 15]
Solution Becomes Problem. The bankruptcy filing last week by Texas’ largest ethanol producer deals yet another blow to the state’s struggling biofuels sector and is part of a broader industry downturn that analysts say may claim other victims before it is done. Dallas-based White Energy said a Chapter 11 filing became necessary after high raw material costs coupled with low ethanol prices led to “minimal or nonexistent profit margins.” It also blamed significant debt payments and an inability to raise capital from frozen equity markets. [Brett Clanton, Houston Chronicle, May 12] In addition, Venture capitalists reined in spending on renewable energy to the begin the year, with funding for research and startup projects falling 63 percent through March, according to an industry report released today. [AP, May 11] Mascoma (Lebanon, NH; no SBIR) a cellulosic biofuels company, reports significant advances in its goal of simplifying the cellulosic ethanol process by skipping the use of costly enzymes, which could potentially reduce cellulosic ethanol's production costs by 20 to 30 percent. [Jennifer Chew, MIT Tech Review, May 12] But none of the process efficiency improvements can fill the hole in food production displaced for the fuel biomass.
Conserve or Attack? many start-ups are finding themselves locked in boardroom dramas as they navigate the tricky tightrope between how much to cut and how much to grow. These debates have taken on new urgency because fresh financing is hard to come by and, for some, cash is running low. .. The issue is acute in Silicon Valley, where start-ups have typically burned through savings to chase growth. Google Inc., for instance, ramped up during the dot-com bust earlier this decade and ended up a behemoth. [Pui-Wing Tam, Wall Street Journal, May 12]
With its famous brain trust, Massachusetts feels it should be the next Silicon Valley for startup tech companies. Brains, though, are only part of the equation, and perhaps not even the most important part. According to observers, Silicon Valley’s strength is the art of the deal; Boston’s strength is the art of innovation. [Dann Maurno, Mass High Tech, May 8] And an inquiring Congress were to ask what is SBIR's strength, what would the advocates answer?
Inventors Thomas A. Edison and Charles Steinmetz are [shown] in Steinmetz's Schenectady, N.Y., laboratory, in 1931. Last month, Robert Budens, president of the Patent Office Professional Association said "Innovation is the way America generally gets out of downturns." (AP)
Prizes vs. Funding. Call it crowd-sourcing; call it open innovation; call it behavioral economics and applied psychology; it's a prescription for progress that is transforming philanthropy. In fields from manned spaceflight to the genetics of aging, prizes may soon rival traditional research grants as a spur to innovation. "... Critics, though, dismiss the newest trend in prize-giving as a form of advertising that masquerades as public service -- and a clever ploy to attract top research talent at a discount. [Wall Street Journal, May 8] Prizes do reduce the chances for pork funding at specified locations.
Less Silicon, Cheaper Solar. An improved process for making solar cells could allow manufacturers to cut the amount of silicon needed in half. Since silicon can account for about three-quarters of the cost of conventional solar cells, this could significantly lower the price of solar power. The technique can reduce the amount of other materials used and improve solar-cell performance. The process uses ink-jet printing to make electrical connections within a solar cell, replacing the existing screen-printing process. .. uses an ink-jet printer built by iTi Solar, based in Boulder, CO, that was originally designed for printing electronics, such as the contacts on touch screens. [Kevin Bullis, MIT Tech Review, May 7]
Got a bright business idea? Take a number. Americans haven't stopped dreaming up newfangled gizmos or sketching engineering marvels on the back of cocktail napkins. But tight credit and business cutbacks have slowed the pace of getting the latest U.S. innovations to market. ... Venture capital investments have plummeted. Lenders aren't lining up to fund business startups. New patent applications are down at the U.S. Patent and Trademark Office, creating a budget crisis at the agency, ... So far, companies that spend the most on innovation have resisted the temptation to raid their research and development budgets. They're opting to ride out the recession with an eye to future sales, according to Booz & Co., which surveys the world's 1,000 largest, publicly traded, corporate research and development spenders. [Dec Riechmann, AP, May 4]
we all know economists were created to make weather forecasters look good - Rupert Murdoch
"If you have a 150 I.Q., sell 30 points to someone else. You need to be smart, but not a genius." So said Warren Buffett, the world’s most famous value investor, [AR Sorkin, New York Times, May 4]
The nation's biotechnology industry, which has a large hub in the Triangle, is going through a "Darwinian moment" that probably will weed out some of its weaker players. That's according to the authors of Ernst & Young's annual biotech analysis, released Tuesday. The report points to the global financial crisis as the top challenge that crimped the industry's growth last year. [Alan Wolf, Raleigh News &Observer, May 6]
It was the men and women of what Edmund Burke later called "life's little platoons" who gave Europe its energy and wealth. The big institutions -- the church and feudal monarchies -- merely cashed in. [Arthur Herman, reviewing Holland's The Forge of Christendom, May 5]
Shares of Silicon Laboratories shot up almost 15 percent Wednesday after the Austin chipmaker issued a strong outlook for the second quarter. The company eked out a small profit in a difficult first quarter but said all signs point toward stronger growth in orders for the current quarter. [Kirk Ladendorf, Austin American-Statesman, Apr 30]
Certainly from an investor's standpoint, there's perhaps no better time to be investing in startups. The entrepreneurs doing it are pretty passionate about what they do. Companies raised with scarce resources tend to be more resourceful, right? [Steve Jurvetson, VC]
according to a recent global survey of 2,700 senior executives ... 14% of respondents are planning to reduce their innovation investments in 2009. On the plus side, 58% said they would increase innovation spending this year, although that figure is down from 63% last year and 72% in the previous year. .... Among U.S. companies, 44% said they would increase their innovation spending in 2009. [Industry Week, Apr 21]
The decision to make large energy investments in hopes of realizing both immediate economic benefits and longer-term environmental dividends represents a "massive shift" in government policy, says Robert Pollin, a professor of economics at the University of Massachusetts [David Rotman, MIT Tech Review, Apr 21] Of course, people who get the federal contracts and sub-contracts think that the value of such spending is obvious. But, The concern over the stimulus bill's technology spending is not just that it offends conventional macroeconomic theory about the best way to boost the economy; it's that it might harm the very technologies it means to support. ... [MIT economist] Daron Acemoglu suggests, "when you make investments in bad projects under the name of stimulus and in the name of technological investments, you're doing damage in a number of ways. First of all, you're not helping; second, you're confusing matters; and third, you're poisoning the well for the future."
Besides, the new emphasis on energy R&D is also a stark reminder that, almost 30 years after such funding peaked in the late 1970s, there are still no good or easy answers when it comes to replacing fossil fuels. [David Rotman, MIT Tech Review, Apr 21]
It is no wonder that biotechnology companies like North Carolina. It has a high-powered university zone .... This has helped attract over 170 companies to Research Triangle Park, right in the middle of things. And the state has reached out to industry. North Carolina’s community-college system runs courses that prepare students for entry-level technician jobs. It also offers short courses in specific skills, such as micropipetting. [The Economist, Apr 16]
Advances in so-called “white LEDs” are driving the devices into the multibillion-dollar general illumination market, and a handful of New England companies are leading the way. .... According to a report released last month by market research firm Strategies Unlimited, the market for general illumination applications is expected to exceed $5 billion in 2012, with a compound growth rate of 28 percent between 2008 and 2012. [Efrain Viscarolasaga, Mass High Tech, Apr 17]
Silicon Valley's jobless rate continued to soar in March, hitting 11 percent — nearly doubling in one year [San Jose Mercury News, Apr 17]
San Diego's stem cell scientists hope they are closer to breaking ground on a new research facility now that the freeze on state bond money has thawed. The state Pooled Money Investment Board this week approved putting $43 million in an escrow account for San Diego's stem cell consortium [Teri Somers, San Diego Union Tribune, Apr 17]
Biofuel Bubble. More than 200 companies, from 12-person startups to oil giants, are developing next-generation biofuels using a bewildering array of technologies. ... Yet behind the very real innovations and investments, the brash claims and the breathless headlines, lies an inconvenient truth. Replacing petroleum with biofuels is a tough business. Even as the industry develops, many of the companies—probably most—will not survive. "We've seen a venture capital-led bubble," says Alan Shaw, CEO of Codexis, a Redwood City (Calif.) manufacturer of enzymes used to make drugs, chemicals, and biofuels. "I cannot see how the small companies can build a business and still get a return to their original investors. The numbers just don't add up." ... [The announced goal] would require not only building hundreds of fuel factories—at a cost of $500 million or more each—but also surrounding each one with thousands of acres of land planted with energy crops such as prairie grass. [John Carey, Business Week, Apr 16]
Busy as Robots. Executives at the RoboBusiness Conference & Expo said that demand for military robots, combined with the likely effects of President Obama's economic stimulus package, is helping to offset a slowdown in commercial orders and difficulties in obtaining bank financing...."We almost didn't make it to the show because we've been so busy," said Will Pong, director of robotics for Segway ... Foster-Miller Inc. in Waltham, said he was seeing "very strong" demand for his company's machines. "Every developed country with a really strong military either uses robots or sees the need to use robots," Foley said. [Hiawatha Bray, Boston Globe, Apr 17]
The state's biotechnology industry has grown significantly in recent years, though somewhat slower than hoped, according to a study released today by the Massachusetts Biotechnology Council. Massachusetts has more than 40,000 biotech jobs, according to the council's 2015 Strategic Plan, up from about 30,000 in 2002 [Boston Globe, Apr 15]
Ethanol derived from corn consumes up to three times more water than previously thought, according to a new study. ... researchers at the University of Minnesota have concluded that the amount of water used in ethanol production varies hugely from state to state (much higher west of the Missouri R) , ranging from 5 (OH) to 2,138 (CA) liters of water per liter of ethanol, depending on regional irrigation needs. [Phil McKenna, MIT Tech Review, Apr 14] .... the story of ethanol. Consumers were asked to suspend disbelief as policy makers blurred the lines between economic reality and a business model built on fantasies of a better environment and energy independence through ethanol. Notwithstanding federal subsidies and mandates that force-feed the biofuel to the driving public, ethanol is proving to be a bust. ... For all the pain ethanol has caused, it displaced a mere 3% of our oil usage last year. Even if we plowed under all other crops and dedicated the country's 300 million acres of cropland to ethanol, James Jordan and James Powell of the Polytechnic University of New York estimate we would displace just 15% of our oil demand with biofuels. [Max Schulz, Wall Street Journal, Apr 18] Idealistic programs like ethanol get going when government subsidies drive economic decisions and encourage beneficiaries to lobby Congress for handouts. The same kind of blather with idealistic theory and fairy-tale economics is used by SBIR advocates to keep a handout program going to a class of dependent beneficiaries.
In 2003, Surgenor became chief executive of Cyberkinetics Inc., helping the company raise more than $40 million, go public, and shepherd the technology he'd seen into human testing. Just last month, he finished shutting down the company, selling off the last of its assets to another local neurotechnology company for $350,000. What happened in the intervening six years offers a glimpse of how challenging it can be even for a well-funded start-up to bring a breakthrough technology to market - especially in the regulated world of medical devices. [Scott Kirsner, Boston Globe, Apr 12]
small businesses in general make 12 to 14 times the number of patents per employee as large companies. This is where innovation comes from. Over 50% of the SBIR phase II companies have a product that goes to commercialization, so how do we turn innovation into jobs? .... the great metric that says the SBIR companies do 4 times the number of jobs and grow 4 times as fast as in a comparable sample. Said Karen Mills in her confirmation hearings for SBA Administrator.
Sic Transit Gloria Silicon Graphics. Died and sold its assets for $25M. Founded 1982 by Jim Clark, public 1986, Clark left to found Netscape 1994, market cap hit $7B 1995, begins to lose money 1997. [Don Clark and Jacqueline Palank, Wall Street Journal, Apr 2]
The synergy of the new industrial era was remarkable. As factories grew, so did the demand for labor. And the new agricultural machinery that was built in factories -- such as the reaper developed by the American Cyrus McCormick -- freed countless agricultural laborers for factory work. The collapse in the price of steel -- thanks to Henry Bessemer, the Englishman whose process allowed steel to be produced by the ton -- greatly increased the demand for iron ore and coking coal. That in turn spurred demand for steel railroad tracks and rolling stock. The new railroad routes proved the perfect place to string telegraph lines, which, in turn, fostered communication that allowed the trains to run more efficiently. [John Steele Gordon, reviewing Weightman's The Industrial Revolutionaries, Wall Street Journal, Apr 11] Synergy and innovation: what SBIR should be fostering, instead of rocket plume models. But where would government find visionaries to invest small but critical amounts in ideas with great potential? SBIR's history shows little evidence in that such vision resides (or is allowed to practice) anywhere in government. And why should government be doing such investment anyway when the private market is so much better at nosing out potential? Remember that the innovators who brought us the Industrial Revolution had no government funding for R&D. Nor can government claim much credit for the transistor, the laser, the integrated circuit, the microprocessor the PC, ..... No indeed, the SBIR advocates can only play a politics game in their quest for their "fair share".
researchers have combined a nanogenerator with a solar cell to create an integrated mechanical- and solar-energy-harvesting device. This hybrid generator is the first of its kind and might be used, for instance, to power airplane sensors by capturing sunlight as well as engine vibrations. [Katherine Bourzac, MIT Tech Review, Apr 9]
Researchers at NIST have made one of the most sophisticated nanofluidics device to date. They make it using a one-step process, as opposed to by using the multilayer lithography techniques employed to fabricate integrated circuits. .... The new device, presented online in the journal Nanotechnology, is a chamber with 30 different depths. Its side profile looks like a staircase, with a depth ranging from 10 nanometers at the shallowest end to 620 nanometers at the other end. [Pachi Patel, MIT Tech Review, Apr 8]
Is It Because They're Smarter, or Cheaper? Immigrants like Mr. Mavinkurve are the lifeblood of Google and Silicon Valley, where half the engineers were born overseas, up from 10 percent in 1970. Google and other big companies say the Chinese, Indian, Russian and other immigrant technologists have transformed the industry, creating wealth and jobs. ... “There are probably two billion people in the world who would like to live in California and work, but not everyone in the world can live here,” said Kim Berry, an engineer who operates a nonprofit advocacy group for American-born technologists. “There are plenty of Americans to do these jobs.” [Matt Richtel, New York Times, Apr 12] If all workers are equal, then natives are enough. And since politicians put a big discount on foreigners, especially when talking to unemployed voters, the burden of proof falls on the companies to establish the great technical advantage of the foreigner. Tribes care for their own, almost no matter how inferior.
In a major blow to Applied Materials, [world's biggest manufacturer of equipment for making semiconductors] has disclosed that the $1.9 billion solar panel deal [which analysts speculated was for a solar-manufacturing project to be built in Suzhou, China, by Best Solar] it announced early last year — believed to be one of the biggest such agreements ever signed — has been trimmed back to just $250 million because of the soured economy. [Steve Johnson, San Jose Mercury News, Apr 7]
It's hard for anyone who grows up in an industry to see fundamental problems in its culture. [Steve Pearlstein, Washington Post, Apr 8] Although Pearlstein was talking about Wall Street, the SBIR re-authorization debate has the same hallmarks. People getting an advantage don't want to admit that the ultimate customers are getting a bad deal. BTW: in SBIR, who do you think is the customer?
A new catalyst based on iron works as well as platinum-based catalysts for accelerating the chemical reactions inside hydrogen fuel cells. The finding could help make fuel cells for electric cars cheaper and more practical. ... researchers at the Institut National de la Recherche Scientifique (INRS) in Quebec have dramatically increased the performance of this type of iron-based catalyst. Their material produces 99 amps per cubic centimeter at 0.8 volts, a key measurement of catalytic activity. That is 35 times better than the best nonprecious metal catalyst so far. [Kevin Bullis, MIT Tech Review, Apr 3]
Researchers at the University of Illinois at Urbana-Champaign have synthesized DNA to detect trace amounts of lead, mercury, arsenic and other contaminants in water. The DNA sensors can be produced in the form of sophisticated testing instruments suitable for metropolitan water districts or in the form of strips - like a home pregnancy test - for households and other direct-source water users. [Lee Bruno, LARTA, Apr 2]
in a Report in the 13 Mar 2009 Science, Ghosh and Urban describe the development of a new polyurethane material that can repair itself simply upon exposure to ultraviolet light and could thus be useful for scratch-resistance coatings for objects from cars to furniture. The new material is a network consisting of polyurethane and compounds called oxetane-substituted chitosan precursors. [AAAS, Apr 2]
Ewing Marion Kauffman. In 1950, he launched a drug company in the basement of his Kansas City home. Forty years later, when he sold the business to Merrell Dow, it had become a diversified health-care company with nearly $1 billion in annual sales and more than 3,000 employees.
Wary of emerging from the recession with obsolete products, big U.S. companies spent nearly as much on research and development in the dismal last quarter of 2008 as they did a year earlier. [Wall Street Journal, Apr 6]
Speculation by Extrapolation. With their jobs less secure, their houses worth less and their stock-market portfolios shrunken, Americans are saving more now. But will they still be thrifty when the recession ends? No one will know for sure for years, but there's good reason to believe Americans will be saving more in the next decade than they did in the last one. [Kelly Evans, Wall Street Journal, Apr 6]
In May, small companies focusing on security products will have the chance to show off their technologies for the chance to earn investment money and partnerships with a more established firm working with the Department of Homeland Security. It's part of the American Security Challenge, which encourages universities, entrepreneurs and research labs to demonstrate their technologies. The inaugural challenge held last year awarded $100,000 to a company called TeleContinuity (Germantown, MD; no SBIR) that backs up communication networks in case of a terrorist attack. .... Chart Venture Partners of New York has agreed to pump between $200,000 and $2.5 million into a promising company. And another company will win the chance to team up with Alion Science and Technology, a McLean defense contractor. ... submit a summary of their product or company by March 31. [Kim Hart, Washington Post, Mar 23]
The American Medical Association said it has asked an oversight committee to investigate charges that the top editors of its well-known medical journal threatened a researcher who publicly faulted a study in the publication. ... A Tennessee researcher, Jonathan Leo, says top JAMA editors threatened him and his dean after he published an online letter earlier this month in the British journal BMJ that criticized how results were reported in a JAMA study last year that looked at the use of the antidepressant Lexapro in stroke victims. Dr. Leo also said JAMA didn't disclose the author of the study's financial relationship with Lexapro's maker, Forest Laboratories Inc. [David Armstrong, Wall Street Journal, Mar 28]
There are “only” four main problems that need solving, according to Khosla — oil, coal, cement and steel. Between them they are responsible for 75% of greenhouse-gas emissions. ... For technology to save the planet it must reach what he calls the “Chindia” price — a level at which a new product can compete fairly with existing products and can be adopted without adding extra cost by India and China, two fast-growing countries whose energy needs rival those of America. No matter what the environmental costs, Indians won’t buy a $22,000 Prius hybrid electric car when Tata makes the Nano for $2,000. “Where is the electricity for those cars going to come from? Coal. Do we want coal-powered cars?” said Khosla. [Dominic Rushe, The Sunday Times, Mar 29]
the Nasdaq Composite Index burst into positive territory for 2009 ... The technology and consumer stocks that make up the bulk of the Nasdaq are thought to be "early cycle" stocks because they react more quickly to changes in the economy. [Rob Curran, Wall Street Journal, Mar 27]
MIT has made its scholarly articles available to the public on the Internet for free, according to the school. Under the new policy, faculty authors give MIT nonexclusive permission to publish their journal articles using DSpace, an open-source software platform developed by the MIT Libraries and Hewlett-Packard Co. MIT can publish the material for any reason other than to make a profit. Authors may opt out on a paper-by-paper basis. [Mass High Tech, Mar 25]
An international team of scientists in Europe has created a silicon chip designed to function like a human brain. With 200,000 neurons linked up by 50 million synaptic connections, the chip is able to mimic the brain's ability to learn more closely than any other machine. [Duncan Graham-Rowe, MIT Tech Review, Mar 25]
Austin [despite its slipping Dellionaires] was the nation’s second-fastest-growing metropolitan area between 2007 and 2008, according to new data from the U.S. Census Bureau. ... second only to Raleigh-Cary, NC [Austin Business Journal, Mar 19]
Scientists excited by prospect of stimulus spending. In a down economy, science is up. E-mails ping-pong back and forth late at night. Scientists click and re-click on websites to check for the latest updates on research grants. ... a frenzy for "lab-ready" science, with a $21.5 billion investment in [R&D] [Boston Globe, Mar 23]
researchers at Stanford University and Samsung have developed a technique that allows them to precisely position organic microwires on a substrate and build complex circuits with relative ease. The new technique involves putting microwires in a liquid solution and filtering them through paper to form the circuit's transistors. [Kate Greene, MIT Tech Review, Mar 17]
The more important reason that it is difficult to guess where the economy is headed is that the decision will be more about politics than about the usual economic indicators. Power has moved from Wall Street to Washington. It is in the nation’s capital that plans to save the housing market are being considered [Irwin Stelzer, The Sunday Times, Mar 15]
Cells coated with sticky bits of DNA can self-assemble into functional three-dimensional microstructures. This bottom-up approach to tissue engineering, developed by scientists at Lawrence Berkeley National Laboratory and the University of California, Berkeley, provides a new solution to one of field's biggest problems: the creation of multicellular tissues with defined structures. Unlike top-down methods, in which scientists build cell structures on scaffolds, the new technique allows tissue engineers to dictate the precise geometric interactions of individual cells. [Jocelyn Rice, MIT Tech Review, Mar 11, 09]
What Do Laws Mean? In answer to the screaming (whineing?) about the Stimulus Bill (ARRA) exempting NIH from SBIR for the incremental $7.4B, two SB Senators wrote a letter saying that NIH was responsible for funding SBIR at 2.5% of its extra-mural R&D. In general, if a law recognizes and conflicts with a previous law, the new law governs on the principle that Congress knows what it is doing.
In what may be among the longest-running and widest-ranging cases of academic fraud, one of the most prolific researchers in anesthesiology has admitted that he fabricated much of the data underlying his research, said a spokeswoman for the hospital where he works. T.. Dr. Scott S. Reuben, an anesthesiologist in Springfield, MA, never conducted the clinical trials that he wrote about in 21 journal articles dating from at least 1996, said Jane Albert, a spokeswoman for Baystate Health. ... The drug giant Pfizer underwrote much of Dr. Reuben’s research from 2002 to 2007. Many of his trials found that Celebrex and Lyrica, Pfizer drugs, were effective against postoperative pain. [Gardiner Harris, New York Times, Mar 11]
A sign of the times: investors are losing patience with biotech start-ups and want to cash out. Faced with a long and arduous regulatory process, medical device and biotech start-ups always needed lots of capital. But as the recession wears on, VCs are limiting new investments and concentrating on their existing portfolios. [Thomas Lee, Minneapolis Star, Mar 9]
Biotech venture capitalists have generated some of their best investment returns in recent years by selling start-ups to Merck & Co. Inc. Now, some fear that Merck’s planned purchase of Schering-Plough Corp. will distract it from the smaller acquisitions that have fueled VC returns. .... Biotech concerns that survive this period could be in the driver’s seat in a couple of years as these drug titans strive to build from a larger base and compensate for patent expirations. [Brian Gormley, Wall Street Journal, Mar 10]
China takes charge. Industry sources believe that with China dramatically cutting its annual rare earth export quotas, the time may be rapidly approaching when it will be impossible for any company to produce a wind turbine or hybrid electric car outside the communist country. After a long, relentless campaign of price wars and export quota reductions, more than 95 per cent of the global supply of rare earth metals — a group of 17 “lanthanide” elements employed in hundreds of technologies ranging from mobile phones and BlackBerrys to lasers and aviation — is produced by China. [The Times (London), Mar 9] Restricting the supply of any needed commodity charges up capitalism's incentive for users to find a substitute.
As [physicist] Dr. Derman put it in his book “My Life as a Quant: Reflections on Physics and Finance,” “In physics there may one day be a Theory of Everything; in finance and the social sciences, you’re lucky if there is a useable theory of anything.” [Dennis Overbye, New York Times, Mar 10]
On Wisconsin. Calling all entrepreneurs or entrepreneurs-in-the-making! If you have a dream of starting a business someday, especially if it is a potentially high-growth business, new resources are coming on stream that will help you realize your goal. BizStarts Milwaukee, a group I helped found and lead, is launching three initiatives that will offer tools and support to prepare you for pitching to investors about your venture. They are BizStarts Connect, BizStarts Learn and BizStarts Venture Track. [Milwaukee Journal Sentinel, Mar 8]
Seeks Perspective, too. A taste for historic fiction. >ceo watch: what they're reading: Dave King, CEO of medical testing leader LabCorp, favors fiction but recently made an exception for a book with powerful North Carolina connections. ... seeks compelling stories, well-written and without wasted words. He found that in Raleigh lawyer Anna Hayes' "Without Precedent: The Life of Susie Marshall Sharp." In 1974, Sharp became chief justice of the state's Supreme Court, the nation's first woman to achieve that rank in any state. [Raleigh News & Observer, Mar 10]
for entrepreneurs, optimism dies hard. Perhaps that's why – despite a deep recession – 36 percent of the county's small businesses forecast profits to increase this year. True, that's down from 51 percent who expected higher profits it 2008. [San Diego Union Tribune, Mar 6]
Narasimharao Kondamudi, Susanta Mohapatra and Manoranjan Misra of the University of Nevada at Reno have found that coffee grounds can yield 10-15% of biodiesel by weight relatively easily. And when burned in an engine the fuel does not have an offensive smell—just a whiff of coffee. [The Economist, Mar 5, 09]
Researchers at Sandia National Laboratories, in Livermore, CA, have created the first carbon-nanotube devices that can detect the entire visible spectrum of light. [Katherine Bourzac, MIT Tech Review, Mar 6]
Efforts to support new business creation are underway in Rhode Island, where 10.3 percent of residents were unemployed in January. The Rhode Island Economic Development Corporation (RIEDC) and Brown University announced plans to open a Center for Innovation and Entrepreneurship in the spring, leveraging the assets of the state's institutions of higher education, hospitals and the private sector. [SSTI, Mar 5]
Liquid Battery. The battery is unlike any other. The electrodes are molten metals, and the electrolyte that conducts current between them is a molten salt. This results in an unusually resilient device that can quickly absorb large amounts of electricity. The electrodes can operate at electrical currents "tens of times higher than any [battery] that's ever been measured," says Donald Sadoway, a materials chemistry professor at MIT and one of the battery's inventors. What's more, the materials are cheap, and the design allows for simple manufacturing. [Kevin Bullis, MIT Tech Review, Mar 5]
innovation, like “change,” has no inherent value. It can be bad (the “liar” loans are a good example) as well as good. [J Stiglitz, Vanity Fair, Jan 09]
Innovation may fuel economic recovery When the economy finally snaps back, technology is expected be the catalyst that pulls Massachusetts out of its doldrums, just as it has done in the past. It may not be computers or the Internet this time, but according to analysts, entrepreneurs are likely to ride to the rescue in fields like cellphones, medical gear, and the batteries that power the cars of the future. ... and A new public-private effort, the Information Technology Collaborative, is funding a $150,000 study on the economic impact of technology, and the Boston History and Innovation Collaborative recently brainstormed about branding initiatives. [Boston Globe, Mar 9]
Researchers have discovered a way to grow tiny micrometer-scale tubes from materials that act as catalysts and gas sensors. By making networks of these tubes, the researchers say that they could create compact lab-on-a-chip devices in which the channels themselves are made of the catalyst or sensing material. ... Lee Cronin, a professor of chemistry at the University of Glasgow, U.K., who led the work. ... In a paper published in the journal Nature Chemistry, Cronin and his colleagues report that they can control the diameters of the tubes and the speed with which they grow. What is more, by using simple tricks, they can control the tubes' direction of growth and can merge two tubes together to make different structures. [Pachi Patel-Predd, MIT Tech Review, Mar 3]
Worldwide PC shipments are expected to plunge this year to 257 million units, a drop of 11.9 percent - the biggest ever in the industry, according to a new report. Mobile phone sales are also declining. [Deborah Gage, SF Chronicle, Mar 3]
Avouris's team found that when an electrical current is applied to a nanotube transistor, some atomic vibrations can produce heat of up to 1,000 °C, while other vibrations produce a relatively cool temperature of 400 °C. This is contrary to the behavior of most materials, which maintain a relatively uniform heat. .... understanding how nanotubes heat up when an electric current is passed through them has been a roadblock to building reliable nanotube circuits. [Kate Greene, MIT Tech Review, Mar 2]
It Has to Do Something. the new standard imposed [by the patent office]— that the invention must involve a machine or a physical transformation — threatens to put the brakes on the busiest area of patent application and analysis. Of the 13,779 "process" patents sought in 2008, just 1,643 were granted. [Carol Williams, LA Times, Mar 2]
When it comes to predicting the market's future behavior, it is said that there are two types of people -- those who don't know, and those who don't know they don't know. [Bill Dix, Raleigh News & Observer, Mar 1]
A decade ago, it would have been difficult to staff and run a start-up drug development company in downtown Milwaukee - and local academic institutions generally didn't have the science or the will to transfer it to commercial ventures. But there's been a sea change here, and Lawton and his partners at Promentis Pharmaceuticals Inc. are in the thick of it. They're among a small but growing number of people who are launching new firms focused on bringing drugs to market. In the process, they're giving the area's manufacturing-heavy economy a shot in the arm with technology-driven enterprise. So far, Milwaukee and Wisconsin remain a speck on the global drug development scene. [Milwaukee Journal Sentinel, Mar 1]
researchers including Anastasios John Hart, assistant professor of mechanical engineering at the University of Michigan, are honing techniques for growing carefully structured forests of high-quality carbon nanotubes. Hart made these images with a scanning electron microscope; all show vertically grown nanotubes. [Katherine Bourzac, MIT Tech Review, M/A09]
Late this year or early next, Intel plans to introduce a new line of chips that shrinks the components even smaller. ... Intel worked out a manufacturing strategy, and last year the company began shipping chips made with the new metal gates and HfO2 insulator. At the time, Gordon Moore, co-founder of Intel and eponymous drafter of the law, called the switch "the biggest change in transistor technology since … the late 1960s."
New products find markets regardless of circumstance. By 1937, more than 40 percent of DuPont’s revenue came from products that did not exist before the start of the decade. [R Cyran and R Beales, New York Times, Feb 26]
The competitive edge of the US economy has eroded sharply over the last decade, according to a new study by a nonpartisan research group. ... the Information Technology and Innovation Foundation found that the United States ranked sixth among 40 countries and regions, based on 16 indicators of innovation and competitiveness. They included venture capital investment, scientific researchers, spending on research and educational achievement. But the American economy placed last in terms of progress made over the last decade. ... The study’s specific recommendations include federal incentives for American companies to innovate at home, ranging from research tax incentives to work force development tax credits. Public investments and regulatory incentives can accelerate the use of information technology in health care, energy systems, transportation, government and education. [Steve Lohr, New York Times, Feb 25]
Will Intel Be the Last Man Standing? For any company trying to do business in 2009, it must feel like they’re standing on a gravel-covered slope, where any movement sends the very ground they’re standing on rolling even further downhill. It’s not a good feeling. In the CPU and GPU markets, that hill is crumbling fast and, there’s a possibility that, when all the gravel has rolled away, only Intel will be left standing. If you understand the market and what AMD, Nvidia and Intel have in the pipeline, then you know this isn’t heresy. [Lloyd Case, Extreme Tech, Feb 24]
Alexander Fleming was an accomplished biologist well before his famous discovery of penicillin, and his name first appeared in The New York Times on May 18, 1922, seven years before any news of the drug. Fleming had discovered that human tears have an antibacterial effect, produced by a substance called lysozyme. Scientists now know that lysozyme is an enzyme, N-acetylmuramide glycanhydrolase, that destroys the cell walls of certain types of bacteria. The Times article led with a literary allusion that might seem unlikely for a science reporter today: “Tennyson, it appears, made a mistake in calling tears ‘idle.’” [Nicholas Bakalar, New York Times, Feb 24]
A giant flower beetle with implanted electrodes and a radio receiver on its back can be wirelessly controlled, according to research presented this week. Scientists at the University of California developed a tiny rig that receives control signals from a nearby computer. Electrical signals delivered via the electrodes command the insect to take off, turn left or right, or hover in midflight. The research, funded by DARPA. [MIT Tech Review, Jan 30]
a Light-Guide Solar Optic (LSO)--is a new type of [acrylic] solar concentrator that could significantly lower the cost of generating electricity from the sun. Unlike existing designs, there's no need for mirrors, complex optics, or chemicals to trap and manipulate the light. "It's pure geometric optics," says Morgan, director of business development at Toronto-based Morgan Solar. [Tyler Hamilton, MIT Tech Review, Feb 20]
dozens of corporate professionals taking new ideas and dreams of entrepreneurship to regional technology incubators, which are seeing an explosion in demand. ... Incubator managers in the life sciences say large pharmaceutical and biotech companies are backing away from heavily specialized research. This allows “the little guys” to create boutique research startups. It also allows contract researchers to fill in those gaps cheaper and more efficiently, said Kevin O’Sullivan, president and CEO of the nonprofit incubator Massachusetts Biomedical Initiatives, based in Worcester. Last year, 81 qualified prospects sought to lease space at MBI [Marc Songini, Mass High Tech, Feb 20]
researchers at Harvard University have developed a simple way to [retrain the body's own defenders--the cells of the immune system--to recognize and destroy tumors inside the body]: a polymer implant attracts and trains immune-system cells to go after cancer. [Katherine Bourzac, MIT Tech Review, Jan 28]
Applied Materials [the biggest seller of tools for making chips] predicted worsening conditions for semiconductor makers and their suppliers, including a 50% drop this year in spending on equipment for turning silicon wafers into chips. [Don Clark, Wall Street Journal, Feb 11] Meanwhile, Intel said it will spend $7 billion to upgrade technology at U.S. factories.
The Nightly Business Report and the Wharton school of business at the University of Pennsylvania complied the top 30 innovations over the past 30 years. (Sorry, the Post-It note, Spam, and honey crisp apple didn’t make the cut.) 30. Anti retroviral treatment for AIDS; SRAM flash memory; Stents; ATMs; Bar codes and scanners; Biofuels Gentically modified plants; RFID; Digital photography/videography; Graphic user interface Social networking via Internet; Large scale wind turbines; Photovoltaic solar energy; Microfinance; Media file compression; Online commerce/retail/auction; GPS sytems; Liquid crystal displays; Light emitting diodes; Open source software and services (Linux, Wikipedia); Non-invasive laser/robotic surgery; Office software (spreadsheets, word proccessing); Fiber optics; Microproccessors; Magnetic resonance imaging (MRIs); DNA testing and sequencing (human genome mapping); E-mail; Mobile cell phones; PC/laptop computers; 1. Internet [Thomas Lee, Minneapolis Star Tribune, Feb 16] A question for the SBIR advocates; can any SBIR project claim an enabling contribution to any of these innovations?
Incision, Heal Thyself. in the Wellman Center for Photomedicine at Massachusetts General Hospital, Irene Kochevar and Robert Redmond have developed a method that has the potential to replace the surgeon's needle and thread. Using surgical lasers and a light-activated dye, the researchers are prompting tissue to heal itself. [Lauren Gravitz, MIT Tech Review, Feb 11]
The drastic drop in consumer demand for electronics has had a crushing effect on the semiconductor industry, and local chip equipment manufacturers are paying the price. Over the past four months, the region’s well-known makers of equipment used in the manufacture of semiconductors have released some shocking numbers. [Mass High Tech, Feb 13]
Amid a global credit crisis, roughly 75 percent of the 400 US public biotech companies have one year of cash or less, according Burrill & Co, a specialist life science bank. ... opportunities abound for companies looking to acquire cheap assets. [Boston Globe, Feb 13]
Confidence among the state's high-tech executives has fallen to its lowest point since 1991, the Massachusetts High Technology Council said. [Boston Globe, Feb 12]
The deepening recession is speeding up the shakeout in Silicon Valley, forcing droves of start-ups to shut down or sell themselves at fire-sale prices. .... recalling the dot-com bust earlier this decade .... Since mid-January, his firm has shut down an average of three start-ups a week, up from just one or two closures a month in September, says one wind-down firm. ... Overall, 15 U.S. private companies backed by venture capital were sold in January for an average price of $5.7 million. That's down sharply from the average price of $44.2 million that 26 venture-backed U.S. companies fetched in January 2008, according to research firm 451 Group. [P-W Tam and B Worthen, Wall Street Journal, Feb 12]
Science Not Enough. “The ethanol industry is on its back despite the billions of dollars they have gotten in taxpayer assistance, and a guaranteed market,” said Amy Myers Jaffe, an energy analyst at Rice University. ... The law came at a time when the country’s thirst for gasoline seemed unquenchable, and oil prices seemed only to go up. ... Producing the advanced fuels entails breaking down a tough material, cellulose, that is abundant in corn cobs, wood chips and other biological waste, then converting it to liquid fuel. While scientists have proven it can be done, the cost is still high, and little if any cellulosic ethanol is being produced at commercial scale. [Clifford Krauss, New York Times, Feb 12] Political extrapolation and mandates are blunt tools that often ignore basic economics.
All 15 new members [including Carver Mead and Gordon Moore] of the National Inventors Hall of Fame [Akron, OH] .. are connected in some way to products based on the development 50 years ago of electronic circuits built on small silicon wafers, leading to many of the things modern society depends on daily ... ceremony is planned for May 2 at the Computer History Museum in Mountain View, CA [M Kropko, AP, Feb 11]
Ready to Buy. Cisco Systems sold $4 billion in bonds to bolster its war chest for acquisitions, the latest company to take advantage of healing credit markets and falling interest rates. .... follows a string of successful efforts just in the past five weeks to tap the market for corporate debt. [B Worthen and K Geressy, Wall Street Journal, Feb 10]
Invent or Discover? Did you know that 365 -- the number of days in a year -- is equal to 10 times 10, plus 11 times 11, plus 12 times 12? ... The author acknowledges that some readers will find his inconclusive conclusion to be unsatisfying. I didn't. Sometimes the adventure, the intellectual ride, is more important than the final destination. [Marc Kaufman, reviewing Livio's Is God a Mathematician?, Washington Post, Feb 8]
Then there are extraordinary geniuses (Mark Kac, a mathematician, called them “magicians”) whose insights are so astonishing and run so counter to received wisdom that it is hard to imagine anyone else devising them. Einstein was one such genius. Paul Dirac, whose equations predicted the existence of antimatter and who died in 1984, was another. He was quite probably the best British theoretical physicist since Isaac Newton. [The Economist, reviewing The Strangest Man: The Hidden Life of Paul Dirac, Quantum Genius, by Graham Farmelo, Jan 24]
supply-side capitalism is really just a simple and benign idea: Only suppliers can supply us with goods and services; the demand side can't will a product or service into existence, no matter how hard it tries. Society therefore advances economically when it reduces tax and regulatory barriers to the creation of goods and services. [Rich Karlgaard, Forbes, Feb 16] A nice sounding self-serving idea by and for the moneyed class. But what tax barrier impedes innovation? A high capital gains tax? How, then, did we do so well in the 1950s and 1960s? Is not the smell of demand still a strong incentive to invent a better mousetrap? And of course, Karlgaard supports his employer's devotion to a flat tax.
Huddling for Warmth. Business leaders [at Davos], stunned by their loss of public trust and fearful of a further backlash, vowed at the weekend to join forces more often in order to share the burden of tackling challenges from shrinking demand to climate change. ... but struggled to agree on a single answer to the crisis [A Edgecliff-Johnson, Financial Times, Feb 1]
Optimal Technologies (Canadian), which moved its headquarters to Raleigh NC just more than a year ago promising 325 jobs, is now down to about two dozen people as it attempts to weather the recession with dwindling funds. .... has suspended development of new products [Raleigh News & Observer, Feb 4, 09]
Lithium Batteries Need ... Lithium. Bolivia will not easily surrender its massive reserve of lithium, the mineral needed to power electric vehicles. ... almost half of the world’s lithium is found here in Bolivia ... For now, the government talks of closely controlling the lithium and keeping foreigners at bay. Adding to the pressure, indigenous groups here in the remote salt desert where the mineral lies are pushing for a share in the eventual bounty. [Simon Romero, New York Times, Feb 3] Capitalism has a classic response to supply restrictions - find an alternative supply or a substitute material.
Fleeting Economics. Renew Energy LLC, operator of a year-old ethanol plant in Jefferson IN, sought protection from creditors in U.S. Bankruptcy Court [Indianapolis Star, Jan 31]
The new catalyst [for ethanol fuel cells] , developed by researchers at Brookhaven National Laboratory, breaks the carbon bonds without high voltages, efficiently releasing enough electrons to produce electrical currents 100 times higher than those produced with other catalysts. The next step is to incorporate the catalyst into a fuel cell, so that its performance can be compared with those of other catalysts in fuel cells, says Brian Pivovar, a scientist at the National Renewable Energy Laboratory, in Golden, CO, who was not involved in the research. [Kevin Bullis, MIT Tech Review, Feb 2]
What are Americans still buying? Big Macs, Campbell’s soup, Hershey’s chocolate and Spam — the four food groups of the apocalypse. [Frank Rich, New York Times, Feb 1]
researchers at Intel, RTI International of North Carolina, and Arizona State University have shown that it's possible to build an efficient microrefrigerator that can target hot spots on chips, saving power and space, and more effectively cooling the entire system. Their work also demonstrates, for the first time, that it is possible to integrate thermoelectric material into chip packaging, making the technology more practical than ever before. A paper detailing the research was just published in Nature Nanotechnology. [Kate Greene, MIT Tech Review, Jan 26]
IBM reported a 12% profit gain ... bucking the trend of steep declines for many technology companies amid the economic downturn and surprising Wall Street. The company is seen as a bellwether of global technology spending among corporations. Yet its strong performance in the fourth quarter, analysts say, mainly points to the success of its strategy in recent years of tilting toward higher-profit software and services and reducing its reliance on the computer hardware business, which suffers more in down economic cycles. (Source: New York Times)
Texas Instruments said it will cut its work force by 12%, or 3,400 employees, as the big chip maker reacts to economic conditions that it says are getting worse. [Wall Street Journal, Jan 27]
Distance Learning. MIT's Sloan School of Management announced the global launch of a new website, MIT Sloan Teaching Innovation Resources (MSTIR), offering a collection of creative teaching materials such as case studies and videos that were developed by MIT faculty and students. [Boston Globe, Jan 27]
In spite of the string of bad news, some forecasters still expect global IT spending to grow this year, at least when you allow for currency fluctuations. ... last time around [Y2K] the IT industry was not the victim of an economic crisis, but its cause, says Graham Vickery, author of the OECD report. For years companies had spent far too much on technology, buying more e-commerce software than they could ever hope to use, for example. [The Economist, Jan 17]
Pain in Paradise. The Silicon Valley region shed 6,100 jobs in December and the unemployment rate jumped to 7.8 percent — the highest in six years [MercuryNews.com. Jan 23]
And since fewer MSFT workers means fewer $5 lattes, Starbucks layoffs will include possibly as many as a third of its headquarters employees as well as some district managers and field employees, but no baristas. [Melissa Allison, Seattle Times, Jan 24]
At last week's CES show, a Super Session called "Big Thinkers and Disruptive Technologies." 1. Instant-On. flash memory become the storage medium of all things mobile, instant-boot and instant-on access. Harari suggested that instant-on would be disruptive, changing the way people will work with a multitude of digital devices; 2. pervasive connectivity. >simple for people to share pictures and new digital media, as well as data; 3. Targeted advertising. they will find you by your tastes; 4. Telepresence. video networking will extend down to consumers; 5. Cloud-based DRM.
Researchers at GE have come up with a way to treat metals so that they repel water. The extreme water-repelling property, called superhydrophobicity, means that water forms drops on the surface instead of spreading and sticking to it. ... Many other superhydrophobic materials have been demonstrated, but most have used some kind of plastic. Superhydrophobic metals open up many new applications, says Jeffrey Youngblood, a professor of materials engineering at Purdue University. [Pachi Patel-Predd, MIT Tech Review, Oct 15, 08]
A new 700,000 square-foot research center in Boston's Longwood Medical Area is nearly fully leased [91%], the center's owner said. [Boston Globe, Jan 21] Meanwhile, The first building in the Purdue Research Park at Ameriplex opened with lofty ambitions, but just one tenant. FlamencoNets, a data network company that provides private Internet service, will bring five employees [Indianapolis Star, Jan 22]
Millions of patients who take the blood-thinning drug Warfarin could soon use a home testing kit to measure the thickness of their own blood. ... MicroVisk (UK) achieves the same result using a pair of vibrating cantilevers, which are immersed in a blood sample and vibrated quickly. [Duncan Graham-Rowe, MIT Tech Review, Nov 11]
demonstrated leadership in the area of innovation signals to competitors and customers alike that your company possesses the right stuff. The trouble is that measuring innovation is not easy. Which doesn’t mean people aren’t trying. McKinsey Quarterly recently reported results of a global survey that it says reveals the companies getting the highest returns from innovation. Among the interesting findings are: only 16 percent of the survey respondents say their companies don’t use metrics to assess innovation; and 45 percent don’t track the relationship between spending on innovation and shareholder value. [Lee Bruno, LARTA, Dec 08]
We Don't Do Drugs Any More. experts and lawmakers are growing more and more concerned that the nation is far too reliant on medicine from abroad, and they are calling for a law that would require that certain drugs be made or stockpiled in the US ... The critical ingredients for most antibiotics are now made almost exclusively in China and India. ... Half of all Americans take a prescription medicine every day. ... “If China ever got very upset with President Obama, it could be a big problem.” [Gardner Harris, New York Times, Jan 20]
Cataracts are the single biggest cause of blindness and are responsible for almost half of all cases worldwide. A new laser probe, originally developed for the U.S. space program, has been shown to detect the condition earlier than is otherwise possible. Its developers say that the technique can tell that a cataract is forming even when an eye looks perfectly clear. [Duncan Graham-Rowe, MIT Tech Review, Jan 13]
Silicon solar cells reflect about a third of the light that they could potentially convert into electricity. A new nanostructured coating developed by researchers at Rennselaer Polytechnic Institute (RPI), in Troy, NY, cuts these reflections to only 4%. Applied-physics professor Shawn-Yu Lin and his colleagues calculate that the coating could boost a silicon solar cell's efficiency to convert light into electricity by nearly 43 percent. They presented their results in an October 29 Optics Letters paper. [Pachi Patel-Predd, MIT Tech Review, Nov 11]
strong protein silk fibers .. will be used to build optical materials that can serve as the basis for sensors and other devices. Bioengineer Fiorenzo Omenetto, ultimately hopes to build implantable, biodegradable sensors that could help monitor patients' progress after surgery or track chronic diseases such as diabetes. .... because silk devices can be manufactured in a gentle environment, it's possible to incorporate additional biological molecules (such as proteins) into them as they are being built. These molecules serve as sensors that, once integrated into the silk devices, can remain active for years. [Katherine Bourzac, MIT Tech Review, Jan 13]
2009: What to Expect in Tech: Net neutrality becomes law, Bandwidth limits become the norm, Cyber-security czar will transform how we protect our networks and computers, Consumer robotics development will slow way down. [Lance Ulanoff, PC Mag]
Now Grätzel, along with Peng Wang, a professor at the Changchun Institute of Applied Chemistry, Chinese Academy of Sciences, have made efficient solar cells that use nonvolatile electrolytes, with the best achieving efficiencies of 10 percent. They also showed that the solar cells remained stable when exposed to light and high temperatures for 1,000 hours. The advance "pushes the technology close to over the '10 percent hump,' which is where a thin-film technology needs to be to be economically competitive," says Tonio Buonassisi, a professor of mechanical engineering at MIT. [Kevin Bullis, MIT Tech Review, Nov 7]
Consolidating the Objective. Two weeks into the new year and the "dark matter" projects Google CEO Eric Schmidt said the company would eliminate have continued to come to the fore, paired with the layoff of 100 recruiters and the move of 70 engineers to other facilities. After shuttering its Lively virtual reality, SearchMash and Research DataSets late last year, Google Jan. 14 said it is shutting down: Google Video, Google Notebook, Google Catalogs, the Dodgeball mobile social networking service and the Google Mashup Editor. [Clint Bolton, eWeek.com, Jan 15] "consolidating" is Armyspeak for digging in after a successful attack to prepare for the counter-attack.
to describe many of the ideologues that you find in such profusion on the Web: His view of the world is always complete, three-dimensional, graphic, and wrong. That’s from Gordon Goldstein’s very interesting book on McGeorge Bundy, “Lessons in Disaster.” [James Surowiecki, New Yorker, Jan 6]
IBM plans to open a technology service delivery center in Dubuque, Iowa, creating 1,300 jobs ... because of the city's strong reputation as a place that values public-private partnerships. [Yahoo Tech News, Jan 15] The downtown could stand a little spiffing beyond its engaging Mississippi River Museum.
Intel's profit sank 90% as sales dropped 23% amid a rapid deceleration in computer demand and pricing pressure during the key holiday season. [Wall Street Journal, Jan 16] Nevertheless, Intel remains committed to spending billions of dollars on new manufacturing facilities and attacking rivals in new markets. [Ashlee Vance, New York Times, Jan 16]
Pfizer is laying off up to 800 research division employees this year in its latest effort to refocus disappointing research efforts and cut its massive overhead ahead of an anticipated crash in revenue. [Hartford Courant, Jan 13]
Microsoft is exploring significant work-force reductions, a rare occurrence for the world's largest software company. ... Motorola said it will cut 4,000 jobs [Wall Street Journal, Jan 15]
BizStarts Milwaukee has counted seven new start-ups since declaring in September that it's aiming to help form 50 start-ups by 2010, the group's organizers said at its first-ever networking event last night. [Milwaukee Journal Sentinel, Jan 14]
Rensselaer Polytechnic Institute's business incubator program has had a leadership shake-up as part of the layoffs at the college last month. [the fired leader is ] one of the 98 people who lost their jobs in a schoolwide reduction. [Albany Times Union, Jan 13]
Most new innovations are started without access to credit in good times or bad. Microsoft was started without any access to credit. It's only in crazy times that people lend money to people who are experimenting with innovations. Most of the great businesses today were started with neither a lot of venture capital nor with any bank lending until five or six years after they were [up and running]. [Nouriel Roubini and Amar Bhidé, Business Week, Jan 19]
Researchers at MIT have made pure, dense, thin films of carbon nanotubes that show promise as electrodes for higher-capacity batteries and supercapacitors. Dispensing with the additives previously used to hold such films together improved their electrical properties, including the ability to carry and store a large amount of charge. [Katherine Bourzac, MIT Tech Review, Jan 9]
Sowing an Asian Future. TO SEE the geography of the technology industry, crack open an Apple iPhone. Although the firm that sells it is American, it provides none of the physical innards. The components are almost entirely Asian ... As goes the iPhone, so goes the broader technology industry. The biggest and most technically clever firms are American and European, but their predominance in research, innovation and production is being challenged by Asian companies. ... Every year around $1 trillion is spent on research and development (R&D) in computing, telecoms and electronics; America accounts for over one-third. But while corporate R&D in America and Europe grew by 1-2% between 2001 and 2006, in China it soared 23%. China is now close to surpassing Japan in total research spending, from almost nothing a decade ago. And as a percentage of GDP, China’s corporate R&D spending is almost on a par with the European Union’s (around 1%). [The Economist, Jan 3]
While a last-hour broad move higher in technology names was led by several industry bellwethers, small technology shares weren't excluded from the gains. The tech sector has often been a favorite of bulls in recent months since many of its components have significant cash reserves, minimal overhead from doing business online, flexibility via the Internet to generate revenue globally wherever a local economy is doing particularly well, or all three. [Geoffrey Rogow, Wall Street Journal, Jan 9]
MasterCard estimated that sales of electronics and appliances fell 26% year-over-year from the beginning of November through Dec. 24. [Business Week, Jan 12]
Intel expects revenue to fall by 20% in the fourth quarter, blaming weakened demand and computer-maker efforts to clear excess inventory. That was its second warning on the quarter. Computer chips are to some extent the currency of commerce, just as steel once was, and analysts said the warning speaks volumes about the economic outlook world-wide. [Rob Curran, Wall Street Journal, Jan 8]
Beijing is starting to keep more of its money at home, a move that could have painful effects for American borrowers. ... In the last five years, China has spent as much as one-seventh of its entire economic output buying foreign debt, mostly American. [Keith Bradsher, New York Times, Jan 8]
How to Refurbish the U.S. Tech Industry GOVERNMENT: Obama already has plans to bolster tech, with pledges of universal broadband service and a permanent R&D tax credit. Government can also help with new incentives for long-term tech investments, funding more university research, and improving science education. VENTURE CAPITALISTS: Many venture capitalists gravitated to what looked like the easy money of low-cost Web 2.0 startups in recent years. But that market is now faltering. It's an opportune time for VCs to take a fresh look at companies planning breakthrough technologies. New tax policies could help. STARTUPS: Rather than creating me-too companies that offer the latest twist on social networking, entrepreneurs can build technologies that deliver value to hard-hit businesses. One opportunity: applying Web 2.0 ideas to improve the performance of corporations and government. LARGE TECH COMPANIES:Breakthroughs often come from startups, but it's important for established companies to invest in disruptive technologies, too. Apple did it by moving from computers into music. Established companies may be able to create new markets in energy, transportation, and infrastructure. [Business Week, Dec 31]
The 2008 carnage: AMRI -32% ATMI -55% American Super -40% Cascade Microtech -81% Ceradyne -56% Cree -42% Emcore -91% Energy Conversion -25% First Solar -48% Fuel Cell -61% II-VI -37% Infinera -40% iRobot -50% KVH -36% Luna Innovations -78% Micrel -13% Ocean Power -59% Spire -78% Symyx Tech -23% Unica -41% Universal Display -54% ViaSat -30% ....
and in the life sciences: Acorda Thera -7% Affymetrix -87% Alnylam Pharma -15% Allos Thera -3% Alexion Pharma -4% AMAG Pharma -40% Ariad Pharma -80% Biomimetic -47% Combimatrix -8% Cepheid -61% Genzyme -11% Genomic Health -14% Illumina -12% Immersion -54% Isis Pharma -10% Intermune -20% Landec -51% Metabolix -46% Medarex -46% Meridian Bioscience -15% Molecular Insight Pharma -52% OPNET Tech -44% Sangamo Bio -73% Seattle Genetics -22% Surmodics -53% Targacept -57% Tessera -71% Ultralife -33% Xenoport -55%
Winners in 2008: Aerovironment +52% Amer Sci & Engr + 32% NVE +6% .... Abiomed +6% Argon ST +2% Maxygen +11% Momenta Pharma +62% Myriad Genetics +51% Optimer Pharma +73% Osiris +49% Salix Pharma +12% Sequenom +108% Thoratec +78% Vertex Pharma +31%
The wall of money stashed in low-paying Treasury IOUs will sooner or later wash back into shares and corporate bonds. .... It will be surprising indeed if all of these moves don’t put the economy on the path to recovery by the end of the year. [Irwin Stelzer, The Sunday Times, Jan 4]
Wall Street rang out its worst year since the Great Depression yesterday, leaving shareholders $6.9 trillion the poorer. [WP, Jan 1]
solweil writes to mention that Cryptol, a 'domain specific language for the design, implementation and verification of cryptographic algorithms,' is now available to the public. Cryptol was originally designed for the NSA. It allows for a quick evaluation and continued revisions, and is available for Linux, OS X, and Windows. [slashdot.org]
Fortunately, history suggests that this gloom and confusion shall pass. At the end of the second world war economists were predicting a resumption of the Great Depression: it didn’t happen.... America is endowed with ample natural resources to sustain rapid rates of growth. It is blessed with an entrepreneurial spirit that has produced successive waves of the creative destruction that allow the economy to shed the old and move on to the new. Its policymakers, far from perfect, have never gone so far as to stamp out risk-taking, initiative and the incentive to work hard while reforming the capitalist system. [Irwin Stelzer, The Sunday Times, Dec 28]
researchers at Yale University have used the nanoscale optical force to control an integrated circuit. Their device could form the basis of fast, low-power optical chips, just as transistors are the building blocks of today's electronic circuits. The new device, a light-driven nanoresonator, could also be used as an extremely sensitive chemical detector. The work is a major landmark in uniting mechanical and optical forces at the nanoscale. [Katherine Bourzac, MIT Tech Review, Dec 2]
These Technologies Are Going to Bomb Big-Time in 2009. Social networking will unravel; Mashups will get peeled back; Large-scale VoIP and unified communication implementations will be muted; Analytics and business intelligence (BI) will lose luster; Aged infrastructure will stay in service longer. [David Blanchard, Industry Week, Dec 24]
In a recent survey from the National Federation of Independent Business, more than a quarter of small business owners said the current economic downturn is threatening their ability to survive. Nearly half of respondents said slow or lost sales are their most immediate problem. ... Small businesses are a driver of the U.S. economy. In the past decade, small businesses -- those with fewer than 500 employees -- have created 60% to 80% of the nation's net new jobs each year, according to the Small Business Administration. More than half of Americans are employed by a small business, and these companies are responsible for more than half of the nation's nonfarm private gross domestic product. [Simona Covel, Wall Street Journal, Dec 26] The SBIR advocates will be making a plea for more money without ever mentioning that every set-aside dollar for small business comes from large entities, because set-asides are a zero-sum game do not create any new money. Nor has SBIR created any net new wealth in the national economy.
Another Culprit Found. “Usually it’s the rich country lending to the poor. This time, it’s the poor country lending to the rich.” — Niall Ferguson The problem, [Bernanke] said, was not that Americans spend too much, but that foreigners save too much. The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption. ... China, some economists say, lulled American consumers, and their leaders, into complacency about their spendthrift ways. [Mark Landler, New York Times, Dec 26]
For years, I've decried a lack of robots that would be able to
care for Americans in their old age. While DARPA-backed university labs
in the United States are busy building killing machines, the Japanese
are making androids that can carry centenarians up and down stairs.
Novell, the Linux software vendor, has cancelled its
annual BrainShare trade show, which was set for March 2009. ... has
been held in Salt Lake City, Utah, for more than 20 years, generally
attracts between 4,000 and 6,000 attendees from nearly 60
countries [Boston Globe, Dec 19]
Fourteen U.S. technology companies are joining forces and
seeking $1 billion in federal aid to build a plant to make advanced
batteries for electric cars.
Less R&D. After a decade of uninterrupted increases, U.S. investment in research and development is set to fall next year, as corporations and the federal government tighten their belts in response to a faltering economy. After accounting for inflation, total R&D spending in the U.S. is expected to fall by about 1.6% in 2009, according to a report by Battelle Memorial Institute, a nonprofit trust in Columbus, Ohio, that does scientific research for the government and industry. By comparison, R&D investment in the U.S. since the late 1990s has increased annually at rates of between 1% and 2%, including inflation. [Gautam Naik, Wall Street Journal, Dec 18] Let's guess that SBIR advocates will say that since the US will spend less, we need more of it, as all roads lead to "we need more SBIR."
researchers in China have developed a fuel cell that uses a new membrane material to operate in alkaline conditions, eliminating the need for an expensive catalyst. The power output of the new prototype, which uses nickel as a catalyst, is still relatively low, but it provides a first demonstration of a potentially much less expensive fuel cell. [Katherine Bourzac, MIT Tech Review, Dec 16]
Materials under development at MIT could lead to coatings that repel both water and oil. A group of MIT researchers have created an improved set of design rules for making any surface impervious to any liquid, be it water or gasoline. Such materials could eventually have promise as fingerprint-repelling coatings, fuel filters, self-washing car paints, and stain-resistant clothing. [Katherine Bourzac, MIT Tech Review, Nov 14]
one important challenge faced by innovators is to persuade
entrepreneurs to take a chance on innovations in the absence of any
hard demonstration that the returns are worth the risks. One of the
notable features of the modern innovation system lies in the great many
individuals and organizations that are willing to be so persuaded.
Have We Lost It? The US lost its
According to a new study from Babson College, new businesses are being created more rapidly in Massachusetts than in the United States overall. “Massachusetts is number one in the country in entrepreneurial activity," Babson president Leonard Schlesinger said in a statement. [Boston Globe, Dec 12]
A medical technology think tank is relocating its headquarters from Minneapolis to Indianapolis. The National Medical Technology Group, founded in 1996, brings together entrepreneurs, physicians, research institutions, health plans, manufacturers, patient organizations and public policy leaders. [Indianapolis Star, Dec 15]
They are so bright, so self-confident, so accustomed to being the
smartest guy or girl in the room, that doubt is not one of the
emotions with which they are familiar, as was true of the bright young
“quants” (mathematical economists) who designed the models used to
manage the risks taken on by Lehman Brothers and AIG. Something about
hubris and nemesis comes to mind.
"This is the first time a silicon photonics device has [shown] better performance than any recorded for a III-V-based material," says Mario Paniccia, an Intel fellow and director of the company's photonics technology lab .... detailed yesterday in Nature Photonics [Kate Greene, MIT Tech Review, Dec 8]
Technology spending will grow at its lowest rate in six years in 2009, a research firm said, as businesses shift their buying habits in response to the economic downturn. Businesses and other organizations in the U.S. will spend $573 billion on computer software, hardware and services next year, just 1.6% more than they spent in 2008, according to new data out Tuesday from Forrester Research Inc [Wall Street Journal, Dec 9]
“Innovation today isn’t a sudden break with the past, a brilliant insight that one lone outsider pushes through to save the company,” he says. “Just the opposite: innovation today is a continuous process of small and constant change, and it’s built into the culture of successful companies.” [Keith Sawyer, a researcher at Washington University in St. Louis, New York Times, Dec 7]
On the national level, the economy has lost almost 2m jobs this year - more than half a million last month alone. Only the decision by thousands to leave the labour market has kept the unemployment rate from rising to more than 6.7%. House prices continue to decline, share prices engage in nerve-jolting gyrations, millions more Americans rely on food stamps, and retailers gird for a Christmas with sales made at profit-destroying discounts. ... manufacturing activity is at a 26-year low. ... But there just isn’t enough silver around to line all the clouds that are in clear view. And since government is called on the rescue the economy, If politicians remain in the saddle and ride the private sector, the entrepreneurs who have powered America’s growth in the past will be displaced by lobbyists with access to the government honeypot. Bad news, that. [Irwin Stelzer, The Sunday Times, Dec 7]
Today, young people barely accept the idea that newspaper editors can judge the importance of what happened yesterday. [LG Crovitz, Wall Street Journal, Dec 8], much less accept the idea of a Western canon of literature.
researchers have developed a method for manufacturing nacre-like materials in the lab. These new materials have mechanical properties similar to metal alloys and are the toughest ceramics ever made. The new method could lead the way to ceramic structural materials for energy-efficient buildings and lightweight but resilient automobile frames. Nacre, also known as mother-of-pearl, combines plates of strong but brittle calcium carbonate with a soft protein glue in a brick-and-mortar structure that's 3,000 times tougher than either constituent. [Katherine Bourzac, MIT Tech Review, Dec 5]
Two types of companies are destined for the sales bin. Type one: startups without revenue that will soon need another round of financing just to get by. Any number of the dozens of Internet video startups that launched in the past two years fall into that category. Type two: later-stage companies with big burn rates that have been hoping to go public. Just scan the tech companies withdrawing IPOs, such as content-delivery company Synacor and software maker Varolii, for example. With both types of companies, the money they and their VCs were banking on has been squeezed off, so selling for cheap might be the only option. [Michael Copeland, Fortune, Nov 10]
at Hanyang University, in Ansan, South Korea, .... a team, led by chemist Jaephil Cho, developed a nanoporous silicon electrode that could at least double the charge capacity of a lithium battery--essentially doubling the range of an electric vehicle. And unlike previously reported silicon anodes, the one created by Cho's team can charge and discharge rapidly. [Peter Fairley, MIT Tech Review, Dec 3]
The coming year will be the most perilous in modern history for the American economy. The forces at work are unlike any the country has seen since the Great Depression and could result in anything from anaemic growth to a severe contraction. [Greg Ip, The Economist, Nov 19]
Another common view is that scientists were once set apart from hoi polloi by virtue of distinctive skills and a civic responsibility to use them for esteemed ends. Now, the story goes, labs are populated by interchangeable researchers and Organization Men who are just like ordinary folk, and their occasional achievement of great things is not due to genius or goodness but to scientific management and strategic planning. But this assumption of the "moral equivalence" of scientists is undone by a look at venture capitalists struggling to discern the unique scientist who just might have the next fortune-making widget and (possibly more important) who possesses a personal character worthy of the investor's trust and confidence. [Thomas Gieryn, Science, Nov 21]
Soft Exams for Hard Numbers. cheesethegreat writes "The Royal Society of Chemistry has sharply criticized the 'catastrophically' falling standards for UK school exams in the sciences. The RSC had 1,300 highly achieving students take an exam made up of questions taken from the last 50 years. The students averaged an appalling 15% on 'hard' numerical questions set in the 1960s, but managing much higher marks on the more recent 'soft' non-numerical questions. This latest report has garnered mainstream media attention. The RSC has also created a petition on the UK Prime Minister's official website, calling for urgent intervention to halt the slide, which has garnered over 3,000 signatures. The issue of declining exam standards has been an ongoing concern in the UK, with allegations that exam results have been manipulated by the government to increase pass rates and meet its own targets." [slashdot.org, Nov 30]
the Upton Sinclair theorem: It is difficult to get a man to understand something, when his salary depends upon his not understanding it.
Biotechnology companies in the United States are raising less cash than they have in a decade, in part because of the global economic crisis. The reductions have led to bankruptcies and threaten development of drugs based on biomedical breakthroughs. ... Twenty-five percent of the 370 public U.S. biotechnology companies have less than six months of cash, according to data compiled by the Biotechnology Industry Organization, a trade group in Washington. .... Among others, Peptimmune (Cambridge, MA; one SBIR), a 6-year-old firm, said it is struggling to pay for clinical trials of its multiple sclerosis drug. ... cut its staff more than half, to 22 people; moved to smaller offices to conserve the $6.5 million it has on hand; and is delaying research on drugs for Alzheimer's disease and Parkinson's disease, chief executive Thomas Mathers said. .... On Nov. 10, MicroIslet (San Diego, CA; $1.8M SBIR) developer of diabetes treatments, and Accentia BioPharmaceuticals (Tampa, FL; no SBIR) sought bankruptcy protection to reorganize, each citing an inability to raise money. [David Olmos and Rob Waters, Bloomberg News, Dec 1, 08]
for managers the "paradox of thrift" works the other way: spending money might be in society’s interests, but not in their shareholders’. For a whole generation of bosses, what they do in the next few months may come to define the rest of their careers. [The Economist, Nov 22]
In 1936, Keynes wrote, “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slave of some defunct economist.” In 2008, no defunct economist is more prominent than Keynes himself. [NG Mankiw, New York Times, Nov 30]
in my conversations with economists who have been worth listening to in the past I detect some scepticism about the consensus that we are in a tunnel in which no light is discernible. They sense unreasoned panic among consumers, related more to media fixation on share prices than to an appraisal of their own economic circumstances. The overwhelming majority are in work and are paying their mortgages on time. [Irwin Stelzer, The Sunday Times, Nov 30]
Innovation runs its course. Sun Microsystems plans to cut up to 6,000 jobs, or 18 percent of its global work force, as sales of its high-end computer servers have collapsed. ... Sun's shares have fallen so steeply they’ve crossed an ominous threshold, driving the company’s market value below its cash on hand. That means investors believe the company itself is essentially worthless. (Source: MSNBC)
Michael Dell's turnaround plan for Dell is stalling, a testament to the rapidly changing global gadget business. [Wall Street Journal, Nov 28]
this dramatic shift toward technological ubiquity comes at a price. The producers of technology are today faced with the pressure to drive costs down--and down, and down--so that more people can afford it. From PCs to cellphones to wireless routers, every consumer product is going through a process by which margins are getting squeezed out until businesses are almost forced to operate as nonprofits. Even technology for businesses is going through a similar cost squeeze, making it possible for small businesses to afford sophisticated offerings like networking equipment, video conferencing and business applications in the form of software-as-a-service. (Source: Forbes.com) [Investors Guide Daily, Nov 14]
[Competition guru Michael] Porter wrote that the U.S. economy has historically benefited from several great assets: an unparalleled environment for entrepreneurialism, a tremendous infrastructure for scientific research, the world’s best universities, a strong commitment to competition and free markets, decentralized regional economies, and efficient capital markets. But, Porter continued, these advantages are starting to erode. The U.S. has an inadequate rate of reinvestment in science and technology. America’s confidence in free markets is waning. Lack of regulatory oversight has undermined capital markets. Universities have not sufficiently increased graduation rates. American workers do not have a credible safety net. Regulations and litigation have inflated the cost of business. Most important, there is no long-term economic strategy to organize responses to these problems. [David Brooks, New York Times, Nov 28]
The most obvious candidate for memification in Outliers is a little gem Gladwell calls the 10,000-Hour Rule. Studies suggest that the key to success in any field has nothing to do with talent. It's simply practice, 10,000 hours of it — 20 hours a week for 10 years. [Bill Wadman, Time, Nov 13]
"A bull market tends to bail you out of all your mistakes. Conversely, bear market make you pay for your mistakes." - Richard Russell
Memristors were first predicted in 1971 by Berkeley professor Leon Chua. They are nanoscale devices with unique properties: a variable resistance and the ability to remember the resistance even when the power is off. After rediscovering Chua's work, researchers at HP Labs built the first working memristor in May of this year. And last week, at the first ever Memristor and Memristor Systems Symposium, in Berkeley, CA, the same team showed how memristors can be integrated into functioning circuits. Their circuits require fewer transistors, allowing more components (and more computing power) to be packed into the same physical space while also using less power to function. [Kate Greene, MIT Tech Review, Nov 25]Overseas demand is collapsing as the global economy slides into its worst downturn since the early 1980s. Making matters worse, the dollar's trade-weighted 16% rise since July is cutting into U.S. competitiveness. [Business Week.com, Nov 20]
His X Prize, moreover, has become a template for organizations, companies, and even the federal government. The format: Announce an attention-grabbing goal, find a benefactor who'll put up the prize money or pay for it yourself, wait as the brightest minds race each other to come up with the answer, and then bask when you declare a winner. Today there are dozens of copycat contests in the U.S. and Europe for everything from curing Lou Gehrig's disease to solving age-old math conundrums. Awards run from $75,000 to $50 million. [Steve Levine, Business Week.com, Nov 20]
North Carolina is reaping the benefits of investing about $1.2 billion in the biotech industry over the past decade, according to a study the N.C. Biotechnology Center [Sabine Vollmer, Raleigh News & Observer, Nov 22]
"Apparently the only topic that everyone on both sides felt agreeable about undertaking jointly was earthquakes," said Mr. Housner in an oral history published in 1997. Known in his profession as the father of earthquake engineering, Mr. Housner, who died Nov. 10 at age 97, pioneered research techniques that led to advances in the construction of tall buildings, dams, bridges, oil tanks, nuclear plants and other structures at risk in seismically active zones. [Stephen Miller, Wall Street Journal, Nov 22]
I don't foresee another Great Depression, but I am under no illusion that it can't happen. My parents and grandparents lived through it, and their memories of it have been branded on my brain. ... None of us can control what the markets do to us. But we can control how we handle money, and we need to learn from our parents and grandparents who survived the Great Depression. [Jason Zweig, , Wall Street Journal, Nov 22]
While economic downturns inevitably lead to accusations that foreigners are stealing American jobs, the reality is that we have long attracted immigrants who innovate, create jobs and boost our economy. Some 40 percent of all new start-up companies in Silicon Valley, for instance, are headed by immigrants, according to a 2006 study for the NVCA. [Edward Alden, Washington Post, Nov 23]
work started on a [Indiana University] long-planned incubator for tech and life sciences startups, and Lilly Endowment announced that it would bankroll an early tenant. The Pervasive Technology Institute, with its three research centers, will open when the $10 million incubator opens next July in Bloomington. Lilly Endowment will give IU $15 million over five years to help fund the institute. [Indianapolis Star, Nov 19]
Got Skills, Need Skills? Google and Procter & Gamble are swapping employees as P&G seeks to learn how to market products online and Google tries to persuade advertisers to shift away from TV. [Wall Street Journal, Nov 19]
The percentage of stocks trading with a trailing one-year price/earnings ratio below 10 is at 61%, the highest level since the early 1980s, according to data from J.P. Morgan Securities. [T Lauricella and a Lobb, Wall Street Journal, Nov 17]
The New England Biotech Association, which plans to represent biotechs in the six New England states, officially got off the ground today with its first board meeting in Cambridge. [Boston Globe, Nov 14]
Valleywag, the Silicon Valley gossip blog that made tech execs the target of Perez Hilton-like sniping, is getting folded into Gawker.com. [San Francisco Chronicle, Nov 14]
Ludwig Von Mises once wrote that the entrepreneur who fails to use his capital to the "best possible satisfaction of consumers" is "relegated to a place in which his ineptitude no longer hurts people's well-being." The latest losses at General Motors reveal yet again that it is the living embodiment of managerial ineptitude, and to insure that it no longer fails its customers while harming the well-being of Americans more broadly, it's essential to let the firm die. Many will of course blanch at the presumed loss of jobs that would result from GM's death, but judging by the high level of unemployment in Michigan, it would be more realistic to say that GM's continued existence under weak management has served as a capital repellant such that capital and jobs will continue to flee the state if GM is saved with the money of others. Worse, business history, from ships to farming to mining, shows that sectors reliant on government help are invariably weakened as opposed to strengthened. (Source: Real Clear Markets) [Investor Guide Daily, Nov 12] Governments world-wide try to stop the progress of capitalism by "saving" national champion firms and industries. In the long run, the efforts fail. Present jobs vote. Programs like SBIR do much of the same thing by "investing" heavily in market-dead companies instead of market-live companies.
unputdownable Michael Crichton was a master of the unputdownable novel ... His best-selling thrillers are magnificent mind candy for cross-country flights or days at the beach ... selling more than 150 million novels is nothing to mock. Mr. Crichton's success certainly owed a lot to skillful storytelling. ... fundamentally a novelist of ideas -- a public intellectual who wrote potboilers. He took on big subjects, such as bioengineering and climate change. He wasn't afraid of slowing down the action to teach a scientific concept. When he wanted his readers to understand something, he would devote a couple of paragraphs to explaining it. [John Miller, Wall Street Journal, Nov 11] Most SBIR proposals could stand more of a sense of a narrative to frame the incessant explanation of the technology.
William D. Watkins, CEO of disk-drive maker Seagate Technology. He makes no bones about the fact that he takes the best deal he can get [on corporate taxes]. "At the end of the day, how do I make my company stronger?" Watkins asks. "I move all my plants offshore. How long is it before I move all my R&D?" [Jane Sasseen, Business Week, Nov 17] For all the CEO talk about off-shoring their R&D, they have to seriously consider the advantages of US R&D with open discussion that keeps their tech staff en courant in a mobile work force.
DeCode Genetics (Iceland) has produced a string of recent scientific advances that reconfirm its status as a global leader in its field. In just the past few weeks, the firm’s researchers have unveiled several genetic mutations linked to schizophrenia, made advances on a drug targeting Alzheimer’s disease and fingered genes linked to basal cell carcinoma. ... Despite these steps, the firm’s access to credit has virtually dried up over the past few weeks. For a small biotech firm without blockbuster revenues, that has dealt a severe blow. [The Economist, Oct 25]
Pre-Emptive Blogging. In the age of transparency, the layoff will be blogged. Elon Musk, chief executive of the electric-car company Tesla Motors in San Carlos, Calif., said that he had no choice other than to blog about the Oct. 15 layoffs at the closely watched company — even though some employees had not yet been told they were losing their jobs. Valleywag, a Silicon Valley gossip blog owned by Gawker Media, had already published the news, and it was being picked up by traditional media reporters, Mr. Musk said. “We had to say something to prevent articles being written that were not accurate.” [CC Miller, New York Times, Nov 5]
it's necessary to assess where America really stands. The U.S. has prospered because it has enjoyed a set of unique competitive strengths. First, the U.S. has an unparalleled environment for entrepreneurship and starting new companies. Second, U.S. entrepreneurship has been fed by a science, technology, and innovation machine that remains by far the best in the world. Third, the U.S. has the world's best institutions for higher learning, and they are getting stronger. They equip students with highly advanced skills and act as magnets for global talent, while playing a critical role in innovation and spinning off new businesses. Fourth, America has been the country with the strongest commitment to competition and free markets. This belief has driven the remarkable level of restructuring, renewal, and productivity growth in the U.S. Sixth, the U.S. has benefited historically from the deepest and most efficient capital markets of any nation, especially for risk capital. Only in America can young people raise millions, lose it all, and return to start another company. [Michael Porter, Business Week, Oct 30]
Wild market gyrations, frozen credit markets and an overall sour economy herald a new round of corporate belt-tightening. Foremost on the target list is anything inefficient. That’s bad news for corporate innovation, and it could spell trouble for years to come, even after the economy turns around. .... In fact, hard times can be the source of innovative inspiration ... In the early 1990s, tens of millions of dollars had gone down the drain in a futile effort to develop “pen computing” — an early phase of mobile computing — and a recession was shriveling the economic outlook. Yet the tiny Palm Computing managed to revitalize the entire industry in a matter of months by transforming itself overnight from a software maker into a hardware company. [Janet Rae-Dupree, New York Times, Nov 2]
The Paradox of Thrift. If everybody does the thrifty thing for an individual, disaster. Americans are spending less and are gloomy about the economy. Keynes's paradox of thrift says that if everyone saves during slow times total demand falls which in turn lower total savings in the population. Adam Smith's self-interest dependence works only if the economic system is in steady-state.
In work published last spring in Advanced Materials, [MIT, chemical-engineering professor Paula] Hammond used an elegant, inexpensive process to reduce methanol crossover in a commercial fuel-cell membrane, increasing the efficiency of a methanol fuel cell by more than 50 percent. [Kristini Grifantini, MIT Tech Review, N/D 08]
Bidders will gather in Chicago for a live auction of patents, trademarks, copyrights and domain names. For the first time, a government agency, NASA's Goddard Space Flight Center, will auction off exclusive licensing rights to more than 40 patents or applications. Ocean Tomo will broker the sale. [Wall Street Journal, Oct 30]
Investment Goes On. Intel Capital announced its first "clean-tech" initiative in China, a $20 million equity investment in Trony Solar Holdings Co., one of China's biggest makers of solar energy and wind power equipment. [AP, Oct 28, 08]
Cash Poor Biotechs. Many small biotech firms are expected to file for bankruptcy this year, potentially damaging the drug pipeline that big pharmaceutical companies rely on. ... cancel drug trials, lay off workers or sell out to large companies ... In the U.S., 38% of 370 small biotech companies are operating with less than a year's worth of cash, and nearly 100 publicly traded biotech companies have less than six months' cash, according to the Biotechnology Industry Organization [J Whalen and R Winslow, Wall Street Journal, Oct 29]
Bogle and Buffet Say Buy. But, Stocks are truly cheap only relative to their values over the last 20 years, a period that will go down as one of the great bubbles in history. If you take a longer view, you see that the ratio of stock prices to corporate earnings is only slightly below its long-term average. And in past economic crises — during the 1930s and 1970s — stocks fell well below their long-run average before they turned around. [David Leonhardt, New York Times, Oct 29]
Internet-connection speeds climb at about 50% a year. But the batteries that run these devices can't keep up. Their power is rising at only about 10% a year. ... The last real breakthrough in the field came in 1991, when Sony introduced rechargeable lithium-ion batteries. ... Lately, some power engineers are pressing ahead with an alternative -- a hybrid technology based on a fuel cell that recharges a small battery whenever it gets low. ... The slow pace of battery improvement isn't for lack of trying. The battery market invests heavily in improvement, and venture capitalists have thrown millions at start-ups promising to power everything from fork-lifts to heart-pumps with small, safe, long-lasting portable power. Fuel-cell makers hope their devices will soon begin to grab some of the $71 billion-a-year world-wide battery market, which is growing 4.8% annually, according to Cleveland market researcher Freedonia Group. Rechargeable batteries account for two-thirds of the market. [William Bulkeley, Wall Street Journal, Oct 28]
The quest for stimulation, challenge, testing (we are good at tests), exploration and discovery is a core part of American culture--read Emerson, Twain and William James. It is unlikely to be shattered by the latest recession. [Edmund Phelps, Forbes, Nov 11]
much of the banking industry has lost the expertise it needs for making loans for innovative ventures, as in the golden age of U.S. and European capitalism. Our banking industry must be redirected to serving the needs of business. President Calvin Coolidge famously declared that "the chief business of the American people is business." Not anymore. As the politicians describe it, the business of America is now homeownership. [Edmund Phelps, Forbes, Nov 11]
Step Up Silicon Valley. We have, today, an economy Washington will not be able to handle--and that Wall Street certainly can't handle. It is you, Silicon Valley, who needs to step up to the plate. Remember the Clinton years? Sure, Bill Clinton takes credit for the prosperity, but anyone who pays attention knows that '90s boom was Silicon Valley's doing. Valley-inspired entrepreneurship washed away most of the $300 billion deficit that haunted the U.S. economy early in the decade. [Sramana Mitra, Forbes, Oct 10]
Knowledge is about the past; entrepreneurship is about the future. .... If creativity was not unexpected, governments could plan it and socialism would work. But creativity is intrinsically surprising and the source of all real profit and growth. [George Gilder, Forbes, Nov 10]
Cleaning It Up. Microsoft has just been awarded a patent for technology designed to automatically detect and remove “undesired words or phrases” from all manner of digital communications, ranging from YouTube broadcasts to internet chat and songs. The patent describes a system that listens out for phonemes (word fragments) likely to be part of a swearword. If it thinks it hears a forbidden phrase, the software either fades out the offending syllables or simply replaces the rude word with a similar-sounding but clean alternative lifted from earlier speech without a second’s delay. [Mark Harris, The Sunday Times, Oct 26]
Q.(for Guy Kawasaki) “Reality Check” includes a venture capital aptitude test in which you opine on the types of people who are best qualified for careers in venture capital. A. Ideally, a venture capitalist would add value beyond writing a check. This includes experience with difficult situations and insights into building a company. Consulting, investment banking and accounting do not provide you with “on the firing line” experience. You’re always the “outside expert” who zooms in, interviews a few people, creates a PowerPoint presentation and then tells people what they should do. Unfortunately, analysis and ideas are easy. Implementation is hard. A consultant can tell you to reduce your work force by 10 percent, but figuring out who to lay off and looking people in the eyes when you do it is much harder. [Marci Alboher, New York Times, Oct 26]
Tougher Tech Finance. Troubles are brewing in the technology-financing business, the credit that greases many technology sales. Defaults on tech financings, loans that allow companies to purchase computers, software and other products, have spiked this year. The problems are surfacing after years in which such loans flowed freely. Now the banks and specialty lenders that most tech companies rely on to finance customer sales are retrenching, and financing terms are getting tougher. [Wall Street Journal, Oct 27] If your tech idea needs early-stage finance, you can always apply for free-money SBIR. Just be prepared for long waits, slow money, government inspection, no marketing help, and stiff competition from established SBIR junkies who do decent research but have few market prospects.
Mr. Grantham calls 2009 earnings estimates "laughable." "We are in the teeth of the biggest financial crisis since the Depression and the early days of the broadest economic slowdown since 1982," he said. "There are still claims earnings will be well above average, and it does not compute." [Annalena Lobb, Wall Street Journal, Oct 27]
consumers are beginning to regard payments on home equity, credit card, auto and other loans as discretionary outlays. .... The recession will probably be the deepest since the 1930s, especially as it spreads globally in its fourth phase. ... commodity prices are collapsing as global demand falls and as those who thought commodities were a legitimate investment rush out even faster than they charged in. The dollar is rallying as everyone flees to Treasury bills.[A Gary Shilling, Forbes, Nov 10]
if innovation policies are to be effective, it's critical that they be based on an accurate understanding of the U.S. innovation system-in particular, an understanding of where U.S. innovations come from. This report does this by analyzing the sources of award-winning innovations over the past few decades. [LARTA Vox, Oct 16]
The world of finance capitalism was different after Franklin Roosevelt laid hands on its architecture in the 1930s. Out went rampant insider trading, in came the Securities and Exchange Commission .... Out went runs on banks, in came the Federal Deposit Insurance Corporation .... Out went indiscriminate home repossessions, in came the Home Owners’ Loan Corporation .... Capitalism survived, in a new form. .... Now, Gone are the investment banks and the swaggering masters of the universe who did so much to make capital available to entrepreneurs; they are now subsumed in bureaucratic bank holding companies, ... The capitalism that will emerge from our current trials will be a New Capitalism, not socialism or some other ism. The balance of power between government and the private sector will shift a bit to government; the balance between cash and debt in businesses and households will shift to cash; other nations will be richer, relative to the United States, not a bad thing. [Irwin Stelzer, The Sunday Times, Oct 26]
Transport officials have slashed train overcrowding – by tripling the number of standing passengers deemed 'acceptable'. [Adam Smith Institute, Oct 22]
The Bill & Melinda Gates Foundation will give $100 million in small doses to researchers doing novel medical-research experiments -- part of a new way to use the Web to reach medical researchers who might be missed in a traditional grant-selection process.... will grant 104 scientists and experimenters in 22 countries $100,000 each for research into areas that include how to prevent or cure HIV/AIDS and tuberculosis. [Robert Guth, Wall Street Journal, Oct 23]
Love-Hate Subsidies. Investors, such as Bill Gates, are sitting on billions of dollars in losses after buying into the corn-based ethanol industry that George W. Bush embraced as the answer to US energy woes. Six of the biggest publicly traded US ethanol producers have lost more than $8.7bn in market value since the peak of the boom in mid-2006 and the beginning of this month, according to an analysis by the Financial Times. The boom followed a 2005 law requiring refiners to mix billions of gallons of the biofuel with petrol. ... ethanol producers that have gone public since 2005, have seen the value of their holdings plummet as much as 90 per cent from their flotation price, in spite of billions of dollars of government support for the industry. [Kevin Allison and Stephanie Kirchgaessner, Financial Times, Oct 21] Subsidies, SBIR being one, sound good as a government incentive to some desired societal goal. But unlike free market incentives, they have no underlying economic support (otherwise they wouldn't be needed) and can evaporate in a political heartbeat.
THE BAD NEWS: Job cuts are sweeping through the Triangle's technology companies. THE EVEN WORSE NEWS: The looming global recession is only beginning to have an impact. [Raleign News & Observer, Oct 23]
As for current credit woes, smaller biotech firms could be hurting. If they can't access credit markets, or if health care-focused hedge funds shutter, small-cap biotechs could find cash the rarest of compounds. But big biotech firms, with their substantial cash-flow, are generally unaffected. On the brighter side, "People need their drugs" and biotech firms have numerous blockbusters already on pharmacy shelves. [Jeff Opdyke, Wall Street Journal, Oct 22]
Fewer Buyers. one U.N. agency predicts the financial crisis will wipe out 20 million jobs around the world [Foreign Policy morning brief]
Sun Microsystems warned of a much larger-than-expected quarterly loss on lower revenue, as the computer maker begins to suffer from the economy's meltdown. ... Texas Instruments slid after the bell as it warned "weak order trends" would lead to lower revenue in the fourth quarter as consumers and corporations cut down on spending. [Wall Street Journal, Oct 21]
I went to an ATM today, and it asked to borrow a twenty till next week. [Calculated Risk blog]
Can the U.S. and global economies get off the slow-growth track? Yes, but it won't be easy. One key is that U.S. companies have to pay more attention to sustaining productivity growth and innovation at home rather than resorting to outsourcing as their main source of cost savings. That would boost wages and incomes for U.S. workers and reduce the need for the U.S. to take on huge debts to pay for foreign-made goods. [Michael Mandel, Business Week, Oct 27] The government can do its part by pushing its SBIR money into companies and technologies that have an economic future IF the technology really works as envisioned. Money for rocket plume models will do none of it. On the other hand, don't hold you breath to see whether the DOD can see that as part of its government function. Old habits and incentives die hard.
Forget Adam Smith, Whatever Works. Advanced Micro Devices decided to spin off its manufacturing operations into a new company in which the government of Abu Dhabi will own a 50% stake. The venture will build a $4.5 billion silicon wafer plant in Albany, N.Y. The state of New York, which already has invested more than $1 billion in nanotech research and development, worker training, and a state-of-the-art clean room in Albany, will kick in $1.2 billion in tax benefits and outright cash rebates to cover construction and equipment costs. For struggling AMD, one of the last U.S. chipmakers that still manufactures its own wafers, the financial help from New York and Abu Dhabi "was incredibly important," says AMD executive chairman Hector de J. Ruiz. Few private investors in the U.S. are willing to risk such huge sums on a high-tech plant that won't produce returns for at least five years. "In a large economy like the U.S., it is impossible to be successful and thrive if you do not make something, especially in industries in line with your core strengths. The government will have to realize it must play a role," says Ruiz. [Pete Engardio, Business Week, Oct 27]
Over the past 30 years, economists have devoted great intellectual energy to proving that such disasters cannot happen. ... We Forgot Everything Keynes Taught Us [(Keynes's biographer)Robert Skidelsky, Washington Post, Oct 19]
The prospects of renewable-energy companies soared with oil prices, but the global credit crunch and the easing of energy costs have brought them back to earth with a thud. With banks reluctant to lend and their stock prices tumbling, many green-energy concerns are struggling to find the long-term funding they need to expand in a capital-intensive industry. In the past three months, global renewable-energy stocks tracked by New Energy Finance, a London-based consultancy, have dropped about 45%, [Tom Wright, Wall Street Journal, Oct 20]
James W. Benson, 63, a serial entrepreneur who invented one of the first full-text computer index and search systems that allowed people to search more easily through federal acquisitions regulations, died Oct. 10 ... Mr. Benson started Compusearch and ImageFast Software Systems, both of McLean, in the 1980s. He turned from computers to space in the 1990s, founding the California firm SpaceDev, which helped build the hybrid rocket engine that launched the world's first privately built manned spaceship into suborbital space. [Washington Post, Oct 16]
Pick a Tech Fix. In 2002, the nation’s high-technology balance of trade went south, and it never came back. By 2007, the annual gap between high-tech exports and imports had grown to $53 billion. The gap this year is expected to be the largest ever — approaching $60 billion. ... McCain would encourage innovation by cutting corporate taxes and ending what he calls “burdensome regulations” that he says inhibit corporate investment. But Mr. McCain has also repeatedly gone up against business if he sees a conflict with national security, for instance, in seeking to limit sensitive exports. ... Obama looks to the federal government to finance science, math and engineering education and the kind of basic research that can produce valuable industrial spinoffs. [W Broad and C Dean, New York Times, Oct 17]
“We continue to see a vortex of selling, led by a levered, scared hedge fund community stepping on each other trying to get in front of the other guy to liquidate, based upon the real investment losses that they’ve experienced, coupled with the threat of year-end redemptions,” says Doug Kass, president of Seabreeze Partners [David Gaffen, Wall Street Journal Market Beat, Oct 15]
Investors are recognizing that the financial crisis is not the fundamental problem. It has merely amplified economic ailments that are now intensifying: vanishing paychecks, falling home prices and diminished spending. And there is no relief in sight. .... said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “I don’t think there’s a way we can get out of this without a full-fledged recession and a lot of people losing their jobs. All we can really talk about is ameliorating it, making sure the people who are hit have support.” [Peter Goodman, New York Times, Oct 16]
a third of all the potatoes in the United States. But its economy is increasingly being driven by technology and green manufacturing companies, big and small. Most of those companies have settled in the Boise Valley, an area of about 600,000 people, where they have received an enthusiastic response from city officials and technological and business assistance from Boise State University. [James Flanigan, New York Times, Oct 16]
Uncertain. Intel cautioned that the outlook for spending on technology products is uncertain. [Wall Street Journal, Oct 15] Life and economics are usually uncertain. Also uncertain: MasterCard reported last week that spending on consumer electronics and home appliances dropped 13.8 percent in September compared with a year ago. That number is by far the largest recorded since MasterCard began tracking the category in 2003, and twice the largest previous monthly drop in such spending. [M Richtel and S Rosenbloom, New York Times, Oct 15]
MasterCard reported last week that spending on consumer electronics and home appliances dropped 13.8 percent in September compared with a year ago. That number is by far the largest recorded since MasterCard began tracking the category in 2003, and twice the largest previous monthly drop in such spending.
A Less Free Market. Dow Drops 18% on Week, Worst Ever. Paulson said the U.S. will move ahead with plans to buy equity stakes in financial institutions. ... The U.S. is weighing two dramatic steps to repair ailing financial markets: guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits. If the two moves come to fruition they would mark the government's most extensive intervention yet in the financial system, as officials ponder increasingly far-reaching measures to stem the sprawling crisis. [Wall Street Journal, Oct 10]
Unless you are in your late 80s and were an adult as World War II ended, stocks are cheaper, adjusted for tax rates and interest rates, than they've been at any time in your adult life. [Ken Fisher, Forbes, Oct 27]
[recession] promises to be deep and protracted because consumers and banks both need to cut their reliance on borrowed money. Assets at U.S. commercial banks have soared over the past decade and are now equal to about 79% of gross domestic product. That is the highest level in 20 years. ... Investors and banks have money. But they are refusing to invest it because prices aren't realistic. Alternatively, they feel that they can't adequately assess real value because it is unclear which banks have enough capital to survive. [David Reilly, Wall Street Journal, Oct 11]
almost 30 years after Freeman Dyson described the almost unspeakable urges of the nuclear geeks creating illimitable energy out of equations, his son, George Dyson, has written an essay (published at Edge.org) warning about a different strain of technical arrogance that has brought the entire planet to the brink of financial destruction. George Dyson is an historian of technology and the author of “Darwin Among the Machines,” a book that warned us a decade ago that it was only a matter of time before technology out-evolves us and takes over. [Richard Dooling, New York Times, Oct 12]
In the middle years of this decade, we had negative real short-term interest rates. And that really means free money, which really distorts the system. Capitalism is premised on the idea that capital is a scarce commodity rationed with a price mechanism. It wasn't just a handful of clever guys on Wall Street who figured out what to do with the free money. People all over the housing and financial-services industries figured out ways to lever themselves up way too far. That's the engine that led us this far astray. [Peter Fisher, Business Week, Oct 20]
about as important as the manoeuvrings of a flea in the fur of a mouse on the back of an elephant hurtling towards the rocks below [Patrick Hosking, The Times (London), Oct 11] Not about SBIR, but it could approach Congress's distraction level.
the U.S. economy is still the most flexible in the world and our "innovation machine" is alive and well [Burton Malkiel, Wall Street Journal, Oct 13]
The trouble with high finance is that nobody speaks English. Jargon defeats clear thinking. [James Grant, Business Week, Oct 20] When four well-versed financial observers named a fantasy bailout team, only one name showed up on two of the lists: Alexander Hamilton.
Micron Technology will cut about 15% of its global work force the next two years as it battles slumping memory chip prices. [Wall Street Journal, Oct 9]
one line currently making the rounds is that the only things anyone wants to buy right now are Treasury bills and bottled water ... we have a globalized financial system in which a crisis that began with a bubble in Florida condos and California McMansions has caused monetary catastrophe in Iceland. We’re all in this together, and need a shared solution. [Paul Krugman, NY Tines Oct 10]
moving to cash right now is just fine as long as you know precisely when to get back into stocks (even though you didn’t know when to get out of them). [Ron Lieber, NY Times. Oct 9]
"But what we've seen in the last few days suggests we'll see even more trade deterioration," said Paul Bingham, the group's trade economist. Mr. Bingham said a global recession is now all but certain, which will take a bite out of all types of trade. U.S. export growth was already slowing before financial markets went into a tailspin, as a result of more-modest economic growth in many regions of the world and an upswing in the value of the dollar. A stronger dollar makes U.S. products less competitive in foreign markets. [Timothy Aeppel, Wall Street Journal, Oct 8]
Iceland: Who Cares? Ripples from the financial collapse in Iceland struck savers and governments elsewhere in Europe on Wednesday, in what economists say may be just the first painful jolts from the small nation to the global economy. As Iceland nationalized a second big bank and abandoned a brief attempt at pegging its tumbling currency, Britain and the Netherlands sought to protect hundreds of thousands of their savers who have money in frozen Icelandic bank accounts. [J Whalen and C Forelle, Wall Street Journal, Oct 9] Globalized = Interlocked.
The Dow is now 35% below its record finish a year ago, on Oct. 9, 2007.
John A. Rogers of the University of Illinois, Urbana-Champaign, and colleagues have come up with a novel method for creating extremely thin solar cells that can be combined in flexible, even partially transparent, arrays. Described in Nature Materials, it could be called the rubber-stamp approach. The technique involves creating a series of precisely spaced “microbars” on a block of single-crystal silicon. These bars, which have a thickness of a few micrometers, have doped regions that create p-n junctions, the main feature of most photovoltaic cells. [Henry Fountain, New York Times, Oct 7]
Is this a final "Crisis of Global Capitalism" -- to borrow the title of a book by George Soros written shortly after the Asian financial crisis of 1997-98? The crisis that kills capitalism has been said to happen during every major recession and financial crisis ever since Karl Marx prophesized the collapse of capitalism in the middle of the 19th century. Although I admit to having greatly underestimated the severity of the current crisis, I am confident that sizable world economic growth will resume before very long under a mainly capitalist world economy. [Gary Becker, Wall Street Journal, Oct 7]
Once again, investors who placed their hopes in technology have been burned. In 1999, they bet on fledgling technology firms because of the promise of what they could be. In 2008, investors put their money in technology because of the promise of what they were not. The results haven't been as desired. [David Gaffen, Wall Street Journal, Oct 7]
Go, Go, Gone? “It’s the beginning of the end of the era of infatuation with the free market,” said Steve Fraser, author of “Wall Street: America’s Dream Palace,” and a historian. “It’s the end of the era where Wall Street carries high degrees of power and prestige. And it’s the end of the era of conspicuous displays of wealth. We are entering a new chapter in our history.” [Tim Arango and Julie Creswell, New York Times, Oct 5]
Tomorrow. It is too simplistic to blame greed for the financial mess. The fault is a broader human trait: the reluctance or inability to consider the downside of a situation that has so many attractive features. The financial products at issue were profitable, and people were getting houses. Any problems that arose would be taken care of tomorrow. Wonderful invention, tomorrow! Kenneth Viste, BOISE, IDAHO [Time, Oct 13]
Small businesses are turning to angel investors, suppliers and personal credit cards as the financial crisis spreads to Main Street and access to commercial bank loans becomes more restricted. ... Some businesses, meanwhile, are finding sympathetic suppliers will help get them over the financing hump. Jorge Marinez and his two partners went this route after getting turned down by seven banks over eight months. [Wall Street Journal, Oct 2]
A government report said that orders to U.S. factories plunged by the largest amount in nearly two years as the credit strains smashed manufacturers with hurricane-like force. [AP, Oct 2]
The financial and economic news since the middle of last month has been really, really bad. And what’s truly scary is that we’re entering a period of severe crisis with weak, confused leadership. .... growing evidence that the financial crunch is spreading to Main Street, with small businesses having trouble raising money and seeing their credit lines cut. And leading indicators for both employment and industrial production have turned sharply worse, suggesting that even before Lehman’s fall, the economy, which has been sagging since last year, was falling off a cliff. [Paul Krugman, New York Times, Oct 3]
The centennial of Henry Ford's creating the American middle class with an auto that auto workers could afford to own. The innovations: assembly line manufacturing and paying workers well above the prevailing wage of the time.
A number of banks have called for a suspension of the rules in favour of being able to use their own internal estimates of the final values of their holdings when the underlying debt matures – a move that would bolster their reported balance sheets. [Financial Times, Oct 1] My bank's worth whatever I say it's worth.
From student loans to businesses, there's just no liquidity, ... said Chris Colarik, a portfolio manager for Glenmede Investment Management [Geoffrey Rogow, Wall Street Journal, Sep 30]
The United States ranks 16th and 20th among nations in college and high-school graduation rates, respectively; 60th in the proportion of college graduates receiving natural science and engineering degrees; and 23rd in the fraction of GDP devoted to publicly funded nondefense research. The number of U.S. citizens receiving Ph.D.s in engineering and the physical sciences has dropped by 22% in a decade. U.S. high-school students rank near the bottom in math and science. [Norm Augustine, Science, Sep 19]
And it's an ill wind that blows no one good. For months, vulture funds and other yield-hunting investors have been poised to buy distressed commercial real-estate assets from ailing institutions. Now, some of them think it may soon be time to pounce. because banks and other sellers of the soured securities and mortgages may be more willing to do deals with them because, unlike the government plan, they aren't insisting on provisions such as a limit on executive compensation. [Lingling Wei and Peter Grant, Wall Street Journal, Sep 29] That's the classic problem of agency where management looks out for itself at the possible expense of the banks' owner-shareholders.
Barriers to entry for robotics companies are
dropping. Technology costs less, more college graduates are entering
the workforce with robotics experience, and seasoned employees are
leaving established robotics companies to form their own startups. It’s
a smaller-scale version of the Internet ecosystem created by alumni of
Google and Amazon.com, says Cory
Kidd, CEO of MIT
robotics spinout Intuitive
Automata Inc. ... Three local companies have been launched or
announced by entrepreneurs with robotics roots cultivated at
Bedford-based consumer and military robot maker iRobot (Nasdaq: IRBT).
Rodney Brooks, co-founder and former CTO of iRobot, started work on
Robotics in Cambridge, whose products Brooks said will help
physical laborers the way the PC helped office workers. Roomba
Joseph Jones and
Paul Sandin, meanwhile, launched Harvest
Automation, a Groton company making robots to work at greenhouses.
And ex-iRobot executives Tom
Grinnell More started North
End Technologies, a startup company quietly working in Nashua,
N.H., on a product that incorporates robotics into its multimedia
Another example is the work of Eliot Mack and Phil Mass, engineers on the Roomba, who left iRobot in 2004 to found Cinital LLC, which makes special-effects technology for film and television studios. Cinital moved from Cambridge to Pasadena, Calif., this year and changed its name to Lightcraft Technology LLC. [Brendan Lynch, Mass High Tech, Sep 12]
The solar power industry is experiencing growing pains over how power is financed and distributed. In the end, larger companies may gain the upper hand, and the incentives could decrease or even disappear. .. “I think probably what we’re going to see is the gradual disappearance of the very small one-, two-, three-person company that does everything,” said Dave Ljungquist, associate director of project development at the Connecticut Clean Energy Fund. ..... Bill Condit, the chief operations officer of Trinity Solar in Freehold, N.J., which evolved from a heating and air conditioning company, said the suspension of the rebate program was a worrisome reminder of the solar hot-water boom and bust of the mid-1980s. At that time, too, generous rebates and tax credits spawned dozens of small solar companies. Almost all went out of business when the programs abruptly ended. [Jan Ellen Spiegel, New York Times, Sep 25]
Got Cash, Sitting on It. Corporate America waded into the darkest days of the credit crisis with more cash than ever before, a sign many of the US’s biggest companies have been bracing for signs that Wall Street’s problems will infiltrate the rest of the economy. Excluding utilities and financial institutions, members of the Standard & Poor’s 500 Index ended June with a record $648bn in cash and short-term securities [Justin Baer, Financial Times, Sep 23]
US exports of high-tech hardware slid 3% in 2007 while imports rose by a like margin, creating a $118 billion tech trade deficit, according to a new American Electronics Association report. [Tom Abate, SF Chronicle, Sep 23]The trade gap in our most valued industry means a need for capital import to balance the national accounts. If you were a foreign account with capital, what American item(s)would you buy? An SBIR firm with little market value or a Treasury note? If the note, maybe the government should do the same. What an interesting test: a firm wanting SBIR has to show that it is a better investment than a Treasury note. How many firms do you think would pass the test?
Researchers at the University of Wisconsin-Madison have developed a simple, two-step chemical process to convert plant sugars into hydrocarbon fuels. The compounds created during the process could also be used to make other industrial chemicals and plastics. [Pachi Patel-Predd, MIT Tech Review, Sep 22]
A steady drumbeat of cutbacks in Oregon's high-tech sector has reduced the number of technology jobs in the state to its lowest point in nearly three years. The most recent cuts came Tuesday, when Hillsboro-based Lattice Semiconductor Corp. announced it will lay off 125 employees in a major restructuring -- about 14 percent of its work force -- including 20 who work in Oregon. [The Oregonian, Sep 17]
Will Tech Survive The Wall Street Meltdown? We're mostly worried about companies for whom Wall Street represents a significant part of their customer base. Blackberry-maker RIM (RIMM) should be OK, ...Dell (DELL) is in trouble ... Meanwhile HP (HPQ) is acquiring EDS, shedding 24,600 employees in the process. ... Looking for optimism? Talk Rupert Murdoch: "Hard times are good for big companies." [Eric Krangel, Silicon Alley Insider, Sep 20]
Last spring, on a research vessel cruising through the North Sea, Swiss scientists examined tiny vials of bacteria mixed with seawater for hints of fluorescent light. By analyzing how brightly the bacteria glowed, and with which colors, they were able to diagnose and characterize the early aftermath of an oil spill. ... Jan Van der Meer, an environmental microbiologist at the University of Lausanne, in Switzerland. He announced his team's results last week at the Society for General Microbiology's autumn meeting in Dublin. [Jocelyn Rice, MIT Tech Review, Sep 18]
A £10 ($18) test to detect faulty genes that cause breast cancer could be on the market within a year. Up to one in ten cases of the disease are caused by inherited faulty genes and women who carry either of them have an 80 per cent chance of developing the condition during their lifetime. [Telegraph.co.uk, Sep 17]
A week in which the artist Damien Hirst sold a “Golden Calf” for several million pounds, while one of the world’s largest banks was collapsing, is an apt time to reflect on our world’s curious economic system. .... raise an entire institution – the unfettered financial world, for example – to the role of an idol and you are not critical of anything it does, either. That has more serious consequences. When outsiders try to show you its flaws, you will not genuinely listen to their arguments. [David Boudanis, Financial Times, Sep 19]
The good news is that tech spending will be better than expected this year. The bad news is that next year things will be worse, said Forrester Research. [Information Week, Sep 16]
SO far, San Diego remains a fertile breeding ground for entrepreneurs, despite the problems in the broader economy. That is due in large part to a nonprofit organization, Connect, that was created 23 years ago to bring together people knowledgeable about business and investment capital with researchers at the universities and research institutes in San Diego. “In 2007, we helped 54 companies start up, and there are 150 in the queue,” said Duane Roth, chief executive of Connect. [James Flanigan, New York Times, Sep 18]
Boulder did not become a start-up hub due to incentive-based tax policy to lure businesses, or special incubators, or mass investments in technical education (though some of these things were tried). Instead, it began with a group of individuals who moved to Boulder for various lifestyle reasons, but all the while were committed to working together to develop a local software and Internet industry. [Ben Casnocha, The American, Sep 10]
The cold wind blowing from Wall Street is sending shivers through the state's high-tech industry, as start-up companies and their venture backers brace for a slowdown in spending on technology and a prolonged freeze on initial public offerings. [Boston Globe, Sep 17]
What are your biggest obstacles to innovation? One of the big challenges is our ability to predict the outcomes. If you make a discovery in research and it’s at a very basic level, it is not at all easy to predict how that discovery translates into a medicine for human beings that is safe and effective. The balance in a company like Genentech is to make something that people can trust, to really innovate, and to take enough risks so that we can do something substantially better for patients. [Susan Desmond-Hellman, The American, Sep 9]
A Stuttering Start. the joint ventures and startups [spun from Sandia and Los Alamos] suffered from too much red tape. They also faced a drop in federal subsidies, the bursting of the tech bubble, and the task of coaxing scientists to think in business terms. "Without market signals, the labs have shown a predictable capacity to be overtaken by bureaucracy," says Carl J. Schramm, president of the Ewing Marion Kauffman Foundation, which focuses on entrepreneurship. The casualties, Schramm says, are "speed, effectiveness, and inventiveness." [Pete Engardio, Business Week, Sep 22]
Doing Better Now. The labs aren't simply collaborating. They're spinning off new tech companies amid the mesas and deserts of New Mexico. An industrial park on 240 acres abutting Sandia's sprawling Albuquerque compound boasts 27 startups that employ 2,184 people and have attracted $234 million in investment capital. All of these companies were founded by former Sandia scientists or rely on technology licensed from the lab. Los Alamos has helped spawn 54 spin-offs since 1997 [Pete Engardio, Business Week, Sep 22]
Growth Medicine . Can the new field of "innovation economics" help the U.S. economy get back on its feet? Facing low-cost foreign competition and floundering financial markets, the U.S. can prosper only by creating and adopting new technologies that spur growth and create jobs, say the disciples of innovation economics. Business Week, Sep 22]
In his new book, The Subprime Solution, Yale University economist Robert J. Shiller says regulators suffered from an "inability to believe that there could ever be a housing crisis of the proportions we are seeing today." [Peter Coy, Business Week, Sep 22] Isn't hindsight great? If the regulator had suggested an incipient collapse and a stiffening of regulation, he would have been pilloried by Congress in support of the vested interests.
What does the great credit crunch do to the case for competitive capitalism? ... Even if in the end we suffer no more than an average post-second- world-war recession it will still look like a narrow escape owing to the readiness of leaders such as Hank Paulson, the US Treasury secretary, not merely to jettison free-market principles but to take risks with prudence to bail out US corporate bodies. There will be no “glad confident morning” for free-market principles for a long time to come. ... I welcome a short and well-written book, The Origin of Financial Crises (Harriman House £16.99) by George Cooper, which attempts to relate apparently esoteric financial issues to elementary economic theory ... Nothing that has happened suggests that governments are any good at picking winners, that freeing international trade is a bad thing or that consumer choice should be overridden. But we need to be reminded of the dictum of Keynes that “money will not manage itself”. [Samuel Brittan, Financial Times, Sep 12]
Jeff Rubin and Benjamin Tal of CIBC, a Canadian bank, issued a memo a few weeks ago saying that a reversal of the great migration of manufacturing operations to China might already be under way. The cost of shipping a standard 40-foot container from Shanghai to America’s east coast, for example, has jumped from $3,000 in 2000 to about $8,000 today. The extra cost of transporting goods halfway around the world, Messrs Rubin and Tal wrote, is wiping out the often slim margins of Chinese exporters. What is more, if oil and shipping prices stay high, many Western companies that now outsource their manufacturing to China might decide that it makes more sense to shift production closer to their customers at home. [The Economist, Aug 9]
Flee the Bear. Russia's stock markets slumped to their lowest levels in more than two years as falling oil prices and geopolitical tension sapped confidence. .. A perception that Russia's political behavior on the world stage has become more unpredictable [Andrew Osborne, Wall Street Journal, Sep 10] Capital does not like the certainty that nationalism and political power trump any considerations of what little law exists there anyway. .... The response: With stock prices plunging to two-year lows, Russian President Dmitry Medvedev sought to boost investor confidence, predicting an impending rebound. But his assurances had little impact amid concerns about the outlook for Russia's economy. [Greg White, Wall Street Journal, Sep 11]
New genetically modified bacteria could slash the costs of producing ethanol from cellulosic biomass, such as corn cobs and leaves, switchgrass, and paper pulp. The microbes produce ethanol at higher temperatures than those used to produce yeast, which is currently employed to ferment sugar into the biofuel. The higher temperature more than halves the quantity of the costly enzymes needed to split cellulose into the sugars that the microbes can ferment. [Pachi Patel-Predd, MIT Tech Review, Sep 19]
A promising way to use the sun's energy more efficiently is to enlist it to split water into hydrogen gas that can be stored and then employed at any time, day or night. A cheap new nanostructured material could prove an efficient catalyst for performing this reaction. Called a nanonet because of its two-dimensional branching structure, the material is made up of a compound that has been demonstrated to enable the water-splitting reaction. Because of its high surface area, the nanonet enhances this reaction. Researchers led by Dunwei Wang, a chemist at Boston College, grew the nanonets, creating structures made up of branching wires of titanium and silicon. [MIT Tech Review, Sep 10]
Corning down 13% [Sep 3, 08] a more than three-year low... after the company lowered its third-quarter sales and profit guidance to reflect a bigger-than-expected drop in orders for glass used in flat-screen televisions and computers. [Investors Business Daily]
The US does still lead the world in the number of researchers (1.3 million), but the European Union is close behind (1.1 million), and China is coming up fast (0.93 million) . The trends are discouraging. The U.S. global share of new doctorates in science and engineering slipped from 52% in 1986 to 22% in 2003; the U.S. share of scientific publications declined from 38% in 1988 to 30% in 2003 . Although the United States led the world in magnitude of total research and development (R&D) investment in 2007 ($353 billion), with about a third of the total, China led the world in the growth rate of its R&D, by 2007, and was expected to pass Japan for second place . .... However, the government continues to believe, wrongly, that market forces are sufficient to bridge the "valley of death" between basic research and commercial innovations without public policy support ... Competitive advantage is, more and more, coming down to talent and imagination in business organization and service, going beyond traditional emphasis on science- and engineering-based product innovations. Scientists and engineers should be steeped in the realities of how the global system for creating, exploiting, and rewarding innovations works most effectively. [Lewis Branscomb, Science, Aug 15]
Unlike the mirrors and lenses in conventional solar concentrators, Baldo's glass sheets act as waveguides, channeling light in the same way that fiber-optic cables transmit optical signals over long distances. The dyes coating the surfaces of the glass absorb sunlight; different dyes can be used to absorb different wavelengths of light. Then the dyes reëmit the light into the glass, which channels it to the edges. [Kevin Bullis, MIT Tech Review, Sep 5]
By adding carbon nanotubes to a stretchy polymer, researchers at the University of Tokyo made a conductive material that they used to connect organic transistors in a stretchable electronic circuit. The new material could be used to make displays, actuators, and simple computers that wrap around furniture, says Takao Someya, a professor of engineering at the University of Tokyo. The material could also lead to electronic skin for robots, he says, which could use pressure sensors to detect touch while accommodating the strain at the robots' joints. Importantly, the process that the researchers developed for making long carbon nanotubes could work on the industrial scale. [Kate Greene, MIT Tech Review, Aug 14]
IBM researchers are detailing what IBM calls a significant breakthrough in the field of nanotechnology that could lead to new developments in processor technology and the field of photonics. The IBM researchers are detailing how they were able to control light emissions from carbon nanotube transistors, which could lead to new ways to develop and power new processors. [Scott Ferguson, eWeek, Sep 3]
Tricky Business, Medicine. A potent substance used in spine-repair surgery to promote bone growth has been linked to life-threatening complications in dozens of patients. Many of the complications involving the product, Medtronic's "Infuse Bone Graft," have occurred during "off label" uses, when surgeons use it in ways that haven't been approved by the FDA. [D Armstrong and T Burton, Wall Street Journal, Sep 4]
Two Protons Walk Into a Black Hole ... It remains to be seen whether comedy classes will help CERN scientists explain their work to the public. CERN's in-house science writer has already made a rap video about the LHC and posted it on YouTube, where it has been viewed some 900,000 times. ... learning to improvise will help them think creatively about some of the toughest questions of physics, such as why gravity is so much weaker than the other fundamental forces, and why 95% of the universe seems to be missing. [Alexandra Alter, Wall Street Journal, Sep 4]
Silicon Returns. New Energy Finance, a research firm, expects the output of silicon for the solar industry almost to double next year. ..... participants in the industry expect prices to fall by more than 40% next year, and over 70% by 2015. ... HSBC predicts that the solar industry will grow by 45% a year until 2012. Such searing expansion is bound to cause more growing pains. [The Economist, Aug 30]
Solar, a Century Idea. Solar panels are one of the least cost-effective ways of combating climate change and will take 100 years to pay back their installation costs, the Royal Institution of Chartered Surveyors (Rics) warned .... The solar power industry accused Rics of failing to take account of the rising cost of energy and other financial benefits of renewable power in its figures. Jeremy Leggett, of Solar Century, said: "They are grossly irresponsible." [Martin Hickman, The Guardian, Sep 3] Can't compete? Get a subsidy. Works for SBIR companies.
the credit crisis refuses to lie down and die. The authorities have bombarded it with interest-rate reductions, tax cuts, special liquidity schemes and bank bail-outs, but still the creature lumbers forward, threatening new victims with every step. Global stockmarkets are suffering double-digit losses this year, and credit markets are once again gummed up. [The Economist, Aug 30]
Paying Respects. When the cortege of the great railway engineer Robert Stephenson passed through London to his funeral at Westminster Abbey, the whole route was lined with crowds. In his homeland on Tyneside, the towns fell silent at noon. On the Thames, Tyne, Wear, and Tees, all shipping lay still, with flags at half-mast. [Science Museum, London]
CodeWeavers CEO Jeremy White, whose software lets Mac and Linux users run Windows programs, pledged to make available its $39.95 program for free if Bush: reduces gas prices to $2.79 per gallon; reduces the average price of milk to $3.50; creates at least one net job in the U.S. this calendar year; returns the median home price in the Twin Cities to $233,000; or brings Osama bin Laden to justice. [Andrew Noyes, Tech Daily Dose, Aug 28]
Economists often parade their theories as if they were as absolute as a mathematical proof, concealing the subjective assumptions on which they rest. ... 'There is nothing like a fact,' he wrote, 'facts are ten times more valuable than declamations'. [Douglas Hurd, Robert Peel: A Biography, 2007] Would that Peel could meet the parading theorists and declaimers of SBIR.
Those who believe in free markets have now received another rude shock: We have not yet sunk into an "official" recession, but it has been more than half a year since any new jobs were created, and, meanwhile, our labor force continues to grow. ... Too much energy has been spent trying to make an easy buck; too much effort has been devoted to increasing profits and not enough to increasing real wealth, whether that wealth comes from manufacturing or new ideas. [Joe Stiglitz, The New Republic, Sep 10]
Because renewable energy technologies are going to constitute the next great global industry. They will rival and probably surpass information technology. The country that spawns the most E.T. companies will enjoy more economic power, strategic advantage and rising standards of living. We need to make sure that is America. Big oil and OPEC want to make sure it is not. [Tom Friedman, New York Times, Sep 3]
Collaborative research, particularly federally funded R&D, is playing an increasingly significant role in producing the top innovations each year, according to a new analysis released by the Information Technology and Innovation Foundation (ITIF). Where Do Innovations Come From? Transformations in U.S. National Innovation System, 1970-2006 shows a dramatically diminishing role for the largest firms acting independently to fuel future technological advances. Read full article here [LARTA, Aug 7]
According to NSF data, companies spent in aggregate $247.7 billion on R&D expenditures performed in the U.S. in 2006. Leading the nation was California, with $58.4 billion in industrial R&D. [SSTI, Aug 27]
Ten Startups to Watch: Instant Voicing by Pinger Founded 2005, Funding $11 million; Sharing, Privately by Pownce founded 2007 funding undisclosed; Cell-phone Streaming by Qik founded 2006 funding $4M; Traffic Master by Dash Navigation founded 2003 $71M; Crisis Sourcing by Ushahidi founded 2008 funding undisclosed; Partial Recall by QTech founded 2004 $5M; Are You ... Influential? by 33Across founded 2007, $1M; Semantic Ads by Peer 39, 2006, $11M; Mashups Made Easy by Mashery, 2006, $5M; Video Packet-Switching by Anagran, 2004, $40M. [MIT Tech Review, J/A08]
Silicon Valley is known worldwide as a center of high-tech innovation, but a new report warns that a widening wage gap is putting pressure on middle-income earners and grinding down those at the bottom. ... Auerhahn is the principal author of "Life in the Valley Economy," a 128-report that likens Silicon Valley's economy to a barbell or an hourglass - great jobs at the top for software engineers and biotech scientists, and lots of low-paying jobs at the bottom for janitors and home health aides. But it's tough times for those in the middle to bottom. [San Jose Mercury News, Aug 26]
Scientists at Harvard University recently announced a much anticipated milestone in regenerative medicine: the creation of stem cells from patients with a variety of diseases. The cells, which can be encouraged to develop into cell types damaged by disease, such as the insulin-producing cells in diabetes or neurons in Parkinson's, are poised to give scientists an unprecedented view of disease. [Emily Singer, MIT Tech Review, Aug 27]
Innovation Anniversary: first oil well drilled, Titusville PA 1859. drilled to a depth of 21.18 m (69 1/2 feet). It was not until the next morning, on August 28, when the driller, "Uncle Billy" Smith, noticed oil floating in the hole they had pulled the drilling tools from the night before. By today's standards, it was a pretty unremarkable hole, probably producing 20 barrels or less of oil per day. [The Paleontological Research Institution]
Bayer CropScience is facing scrutiny because of the effect one of its best-selling pesticides has had on honeybees. A German prosecutor is investigating Werner Wenning, Bayer's chairman, and Friedrich Berschauer, the head of Bayer CropScience, after critics alleged that they knowingly polluted the environment. ... In the U.S. diet, about one in three mouthfuls comes from crops that bees pollinate. Scientists are looking at viruses, parasites and stresses that might compromise bees' immune system. In the past two years, Congress has earmarked about $20 million to boost research. [Sabine Vollmer, Raleigh News & Observer, Aug 27]
Wind Power Pipes Clogged. The dirty secret of clean energy is that while generating it is getting easier, moving it to market is not. The grid today, according to experts, is a system conceived 100 years ago to let utilities prop each other up, reducing blackouts and sharing power in small regions. It resembles a network of streets, avenues and country roads. “We need an interstate transmission superhighway system,” said Suedeen G. Kelly, a member of the Federal Energy Regulatory Commission. [Matthew Wald, New York Times, Aug 27]
Posilac is an government-approved animal pharmaceutical used by U.S. dairy farmers to increase dairy cow’s milk output. Though it has been used by dairy farmers in the U.S. since 1994, the use of the hormone has become controversial in recent years after some dairy wholesalers began to label some brands of milk as being free of rbST. Monsanto has tried to get regulators to force the stop the practice of using such labels, arguing that FDA tests show no difference in milk from cows that have been given Posilac and those that have not. Monsanto gave up the fight and sold the business to Lilly for $300M. [Doug Wong, St Louis Post-Dispatch, Aug 20]
I think that San Francisco’s probably the most successful place for biotechs — for the large biotechs. I think the New Jersey area’s probably the most successful for pharma, but I think what Boston has is that it is world-class in biotech. [Christoph Westphal, Mass High Tech conference, Aug 22]
despite an uncertain economy, worldwide information technology spending is on track to reach $3.4 trillion in 2008 — an 8% increase over 2007, according to the research firm Gartner. Of all spending categories, software and services are set to show the healthiest growth — with projected increases of around 10 percent each. This is partly because companies are in the middle of an upgrade cycle that will continue beyond the end of the decade, Gartner explains. [Phyllis Korkki, New York Times, Aug 24]
What next for the dollar? Expect a soaring dollar compared with the pound and the euro to continue to be the big news story during coming months. [Komal Sri-Kumar, Financial Times, Aug 26]
Researchers at the University of California, Berkeley, have created the first integrated circuit that uses nanowires as both sensors and electronic components. With a simple printing technique, the group was able to fabricate large arrays of uniform circuits, which could serve as image sensors. [Lauren Rugani, MIT Tech Review, Aug 13]
Think Dry. Since 1995 Dow has reduced the amount of water it uses per tonne of output by over a third. Nestlé cut its water consumption by 29% between 1997 and 2006, even as it almost doubled the volume of food it produced. [The Economist, Aug 21]
Smart Meters Imperfect. San Francisco-based Pacific Gas & Electric Co. is in the midst of the biggest smart-meter rollout in the country. It plans to install some 10 million advanced electric and gas meters by 2012. Yet just two years into the program, the company is already saying it will have to spend $600 million to complete the project, on top of the $1.7 billion already budgeted. .... PG&E says the smart gadgets came up short. Among other things, they were supposed to send information to the utility over the power lines. But that proved too costly. PG&E is now planning to replace them with sleeker wireless models. .... politicians and consumer advocates. They say the company is adopting expensive, unproven technology just so it can raise rates. [Business Week.com, Aug 14]
Amateur Competition. In the garage of his house, Frank Sanns spends nights tinkering with one of his prized possessions: a working nuclear-fusion reactor. Mr. Sanns, 51 years old, is part of a small subculture of gearheads, amateur physicists and science-fiction fans who are trying to build fusion reactors in their basements, backyards and home laboratories. ... a loosely knit community www.fusor.net that numbers more than 100 world-wide [Sam Schechner, Wall Street Journal, Aug 18] Don't snicker too loud, one of them may actually stumble on a key.
plantsdoitsocanwe writes "An international team of researchers led by Monash University has used chemicals found in plants to replicate a key process in photosynthesis, paving the way to a new approach that uses sunlight to split water into hydrogen and oxygen. The breakthrough could revolutionize the renewable energy industry by making hydrogen — touted as the clean, green fuel of the future — cheaper and easier to produce on a commercial scale." This was a laboratory demonstration only and the researchers say they need to bring up the efficiency. [slashdot.org, Aug 17]
Exports are the bright spot this year in an otherwise bleak economy. But the world is not suddenly snapping up made-in-America goods like aircraft, machinery and staplers. The great attraction is decidedly low-luster commodities like corn, wheat, ore and scrap metal. This helps explain why manufacturing jobs are continuing to disappear by the tens of thousands and factories are closing even during a miniboom in exports. While the surge in commodities is a welcome relief, it is an unreliable prop for an industrial power. [Louis Uchitelle, New York Times, Aug 18]
The American Wind Energy Association has blown off Minneapolis for its 2009 convention because demand for exhibition space has far outstripped the capacity of the city's Convention Center ... expects to host at least 13,000 attendees and 800 exhibitors ... could end up in Orlando or Las Vegas -- alien territory for the wind industry [Neal St Anthony, Minneapolis Star Tribune, Aug 8]
George Orwell was obsessed - not too strong a word - with the habits of totalitarian states and the attempts by those in authority to control information, manipulate opinion and conceal or distort the truth; every reader of Nineteen Eighty-Four knows this. So it is likely that he would have approved the open democracy of the internet, and been happy to make use of it, if only to express opinions that newspaper editors might have fought shy of. ... [He] started keeping a diary on August 9, 1938, and maintained it on a more or less daily basis till shortly before his death in 1950. Now the trustees for the Orwell Prize have decided, 70 years after his first entry, to post the diaries on the internet, a day at a time, an enterprise that should therefore continue till 2019 or 2020. [Allen Massie, The Telegraph, Aug 8]
Adapting. The U.S. economy is starting to figure out how to curb its legendary appetite for energy. ... With shipping costs surging, companies are rethinking overseas production, slimming down packaging and retooling distribution networks. ... Whether this newfound energy austerity alters the fabric of American life in a lasting way will depend partly on what happens to oil prices over the long term. [J Lahart and C Dougherty, Wall Street Journal, Aug 12]
Will the Internet change China or will China change the Internet? Events in Beijing leave little doubt it's the latter. More interesting, though, is that many Asian governments may be following China's lead. It could be an ominous sign for Asia's economic outlook. Reporters Without Borders calls China the "world champion'' of cyberspace censorship. Journalists in Beijing were reminded of that when they couldn't access Web sites such as Amnesty International. The International Olympic Committee pressured China to allow access to blocked sites. Yet Reuters reported that the IOC had agreed to let China block them in the first place. China's attempts to filter what its 1.3 billion people read or view may serve as a model of sorts for the region. [Bloomberg, Aug 8])
A new electrolyte for solid-oxide fuel cells, made by researchers in Spain, operates at temperatures hundreds of degrees lower than those of conventional electrolytes, which could help make such fuel cells more practical. Jacobo Santamaria, of the applied-physics department at the Universidad Complutense de Madrid, in Spain, and his colleagues have modified a yttria-stabilized zirconia electrolyte, a common type of electrolyte in solid-oxide fuel cells, so that it works at just above room temperature [MIT Tech Review, Aug 4]
what some economists call a neighborhood effect — putting factories closer to components suppliers and to consumers, to reduce transportation costs — could grow in importance if oil remains expensive. A barrel sold for $125 on Friday, compared with lows of $10 a decade ago. ... the Canadian investment bank CIBC World Markets, calculates that the recent surge in shipping costs is on average the equivalent of a 9% tariff on trade. [Larry Rohter, New York Times, Aug 3]
the era in which free trade is organized around rules set in the West — with developing nations following along — definitely appears over, and few are mourning its demise. Even in America, where for years free trade advocates assumed their own country would be the biggest winner, advocates of the system are on the defensive. .... the Chinese realized quickly that Japan’s downfall came in part because it never created a culture of innovation. The Chinese know they do not want to be assembling low-cost goods for long — and so they are experimenting with companies like Lenovo. .... When the Chinese finally took the so-called Doha round of trade talks off of life support last week, teaming up with India to say they would not stop protecting farmers in order to get tariffs reduced on their expanding industrial exports, it was no surprise. This wasn’t about tariff rates. It was about a fundamental shift in power — sophisticated manufacturing capacity, know-how and capital — that the United States, emerging from its own preoccupation with two wars, is just beginning to appreciate. [David Sanger, New York Times, Aug 3]
Less costly methods for producing oxygen from water have been developed by researchers in the U.S. and Australia, possibly setting the stage for more use of fuel cells to produce energy. ... chemist Daniel Nocera of MIT added cobalt and phosphates to neutral water and then inserted a conductive-glass electrode. .. raises the possibility of using solar energy to generate the electricity in daytime and using excess power to get oxygen from water ... Bjorn Winther-Jensen at the Australian Centre for Electromaterials Science, developed an electrode that consists of a conducting polymer on a Goretex membrane. They report that the large surface area of the membrane allows oxygen production at rates close to those of platinum electrodes. ... Nocera said he expects [using expensive Pt] to be overcome by ongoing research. [Randolph Schmid, AP, Jul 31] in Friday's edition of the journal Science
Shell Oil Co. has donated $100,000 to the Houston Technology Center to support the acceleration and commercialization of emerging technology companies in energy, information technology, life sciences, nanotechnology, and aerospace technologies, the center is announcing today. .. one of the largest single contributions to the business incubator and accelerator. In nine years of operation, HTC has provided input to more than 1,000 entrepreneurs and coached more than 200 companies, helping them raise more than $500 million. [Houston Chronicle, Aug 1]
BYD for Build Your Dream — little-known company has grown into the world’s second-largest battery producer in less than a decade of existence. Now it plans to make a great leap forward: it has built a 16-million-square-foot auto assembly plant here and hired a team of Italian-trained car designers; it plans to build a green hybrid by the end of the year. No longer content to be the home of low-skilled, low-cost, low-margin manufacturing for toys, pens, clothes and other goods, Chinese companies are trying to move up the value chain, hoping eventually to challenge the world’s biggest corporations for business, customers, power and recognition. The government is backing the drive with a two-pronged approach: using incentives to encourage companies to innovate, but also moving to discourage low-end manufacturers from operating in southern China. That step would reverse one of the crucial engines of this country’s spectacular economic rise. [David Barboza, New York Times, Aug 1]
researchers at UT Austin and VPI have engineered a chlorine-tolerant membrane that filters out salt just as well as many commercial membranes. The researchers say that such a membrane would eliminate expensive steps in the desalination process and eventually be used to filter salt out of seawater. The results appear in the most recent issue of the journal Angewandte Chemie. [Jennifer Chu, MIT Tech Review, Jul 30]
Amgen up 12% [Jul 28, 08] A trial of the biotech giant's bone-loss treatment, previously seen by Wall Street as a glowing, but risky, prospect, eased fears about its safety. After the bell, Amgen boosted its outlook for the year. [Wall Street Journal, Jul 29, 08]
Doubled Electricity. By improving the electronic properties of a common thermoelectric material--a type of semiconductor that converts heat into electricity--researchers have doubled its performance, making it more practical for generating electricity from waste heat ... the researchers, including Joseph Heremans, a professor of mechanical engineering and physic at Ohio State University, added trace amounts of thallium to lead telluride, a thermoelectric material that's been generating electricity onboard deep space probes for decades. [Kevin Bullis, MIT Tech Review, Jul 24]
Great minds think (too much) alike. Is it good that ONLINE databases of scientific journals have made life easier for scientists as well as publishers. Maybe not. James Evans, a sociologist at the University of Chicago, found that the opposite is happening. as more journals become available online, fewer articles are being cited in the reference lists of the research papers published within them. Moreover, those articles that do get a mention tend to have been recently published themselves. Far from growing longer, the long tail is being docked. [The Economist, Jul 19]
Computing in 100 BC. After a closer examination of a surviving marvel of ancient Greek technology known as the Antikythera Mechanism, scientists have found that the device not only predicted solar eclipses but also organized the calendar in the four-year cycles .... sometimes called the first analog computer, was recovered more than a century ago in the wreckage of a ship that sank off the tiny island of Antikythera, north of Crete. Earlier research showed that the device was probably built between 140 and 100 B.C [J Wilford, New York Times, Jul 31]
A new way to make advanced lithium-ion battery materials addresses one of their chief remaining problems: cost. Arumugam Manthiram at the University of Texas at Austin demonstrated that a microwave-based method for making lithium iron phosphate takes less time and uses lower temperatures than conventional methods, which could translate into lower costs. [Kevin Bullis, MIT Tech Review, Jul 29]
Build It, They're Coming. The surge in Internet video is being matched by a transoceanic building boom [$6.4B], a big change from several years ago, when telecom companies were going belly-up from overbuilding their networks. [David Talbot, MIT Tech Review, J/A08]
Yadda, yadda, yadda; forget it. World trade talks collapsed after seven years of on-again, off-again negotiations, in the latest sign of India’s and China’s growing might on the world stage and the decreasing ability of the United States to impose its will globally. [S Castle and M Lander, New York Times, Jul 30] Happy words about trade advantages aren't enough in a world of individual nations seeking economic gain.
"Please sir, I want some more." like college graduates whose parents want them married or out in the workforce on their own. Instead, they've come home to hit up mom and dad for more money to go to grad school. .. the venture-backed start-up world in the summer of 2008, when the prospects for cutting the cord look mighty daunting. ...The window for initial public offerings is closed tighter than at any time since the 1970s. Technology and life sciences companies are fetching smaller sums from buyers. [Robert Weisman, Boston Globe, Jul 28]
Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring. [Peter Goodman, New York Times, Jul 28] Just the kind of help SBIR advocates need; since private capital won't support good small businesses, government should. Never mind that most of the companies supported are creating no wealth, just doing government jobs.
Check Your Assumptions. But behind the political pyrotechnics is a simple truth: Executives at IndyMac, like many people on both Wall Street and Main Street, apparently never dreamed that home prices might fall. [Vikas Bijaj, New York Times, Jul 29]
Sell the roots, lose the land. farmers should resist the urge to harvest their crop residue and sell it for ethanol production, a federal researcher says. Leaving wheat residue on the ground helps preserve soil while harvesting the residue would speed erosion ... But farmers are rushing to cash in on the high prices [Nicholas Geranios, AP, Jul 24] A proposal to build the nation's first commercial ethanol production plant using yard trimmings, paper, wheat straws and other green wastes was approved yesterday by Los Angeles County officials. [Daisy Nguyen, AP, Jul 24] Beware the urge to maximize in the short run. The farmers' urge mimics the national financial urge to fix problems in the short run without a view to the long term. With handout programs for every affected interest, and tax cuts for all, where do we find long term stability?
A pixel that uses a pair of mirrors to block or transmit light could lead to displays that are faster, brighter, and more power efficient than liquid crystal displays (LCDs). Researchers at Microsoft Research who published their novel pixel design in Nature Photonics say that their design is also simpler and easier to fabricate, which should make it cheaper. ]Pachi Patel-Predd, MIT Tech Review, Jul 21]
Power transmission in Texas from where the wind blows free to where the people live got a big boost with a $4.93 billion wind-power transmission project, enough for 3.7 million homes on a hot day when air-conditioners are running ... Transmission companies will pay the upfront costs of the project. They will recoup the money from power users, at a rate of about $4 a month for residential customers. [Kate Galbraith, NY Times, Jul 19] Which means more transmission lines along, more wind generators, and more openings for technology improvements.
One barrier is that Santa Clara County is an expensive place for manufacture. The valley is to lose yet another public company as Catalyst Semiconductor, a fabless maker of programmable semiconductors based in Santa Clara, has agreed to be acquired by ON Semiconductor of Phoenix, AZ [San Jose Mercury News, Jul 17, 08]
Internet Gotcha? A new book by two researchers explains how companies' reputations can be tarnished by the [unmediated, 24/7, often anonymous] cacophony of Internet commentary, and how they can fight back. .... "Groundswell - Winning in a World Transformed by Social Technologies," published this spring by Harvard Business School Press, Josh Bernoff and Charlene Li lay out the threats and opportunities. [Robert Weisman, Boston Globe, Jul 20]
the second leak at an Areva [French] nuclear power plant in two weeks. [NY Times, Jul 19] It doesn't take many nuclear leaks to scare the public about nuclear power because radioactive material in the open is dangerous and hard to collect.
In Winner Take All: How Competitiveness Shapes the Fate of Nations, longtime Silicon Valley executive Richard J. Elkus Jr. demonstrates how, through complacent government and misguided business practices, the U.S. has surrendered its lead in one key market or technology after another, from cameras and video displays to HDTV. As a result, he says, the country has lost its competitive edge—and it will take a new mindset and gutsy investment to get it back. ... reminiscent of arguments made in the mid-1980s, when the U.S. fretted about competition from Japan. .... The author also believes the strategy must be built on agreement that certain technologies and markets seem likely to be vital to the nation's future and must receive investment even if there won't be an immediate payoff for shareholders. [Steve Hamm, Business Week, Jul 28] Another advocate for government program for innovation that would soon become a playground for lobbyists and vested interests, all of which would get a piece of a political pie. The results would likely be in the eye of the beholder because in a complex economy, economic cause and effect are not easily joined. Everyone wanting a handout could always find some argument of a national need suffering from a market failure. When a politician cites market failure, hold on to your taxpaying wallet.
"From small beginnings there developed a tangled web of wishful thinking, scientific misjudgment, institutional lapses and human failings," the committee wrote. "Each strand could have been resolved separately, but knitting them together produced a crisis." as A Purdue University panel has found two instances of misconduct by a researcher who claims he produced nuclear fusion in tabletop experiments. [Deanna Martin, AP, Jul 18]
"Cheer up," he said, "things could be worse." So I did, and sure enough, things got worse. Even to many economists who recently thought the gloom was overblown, the situation looks grim. The economy is in the midst of a very rough patch. The worst is probably still ahead. ... But, despite what some doomsayers now proclaim, this is not the Great Depression, when unemployment spiked to 25 percent and millions of previously working people woke up in shantytowns. Not by any measure. ... From 1985 to 2002, the average American home sold for about 14 times the annual rent for a similar home, according to Moody’s Economy.com. By early 2006, home prices ballooned to 25 times rental prices. Since then, the ratio has dipped back to about 20 — still far above the historical norm. [Peter Goodman, NY Times, Jul 19]
After John M. Haake started his Bridgeton-based company, Titanova Inc., in February, he wanted an adviser who could help him navigate the maze of starting a business. Through a free mentoring service called InnovateVMS (Clayton, MO, an upscaling close-in burb) , Haake met more than one business counselor. He met seven. The service, modeled after a program at the Massachusetts Institute of Technology, matches startup businesses with teams of experienced business leaders who can serve as mentors. It was launched about 14 months ago by Innovate St. Louis, a regional group aimed at innovation and entrepreneurship. [Angela Tablac, St Louis Post Dispatch, Jul 17, 08]
In partnership with Rensselaer Polytechnic Institute and the state University at Albany, IBM announced plans Tuesday for a $1.5 billion expansion in nanotechnology research and development that will create about 1,000 jobs, including at least 325 at UAlbany. [Danielle Sanzone, Troy Record, Jul 17]
Salary.com, a leading provider of on-demand compensation and talent management solutions, announced the results of its 2008 Salary Value Index (SVI). ... ranks the best and worst American cities in which to build personal wealth.... the complete list of the 2008 Salary Value Index cities, Best Cities 1. Plano, TX, 2. Aurora, CO, 3. Omaha, NE, 4. Minneapolis, MN, 5. Albuquerque, NM. Worst Cities 1. New York,2. Washington, 3. Los Angeles, 4. Honolulu, 5. San Francisco.
"There seems to be something in the water in Washington where people think market manipulation is the reason oil prices are rising and stocks are falling," said Peter Morici, a professor at the business school at the University of Maryland. "Stocks are falling because the global capital markets are downgrading the U.S. economy because the banks are broken." [Wall Street Journal, Jul 16]
Manufacturing Revival. The economic forces working in favor of U.S. manufacturing include a weaker dollar, which is helping drive sales for exporters and their suppliers. Rising transportation costs are encouraging companies to buy and produce more goods closer to home. An infrastructure and mining boom abroad is boosting orders for the huge cranes made by Manitowoc Co., one of the [Wisconsin] town's oldest companies. At the same time, rising labor costs in some countries are starting to make outsourcing less attractive. ... Still, Nationally, only about 10% of the U.S. work force is currently employed in manufacturing. That's down from a peak of about 42% in the early 1940s, and about 18% in the 1980s. [Timothy Aeppel, Wall Street Journal, Jul 18] If only 10% are making things, what are the rest doing? Selling mortgages to each other?
Oil is Still for Capitalists. No commentator seems to know that oil exploration is already subject to "use it or lose it" provisions -- and that petroleum exploration typically goes forward when companies feel they'll make a profit, and doesn't when they don't. Neither pundit nor politician knows anything about the oil business. [Econopundit blog, Jul 8] [B]oth parties are responding (unsurprisingly) to the American public’s great sensitivity to short-term prices for gasoline (in the summer) and home heating oil (in the winter). No doubt high prices are causing a lot of hardship. ...But market prices are high today for a reason. What is the market failure that would call for government intervention in the oil market? [Jeff Frankel, Economist's View blog, Jul 15]
We apologize for the delay, but, hey, you're calling India for free. WSJ's daily cartoon Pepper and Salt shows a man holding a telephone in front of a computer monitor.
The 10 Emerging Technologies of 2008: Modeling Surprise, Probabilistic Chips, NanoRadio, Wireless Power, Atomic Magnetometers, Offline Web Applications, Graphene Transistors, Connectomics, Reality Mining, Cellulolytic Enzymes. [MIT Tech Review, M/A08]
Roughly $4 billion of Whirlpool's 2008 $19 billion in revenue results came from their innovation areas. [Industry Week, Jul 16]
over two-thirds (67%) [of companies with sales $20M to $5000 M] said their company’s international sales are growing faster than their domestic revenue. “We’re fast approaching a tipping point among U.S. companies as a growing number of them derive a significant portion of their revenue overseas, said Christopher P. Davies, senior executive VP for North America [of HSBC bank] [bank press release]
While NFIB is relatively small—600,000 members compared to AARP’s 38 million—it is remarkably powerful. Fortune has frequently named it the most powerful business lobby in Washington, and in 2005 Republican members of Congress identified it as the most powerful congressional lobby.... Small business owners occupy a Norman Rockwell-space in the American imagination. But as our analysis suggests and experiences in Washington and the nation’s state capitals repeatedly reveal, the appeal of small business has been appropriated by a powerful interest group that does not fully represent the views of small-business owners. [Nicole Kazee, Michael Lipsky, and Cathie Jo Martin, Boston Review, J/A08]
Free Market Speculators - Good and Bad. During the tech-stock bubble in the late 1990s, shorts were overwhelmed by the thundering herd of irrationally exuberant bulls. Then, it was difficult to bet against new tech-stock offerings because shares were in limited supply and costly to borrow. Stocks ended up being clearly overpriced for long stretches. In that case, and during the housing bubble, the speculators made everybody feel good, but were the bigger menace to the markets and economy, pumping up tech shares and home prices to unsustainable levels. Very few people complained about speculators then. Trying to stop them now could lead to still more market folly. [Mark Gongloff, Wall Street Journal, Jul 17] The arguments about short sellers also apply to oil futures traders - they provide liquidity and amplify manias.
speculative manias are an apparently inescapable feature of our entrepreneurial capitalism. "America, from its inception, was a speculation," Aaron M. Sakolski wrote at the beginning of his 1932 classic of economics, The Great American Land Bubble. I know that the railway, automobile, and airplane industries were all built in fits of speculative excess. Most of the companies of those eras no longer exist; but the best are still around. Similarly, I remember that the best of the dot-com companies survived the crash and continue to influence our lives. [Jason Pontin, MIT Tech Review, J/A08]
Different This Time. John Kenneth Galbraith pointed out on numerous occasions that, just as each generation of teenagers believes it invented sex, each generation of spivs (sorry, 'financial executives') believes that it has created a 'New Economics' based on deregulation. Always it ends in massive state bail-outs. [Eric Skelton, Cardiff, The Times, Jul 16]]
Laptops Selling. Intel easily beat analysts' expectations as it reported a 25% jump in profit and record sales in the quarter, fueled by strong sales of processors for laptop computers. [Wall Street Journal, Jul 16]
Spend and Borrow, Borrow, Borrow. “We were betrayed,” said Mr. Liszewski, who was still not sure he could believe the news that the company had agreed to be sold. “The good Lord was sold out for 30 pieces of silver. We were sold out for $70 a share.” August A. Busch IV, the scion who runs the family brewery that makes Budweiser and Michelob and dates to before the Civil War, had vowed that there would be no sale on his watch. But in the end, sentiment and tradition were no match for a $52 billion offer from the Belgian beer giant InBev. [Dirk Johnson, New York Times, Jul 16] It's not a national security problem, this time, it's only a beer company in beer-land St Louis that shows the consequences of the rise of the Euro against the ever-devaluing dollar. Since the people from whom we borrow to prop up our spending have to buy something with the dollars they accumulate; why not a profitable beer company? Which national icon is next for the next $200 billion we borrow to support our Iraq dream? Eventually the voters will realize that a national dept is not just an Washington abstraction.
There seems to be a general feeling, as a Hastings Center working group put it, that “behavioral genetics will never explain as much of human behavior as was once promised.” [David Brooks, New York Times, Jul 15]
Intel Capital is boosting its investments in clean technology startups as a way to develop new sources of power for Intel processors. The chipmaker's corporate venture arm, one of Silicon Valley's largest, said this week it put 24 million euros in a German company, Sulfurcell, which converts sunlight into electricity by using modules coated with a thin metallic film. .... its third clean technology investment in less than six weeks [Deborah Gage, San Francisco Chronicle, Jul 11]
A Boston University spinout looking to reduce the mechanical components of electronic devices to the nano level has landed $8 million in its Series A round of funding. Sand 9 was founded by Pritiraj Mohanty, a physics professor at BU, and Matt Crowley, a former principal at BU’s Community Technology Fund, and it aims to bring to market a nanomechanical resonator that investors claim could change the performance and capabilities of wireless electronics, including cell phones and GPS devices. [Mass High Tech, Jul 11]
In the 1990s, a cancer drug called TNP-470 dramatically increased life span for some patients and led to complete cancer regression in others. But when neurotoxicity was detected in some patients, clinical trials were halted. This is a common problem: many drugs that show great promise in the lab fail in clinical trials due to unforeseen toxicity. Nanomedicine, however, promises a way to make safer, more effective versions of such drugs. Researchers at Children's Hospital Boston have created and tested in mice a safer version of TNP-470. "This is one of the first examples of nanotechnology resurrecting older drugs that we're aware of," says Piotr Grodzinski, director of the National Cancer Institute's nanotechnology programs. [Katherine Bourzac, MIT Tech Review, Jul 11]
Ate His Own Cooking. DeBakey pioneered numerous cardiovascular procedures, including the coronary bypass and the artificial-heart transplant. In 1954, he devised a technique to repair arteries using a Dacron tube he made on his wife’s sewing machine. In 2006, he became the oldest survivor of the procedure he invented. .... I scheduled my last operation when I was ninety. [Cal Fussman, Esquire, Jul 12]
Boys Love Toys. What’s wrong with a hypersonic aircraft? Nothing, except there’s no real explanation for how this technology will defend against future threats, or perhaps more to the point, why this technology was selected over other investments, such as alternative-energy initiatives (which are also funded, but not at that level). As one longtime defense analyst lamented to me, the danger of the Pentagon’s current approach to technology is that without a clear prioritization, everything seems worthy of investment. In that case, what we’ll get is what we have: a military equipped to deal with a future threat that may never exist, while often lacking the tools to cope with the present. [Sharon Weinberger, Foreign Policy, Jul 08]
Attitudes Have Consequences. More and more foreign firms whose homeland currency outweighs the U.S. dollar have been setting up in Massachusetts, particularly in the life sciences sector. [Mass High Tech, Jul 11] For Euro companies, it's a no-brainer. In addition to Harvard and MIT, it's about the closest American place to Europe both geographically and attitudinally. Why would a French science-based company, for example, locate in the state whose representatives changed the pommes-frites to Freedom Fries? Or in a state that denies evolution?
All of the money [China] has absorbed from its net exports has helped the country build up a mountain of foreign-exchange reserves, now totaling about $1.8 trillion. That mass of reserves now looks too big for anyone's good -- it's a source of inflation in China and uncertainty for the global financial system. [Wall Street Journal, Jul 11] What would be the political response if China used a big chunk of that money to buy farmland in Iowa on which it grew crops that it exported home? Investors from China, which imports huge amounts of soybeans and crude palm oil, are purchasing farm land in Africa and Southeast Asia. Korea and Saudi Arabia doing likewise in other countries. [T Wright, M Fam, and P Barta, Wall Street Journal, Jul 11]
An Innovation Competitor? A self-described "chemistry nerd," Dow Chemical CEO Liveris sees a day when Dow scientists will create must-have products craved by customers around the world, just as it did back in the 1960s, he says. .... his grand plan to turn his staid company into a hot-shot high-tech innovation machine. .... Coaxing a high-tech butterfly from a commodity-chemical cocoon is far from easy, experts and competitors say [L Eaton and A Campoy, Wall Street Journal, Jul 11]
Going Nowhere. this newspaper, and most of Wall Street, has declared that stocks have officially entered a bear market now that the Dow Jones Industrial Average is 20% below its record high of last October. I think that's poppycock. We've been in a bear market for years; the Dow was almost 600 points higher in early 2000 than it is today. What about that 10% yearly return that U.S. stocks supposedly provide with near-certainty? To earn a 10% long-term return, according to Morningstar, you need to have bought at least 19 years ago and held on ever since. [Jason Zweig, Wall Street Journal, Jul 12]
Andy Says Go Electric. Energy independence is the wrong goal. Oil, like all other goods, flows toward the highest bidder. Consequently, talking about "independence" in a global economy ruled by market forces is a contradiction. As national policy, we must protect the U.S. economy from interruptions in the supply of such a critical commodity -- whether those interruptions are related to natural or political causes. I believe that the appropriate aim is to strengthen our energy resilience to adjust to such changes. We can do this by increasing our reliance on electricity. [Andrew Grove, Washington Post, Jul 13]
This is the summer of our discontent. Only 14% of Americans are satisfied with the way things are going in the United States, the lowest figure recorded by Gallup’s pollsters since they began asking that question almost 15 years ago. Consumer confidence is at its lowest level in 28 years, according to the respected Reuters/ University of Michigan survey. And not many Americans are expecting things to improve soon. [Irwin Stelzer, The Sunday Times, Jul 13]
As professors Carmen Reinhart and Kenneth Rogoff lay out in one of two recent papers on crises, the current one follows "a well-trodden path laid down by centuries of financial folly." Crises are often preceded by a buildup of asset prices and borrowing. The "deleveraging" that follows creates pernicious feedback loops -- firms reduce debt, selling assets and raising equity, which pushes asset prices lower, forcing them to reduce more debt and sell more assets. It's probably one reason these things come in waves. A common psychology of denial and acceptance is another reason for the waves, as is the mystery of price discovery in such uncertain environments. .... Whatever the policy response, history suggests this won't be finished soon. New waves of market turmoil and economic pain should come as no surprise. [Jon Hilsenrath and Mark Gongloff, Wall Street Journal, Jul 14] It was another great boom while it lasted.
we should now launch a merciless Kulturkampf against every feature of modern Britain that is inimical to our competitive success. We should summon up our courage and tell our ballooning children to put down their beastly PlayStations and go and play outside. We should encourage them to walk or cycle to school. We should stop the sale of school playing fields. We should finally abandon the ethic of "all must have prizes". [Boris Johnson (newly elected mayor of London), Telegraph, Jul 11]
Technology is different. Despite pervasive economic uncertainty, that's the message that many of the industry's big firms are sending in their latest earnings reports. ... the general attitude toward technology. It no longer represents discretionary spending. You may forgo buying a new, all-titanium performance refrigerator, but you can't go without your DSL connection or your mobile phone. .... The big opportunity for the IT industry is that the world remains essentially unwired. While 71% of Americans are connected to the Net, that number is only 20% worldwide [David Kirkpatrick, Fortune, May 28]
But Will It Make Money? US Web sites are waking up to a sobering reality: A huge share of their traffic now comes from overseas, but they are struggling to make money from it. ... Many US sites now draw more than half of their audiences from international visitors but generate only about 5% of their revenue from that traffic [E Steel and A Sharma, Wall Street Journal, Jul 10]
Future Tech: Innovations That Will Change Your Life: Johns Hopkins University's Robotic Prosthetic Arm, UC Berkley's E-nose, Microsoft's LucidTouch, MIT Media Labs' Graspables, Carnegie Mellon University's Computer Vision Systems, Georgia Tech's Machine Hearing, [Eric Griffith, PC Mag, Jun 6]
Scientists at the University of Cambridge have for the first time identified a key component to unravelling the mystery of room temperature superconductivity, according to a paper published in today's edition of the scientific journal Nature. [Science blog, Jul 9]
Engineers at the University of Texas at Austin have patented a laser microscalpel that allows a surgeon to operate on tissue one cell at a time, precisely targeting disease while leaving healthy surrounding cells alive. [Lissa Harris, MIT Tech Review, Jul 9]
there is a fair chance that the sky is the limit ... [First, for 2-3 years] We will be unemployed but able to afford petrol (gasoline)... then the relentless upward march of commodity prices, including oil, gas and agricultural commodities. The reason is simple. Global demand growth is heavily biased towards energy-intensive production and consumption in emerging markets. ... At a horizon of a decade or more, high energy costs may reduce the energy intensity of production, investment and consumption, but total energy demand is still likely to rise even if global real GDP growth averages only 3 or 4 percent per annum. [Willem Buiter, Financial Times, Jul 9]
Win by Working Harder? Toyota's lead engineer, 45, on Camry hybrid model averaged 80 hours OT in two months before he died. ... He regularly worked nights and weekends, was frequently sent abroad and was grappling with shipping a model for the pivotal North American International Auto Show in Detroit ... Such deaths have steadily increased since the [Japanese] Health Ministry first recognized the phenomenon in 1987. [Jay Alabaster, AP, Jul 9]
Alex d'Arbeloff, who cofounded the electronics company Teradyne [SBIR had not yet been invented] above a Boston sandwich shop in 1960 and turned it into a $1 billion business, died last night. Mr. d'Arbeloff, who was 80 and lived in Brookline, had also served as chairman of the MIT Corporation for several years. ... born in Paris, the son of Russian immigrants who had escaped that country around the time of the revolution. With his family, he moved to South America, to New York, and to Los Angeles. He graduated in 1949 with a bachelor's degree in management from MIT, where he and [co-founder] DeWolf lined up alphabetically during an ROTC class, [Boston Globe, Jul 10]
Buying In With Our Dollars. The hunt for the great American trophy asset is on. The global commodities boom and the dollar’s decline have unleashed a wave of big money buys of prized American assets by newly flush foreign investors. From $100 million mansions in Palm Beach, Fla., to $23 million modern art confections, to multibillion-dollar stakes in once-venerated Wall Street banks, the number of flashy acquisitions by Russian and Ukrainian oligarchs, Qatari sheiks and large government-sponsored funds in the Middle East is growing. ... But recall a similar financial plunge by Japanese investors into marquee American properties .. That foray ended badly for the Japanese investors [Landon Thomas, New York Times, Jul 10] Although doubt reigns over whether such investments will be profitable, the foreign wealth may not have profit first on its list of objectives.
As the old saying goes [about buying cheap stocks], the market can stay irrational longer than you can stay solvent. [James Stewart, WSJ, Jul 9]a war for talent With their services increasingly in demand, Triangle companies that help drug makers test new medicines are hiring like mad. Some employees at smaller contract research organizations are being snatched up by larger competitors that can afford to pay more. [Sabine Vollmer, Raleigh News & Observer, Jul 9]
For the first time in history, a solar-powered car is driving around the world without any carbon emissions. Swiss adventurer Louis Palmer is taking a small blue environmentally-friendly taxi around the world. The solar-electric two-seat taxi with attached trailer ... With a full component of batteries, the Solar Taxi has an autonomy of almost 200 miles. With additional energy from the solar cells on a sunny day, it can travel almost 260 miles. ... top speed of 60 miles an hour and needs no gasoline at all. Read more about this project.
Microsoft is reinventing itself, and it's looking to One Memorial Drive for a dose of innovation. That will be the home of Microsoft's Boston Concept Development Center, a first-of-its-kind research unit that's assembling dozens of engineers and designers and sniffing out technologies with the aim of incubating new Internet businesses within the company. ... If the Center can become a wellspring of innovation - in fields ranging from social networking to Internet search - it will spin out new businesses that can grow in the Boston area [Boston Globe, Jul 5]
“THE wolves have not encircled us yet,” the Denver Post opined in an article in 2006 entitled “Signs America's Scientific Edge is Slipping”, “but there's no denying the sounds of scratching at the door.” ... The report demonstrates that America is still the world's science and technology powerhouse. It accounts for 40% of total world spending on research and development, and produces 63% of the most frequently cited publications. It is home to 30 of the world's leading 40 universities, and employs 70% of the world's living Nobel laureates. America produces 38% of patented new technologies in the OECD and employs 37% of the OECD's researchers. ... Others worry that non-US citizens now account for 41% of science and engineering PhDs. [The Economist, Jun 14]
Ever since the tech-stock bubble burst at the end of the 1990s, the Federal Reserve has kept the economy from feeling too much pain by using low interest rates to push that bubble from one asset class to another. First it went from tech stocks to housing, keeping consumers spending and the economy more or less afloat. Now, some say, the bouncing bubble has landed in a place that's not so helpful: commodities. ...The next bubble might also be floating to the alternative-energy sector, which raised nearly $14.8 billion in initial public offerings of stock last year -- more than the $11.6 billion that tech-stock IPOs raised in 1998, according to Dealogic. [Mark Gongloff, Wall Street Journal, Jun 26]
Good Corn, Bad Corn. Predictably, the corn folks say the mandate has benefited Missourians — to the tune of $285 million this year and more than $2 billion over a decade. Show-Me’s Justin Hauke and David Stokes, however, say those figures omit some very large negatives. Specifically, they say the corn promoters are leaving out the cost to taxpayers, and they’re ignoring the fact that ethanol has a lower energy content than gasoline. Their bottom line is much different: We find that accounting for these costs significantly impacts the MCMC savings projections and would result in a net loss to Missouri consumers of almost $1 billion during the next decade. If one were to consider the additional impact of the E-10 mandate on higher food prices and CO2 gas emissions, these costs would be even higher. The ethanol mandates, they conclude, are merely another form of special-interest legislation: Missouri should adopt energy policies that benefit all Missorians, not just those who happen to be on the winning end of a corporate subsidy. [David Nicklaus, St Louis Post Dispatch, Jul 4] As always, where you stand depends on where you sit.
Bernstein concludes with vigorous and well-argued chapters on the current state of free trade. Over time, the right to buy and sell freely has not only brought "a bounty of material goods" and intellectual and cultural riches but also has helped to make the world a less violent place, he says. The drop in violence, Bernstein writes, is because of "the increasing realization that neighbors are more useful alive than dead." [Steve LeVine reviewing Bernstein's A Splendid Exchange, Business Week, Jun 16] As vested interests spar for special advantage, we should keep in mind our greater goal of encouraging competitive capitalism everywhere.
The Law as Information. One of the disconnects of the Information Age is that we expect perfection in the operating systems that make technology function smoothly, but we have low expectations for the predictability and reliability of the operating system for people known as the law. This is surprising, because the law is itself an information system whose aims include telling people as clearly as possible what they can and can't do, and establishing fair and reliable rules, procedures and penalties. Out-of-control jury awards and frivolous litigation are signs of a legal regime that sometimes is less a system than a series of random results. [LG Crovitz, Wall Street Journal, Jun 30]
For most companies, innovation is a proprietary activity conducted largely inside the organization in a series of closely managed steps. Over the last decade, however, a few consumer product, fashion, and technology businesses have been opening up the product-development process to new ideas hatched outside their walls .... distributed cocreation, to use its technical name. LEGO, for instance, famously invited customers to suggest new models interactively and then financially rewarded the people whose ideas proved marketable. [Buguin, Chui, Johnson, McKinsey Quarterly, Jun 08] SBIE was supposed to co-create but evidence of whether it works or not is hard to find in the cloud of political grasping for handouts. [thanks to Brad Delong's blog]
The Chinese began printing 600 years before Johannes Gutenberg introduced the technique in Germany. They built the first chain drive 700 years before the Europeans. And they made use of a magnetic compass at least a century before the first reference to it appeared elsewhere. So why, in the middle of the 15th century, did this advanced civilisation suddenly cease its spectacular progress? ... By the time Joseph Needham died in 1995, he had published 17 volumes of his “Science and Civilisation in China” series, including several that he wrote entirely on his own. .... So powerful has Needham’s contribution been to the historiography of Chinese science that this conundrum is still known as “The Needham Question”. [The Economist, Jun 7 reviewing part 11 of volume five. Each part is a book, in this case a 512-page tome on ferrous metallurgy by Donald B. Wagner, the 24th book in the series.]
Here we go again. Oil prices have roughly quintupled since 2002, once again the result of strong global demand running into limited global supply. .... Then  as now, Dick Cheney was close to the helm. What's more, the erroneous lessons he took away from the 1970s contribute to the problems that haunt us today. Cheney was Gerald Ford's chief of staff in 1976, when soaring oil prices helped doom Ford's reelection campaign. Cheney became obsessed with the fight to control the flow of Middle Eastern oil. That obsession, which by many accounts contributed to Cheney's urge to launch the Iraq war, has made the United States much more vulnerable in terms of energy, not only by tying the United States down in a disastrous military effort but also by diverting attention from a more coherent energy strategy. [Jeffrey Sachs, Fortune, Jun 08]
"Today's financial age has become a period of unbridled excess with accepted risk soaring out of proportion to possible reward," [Ted Forstmann] wrote in October 1988. "Every week, with ever-increasing levels of irresponsibility, many billions of dollars in American assets are being saddled with debt that has virtually no chance of being repaid." Within a year, the junk-bond market had collapsed, and within 18 months Drexel Burnham Lambert, the leading firm of the junk-bond world, was bankrupt. [he] sees even worse trouble coming today. .... I didn't even know subprime mortgages existed and I was worried about the credit crisis." [Brian Carney interviewing Forstmann, Wall Street Journal, Jul 5] Unrestrained capitalism simply cannot contain its tendency to excess.
Limbaugh: "I'm Not Retiring Until Every American Agrees With Me" And with a $400M contract, he'll probably keep talking despite the proportion of drivel.
WHEN Bill Gates helped to found Microsoft 33 years ago there was a company rule that no employees should work for a boss who wrote worse computer code than they did. ... To let it all go is to acknowledge that his best work at Microsoft is behind him. It is to accept that the innovator’s curse is to be transitory. ... Gates’s vision has come to seem so obvious - that computing could be a high-volume, low-margin business, that making hardware and writing software could be stronger as separate businesses. .... Some great industrialists, like Henry Ford, stick around even as the world moves on and their powers fail. Mr Gates, pragmatic to the end, is leaving at the top. [The Economist, Jun 26]
Mark Kroll, who is already the state's most prolific inventor wants to keep pumping out patents before the Grim Reaper. .... more than 270 patents, tops in Minnesota and second in the world for medical devices, especially ways to shrink implantable cardioverter defibrillators (ICDs) ... former top executive at St. Jude Medical ... his father studied electrical engineering, spoke 10 languages, discovered a tribe in Brazil that had not been influenced by Western civilization, and mastered acoustic technology [Thomas Lee, Minneapolis Star Tribune, Jun 30]
Euro-flation hit a record 4% in June. If that continues the ECB will raise interest rates which will further de-value the dollar which will make American exports cheaper in Europe. You just won't be able to afford to go there to romance the buyers. But if you are an SBIR-mill who cares, since your only customer doesn't live there anyway.
the real worry for financial markets is neither recession nor inflation, but rather the policy paralysis caused by $140 oil. The oil shock has created a pincer movement of inflationary and deflationary pressures that is not only threatening the world economy but also disabling the policy tools of Western governments and central banks. ... in the unlikely event that oil is still trading above $140 by the year-end, all bets are off on world economic prosperity. [Anatole Kaletsky, The Times, Jun 30] The US economic prosperity has already been exposed as riding on a bubble of housing credit even though it could adjust to expensive oil if that were the only problem. The policy paralysis will show itself in the election run-up as the candidates merely pretend they know what to do and disavow any policy that would actually address the problem(s). One big barrier to solvency is the idea that government doesn't have to pay for what it buys, like big wars and their latest $162 billion supplement, and can afford to simply borrow money from foreign sources. But the more we so borrow, the lower the dollar, the higher the oil, etc. The candidates so far are still into inventing new things to buy for the electorate without any credible scheme for paying for them. If we don't insist that the candidates talk seriously, we deserve the insoluble mess, and $170 oil, we will get after the election.
The [tech] industry is consumed by disputes similar to those that once roiled American politics. ... These contemporary disputes are united by a common thread. They involve situations in which one company controls a resource upon which other firms must rely to pursue their own businesses. ... Each dependent fears that the network or platform, given its druthers, will raise the price of access to a level that extracts almost all the value from the total enterprise and leaves the dependent with only crumbs. ... The battles of that time resulted in an armistice: the creation of regulatory structures that met immediate crises, but which also failed in many ways. These failures caused significant problems of stasis, rent-seeking, political manipulation, and corruption. .... Besides, if society values innovation, a world of large integrated firms is a poor way to promote it. For many reasons, such as excess bureaucracy and fear of cannibalizing existing businesses, large entities tend to be stodgy. The railroads enabled the great catalog mail-order businesses that transformed rural America, but they did not invent them. A great concern of the contemporary tech world is that innovators need access to platforms on reasonable and predictable terms if the full creativity of society is to be tapped. [James deLong, The American, M/J08]
Out, Out, Brief Candle. Alternative Energy Systems, a Kansas City company that was building ethanol plants in Boone County, Iowa, and Kankakee, Ill., told the SEC today that it plans to go out of business. It is the latest of several biofuel firms damaged by high corn prices, high construction costs and tight financial markets. Last week, Tennessee-based Heartland Ethanol canceled plans for seven Illinois ethanol plants and said it would disband as a company. [David Nicklaus, St Louis Post Dispatch, Jun 28]
Many of the new alternative energy companies will fail. But that’s when the fun will begin. Think about what happened after the dot-com bust. The commercial infrastructure laid down in the 1990s — fiber-optic cables, servers, payment systems — was put to use by new companies like Google, YouTube and Facebook. Bubbles also leave behind mental infrastructure. People didn’t stop buying books online or sending e-mail messages when pioneering Internet firms failed. Since concerns about global energy demand, emissions and climate change are likely to survive the oil bubble, the market for alternative energy won’t evaporate. ... It’s hard to say what we’ll be left with after this bubble. But a few years from now, as ethanol companies linger in bankruptcy and the stocks of alternative energy firms wallow in the single digits, I’ll pick you up in my plug-in hybrid, which I’ve just recharged using the wind turbine in my driveway, and we can discuss it. [Daniel Gross, New York Times, Jun 29]
They're Buying American. nearly one in three American realty agents report working with customers from other countries, and almost half worked with three or more international clients, according to the National Association of Realtors. And that was before the housing bust. So it's probably a safe bet that with the dollar sinking, the trend has become stronger as foreigners try to take advantage of sagging prices, especially in Florida and California. Indeed, for many agents, foreign buyers "are the gift that keeps on giving," says David Michonski of Coldwell Banker Hunt Kennedy in New York. "Once you have one foreign client, you usually have many more." [Lew Sichelman via Chicago Tribune, United Feature Syndicate, Jun 29]
There's a 50-50 chance that the North Pole will be ice-free this summer, which would be a first in recorded history, a leading ice scientist says. ... at the National Snow and Ice Data Center and the University of Colorado. ... It's home to Santa Claus, after all. Last August, the Northwest Passage was open to navigation for the first time in memory. [Seth Borenstein, AP, Jun 27]
Don't look back; someone might be gaining on you. -Satchel Paige. While the innovation lead enjoyed by the United States over Europe has declined in recent years, America retains an edge in most categories. According to the EIS, “There are 15 indicators with full data for the U.S. and EU, and of these the U.S. performs better than the EU in 11 indicators, while the EU scores above the U.S. in 4 indicators.” [The American, May/Jun 08]
No drug, nutritional supplement or medical regimen has been proven to extend human life spans. .. In ancient Rome, where the median age of death for men was 46, you basically worked until you keeled over. [Peter Keating, Smart Money, Jul 08]
Electrical energy will remain cheaper than petrol energy in almost any foreseeable future, and tomorrow's electric cars will be as easy to fill with juice from a socket as today's are with petrol from a pump. Unlike cars powered by hydrogen fuel cells, of the sort launched by Honda this week, battery cars do not need new pipes to deliver their energy. ... Few believe in fusion now, though uranium-powered fission reactors may be coming back into fashion. And, despite Honda's launch, the idea of a hydrogen economy is also fading fast. Thirty-five years of improvements have, however, made wind, solar power and high-tech batteries attractive. [The Economist, Jun 21]
Myths About the Death Of the American Factory 1) cheap wages. For most manufacturing sectors, labor costs are already less than 10%of the cost of making many products, including steel and semiconductors. 2) investing in innovation. "We're the best company in the world, but we can't compete with foreign governments." 3) trade agreements level the playing field help the service and agricultural sectors. Little is being done for basic manufacturing. 4) Good management Even the best management can't overcome some of the structural disadvantages we face. Take health-care costs. In Europe, these costs are absorbed by the government. 5) We make high-tech goods here very few high-tech companies are building new plants in the US [Gilbert Kaplan, Washington Post, Jun 29]
mjasay writes "Remember 'the long tail?' That was the idea that there was gobs of money to be made in the more obscure tastes of any given market, enabled by the web. In recent research highlighted in the Harvard Business Review, however, the long tail theory comes under withering criticism. Not only is a hits-based business more profitable for vendors according to the new research, but the research suggests that consumers also derive more enjoyment from the hits, rather than the tail. In short, the researchers find that 'the tail is long and flat, and therefore that content providers will find it hard to profit much from it.'" Long Tail advocate Chris Anderson defends his theory, and it seems that most of the debate centers around how you define "head" and "tail." [slashdot.org, Jun 27]
Bill Gates ends his full-time role as Microsoft's boss. the software company he built with a mix of visionary manifestos and extreme hands-on management must still wake up Monday to face hard problems even he could not solve. [Jessica Mintz, AP, Jun 26]
Video downloads are sucking up bandwidth at an unprecedented rate. A short magazine article might take six minutes to read online. Watching "The Evolution of Dance" also takes six minutes--but it requires you to download 100 times as much data. "The Evolution of Dance" alone has sent the equivalent of 250,000 DVDs' worth of data across the Internet. [Larry Hardesty, MIT Tech Review, Jun 26] All that excess fiber capacity of the 1990s is being filled with low value video and the TCP can't handle all the congestion. It's the same as Interstate Highway congestion where more capacity attracts more traffic. One answer is more roads and another is toll roads.
Worldwide spending on Internet advertising is projected to total $65.2 billion this year and account for nearly 10 percent of all ad spending, according to a new report... from IDC, a Framingham firm focused on providing global market intelligence. [Boston Globe, Jun 26]
Purdue University said Wednesday that 133 finalists have been selected out of 400 nominations for the inaugural Indiana Companies to Watch awards. The program seeks to recognize the state's 50 most promising second-stage companies. Purdue is collaborating with the Indiana Economic Development Corp. Finalists are being interviewed, with honors to be bestowed Aug. 27, Purdue said. [Indianapolis Star, Jun 26]
Bryan writes "A recent headline at Entertainment Weekly suggests that the '100 Best Reads' of the last 25 years do not include a single science book (not even a popular science book). In response, cosmologist Sean Carroll at Cosmic Variance has given an interesting analysis of EW's disappointing list, and Soul Physics is calling for suggestions on the Greatest Physics Books of the Last 25 Years. For all the great literature that science has produced in the last 25 years, EW's list seems to represent a major shortcoming in the field: it still isn't diffusing into popular culture." I'm not sure what Entertainment Weekly's standing to complain would come from. That aside, have science books ever in modern times been a driving force greater than ones intended as (mere) entertainment, religious instruction, etc? I'd put anything by Richard Feynman on this list, though. [slashdot.org, Jun 25]
Beginning with the observation that "in three hundred years of warfare, the English-speaking powers keep winning", Mead contends that contemporary American influence is the continuation of a long trend of Anglo-American power. Lest any American or Brit become too smug from this observation (and assume that such power will eventually deliver a peaceful world), he then observes that "Anglo-Americans have more and more often been dead wrong about what their growing power and their military victories mean for the world". [Cheryl Schonhardt-Bailey, J American History, Jun 08] Beware the simplistic urge of politicians to extrapolate from mythical versions of their history to recall a Golden Age that never was.
Tech workers in San Jose and San Francisco made the highest wages in the nation, while their counterparts in Oakland ranked fourth in pay, according to a survey of 60 metropolitan areas published today by the American Electronics Association. [Tom Abate, San Francisco Chronicle, Jun 24] High-tech companies are rapidly adding jobs and paying workers more than other industries in metropolitan areas stretching from New York to Seattle, according to a new study looking at the nation's top "cybercities." In a report being released today, the American Electronics Association (AeA) found that 51 of the top 60 U.S. cybercities — those with the most technology workers — added high-tech jobs in 2006. The report also found that the average technology-industry wage was 87% higher than the average private-sector salary. [Joelle Tessler, AP, Jun 24]
Dow Corning's Business & Technology Incubator started in 2001. "the cornerstone" of its ability to introduce next-generation silicon-based products and technologies. It's here that Dow Corning determines its R&D focus by examining emerging "mega-trends" as well as novel branches of silicon science, and looks for new business opportunities. One project currently in the incubator's portfolio is a silicon-based product with the potential to remove selected targeted compounds from liquids, such as pesticides from drinking water. [Jill Josko, Industry Week, Jun 24]
Consumers have environmentally friendlier plastics, patients in clinical trials have a new device to treat clogged arteries and we all might get disease-treating nanoparticles inside our bodies thanks in part to the work of one man, the winner of this year's Lemelson-MIT Prize. The $500,000 prize to chemistry professor Joseph DeSimone was to be announced today at the Massachusetts Institute of Technology. The prize recognizes people who turn their ideas into inventions that help change the world. [Boston Globe, Jun 25]
American schools are not producing a sufficient number of graduates capable of filling these [high-tech] positions. ... According to Mr. Hansen, the result is that large numbers of high-tech jobs are being lost to other countries. [New York Times, Jun 25] The combination of fewer US grads and growing restrictions on immigration has led to more high-tech jobs being exported.
no one has thought to publish The Washing Machine – Which Really Did Change the World. The washing machine transformed our workplaces and our families. It freed women from their most time-consuming household task, allowing them to get out and work. [Michael Skapinker, Financial Times, Jun 24]
Economics Nobel Laureate Robert Mundell says "Remember, the growth prospects for the United States are probably stronger than that of Europe, because you've got continued and substantial population growth in the United States, and zero population growth in Europe. Quite apart from the fact that the U.S. economy is innovating more rapidly, and the population is younger and not getting old as rapidly, so they pick up new technology faster. So I look upon the United States still as the main sparkplug of economic growth in the world." [Wall Street Journal, Jun 21]
Beautiful credit! The foundation of modern society. Who shall say that this is not the golden age of mutual trust, of unlimited reliance upon human promises? That is a peculiar condition of society which enables a whole nation to instantly recognize point and meaning in the familiar newspaper anecdote, which puts into the mouth of a distinguished speculator in lands and mines this remark: – "I wasn't worth a cent two years ago, and now I owe two millions of dollars." From "The Gilded Age: A Tale of Today" (1873), by Mark Twain and Charles Dudley Warner [Wall Street Journal, Jun 25]
Austin has lost thousands of high-tech jobs since 2000, but the ones that remain pay well. A Cybercitiessurvey of American tech communities completed by the AeA trade group shows that Austin's total tech-related wages remained relatively stable even as the number of tech jobs in the area dropped dramatically in 2002 and 2003. [Kirk Ladendorf, Austin American-Statesman, Jun 24]
[John Kao] was described as “an evangelist for a national innovation agenda,” the goal he advocates in a new book, “Innovation Nation” (Free Press, 2007). Reviewers have praised it as both insightful and “scary.” His ideas are further summed up in what he calls his “little orange book,” a pocket-size, 28-page manifesto he hands out freely to people who express an interest in his work. [Cornelia Dean, New York Times, Jun 24]
intellectual-property suits follow successful entertainment businesses the way seagulls trail fishing boats. [Michael Hirschorn, reviewing David Price's The Pixar Touch, New York Times, Jun 22]
He has cried wolf many times, but this time George Soros says the beast is really upon us. .... he argues that markets don't simply reflect fundamental determinants but can change those determinants in a way that causes asset prices to go to extremes. In his latest book, "The New Paradigm for Financial Markets," he argues a "superbubble" has developed in the past 25 years and it is now collapsing. [Greg Ip, Wall Street Journal, Jun 21]
Cisco Systems is projecting a sixfold jump in Internet traffic between 2007 and 2012, with online video the biggest driver of global data communications. [San Jose Mercury News, Jun 16]
Despite Silicon Valley's best entrepreneurial efforts, California continues to lag Massachusetts as a technology incubator and has fallen behind (gasp!) Maryland and Colorado, according to a study released today by the Milken Institute. [San Jose Mercury News, Jun 19]
Intel's new integrated power management could dramatically reduce power consumption in your laptop by shutting down operations not being used. ... forthcoming Atom, a microprocessor for mobile Internet devices, can be put to sleep at up to six different levels, depending on the types of tasks that it needs to do [Kate Greene, MIT Tech Review, Jun 13]
Bioscience employment in the U.S. is led by strong growth in the research, testing and medical lab subsector, which experienced a 17.8 percent increase in employment and a 32.7 percent increase in establishments between 2001 and 2006, according to the report. And most states are working hard to ensure some of that economic development impact happens within their borders. [SSTI, Jun 17]
Soaring Metal Imports. Traders said demand for minor metals such as rhenium, chromium, cobalt and titanium is booming as Rolls-Royce, General Electric and Pratt & Whitney buy them for new super-alloys that help cut aircraft fuel consumption. ... The rhenium [from Chile and Kazakhstan] price on Tuesday surged to a record of $11,250 a kilogram, more than double last year’s level and up from about $1,000 in early 2006, ...Chromium [from South Africa], cobalt [from the Democratic Republic of Congo] [Financial Times, Jun 17]
Persevere with your best. You just keep pushing and pushing. And I did, all week. -- Tiger Woods, after winning the golf US Open with a nearly debilitating post-surgery knee and an extra 19 holes.
Solar energy will cost the same as power produced by coal, natural gas and nuclear plants in about a decade, a report released today suggests. And that price parity could propel solar adoption so it accounts for 10% of U.S. electricity generation by 2025 [San Jose Mercury News, Jun 17]
Food supplies are shrinking. Diseases are mutating. Global warming and high gas and oil prices are making alternative energy a must. Critics still have plenty of problems with genetically engineered foods and bio-based medicines and fuels, but worldwide woes are giving the biotech business an unexpectedly big boost. "It's a great time to be in this space," said Patrick Kelly, a vice president of the Biotechnology Industry Organization trade group. Biotech-industry revenues hit an all-time high last year, according to consulting firm Ernst & Young, as did venture-capital investments in biotech companies. The value of mergers and acquisitions in the business hit a new high too — nearly $60 billion in the United States — as big pharmaceutical companies faced with a record number of expiring patents on their medicines bought up lots of little biotech companies. [Bob Keefe, Cox News Service, Jun 14]
Silicon Valley's business culture is so hectic that "elevator pitch" competitions are staged as a form of speed dating for entrepreneurs and the venture capitalists they want to woo. ...Now comes a new matchmaking service for start-ups and financiers - compliments of a provocative Web site, TheFunded, that is better known for publishing anonymous slams of VCs by name. [San Jose Mercury News, Jun 17]
Five Wisconsin companies each got one of 10 Upper Midwest region winners of the Ernst & Young Entrepreneur of the Year award: Merrill Iron & Steel (Schofield, WI) Ariens (Brillion), Brady (Milwaukee), Harken (Pewaukee), Menasha (Neenah). one had SBIR. The other five were from Minnesota. [Kathleen Gallagher, Milwaukee Journal-Sentinel, Jun 6]
Less Interest in Science. With attendance down and a budget deficit looming, the [Boston] Museum of Science yesterday laid off 10 percent of its 400-person staff. [Boston Globe, Jun 11] And in Manufacturing. Several Massachusetts manufacturers notified the state last month that they would be cutting jobs. In May, Alcatel-Lucent, Pliant Corp., Kronos Inc., and Jevic Transportation Inc. all notified the state Department of Labor that they would be laying off workers in the coming month [Boston Globe, Jun 10]
in the Milwaukee area is the Executive Resource Group, a 16-member network of small-business owners who share expertise to enhance professional development and service to their clients. [Milwaukee Journal Sentinel, Jun 11]
Mountain Oil Patch. The soaring crude prices weighing down the rest of the U.S. economy are helping boost office-space demand in the Boulder region, [Wall Street Journal, Jun 11] Offsetting that optimism is a report that Colorado experienced the nation’s largest rate of growth in impoverished children from 2000 to 2006, .... Colorado ranks 44th in per capita spending, according to the Colorado Fiscal Policy Institute, a research and advocacy group that focuses on tax and budget issues. [Dan Frosch, New York Times, Jun 11]
An American military supercomputer, assembled from components originally designed for video game machines, has reached a long-sought-after computing milestone by processing more than 1.026 quadrillion calculations per second. .... more than twice as fast as the previous fastest supercomputer. ... Programmers have to figure out how to keep all of the 116,640 processor cores in the machine occupied simultaneously in order for it to run effectively. [John Markoff, New York Times, Jun 9]
Still buying on credit: The trade deficit increased to the highest level in 13 months in April as America’s bill for foreign crude oil soared to a record high. [AP, Jun 11]
His basic message is that only those able to turn themselves into monomaniacal workaholics estranged from loved ones and reviled by rivals – or willing to unsheathe their inner monster – can hope to hit the mega jackpot. "Somewhere in the invisible heart of all self-made wealthy men and women," he says, "is a sliver of razored ice." [Edward Kosner reviewing Felix Dennis's How to Get Rich,, Wall Street Journal, Jun 11]
After several years of languishing in the shadows of blockbuster Internet start-up companies, deals involving health-care and medical companies are making a comeback. Last year, venture investors poured $9.1 billion into health-related deals, the most ever and up nearly 20% from 2006, according to the National Venture Capital Association and Thomson Reuters. [Rebecca Buckman, Wall Street Journal, Jun 9]
Nanopaper. TaeKwonDood writes "All paper is made of cellulose, which at the nanoscale level is quite strong, but paper processing makes large, fragile fibers that break easily. Researchers in Sweden have have come up with a manufacturing process that keeps the fibers small, resulting in 'nanopaper' with over 1.6 times the tensile strength of cast iron (214 megapascals vs. 130 mPa). And since cellulose is the most abundant organic compound on the planet, it's cheap to use compared to other exotic, expensive-to-produce options — such as carbon nanotubes." [slashdot.org, Jun 9]
A “comprehensivist . Buckminster Fuller may have spent his life inventing things, but he claimed that he was not particularly interested in inventions. He called himself a “comprehensive, anticipatory design scientist”—a “comprehensivist,” for short—and believed that his task was to innovate in such a way as to benefit the greatest number of people using the least amount of resources [Elizabeth Kolbert, The New Yorker, Jun 9]
Enjoy Now, Pay Later. [Ben] Franklin made it prestigious to embrace certain bourgeois virtues. Now it’s socially acceptable to undermine those virtues. It’s considered normal to play the debt game and imagine that decisions made today will have no consequences for the future. [David Brooks, New York Times, Jun 10]
Engineers at Hewlett-Packard's Corvallis campus have teamed up with colleagues at nearby Oregon State University to develop a new technology they hope will make solar panels twice as efficient as traditional models at half the cost. HP plans to announce today that it has licensed the technology to a Bay Area startup called Xtreme Energetics, which aims to put the technology in large-scale, commercial solar panels within a year [Mike Rogoway, The Oregonian, Jun 4]
Hates Water, Loves Oil. A thin membranes made from a web of nanowires might become a promising tool for cleaning up oil spills and removing toxic contaminants from groundwater. When dipped into a mixture of water and oil, the 50-micrometer-thick membrane absorbs the oil, swelling to 20 times its weight. [Pachi Patel-Predd, MIT Tech Review, Jun 2]
Researchers and innovators from disparate fields are coming together to work out a new approach to biofuels. This "innovation ecosystem" is replacing the traditional energy research organizations and companies, which have been unable to make sufficient progress. ... The companies working to deliver the necessary breakthroughs range from small, privately funded startups to behemoths such as BP. [Vinod Khosla, MIT Tech Review, Mar/Apr 08]
Twenty Superconducting Years Later, many formulation ideas while groping for understanding. A new class of high-temperature superconductors, discovered earlier this year, behaves very differently than previously known copper-oxygen superconductors do. Instead, the new materials seem to follow a superconductivity mechanism found previously only in materials that are superconducting at very low temperatures, Chia-Ling Chien and his colleagues at Johns Hopkins University report in an online Nature paper. [Pachi Patel-Predd, MIT Tech Review, Jun 6]
Few investors are as bullish as Matthew Simmons, president of Houston investment bank Simmons & Co. International, who predicts oil will hit $200 to $500 a barrel over the next six months to five years. [Business Week, Jun 5]
Price Matters. As Wal-Mart stock reaches new highs, the company told shareholders that their renewed focus on price and better merchandise is winning over customers whom they expect to keep when the sluggish economy improves. [Houston Chronicle, Jun 7]
By 2010, China will have more Ph.D. scientists and engineers than the United States. These professionals are not fundamentally a threat. To the contrary, they are creators, whose ideas are likely to improve the lives of ordinary Americans, not just the business elites. The more access the Chinese have to American and other markets, the more they can afford higher education and the greater their incentive to innovate.... If we look at trends of the last 20 years, we have every reason to believe that the modern era of free trade is just getting started. [Tyler Cowen, New York Times, Jun 8]
Watt struggled long and hard to perfect his ideas, lamenting at one point that, "of all things in life, there is nothing more foolish than inventing." .... Even by 1800, the major technologies of the world, with their crude physics and limited force, had not changed fundamentally since Roman times. .... Mr. Klein hesitates to draw one, but more than a few seem obvious: Progress is a messy process by which true geniuses are not always rewarded; inventors never feel that they have enough money, but having a lot does not guarantee success; the market ruthlessly sorts out winners and losers; understanding science helps, but understanding the whims of consumers helps more. Above all, if you are seized with a great idea, be prepared for the possibility that you will want to slit your own throat one day, or throw your life's work into the fire [William Tucker reviewing Maury Klein's The Power Makers, Wall Street Journal, Jun 4]
Don't Steal Ideas. Hewlett-Packard just got slapped hard by a federal jury ... in Syracuse, NY ordered HP to pay Cornell University $184M, for infringing a patent for data processing ... lawsuit filed in December 2001 [San Jose Mercury News, Jun 5]
5 reasons people listen to Buffett: His track record is second to none; He's just like you and me; His "buys" scream value; He's got cash to do deals; His credibility quotient is high [Adam Shell, USA Today, Jun 5]
One in four Americans has a diagnosable mental disorder, if you believe the National Association of Psychiatric Health Systems. Of course, that's like saying that half of Americans are alarmingly under-ice-creamed, according to Baskin-Robbins.[Jack Hough, Wall Street Journal, Jun 5]
Though global competition is increasing, the United States remains an unmatched leader in innovation across technology sectors, from software to clean tech, according to a survey of worldwide venture capitalists. .... Nevertheless, U.S. venture capitalists are increasingly backing technology development on foreign soil. Five years ago, about 25 percent of VCs in the United States said they funded overseas ventures, said Jensen, who is based in San Jose. Now 57 percent report supporting foreign ventures. However, he believes that number may be low. [John Boudreau, San Jose Mercury News, Jun 3]
Right now, it's far easier for veteran entrepreneurs like those at Azuki Systems to find support and funding for a new idea in Boston than it is for first-timers. So young entrepreneurs like Tsumobi's founders tend to get pulled out to Silicon Valley, where investors seem more willing to take a risk on companies started by eager youngsters. ... One initiative, Y Combinator, is trying to change that dynamic - futilely, so far. YC, as it is known, is a blend of boot camp, commune, and mini-university designed to help start-up companies such as Tsumobi get off the ground.... The YC motto, emblazoned on basic gray T-shirts, is straightforward: "Make something people want." [Scott Kirsner, Boston Globe, Jun 3, 08]
"Drug stocks are so cheap I'm quitting my job to buy them," [Michael Krensavage] says. His trick is to value drug firms based on how much cash they generate ... he still thinks making drugs is hard to beat. "You make a pill for a nickel and sell it for four dollars," he says. "Those economics can overcome some management incompetence." [Matthew Herper, Forbes, 6.16.08]
The arrogance of the human race knows no bounds if we believe that the rest of creation is there just for our convenience -- William Buiter, Financial Times, May 22
One of Intellectual Ventures' inventions is a blood filter that catches metastatic cancer cells. The project leader, Lowell Wood, has no medical background. He's a physicist. Isn't that a disadvantage? No, quite the opposite, says Wood. "People in biology and medicine don't do arithmetic." ... Think about the press coverage of just about anything of importance in today's economy: the slowdown, the credit crisis, the price of oil, the misguided ethanol mania, inflation. One rarely comes across a simple mathematical description of these issues. For example, how many gallons of water and fossil fuel does it take to produce and transport one gallon of corn-based ethanol? Really, isn't that the nub of the issue? Of course it is. [Rich Karlgaard, Forbes , 06.16.08]
Measurement Bias. reported in Nature, where researchers have uncovered measurement bias in six-decades-old data on global surface temperatures. The problem arises from how British and American ships measured the temperature of surface water. ...
At that time, British and American ships did much of the logging of sea temperatures worldwide. On British ships, crews measured the temperature of seawater collected in a bucket. But since about 1939, most American ships had switched to measuring the temperature of seawater as it was drawn through an intake pipe for use as an engine coolant. Because of heat from the engine room, American measurements were generally higher. After looking more closely at the data, Dr. Thompson said, they realized what had happened. Most of the wartime data came from American ships, with just 20 percent of the readings from British ones. But starting in August 1945, there was an abrupt switch. Nearly half the readings came from British ships. Because those readings are generally colder, Dr. Thompson said, that accounts for the sudden temperature drop. [Henry Fountain, New York Times, Jun 3]
I’ve spent the past few years trying to find conservative experts to provide remedies for middle-class economic anxiety. Let me tell you, the state of free-market thinking on this subject is pathetic. There are a few creative thinkers (most of them under 30), but for the most part, McCain is forced to run in an intellectual void. ....Many Republicans are under the illusion that they are in trouble because they’ve betrayed their core principles. The sad truth is that if they’d been more conservative, they’d be even further behind. [David Brooks, New York Times, Jun 3]
After an outside advisory panel recommended that the FDA approve a proposed GlaxoSmithKline drug to treat a blood condition, Ligand Pharmaceuticals soared 49%. The San Diego company was a partner in the drug's development. [Wall Street Journal, May 31]
The good folks over at the Gartner Group have revealed the top 10 technologies that they believe will change the world over the next four years: Multicore and hybrid processors; Virtualization and fabric computing; Social networks and social software; Cloud computing and cloud/Web platforms; Web mashups; User Interface; Ubiquitous computing; Contextual computing; Augmented reality; Semantics [slashdot.org, May 30]
The reason science really matters runs deeper still. Science is a way of life. Science is a perspective. Science is the process that takes us from confusion to understanding in a manner that’s precise, predictive and reliable — a transformation, for those lucky enough to experience it, that is empowering and emotional. To be able to think through and grasp explanations — for everything from why the sky is blue to how life formed on earth — not because they are declared dogma but rather because they reveal patterns confirmed by experiment and observation, is one of the most precious of human experiences. [Brian Greene, New York Times, Jun 1]
The good news is that we have brought billions of people into the world trading system, enriching them so they can afford to eat regularly, and trade their bicycles for cars. The less good news is that the process of adjusting to this increased demand on the world’s resources is proving painful, especially here in America. .... Businesses will schedule workloads to make it possible for employees to use the bus or train, or work at home; some long-distance commuters will soon find life unbearably expensive and trade their McMansions for urban flats. ... Unfortunately, politicians remain opposed to allowing high prices to do what high prices do best: curtail demand and increase supplies. [Irwin Stelzer, The Sunday Times, Jun 1]
MIT purchased four life-sciences buildings in Cambridge for $90.5 million, ... The four buildings are 185 Albany St., 195 Albany St., 148 Sidney St., and 149 Sidney St.; collectively, they have just under 150,000 square feet of space, ... the properties are 100 percent leased to four tenants: MIT, Cubist Pharmaceuticals, Shire Pharmaceuticals, and Acceleron Pharma. “With this acquisition, MIT recognized the attractiveness of this investment opportunity, given the portfolio’s diverse rent roll of dynamic life science tenants,” Joe Flaherty, executive vice president of Colliers Meredith & Grew, said in a statement. [Chris Reidy, Boston Globe, May 29]
Dow Chemical said surging energy and material costs are forcing it to raise prices of all its products by up to 20%. [Wall St Journal, May 29]
The largest data centres now rival aluminium smelters in the energy they consume. ... Microsoft is looking for a site in Siberia where its data can chill. Iceland has begun to market itself as a prime location for data centres, again for the cool climate, but also because of its abundant geothermal energy. [The Economist, May 22]
Ethanol stocks, once Wall Street's green giants, have been squashed into wasabi paste. That could be a cautionary tale for today's alternative-energy darling, solar. ... Both are somewhat at the mercy of commodity prices. Ethanol is suffering from expensive corn. Solar has been pinched by skyrocketing silicon, the key ingredient in photovoltaic modules, the black roof panels that store the sun's energy. Ethanol's margins are also squeezed by a glut that has crushed prices. Solar's pricing power has held steady, but could be at risk next year, given the vast and growing number of people making solar panels. [Mark Gongloff, May 22] the parallel to the ethanol situation is obvious - if something seems too good to be true, it probably is. Had the Bush administration and Congress exhibited the wisdom and courage to slap a big honking gasoline tax on drivers after 9/11 - or even in 2006, when the President made his "addiction to oil" speech - it would have been a better energy policy than the cornographic panacea they've given us. We could have reduced consumption, cut oil imports, kept low-income drivers whole by rebating their gas taxes with income tax breaks, and used the rest of the proceeds for deficit reduction or something else useful. [Allan Sloan, Fortune, May 12]
One of the world's largest private philanthropies [The Howard Hughes Medical Institute] will announce today a $600 M initiative to fund risky but potentially lifesaving medical research by 56 of America's top scientists. ... to answer such ambitious questions as how global climate change affects the spread of cholera, malaria and other infectious diseases and whether doctors can apply the engineering behind the building of airplanes and computers to the human immune system. ... on research that many [federal] grantmakers would consider too risky but that could produce the greatest breakthroughs. [Philip Rucker, Washington Post, May 27] No, not life style companies with SBIR, just the world's best scientists with private money.
There is a website devoted to things that are younger than Mr McCain (the Golden Gate Bridge, plutonium, Coke-in-a-can, Velcro, 91% of Americans). [The Economist, May 22]
Mr. Lafley quickly cut jobs, sold declining brands like Crisco shortening, and began reciting what became a familiar mantra: Innovate, innovate, innovate. These days, he said, more than half of Procter’s new products are commercially successful. ... Invention is just a new product or service. Innovation ties that idea to a better customer experience, and results in increased sales and profits....he has codified that thinking in a book, “The Game-Changer,” (Crown Business, 2008), which he wrote with Ram Charan, a management consultant. [Claudia Deutsch, New York Times, May 24]
The US is already in a recession and it will be longer as well as deeper than many people expect, investor Warren Buffett said in an interview published in German magazine Der Spiegel . But "If the world were falling apart I'd still invest in companies," he said. [Reuters, May 24]
You have 7 years to learn Mandarin [Geoff Colvin, Fortune, May 12]
‘It’s like a Greek tragedy,” says George Soros, with a smile playing around his lips. “You can see the trouble coming and you can’t avoid it.” Welcome to global economic meltdown. [JP Flintoff, The Sunday Times, May 25]
commercialization of methanol fuel cells has been limited
because of their price: they require a thick internal membrane made of
an expensive polymer. And even with this expensive material, they use
fuel inefficiently. To overcome these limitations, Paula
Hammond, a chemical engineer at MIT, has made a fuel-cell membrane
out of layers of polymers whose electrochemical properties can be
precisely tuned to prevent fuel waste. The work is described in a
recent issue of
Oil Going Up means a technology opportunity for efficiency. The world's premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand. The International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought. [Neil King and Peter Fritsch, Wall Street Journal, May 22] Congress exercised its right to intervene by calling in the oil company execs and yelling at them in the name of the consuming public. Look for continued hand-wringing and finger-pointing in an election year, with no sensible direction in policy. If you are proposing SBIR to the mission agencies, emphasize however your technology reduces power demand.
With Enron de-fanged, California should have more than enough electricity this summer to keep lights on and air conditioners humming. [David Baker, SF Chronicle, May 21]
A California real estate company wants to build a $1 billion laboratory complex in Cambridge over the next decade to accommodate growing life sciences companies starved for space. .... Real estate brokers say lab space rents in Cambridge have doubled and vacancy rates have shrunk 67% in the past four years because of growing demand from life sciences companies. [Todd Wallack, Boston Globe, May 22] No government money.
Leo Beranek's memoir, "Riding the Waves." ... become a pioneer in electroacoustics – the electronic transmission of sound – a technology that transformed music performance and reproduction, engineering, communications, warfare and architecture. Now 93, Mr. Beranek is the second "B" of BBN Technologies, a company with offices around the world and a legendary history in the acoustical field. ... He tells his tale with a winning style, taking as much pleasure from small triumphs – in high school, outperforming everyone else in his typing class because his fingers were limber from dance-band drumming – as from his major building projects. "Riding the Waves" leaves us wondering which story is the more remarkable – that of the development of electroacoustic technology, or of the person who rose to meet its challenges. [Robert Crease, Wall Street Journal, May 22]
War in the Aisles. American Airlines will start charging $15 for the first checked bag, cut domestic flights and lay off workers as it grapples with record-high fuel prices. [AP, May 21] Although all the thinking passengers know that the airline cannot keep flying at today's fuel costs without a lot of adjustment - that means higher prices for services rendered. What it cannot do is expand the overhead luggage space as price sensitive flyers try to carry on the elephants. Business flyers who can afford the $15 but actually have a need for quick exit will have to compete with Aunt Mary's satchel that she can't hoist into the overhead anyway. It'll be war in the crowded aisles as People's Express returns to the skies.
In a stroke of cosmic luck, astronomers for the first time witnessed the start of one of the universe's most fiery events: the end of a star's life as it exploded into a supernova. On Jan. 9, astronomers used a NASA X-ray satellite to spy on a star already well into its death throes, when another star in the same galaxy started to explode. The outburst was 100 billion times brighter than Earth's sun. [Seth Borenstein, AP, May 21]
A New Asbestos. Strong, versatile little "nanotubes" made out of carbon are considered future stars in nanotechnology research in medicine and industry. Now a study finds that longer threads of the stuff mimic the toxic qualities of asbestos, renewing questions about how carbon nanotubes can be used safely. [AP, May 20] Asbestos goes back to the Greeks also noted its harm to humans. It gained widespread use in the Industrial Revolution as insulation but the first diagnosis of asbestosis didn't come until 1924 although fatal lung diseases from industrial dusts were well known long before. [history from Asbestos Resource Center]
No Free Fuel. biologists and botanists are warning that [biofuels made from non-food crops like reeds and wild grasses], too, may bring serious unintended consequences. Most of these newer crops are what scientists label invasive species — that is, weeds — that have an extraordinarily high potential to escape biofuel plantations, overrun adjacent farms and natural land, and create economic and ecological havoc in the process, they now say. [Elisabeth Rosenthal, New York Times, May 21]
Applied Materials profit dropped 26% as sales of equipment to semiconductor makers slowed amid belt tightening by memory-chip companies.... But revenue almost doubled in its solar-panel-equipment operations, a small but rapidly growing part of the company, though the segment's loss widened sharply. [Wall Street Journal, May 14]
Keep It Cool. The difference between 23 degrees Celsius and 23 degrees Fahrenheit is about $883,000, according to a lawsuit filed this week by Samsung Austin Semiconductor. ... the cost of a wafer analysis machine rendered useless when it was shipped at too cold a temperature. ... Because of its delicate, temperature-sensitive optical devices, the equipment had to be kept at temperatures around 23 degrees - Celsius [Dan Zehr, Austin American-Statesman, May 17] Now if the rest of the world would just adopt English units, we wouldn't have these misunderstandings. After all, English is becoming the world's most used language. Never mind that English units are a hopeless tangle of arbitrarily scaled sub-units.
A cure for MRSA appears to be within grasp after scientists claimed to have developed a drug that destroys the most virulent strains of the deadly superbug. The breakthrough by British researchers could save 1,600 lives a year and wipe out the highly infectious bacteria. [The Independent on Sunday, May 18]
Way More Efficient Solar. IBM researchers have found a way to make concentrated photovoltaic cells that are more efficient in converting the sun's energy into electricity. ... possible to increase the concentration of light on photovoltaic cells by about ten times without causing them to melt. ... makes it possible to boost the amount of usable electrical energy produced by up to five times. [Duncan Graham-Rowe, MIT Tech Review, May 16]
New research shows that formic acid could be used as a safe, easy-to-transport source of hydrogen for fuel cells. Matthias Beller and his colleagues at the Leibniz Institute of Catalysis, in Rostock, Germany, have found a way to convert formic acid, a common preservative and antibacterial agent, into hydrogen gas at low temperatures. [Prachi Patel-Predd, MIT Tech Review, May 15]
Plane maker Airbus and diversified manufacturer Honeywell International said Thursday they are developing a biofuel that by 2030 could satisfy nearly a third of the worldwide demand from commercial aircraft. Along with JetBlue Airways and International Aero Engines, they plan to produce fuel from vegetation and algae-based oils that do not compete with existing food production. [AP, May 16]
After years of fretting over coming shortages, [Japan] is actually facing a dwindling number of young people entering engineering and technology-related fields. ... the young here are behaving more like Americans: choosing better-paying fields like finance and medicine, or more purely creative careers, like the arts, rather than following their salaryman fathers into the unglamorous world of manufacturing. [Martin Fackler, New York Times, May 17]
Dear Oil. A spike in the number of Houstonians who found jobs last month pushed the local unemployment rate to its lowest level in nearly eight years [Houston Chronicle, May 17]
Zakaria argues that America's world-beating economic vibrancy co-exists with a dysfunctional political system. "A 'can-do' country is now saddled with a 'do-nothing' political process, designed for partisan battle rather than problem solving," he writes. That makes it hard to devise a grand strategy, and Zakaria offers just a few "simple guidelines" on the need to set priorities, build global rules and be flexible. But in this non-American world, it may be too late to restore U.S. leadership. "The rest" is moving on. [Pareg Khanna reviewing Fareed Zakaria's The Post-American World, Washington Post, May 18]
Half of all new college graduates now believe that self-employment is more secure than a full-time job. Today, 80% of the colleges and universities in the U.S. now offer courses on entrepreneurship; 60% of Gen Y business owners consider themselves to be serial entrepreneurs, according to Inc. magazine. Tellingly, 18 to 24-year-olds are starting companies at a faster rate than 35 to 44-year-olds. And 70% of today's high schoolers intend to start their own companies, according to a Gallup poll. [Michael Malone, Wall Street Journal, May 19]
The UK “performs poorly” in innovation, the report says, and “is up against rapidly increasing international competition”. There is, it says, “too much complacency” about Britain’s ability to compete and innovate. [David Smith, The Sunday Times, May 18] In the land that invented innovation despite political control by a landed aristocracy. The steam engine, coke-fired iron making, the railroad, mechanized textile manufacturing - the Industrial Revolution. Although America invented the cotton gin, it couldn't exploit it until we stole the English textile machinery designs.
the words of the great investor Warren Buffett: “The worst of the crisis on Wall Street is over.”
Now in its 19th year, the the MIT $100K Entrepreneurship Competition serves as an economic barometer for emerging markets that are getting funded by venture capitalists. Since its launch, the competition has led to the creation of more than 85 companies with an aggregate market capitalization of approximately $10 billion, the competition's organizers said. .... This year’s winner is Diagnostics-For-All, a not-for-profit that seeks to deliver affordable point-of-care diagnostic solutions to the global medical community; based on patent-pending technology developed in chemist George Whitesides’ laboratory at Harvard University [Boston Globe, May 16, 08]
A Penny Saved. Americans use roughly 20.6 million barrels per day. If we stop filling the strategic petroleum reserve we free up about 70,000 barrels per day. We reduce total demand by roughly one third of one percent by calling a halt to the SPR, in other words. Since the price elasticity of demand for gasoline is about 2.5%-3%, the percentage change in price induced by reducing total US oil consumption by 70,000BPD will be between .3/3 and .26/3, or between .087 and .1. What's the bottom line? At a rough national average of $3.75/gallon, cutting out the SPR will bring prices down to something like $3.73 or maybe $3.72. [EconoPundit blog, May 13] No matter, such facts: Congress sped the bill through by unanimous consent on the wings of feel-good politics.
Growth by acquisition. First, cheap computers, and now electronic services. What is this new HP that its founders would hardly recognize? Where is the innovative powerhouse with the world-famous laboratories? Two consecutive CEOs from outside the company apparently see HP as a convenient base to grab for profit and growth by acquisition. Do these CEOs understand the markets they are acquiring?
Euro Power. DRS Technologies, with a plant in Milwaukee, is being acquired by an Italian aerospace and defense company for $4 billion. ... employs 10,000 people. Finmeccanica, which is 34% owned by the Italian government, has 60,000 employees, including 2,100 in North America. [Milwaukee Journal-Sentinel, May 14]
Innovation Leader. 3M unveiled a new micro projector (the size of a 9-volt battery -- which can be embedded in mobile devices) and scores of other products ... 63% of sales come from overseas. That will soon rise to 70%. [Minneapolis Star-Tribune, May 14]
New Territory. At some point you have to acknowledge when a system is no longer working. That time is now. Oil prices are no longer in any kind of predictable trading range. I'm not alone in thinking this. I noticed that Goldman Sachs analysts have been changing their oil predictions even more often than I have, recently calling for oil as high as $200 a barrel within six months to two years. I'm not going to pretend to understand the underlying causes of soaring prices: geopolitics; demand from China, India and other emerging markets; the weak dollar; rising inflation; or speculative excess, all of which I've heard offered as causes. Perhaps it's all of the above. ... The strange thing about bubbles is that they don't seem irrational while they're going on; otherwise, they'd never happen [James Stewart, Wall Street Journal, May 14]
Adults are so busy imagining the ways that technology can improve classroom learning or improve the public debate that they've blinded themselves to the collective dumbing down that is actually taking place. The kids are using their technological advantage to immerse themselves in a trivial, solipsistic, distracting online world at the expense of more enriching activities – like opening a book or writing complete sentences. [David Robinson reviewing Mark Bauerlein's The Dumbest Generation, Wall Street Journal, May 13] One such adult imaginer is DHS's SBIR topic for better math-sci education.
Wall Friction. Most water-filtration technologies require a lot of energy to push water through membranes that eventually become fouled and need to be replaced. ... Now researchers at Palo Alto Research Center (PARC) [are] incorporating scientific insights from the physics of toner particle movements into a low-energy water-filtration device that doesn't use membranes. ... a spiral-shaped, 50-centimeter-long piece of plastic tubing that's one millimeter in diameter. As water is pumped through one end of the device, particles in the water are pressed up against the walls of the tubing. Particles as small as one micron in size are separated out by centrifugal force and shunted away from the clean water via diverging forks in the spiral concentrator. [Lee Bruno, MIT Tech Review, May 12] Nice idea as long as you realize how much pressure head will be lost pushing a fire-hose of water through a 1-mm diameter, curled straw.
Why So Few Negawatts? in the markets for new homes and offices, appliances and vehicles. Builders are not the ones who end up paying the utility bills, so have little reason to add to the construction costs—and hence the price of a home or office—by incorporating energy-saving features. .... There is one working formula for negawatts: Among American states, for every cent per kilowatt-hour by which prices exceed the national average, energy consumption drops by about 7% of the average. [The Economist, May 8]
The new building is massive -- equivalent to eight football fields, with 33 laboratories spread over four floors. The goal is to get hundreds of scientists working under one roof, to speed development of new drugs and push down costs. Eli Lilly dedicated the final phase of its $1 billion biotechnology complex [Indianapolis Star, May 13]
The Era of Open Innovation by Henry W. Chesbrough (Spring 2003) Companies must now harness outside ideas to advance their own businesses while leveraging their internal ideas outside their current operations.... The New Frontier of Experience Innovation By C.K. Prahalad and Venkatram Ramaswamy (Summer 2003) The need to innovate is greater than ever, but the focus of innovation must change, say the authors. ... Is Your Innovation Process Global? By José Santos, Yves Doz and Peter Williamson (Summer 2004) Businesses rarely have innovation activities that integrate distinctive knowledge from around the world as effectively as global supply chains integrate far-flung sources of raw materials, labor, components and services. ..... Why Companies Should Have Open Business Models By Henry W. Chesbrough (Winter 2007) To partake more fully in the benefits of open innovation, companies need to develop the ability to experiment with their business models, finding ways to open them up. .... Are You Networked for Successful Innovation? By Polly Rizova (Spring 2006) An understanding of the interplay between informal social networks and formal organizational structures can help companies design and maintain learning organizations. [Wall Street Journal, May 12]
Clean-tech venture capitalists have taken a shine to Silicon Valley makers of LEDs and other bright lights, seeing a growing potential for these semiconductor-based light sources in streetlights and parking lots, in concert venues and gymnasiums. [San Jose Mercury News, May 7]
Nano Good, and Bad. A coalition of consumer protection groups yesterday filed a legal petition with the EPA seeking to halt the sale of consumer products containing microscopic nanoparticles of silver, an increasingly popular germ-killer that has raised environmental concerns. ... nanosilver's effects are not specific to harmful bacteria [Rick Weiss, Washington Post, May 2]
A Marriage of Necessity. C. Preston Hensley, a senior director at Pfizer, thinks such debacles stem from a deficit of basic research skills, which only academia can provide. "We don't understand the biology of diseases well enough to pick the right drug targets," admits Hensley, who will manage Pfizer's new alliance. ..."Very few basic scientists know what it takes to get a product to market," says Gail K. Naughton, a former biotech entrepreneur who is now a dean at San Diego State University. ...To become equal partners in drug development, universities have begun hiring refugees from the faltering drug industry. [Arlene Weintraub, Business Week, May 19]
Recent events have also caught many mainstream economists with their pants down. They have too readily assumed that central banks can make at least short-term nominal interest rates what they like and have concentrated on esoteric exercises on the path they should follow. The beginning of wisdom is to recognise that financial booms and busts have been a feature of capitalism from the very start. Indeed they are as deep-rooted as human gullibility and greed. This is impressively documented in Charles Kindleberger’s Manias, Panics and Crashes, the last edition of which appeared in 1989. [Samuel Brittan, Financial Times, May 9]
"The global economy is going down, and we think it is going to be ugly," Albert Edwards, Société Générale strategist, told clients. [Mark Gongloff, Wall Street Journal, May 9] Remember that some of that prosperity out there comes from selling America more goods than America exports in return. If our deficit-driven buying machine slows down, so do those economies out there to whom we want to sell stuff. When the richest family in the village stops buying, the village has a big problem.
The global surge in food and energy prices is being driven primarily by fundamental market conditions, rather than an investment bubble, say the majority of economists in the latest Wall Street Journal forecasting survey. [Phil Izzo, Wall Street Journal, May 9]
Scrimping Rich. Nearly 80% of affluent Americans believe a recession has already hit the U.S., and optimism about the U.S. is at a record low among the well-to-do, according to the Annual Survey of Affluence and Wealth in America by American Express Publishing Corp. and Harrison Group. .... Survey respondents, who have an average discretionary income of $342,000, aren't highly sensitive to recent economic shocks, but the poll found that they are in the same "emotional recession." As a result they are cutting debt, saving more and scrutinizing spending. ... The largest worries in the poll concerned the country's leadership, with 66% of the 638 respondents citing this issue. Other widespread worries included the collapse of the dollar, at 61%, and the war in the Middle East, at 57%. [Jay Miller, Wall Street Journal, May 8] It's easy to blame a vague concept like the "leadership" but hard to see the culprits in the mirror. The great concept of self-governance requires steady responsibility for what we demand of our governments.
Any beneficiaries of high gasoline? Sales of new homes in the Houston area are outpacing construction, leading to a shrinking supply and fewer discounts from builders. [Houston Chronicle, May 8]
It Came in the Mail: CHART:Stock broke out in March expected to test $1.60 on VOLUME / MOMENTUM ALERT Uni-Pixel (Georgetown, TX; one Phase 2 SBIR) is developing a “Better Way to Build Displays”. ... The Information in this Breaking News Report . is A PAID ADVERTISEMENT and is for the viewers information only. The Company has agree to pay a fee of $150 to have this corporate information featured. [StockNewsCast.com, May 7, 08]
an unlikely alliance of titans from the cable, Internet and chip industries will disclose they are investing $3.2 billion in a company that will deliver Web access for cellphones and laptops at speeds much faster than what is available today using a technology called WiMax. [A Sharma and V Kumar, Wall Street Journal, May 7]
The Rubles are Coming. Moscow's emergence as a global investor has set off alarm bells across Europe and the U.S., where leaders are growing wary of the Kremlin's widening control of the Russian economy and its projection of commercial power abroad. [Wall Street Journal, May 7] Russia seems more driven to expand its power than its economy, which could eventually lead to the same disaster as the fall of the Soviet Union. Economies built on natural resources simply don't have much staying power.
The pain of higher energy costs won't be going away soon, with oil prices expected to average above $100 a barrel next year, the federal Energy Department said. [Thomas Content, Milwaukee Journal Sentinel, May 7] The wonder of extrapolation feeds the politicians' need for fear.
Replay of 1974. In what analysts call a first, about one in five vehicles sold in the U.S. in April was a compact or subcompact car, while sales of pickups and S.U.V.’s fell sharply. [Bill Vlasic, New York Times, May 2] Then Japanese cars sold well over the sticker price.
competition means that any newcomer with a great idea for a better mousetrap has a good chance of persuading some venture capitalist to back him, assuming his parents won't, and moving from idea to saleable product. That keeps society mobile, flexible, prevents incumbents from resting on their laurels. [Irwin Stelzer, The Times, May 1] It also means that government does not need to give handouts to uncompetitive businesses, small high-tech or otherwise, to improve market competition. The only justifiable handouts might be to technology that has an ultimate high market potential but the technical uncertainty is too high for a sensible Return-on-Investment calculation. That does not include life-style companies beavering away at interesting science. Companies doing science have no competitive advantage over any other science entity and the hopeful small science companies should have to compete openly with all comers for any government sponsored science.
The First Law of Technology says that "with every change in technology that affects consumer behavior, we always overestimate the impact in the short term, but then underestimate the full impact over the long term." The original dot-com era a decade ago was overhyped, but by now the Web has become a utility, increasingly available anywhere for any purpose. This is the Information Age, yet we're just beginning to gather the information and understanding to know how it changes our lives. [LG Crovitz, Wall Street Journal, Apr 21] In the long term, the pioneers have died (often of arrows in the back) and the patient larger investors, who can also shape public policy around the innovation, get the rich returns.
Get ready for the next financial crisis. According to Bank of England Gov. Mervyn King, it should be with us sometime between 2013 and 2018. ... King believes the roots of this and all financial crises are to be found in human nature, and since that won't change much, future crises can't be prevented. ... everything to do with the collective memory of managers at financial institutions. "Over the next five to 10 years, they'll remember this episode only too well," Mr. King told a parliamentary committee. "Beyond that, we need to worry." [Wall Street Journal, Apr 30]
Which is more likely to be reliable, a news story in The Times or a peer-reviewed paper in The Lancet? As the recent volte-face over the dangers of vitamin supplements shows, the newspaper story may be the more credible. ... In a recent letter to the journal Science, Robert Zucker, of the University of California, explained the rules of peer review. Basically, they are: “Give the guy a break.” Professor Zucker wrote: “Do not reject a paper with a brilliant new idea simply because the evidence is not as comprehensive as could be imagined.” You might suppose no scientist would publish a brilliant new idea (“vitamin supplements kill you”) without comprehensively validating it, yet the vitamin paper did not report what the patients died of. Actually, no one knows. [Terence Kealey, The Times, Apr 28]
There are thousands of small companies pursuing innovations that can improve human health, expand our food supply, and provide new sources of energy. They may have no income, but they have tremendous potential – and are precisely the kinds of efforts the SBIR program was intended to foster. Excluding these biotech companies from the SBIR program creates a less competitive system and is preventing the best science and innovation from being funded by American taxpayers. Says BIO which represents more than 1,150 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO’s web site and SBIR blog BIO labels the SBIR revolution "reform" whereas the SBIR protectors scream robbery. The American Small Business League calls it a sellout.
"People believe that basic science can wait," said Rosner (director of Argonne NL). "but the truth is that if you don't do the basic research today, you won't reap the fruits in 20 to 30 years. We have to invest now to benefit our children and grandchildren. But to a culture that expects instant results, such patience is a hard sell. [John Van, ChicagoTribune.com, Mar 17]
Immigrants More Entrepreneurial. Immigrants far outpaced native-born Americans in entrepreneurial activity, increasing from 0.37% in 2006 to 0.46 % in 2007. Immigrants are now substantially more likely to start businesses than are native-born Americans, which remained constant at 0.27% . [Ewing Kauffman Foundation report, Apr 24]
Does an interventionist deity do fuel economics? a community organizer, church choir director and public relations consultant from the Washington, D.C., suburbs - staged a pray-in at a San Francisco Chevron station on Friday, asking God for cheaper gas. [David Baker, SF Chronicle, Apr 26] Or is economics a purely human invention? Perhaps church-led action to lower demand would help.
In 2007, two University of Minnesota economists forecast that biofuels would sharply increase food prices by 2020, leading to many more empty bellies in the world. How wrong they were. It took only a year [Mike Meyers, Minneapolis Star Tribune, Apr 26] The rich get what they are willing to buy.
Young Entrepreneurs Everywhere. There are, undeniably, signs of a bubble economy — wheeler-dealers everywhere, Internet companies with no real business models, private equity and venture capital rushing in helter-skelter, rising inflation, a volatile stock market that moves on rumors and hot tips. There is a gold rush mentality, a powerful sense that you have to do a deal right this second, or somebody else will snatch it out from under you. These are attributes I also saw in Houston and Silicon Valley — and, well, you know how those booms turned out. Yet who can really argue against China’s continued growth? [Joe Nocera, New York Times, Apr 26]
Experience. As a boy, he watched his father, a money manager, navigate the Depression. As a financial manager, consultant and financial historian, he personally dealt with the recession of 1958, the bear markets of the 1970s, the 1987 crash, the savings-and-loan crisis of the late 1980s and the 2000-2002 bear market that followed the tech-stock bubble. Today's trouble, the 89-year-old Mr. Bernstein says, is worse than he has seen since the Depression and threatens to roil markets into 2009 and beyond -- longer than many people expect. Mr. Bernstein, whose books include "Against the Gods: The Remarkable Story of Risk," sees two culprits. One is the abuse of securitization .. The other is simply years of overborrowing by financial institutions and consumers alike. [ES Browning, Wall Street Journal, Apr 26](including all the leverage geniuses) One phrase Bernstein doesn't seem to use: It's different this time.
Euroinvasion. Then they came for condos in Manhattan and Miami. Now they're coming for the companies. ... For many companies, moving across the Atlantic is the fastest and cheapest way to cut costs and become more competitive. ... It will be impossible for U.S. politicians to stop the Euroinvasion, and European politicians will prove equally helpless in preventing their companies from moving to the United States. [Moisés Naím, Washington Post, Apr 27]
SinoInvasion. With the Chinese economy blossoming, Huawei could be a forerunner of a wave of Chinese companies bringing cheap products and competition for incumbent manufacturers — in Huawei's case, companies such as Alcatel-Lucent, Cisco, and Nortel. Much like Japanese companies that entered the U.S. in the 1980s, Chinese firms are quickly ramping up their investment in the U.S. There are 3,500 Chinese investment projects in the U.S. and Canada, more than double the number five years ago, according to an estimate by Maryville University professor Ping Deng. [Peter Svensson, AP, Apr 28]
Incentives and Guardians. Einhorn points out that the fellows who run big investment banks have a strong incentive to maximize their assets and leverage themselves into deep trouble because their pay is a function of how much debt they can pile on. If they can use relatively low-interest debt to generate slightly higher returns, the firm earns more revenue and executive pay increases. Often, an astonishing [half] of total revenue goes to employee compensation at Wall Street firms. In principle, the requirement for capital behind the risks limits the risk. BUT. With a Republican free-market government: Under an interesting set of rules promulgated by the SEC in 2004, called “Alternative Net Capital Requirements for Broker-Dealers That Are Part of Consolidated Supervised Entities,” the amount of capital that had to underlie assets was reduced substantially. ..Through the act, the S.E.C. — acting as one of Wall Street’s chief regulators, mind you — also allowed such things as “hybrid capital instruments” (much riskier than cash or Treasuries), subordinated debt (ditto) and even deferred return of taxes, to be counted as capital. The S.E.C. even allowed the banks to hold securities “for which there is no ready market” as capital. [Ben Stein, New York Times, Apr 26]
Vanity Costs. Nine years after it approved vision-correcting laser eye surgery, the FDA is coming under increasing pressure to step up oversight of the procedure. ... Malvina Eydelman, an [FDA] ophthalmologist .. has acknowledged that clinical data about complications from lasik and their effect on patients' quality of life is incomplete, at best. [Sabine Vollmer, Raleigh News&Observer, Apr 25] Protect your eyes: wear hard plastic spectacles to correct vision. Lasik makes permanent changes, has not yet had long term testing, and is usually done for cosmetic purposes.
Deja Vu? Startup entrepreneurs can be forgiven for suffering flashbacks to the dot-com bust several years ago given the recent rash of worrisome signs about their industry's health. The U.S. economy is sputtering. Venture capital investment is declining. And to add to the gloom, a trickle of startups have shut down or sold out at fire sale prices. Is it 2001 all over again? [Verne Kopytoff, San Francisco Chronicle, Apr 22]
The vibrant entrepreneurial spark found throughout Colorado is showcased particularly well by the successful young entrepreneurs in the Front Range community. This month, we spoke with three who each had a million-dollar idea before they even graduated from college. Printfection, SparkFun Electronics , EventVue. [Colorado Biz, Apr 22]
At least it's an export. Raytheon Co. reports it has received a $241M to provide the Republic of Korea with support and equipment for the Patriot missile system. [Mass High Tech, Apr 21] Not exactly an investment unless you are a military buff.Intel bullish on Taiwan: plans to invest $500 M in Taiwan over the next five years, partly on wireless broadband Internet technology [San Jose Mercury News, Apr 21]
Concentrate, Concentrate, Concentrate. A common complaint among people in Houston technology circles is that startup companies in the area often leave town for Austin, Silicon Valley or other places with more extensive tech histories. Just the opposite is true when it comes to innovative startups in the energy sector, which is responsible for luring dozens of entrepreneurs here. ... Steve Catha said he moved his Smart Pipe Co (no SBIR) here from New Orleans a few years ago because "this is where the activity is." Houston is home not only to the company's potential customers but also to investors who helped get Smart Pipe going. In Houston, Smart Pipe first received $6 M from angel investors to build a factory and develop a prototype. The company later got $10 M from Kenda Capital, the manager of Shell Technology Ventures' investment fund, to make some upgrades, start computer analysis and get the company ready for business. [Brad Hem, Houston Chronicle, Apr 19] Which is not good news for the politicians who think they can create wealth and jobs by dispersing investment in tech start-ups to "have-not" states. Start-ups do much better surrounded by their industry where they can find mobile labor and ideas.
Along with its various derivatives, “misspeak” has become one of the signature verbal workhorses of this interminable political season, right up there with “narrative,” “Day One,” and “hope.” It carries the suggestion that, while the politician’s perfectly functioning brain has dispatched the correct signals, the mouth has somehow received and transmitted them in altered form. .... its second [use](“The President misspoke himself”) is from Richard Nixon’s iconic press secretary, Ron Zeigler, in 1973, annus mirabilis of the Classical period of American misspeaking. [Hendrick Hertzberg, "Mr and Ms Spoken, The New Yorker, Apr 21]
because of growing numbers of scientists in China, India and other lower-wage countries, “the cost of producing a new scientific discovery is dropping around the world,” says Christopher T. Hill, a professor of public policy and technology at George Mason University. American innovators — with their world-class strengths in product design, marketing and finance — may have a historic opportunity to convert the scientific know-how from abroad into market gains and profits. Mr. Hill views the transition to “the postscientific society” as an unrecognized bonus for American creators of new products and services. [GP Zachary, New York Times, Apr 20] But, if the invention was discovered elsewhere, the whole world can also develop profitable products better and before American exploiters. The same places with low wage scientists also have low wage developers who are not necessarily inferior to highly compensated Americans. Just another notice that low return programs like SBIR are wasting the nation's time and money.
When Erin Albert was starting her life-sciences business a few years ago, her mentor from the East Coast recommended she join the local chapter of the Healthcare Businesswomen's Association [4,000 members nationally]. Indianapolis .. has its own chapter. ... Indiana's emerging position as a hotbed for the life sciences, an industry attracting more female entrepreneurs and professionals, [Shari Rudavsky, Indianapolis Star, Apr 20]
The sharp decline in Chinese stocks is approaching a milestone: With a 4% drop Friday, the market has fallen by nearly half since its peak last fall. [J Areddy and G Karmin, Wall Street Journal, Apr 19]
An Opening for Innovation. HP's new labs director, Prith Banerjee, plans to unveil a list of 20 to 30 major projects HP Labs will pursue, a dramatic cut from the 150 or so currently on its docket. [Aaron Ricadela, Business Week, Apr 28] Faster payoff, lower risk, new and improved. Celebrate another corporate genius. Obsolete in a decade, blindsided by the next big innovations. Standard military approach, except for DARPA.
Utahns who dream of some day seeing their computers and homes connected to the high-speed Utopia fiber-optic network may want to start saving now. It is going be expensive. [Salt Lake Tribune, Apr 19]
Oil, Oil, Oil. The world’s total energy demand — including oil, coal, natural gas, nuclear power, as well as renewable energy sources like wind, solar and hydro power — is set to rise by 65% over the next two decades, according to the I.E.A. But petroleum, the dominant fuel of the 20th century, will remain the top energy source. It accounts for more than a third of the world’s total energy needs [Jad Mouawad, New York Times, Apr 20]
Respect for History. “Companies could lose everyone who remembers how they handled the last economic downturn,” said Alison Sander, who studies trends at the Boston Consulting Group. Now some companies are taking preventive action. They are offering shorter hours, flexible locations and lighter duties, hoping to keep older workers on board longer. “They’re letting older employees wind down gradually, so they can transfer their knowledge before it leaves for good,” said AARP's Deborah Russell. [Claudia Deutsch, New York Times, Apr 21] How quaint, respect for history. Now if we could just get our political leaders to do the same before they act on their theories.
Boeing is learning how hard composites can be to analyze effectively and build economically for commercial jet structures. The company has had to delay the 787's introduction because elements of the composite-made wing box--the major structure inside each wing--buckled in stress tests. [David Talbot, MIT Tech Review, Apr 18]
Good News, Houston. Soon, San Francisco is expected to become America's first major city to pay an average of $4 for a gallon of regular gas. [SF Chronicle, Apr 19] Stand by for political hand-wringing.
It is high time the British realised a people cannot become rich by selling ever more expensive houses to one another. --- Martin Wolf, Financial Times, Apr 18
Capital spending in the world-wide semiconductor market could fall 20% in 2008 as a result of the weakening U.S. economy and a slowing market for dynamic random access memory, a market researcher says. [Wall Street Journal, Apr 17] And Technology companies from eBay Inc. to EMC Corp. are embracing cash more than ever amid fears of an economic downturn. 6% bigger hoard than last year [Pui-Wing Tam, Wall Street Journal, Apr 17]
Intel posted a 12% drop in first-quarter profit, but indicated that healthy demand for its widely used microprocessors is offsetting recent problems in memory chips. [Wall Street Journal, Apr 16]
See It Our Way. Two medical-journal studies suggest Merck & Co. violated scientific-publishing ethics by ghostwriting dozens of academic articles, and minimized the impact of patient deaths in its analyses of some human trials of a top-selling drug later linked to cardiac problems. ... Merck vigorously defended its performance, calling the articles "misleading" and saying many of the authors' conclusions "are incorrect." The drug maker said none of its procedures were improper. [Ron Winslow and Avery Johnson, Wall Street Journal, Apr 16]
Still Buying In. Despite turmoil in U.S. financial markets, foreign investors continued to buy tens of billions of dollars in Treasury notes, corporate bonds and agency securities in February, the Treasury Department reported ... Foreigners, in both the private and government sectors, purchased a net $60.1 billion in long-term securities, nearly a 45% jump from the $42.2 billion they purchased in January. Jay Bryson, global economist for Wachovia Corp., said the Treasury report shows capital inflows remain healthy, a critical support for the U.S., which must import huge amounts of capital to cover its massive trade deficit. [Wall Street Journal, Apr 16] And every SBIR dollar that makes no investment in developing exportable technology aggravates the problem.
computing done the old-fashioned way: with lots of gears, a big crank, and some muscle. The Computer History Museum in Mountain View, CA, will unveil a new construction, the first in the US, of the 19th-century British mathematician Charles Babbage's Difference Engine No. 2, an improved version of his earlier design for a mechanical digital calculator. It weighs in at two tons more than the Difference Engine built in 1991 at London's Science Museum. Microsoft millionaire Nathan Myhrvold commissioned and paid for the US model." [slashdot.org, Apr 14]
no doubt that if the US is famous for its get-up and go, that it is because Americans are descended from those who got up and came. [John Steele Gordon, An Empire of Wealth, 2004] And many of those descendants now want to pull up the ladder to the lifeboat in which they luxuriate.
All great empires set too much store by predictions of their imminent demise. Perhaps, as the Greek poet Constantine Cavafy suggested in his poem “Waiting for the Barbarians,” empires need the sense of peril to give them a reason to go on. Why spend so much money and effort if not to keep the barbarians at bay? ... Economic statistics in autocracies such as China are notoriously unreliable, and it’s worth recalling all those breathless predictions, a few decades ago, of Japan’s imminent global domination. [Ian Buruma, After America, The New Yorker, Apr 21]
stocks must deal with a new reality: For many companies, capital is neither cheap nor abundant. [ES Browning,Wall Street Journal, Apr 14]
Biofuels Good and Bad. a reaction is building against policies in the United States and Europe to promote ethanol and similar fuels, with political leaders from poor countries contending that these fuels are driving up food prices and starving poor people. Biofuels are fast becoming a new flash point in global diplomacy, putting pressure on Western politicians to reconsider their policies,... According to the World Bank, global food prices have increased by 83% in the last three years. [Andrew Martin, New York Times, Apr 15]
Plastics Good and Bad. A century ago, the Belgian-born chemist Leo Hendrik Baekeland ushered in a materials revolution with his invention of Bakelite, a synthetic resin that was molded into radio cases, lamps, buttons, dressers and other Antiques Roadshow reliables. We have been emotional bobbleheads about plastics ever since. ... Seeing that “it can take more than 1,000 years for a plastic bag to break down in a landfill” and that “in the U.S. alone, about 100 billion plastic bags are thrown away each year,” [Whole Foods] said it could not in good conscience contribute to the crisis. [Natale Angier, New York Times, Apr 15]
Even GE Down Big. Investors have already seen an average profit decline of 20% from the 32 companies in the Standard & Poor’s 500-stock index that have reported their first-quarter earnings, and they are particularly worried about more unpleasant news from the financial industry. [Reed Abelson and Louise Story, New York Times, Apr 12]
Corn's getting expensive, and that could complicate financing for a massive new ethanol production plant at the Port of Albany. The $350M project would cover an 18-acre parcel. But the partners who will own the plant -- Albany Renewable Energy LLC -- face a confluence of challenges that will make financing difficult, some in the industry say. .... Ethanol production also requires a lot of natural gas and electricity. Each gallon of ethanol takes 35,000 BTUs of natural gas to produce, as well as 1.1 kilowatt-hours of electricity, according to figures from the University of Nebraska. A kilowatt-hour costs 15.27 cents in New York state on average, according to the U.S. Energy Information Administration. That's one of the highest rates in the country. At $1.05 per therm, or 100,000 BTUs, the 35,000 BTUs cost roughly 37 cents. And a bushel of corn yields about 2.9 gallons of ethanol. Corn for October/November delivery to the ethanol production plant in Fulton, Oswego County, was bid Friday at $6.162 a bushel, according to Troy-based Interstate Commodities Inc.'s Web site. Interstate has the contract to supply corn to the Fulton plant, near Syracuse, which will open in June. That works out to $2.12 per gallon of ethanol. So the three biggest inputs together cost $2.65, while ethanol currently sells at a bit less than $2.50 a gallon. [Albany Times-Union, Apr 13]
the Pew Research Center published an eye-opening study on the economic attitudes and prospects of middle-class Americans. Inside the Middle Class: Bad Times Hit the Good Life found that Americans’ number-one priority – named by 68% ... was “having enough free time to do the things you want”. ... The percentage of average Americans who say their life is better than it was five years ago is the lowest in almost half a century [Christopher Caldwell, Financial Times, Apr 11]
Supply and Demand. Virgin Media CEO Says Net Neutrality is "A Load of Bollocks". Anyone here been shaken down by their Internet Service Provider? "The new CEO of Virgin Media is putting his cards on the table early, branding net neutrality 'a load of bollocks' and claiming he's already doing deals to deliver some people's content faster than others... If you aren't prepared to cough up the extra cash, he says he'll put you in the Internet 'bus lane.'" [slashdot.org, Apr 13]
Money Makes Bubbles. Alan Greenspan may be correct that a glut of global saving pumped up the housing bubble by keeping long-term interest rates low. If so, then watch out, because the situation has gotten worse: Foreign stockpiles of U.S. dollars are fatter and interest rates lower than at housing's zenith in 2005. Global central-bank reserves surged to a record $6.4 trillion in the fourth quarter of 2007, according to the International Monetary Fund, up from about $4 trillion in 2005. Those reserves are pouring into U.S. Treasury bonds for safekeeping. ... with so much cash on hand and low rates again providing an incentive to make it magically multiply, investors could find other bubbles to inflate. That might explain crude oil rising to $110 a barrel, even as the U.S. seems to be falling into recession. [Mark Gongloff, Wall Street Journal, Apr 11]
The housing bust has gotten most of the headlines, but the real story is the astonishing buildup of household debt in the U.S. and around the world in recent years. U.S. households now owe almost $14 trillion, nearly equal to the annual output of the U.S. economy. [Michael Mandel, Business Week, Apr 21]
Sir, It doesn’t surprise me that a popular poll supports scientists’ opinions on embryo research (report, April 10). We live in an era unique in history for its uncritical and reverent attitude to scientific opinion, usually referred to as “expert”. Scientists have been placed on the pedestals vacated by politicians and priests. ... Good scientists are happy to admit that there are often several interpretations of the evidence, which can often lead to diametrically opposite opinions. Scientists are not the guaranteed channels to truth; and their moral opinions are as valid and invalid as the rest of ours. [A letter writer, The Sunday Times, Apr 13]
Despite oil prices that hover around $100 a barrel, it may take at least 10 or more years of intensive research and development to reduce the cost of solar energy to levels competitive with petroleum, according to an authority on the topic. “Solar can potentially provide all the electricity and fuel we need to power the planet,” Harry Gray, Ph.D., scheduled to speak here today at the 235th national meeting of the American Chemical Society (ACS). [Randall Parker, Futurepundit blog, Apr 8]
A Little Gloom. Small-business owners' confidence in the economy is plummeting, prompting cutbacks in hiring and expansion plans, a new survey shows. The National Federation of Independent Business said its index of small-business optimism fell 3.3 points in March to 89.6, the lowest reading since the monthly surveys began in 1986. [Kelly Evans, Wall Street Journal, Apr 9]
Gazelles Matter. Erik Stam, a fellow of the Advanced Institute of Management Research at Cambridge University, will discuss his paper, “High Growth Entrepreneurs, Public Policies and Economic Growth.” In it, he contends that the development of entrepreneurs and small business owners as a whole is less important to a country’s economic development than the “gazelles” – companies identified in literature as having high growth potential. This suggests that small business policy is not necessarily most effective when it targets small businesses indiscriminately; rather, it may be more efficient to target those businesses most likely to create growth. April 15, 2008, 11:45 a.m. - 2:00 p.m. - Hudson Institute, Washington, D.C. Headquarters , free and open to the public. Lunch will be served. Go ahead, Congress, keep pouring a billion SBIR a year into businesses that only do technical work for government agencies while heeding their spin on the virtues of small high-tech. When it comes to science and engineering, small business has no advantage over academia or large business. Only when it comes to market agility for new ideas do small businesses have any edge. If the SBIR mills had market agility, they would have quit living on low-profit, dead-end government R&D contracts.
Borrowed Money, Borrowed Time. if the euro zone can persuade Great Britain to become a full-fledged member, thereby acquiring one of the world's two premier financial centers (London), the euro might start to look like a viable alternative to the dollar. ... The dollar’s popularity has moved real resources from the rest of the world to the United States. And on a much larger scale, through an economic sleight of hand in global financial markets, it has allowed the country to sustain an otherwise impossible standard of living. These wonderful tricks, unfortunately, may not work much longer. When they start to fail, as they eventually must, the dollar’s peculiar global role will suddenly become a focus of attention. You don’t know what you’ve got till it’s gone. [Ken Rogoff, TheAtlantic.com]
Hollowing Out the Middle. the now-finished boom was, for most Americans, nothing of the sort. In 2000, at the end of the previous economic expansion, the median American family made about $61,000, according to the Census Bureau’s inflation-adjusted numbers. In 2007, in what looks to have been the final year of the most recent expansion, the median family, amazingly, seems to have made less — about $60,500. This has never happened before, at least not for as long as the government has been keeping records. In every other expansion since World War II, the buying power of most American families grew while the economy did. You can think of this as the most basic test of an economy’s health: does it produce ever-rising living standards for its citizens? [David Leonhardt, New York Times, Apr 9]
"The deal was priced for perfection," says one private equity veteran ... But much has gone wrong. Freescale is shaping up to be one of the ugliest buyouts in history. ... None of this would have been so dire had Freescale remained a publicly traded company with relatively little debt. But Freescale's owners saddled it with $9.5 billion to pay for the deal. Now the company must come up with $375 million in interest payments every six months. [Emily Thornton, Business Week, Apr 14]
Firm but Delicate Hand Needed. For three decades, public policy has been dominated by the power of markets—flexible and resilient, harnessing self-interest for the public good, and better than any planner-in-chief. Nowhere are markets deeper and more liquid than in modern finance. But finance has stumbled and there are growing calls from all sides for bold re-regulation. ... A sophisticated and innovative financial system is susceptible to destructive booms; but a simple, tightly regulated one will condemn an economy to grow slowly. [The Economist, Apr 5] In the past two decades both finance and technology have shown how to run like Wile E Coyote way over the cliff.
Representatives from Weber, Davis and Morgan counties (Utah) aim to reap a half-billion dollars in new business growth with the implementation of the new group, Stimulating the Expansion of Entrepreneurial Development, or SEED. ... SEED director T. Craig Bott said the group is targeting new companies with potential for providing high wages and sustained growth in a national or global market. For more information about free services available to Utah entrepreneurs, go to www.growutahventures.com [Arrin Brunson, Salt Lake Tribune, Apr 5]
Sulfuric Acid Is Sizzling. up 266% over the past five months. ... the ethanol boom led to a corn-planting boom, and the [fertilizer-company surpluses] vanished [Business Week, Apr 14]
Domestic profits were down 6.5%, while earnings from the rest of the world soared 42.8%, the largest gain in 27 years, spurred by solid growth overseas and the lower dollar. [Business Week, Apr 14]
Boston's ambitious push to provide citywide wireless Internet access is faltering: Fund-raising is millions of dollars short, the volunteer heading the project may resign, and coverage plans are being scaled back. [Boston Globe, Apr 5]
They Come, They Go. Four years ago, a low-slung factory on the fringes of town here [Holland, MI] was stagnating and shedding workers. Then Siemens, the German industrial giant, bought the plant and folded it into a global enterprise. Today, the factory is shipping wastewater treatment equipment to Asia and the Middle East and employing twice as many workers. ... About 60 miles to the northeast, Two years have passed since a Swedish multinational shut down what had been the largest refrigerator factory in the country, a sprawling complex along the Flat River in Greenville. The company, Electrolux, sent production to Mexico, eliminating 2,700 jobs from a town of 8,000 people. [Peter Goodman, New York Times, Apr 7]
In the midst of a spreading credit crisis, barely a quarter of Americans (28%) blame the banks that made bad loans and even fewer (14 per cent) blame borrowers. A big plurality (40%) blame government. ... Freedom is held to go hand-in-hand with efficiency in the business world, but few Americans think this about government. In government matters people tend to believe that efficiency exacts a price in freedom. In an ambitious attempt to break this impasse, the economist Richard Thaler and the law professor Cass Sunstein, both of the University of Chicago and both informal advisers to Barack Obama’s presidential campaign, have just published a book, Nudge (Yale University Press) They argue that “choice architecture” – like the architecture of a well-designed public space – can coax (or herd) people in desirable directions at little or no cost to their autonomy and freedom. [Christopher Caldwell, Financial Times, Apr 4]
Hydrogen Still a Future Fuel. "Hundreds of hydrogen fueling stations will be built," Schwarzenegger vowed, as TV cameras rolled. "And these stations will be used by thousands of hydrogen-powered cars and trucks and buses. This starts a new era for clean California transportation." ... But today, not a single hydrogen fueling station has been built under the program. ... The reasons vary, depending on who is offering explanations. [Paul Rogers, San Jose Mercury News, Apr 3]
Crowd-sourcing. By offering on behalf of clients seeking scientific and engineering help, an Internet company called InnoCentive has gathered a virtual work force of 135,000 problem-solvers from around the world ... posting technical and theoretical challenges online and offering awards ranging from $5000 to $1 million for a solution. [Science, Mar 28] "true" scientists will scoff, but people looking for solutions don't mind where the come from, or how. Remember that thermodynamics came after the steam engine.
tempting is the idea that, with enough new rules, the state can ensure that a crisis never happens again. Wrong, because it flies in the face of five centuries of financial booms and busts. Civil servants, however dedicated, cannot outwit the combined forces of the world's bankers. And it is through risk-taking and innovation that banks benefit the economy (finance does that too, remember). [The Economist, Mar 29]
Science Festival. the canyons of the city will be alive with the sound of science. Biologists will discuss the perils and promises of humans’ knowing their own genetic codes. Quantum physicists will debate the nature of reality. Neuroscientists will ponder the mysteries of creativity. The Abyssinian Baptist Church Sanctuary Choir will serenade scientists to demonstrate the effects of music on the brain. First annual New York World Science Festival, May 28- Jun 1, Vowing to make New York City the center of the scientific universe — as it is for commerce, art and expensive dining. [Dennis Overbye, New York Times, Apr 3]
More Sci-Fi for Provocative Thinking. Lev Grossman writes to tell us that Neal Stephenson, author of greats like Snow Crash and Cryptonomicon, has another novel due for release in September. The catalogue copy gives us a small glimpse at what may be in store: "Since childhood, Raz has lived behind the walls of a 3,400-year-old monastery, a sanctuary for scientists, philosophers, and mathematicians--sealed off from the illiterate, irrational, unpredictable 'saecular' world that is plagued by recurring cycles of booms and busts, world wars and climate change. Until the day that a higher power, driven by fear, decides that only these cloistered scholars have the abilities to avert an impending catastrophe. And, one by one, Raz and his cohorts are summoned forth without warning into the Unknown." [slashdot.org, Mar 31]
Always Some Optimists. as the dollar's bear market stretches into its sixth year, a number of currency analysts are signaling that an end could be in sight [Craig Karmin, Wall Street Journal, Apr 1] As long as the USG keeps spending more money that it hasn't got, the dollar has to decline. War, tax cuts, bailouts, ... Prospects: this election year will be followed by another in just two years. BTW: lowering interest rates to "save the economy and the credit markets" has a downside: The sine qua non of a reserve currency is stability. If the Federal Reserve’s aggressive rate cuts unleash sustained inflation, the pre-eminence of the dollar will be tested [Financial Times, Apr 1] The world will not sit idly by while the US debauches the money.
Two widely prescribed cholesterol-lowering drugs, Vytorin and Zetia, may not work and should be used only as a last resort, a panel of four cardiologists told an audience of more than 5,000 people at a major cardiology conference . [Alex Berenson, New York Times, Mar 31]
Anyone who has worked in a large organization — or, for that matter, reads the comic strip “Dilbert” — is familiar with the “org chart” strategy. To hide their lack of any actual ideas about what to do, managers sometimes make a big show of rearranging the boxes and lines that say who reports to whom. You now understand the principle behind the Bush administration’s new proposal for financial reform, which will be formally announced today: it’s all about creating the appearance of responding to the current crisis, without actually doing anything substantive. [Paul Krugman, New York Times, Mar 31]
Emigrate Your Business Here, Please. Thanks to the weakened dollar, the U.S. has leapfrogged France, Britain and other European countries as a cheaper place to do business. [Vinnie Tong, AP, Mar 28] But our hardened nativists request that you leave all your people home. Another five years of civil war in Iraq should drain the US Treasury another trillion and make it even more attractive. Oh, never mind; each generation has to learn the costs of war for itself; history is for wimps.
Economics Happens in China Too. many of China's manufacturers—including Shan Hsing—are undergoing the kind of restructuring that tore through America's heartland a generation ago. The U.S. housing market, which generated demand for everything from Chinese-made bedroom sets to bathroom fixtures, has plummeted. A new Chinese labor law that took effect on Jan. 1 has significantly raised costs in an already tight labor market. Soaring commodity and energy prices, as well as Beijing's cancellation of preferential policies for exporters, have hammered manufacturers. The appreciation of the Chinese currency has shrunk already razor-thin margins, pushed thousands of manufacturers to the edge of bankruptcy, and threatened China's role as the preeminent exporter of low-priced goods. [Dexter Roberts, Business Week, Apr 7]
Hello? Eight years of dead money in the broad stock market? How can that be, given that Ibbotson Associates says the S&P has returned an average of 10.3% a year, compounded, since 1926? Think of it as a six-foot man drowning in a pond with an average water level of six inches - if you step in at the wrong place, the water can be eight feet deep. ... Ted Aronson says that it's in the bottom 2% of the almost 900 different 96-month periods in the Ibbotson statistical universe. Nevertheless, it's the return we have. Barring a miracle - or the creation of a New Math of the market variety - there's no way we'll ever see a bull market along the lines of what so many of us grew up with. During that enchanted period, the boring old S&P returned more than 19% a year. When you include compounding, your money more than doubled every four years. Pretty slick. That was more than twice what stocks earned in the previous 56 years, when they returned about 9%. More than half of that was from dividends, which were almost triple their current level. ... The long bull market was great. But it's not coming back- at least for this generation of investors. Get used to it. [Allan Sloan, Fortune, Mar 17]
More Capitalism Action. As the subprime mortgage crisis has spread, the volume of the business has soared, and firms that handle loan defaults have been the primary beneficiaries. Law firms, paid by the number of motions filed in foreclosure cases, have sometimes issued a flurry of claims without regard for the requirements of bankruptcy law, several judges say. ... Much as Wall Street’s mortgage securitization machinery helped to fuel questionable lending across the United States, default, or foreclosure, servicing operations have been compounding the woes of troubled borrowers. [G Morganstern and J Glazer, New York Times, Mar 30]
In the long run we are all dead. Economists set themselves too easy, too useless a task if, in tempestuous seasons, they can only tell us that when the storm is long past the ocean is flat again. -- John Maynard Keynes , 1923. Peter Bernstein [New York Times, Mar 30] warns, the expectation of a long-run, inflation-adjusted total return of 7% a year from stocks may be little more than a lovely dream. Investing is much more complex than a replay of historical returns. The markets of the future will be determined by the tempestuous seas of the future, not by the past.
PhD Start-up. The Howard Hughes Medical Institute in Chevy Chase, MD, will spend $300 M over 6 years to support researchers it considers promising but who are struggling to obtain their first independent federal research grant. [Science, Mar 14]
The focus of [Elizabeth Leane's] Reading Popular Physics is the liminal status of best-selling science books, caught betwixt and between recognized genres: not exactly original contributions to scientific research, but rarely mistaken for high-brow literature, either. Instead they are hybrids, borrowing certain conventions from both sides of what C. P. Snow famously called the "two cultures." As such, Leane demonstrates, popular-science books--and especially the popular books about physics on which she focuses--played major roles in the overheated "science wars" of the 1990s, which pitted ideas from a variety of humanistic disciplines against a traditional view of how scientific knowledge is generated, vetted, and stabilized. [David Kaiser, Science, Mar 14]
"You can live your life just fine and not know squat about evolution," [Stephen Godfrey] says. Jennifer Couzin [Science, 22 Feb] tells the story of a scientist, whose discoveries destroyed his belief in creationism, who finds the atmosphere too corrosive for him to convince other creationists, including his parents. Myth and denial work roughly the same way for national finance and government subsidy programs.
Concrete is about to start helping in the fight against air pollution, thanks to a new recipe spiked with [simple old] titanium dioxide, a compound that becomes chemically active in sunlight. Originally concocted by Italy's Italcementi for its bright white, self-cleaning features, the product, called TX Active cement, also neutralizes air pollutants such as benzene, carbon monoxide, nitrogen oxide, and others. [Adam Aston, Business Week, Mar 31]
In hindsight, the enthusiastic predictions of the 1990s for [CVD] diamond were perhaps too ambitious, but the story is not over yet. [Paul May, Science, Mar 14] replays the enthusiasm for the magic of [still far too expensive] diamond films.
European companies are frantically investing in US production capacity, which creates jobs and helps to reduce the $740B current account deficit at the root of the dollar's woes. [Jack Ewing, Business Week, Mar 31]
Iceland! vacant land, cheap geothermal power, and a chilly climate. Just right for server farms, the cost of power for which doubled between 2000 and 2006 to $4.5B and could double again by 2011. [Steve Hamm, Business Week, Mar 31]
The stock market is trading right where it was nine years ago. The current market turmoil may result in a lost decade like the 1930s and the 1970s. ... Stocks, long touted as the best investment for the long term, have been one of the worst investments over the nine-year period, trounced even by lowly Treasury bonds. ... When dividends and inflation are factored into returns, the S&P 500 has risen an average of just 1.3% a year over the past 10 years. ... "We have to accept that this is no longer a nation of 4% real economic growth. This is a mature nation that no longer has a strong manufacturing base," says Steve Leuthold, chairman of Leuthold Weeden Research in Minneapolis. [ES Browning, Wall Street Journal, Mar 26]
Profit Always Finds a Way. The notion that future banking crises can be averted by better regulation demonstrates unrealistic expectations of what regulation might achieve. Banking supervision asks public agencies to second-guess the decisions of executives who earn millions in bonuses and business strategies that yield billions in profit. ... Since financial stability is unattainable, the more important objective is to insulate the real economy from the consequences of financial instability. [John Kay, Financial Times, Mar 26]
Researchers at Intel have developed laptop-based security software that adjusts to the way an individual uses the Internet, providing a more dynamic and personalized approach to detecting malicious activity. The software is aimed at corporations that pass out laptops and mobile devices to employees, since IT departments usually install the same one-size-fits-all security software on all their hardware. The homogenous security approach is quick and easy, says Nina Taft, a researcher at Intel Research Berkeley, but because standard software doesn't take into account different people's patterns of computer use, it can produce false positives and entirely miss some attacks. [Kate Greene, MIT Tech Review, Mar 21]
Corning has recently broken ground on a $300M expansion of its research laboratories. Flush with cash from booming overseas sales, the glass giant is amping up its product development efforts at home. "It's important for the functioning of our innovation machine that we be in one location," says Corning Inc. President Peter F. Volanakis. ... Americans are going to need quite a few more Cornings—global companies willing to invest in the U.S.—to ease the pain of the economic slowdown. [Michael Mandel, Business Week, Mar 10] Doing R&D in the US makes more sense these days for multi-nationals as Europe and other developed places recoil from some of America's policies and attitudes, and leftists advocate against cheapest labor shopping. ]Jack Ewing, Business Week, Mar 10]
Futurist is Past. Arthur Clarke The science fiction visionary and writer of 2001: A Space Odyssey has passed away at the age of 90 in a Sri Lankan hospital [The Times, Mar 18]
WirePosted writes to mention that a new highly efficient microchip has been announced by researchers from MIT and Texas Instruments. The new chip touts up to 10 times more energy efficiency than current generation chips. "One key to the new chip design, Chandrakasan says, was to build a high-efficiency DC-to-DC converter--which reduces the voltage to the lower level--right on the same chip, reducing the number of separate components. The redesigned memory and logic, along with the DC-to-DC converter, are all integrated to realize a complete system-on-a-chip solution." [slashdot.org, Mar 17]
Place fewer, bigger bets. ..the conclusion that technology companies slugging it out in some of the most fiercely competitive parts of the industry have reached as they grapple with two conflicting pressures: how to boost profit margins, while investing in the new technologies necessary to fuel future growth. [K Allison and R Waters, Financial Times, Mar 17] In big companies, profit and share price come first. Established technology does not want new technology undercutting its capital return from its existing businesses. Which is not great news for aspiring innovative small tech companies looking for someone to adopt their technologies.
schliz writes "Researchers are investigating large swarms of up to 10,000 miniature robots which can work together to form a single, artificial life form. A resulting artificial immune system is expected to be able to detect faults and make recommendations to a high-level control system about corrective action — much like how a person's natural immune system is able to cope with unfamiliar pathogens." [slashdot.org, Mar 15] For fast-paced insight into swarm intelligence, read Michael Crichton's novel "Prey".
The sputtering economy has changed the calculations of [Boston] area start-up companies, prompting many to husband cash, revise strategies, stockpile more venture capital, and put plans to go public on hold. ...venture-backed technology and life sciences firms, which typically aim to go public or be acquired in five to eight years, are resigning themselves to a longer slog. They are also getting used to streamlined products, cheaper hotels, and more judicious hiring. [Robert Weisman, Boston Globe, Mar 17]
Up-and-Coming Tech Cities, according to Philip Auerswald, professor of public policy at George Mason University: Columbus OH (Battelle oversees seven major laboratories for different federal agencies; current budget: $4 billion), Santa Fe NM (Los Alamos and Sandia nearby), Palm Beach County, FL (becoming a haven for cutting-edge biotech and life science research), Houston (all that medicine and oil), Milwaukee (home base for small engines), Yuma AZ (more prisons and date farms than patent lawyers). [story from Forbes, Mar 10] Filling in 6-9: Pittsburgh, PA, Boise City, ID , Iowa City, IA , Lake Charles, LA [current.com]
just another commodity The bad news: Even with the better-than-expected results, profit for the fourth quarter tumbled 81% as the economics of ethanol (for the time being, at least) remained upside down. ... Ethanol's from-out-of-nowhere boom was tied almost exclusively to its use as a replacement to methyl tertiary-butyl ether, a gasoline additive that had been proved to be a carcinogenic groundwater pollutant. "These guys IPO'ed when corn was $1.80 to $1.90 [a bushel] and ethanol was $4.50 a gallon because of a shock to the system ... Now, with corn at $5.64 a bushel and ethanol at about $2.60 a gallon, he says "it's all digested and worked through," which means ethanol becomes just another commodity. [Herb Greenberg, Wall Street Journal, Mar 15] Since the government's mandates and subsidies caused the problem, should it bail out the losers?
Big Innovation, Yesterday, Please. climate scientists now say it's too late to prevent significant warming. "We have only three options: mitigation, adaptation, and suffering," says Harvard professor John P. Holdren. "We will have to do all three." ...For suffering, look to Alaska. Loss of sea ice near the shore has left coastal Inuit communities at the mercy of storms' pounding waves, which are eating away the land. In Newtok, "the situation is desperate," says Environmental Commissioner Larry Hartig. The town is being moved, and others will follow. Hamlet J. "Chips" Barry III, manager of Denver Water, says he can no longer plan for tomorrow's water needs. [John Carey, Business Week, Mar 13]
The euro moved to record highs – at which point Goldman Sachs estimated that the eurozone had overtaken the US as the world’s biggest economy measured by market exchange rates – before easing slightly. [Financial Times, Mar 14]
The Picnic is Over. The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey [WSJ, Mar 13] Re- think sales expectations unless you're selling caskets, band-aids, or peanut butter.
Report Suggests that IT Labor Shortage May Be Bogus A pretty compelling report out of Duke University suggests that there is no economic evidence that there is anything remotely approaching an IT skills shortage despite all the claims to the contrary. Meanwhile, Microsoft chairman Bill Gates was up on Capitol Hill pleading for more visas of technology workers while Google said it may actually start laying people off as more CFOs seems to think we are in a recession. That all said, there seems to be genuine concern about a lack of knowledge about parallel application development that will be a crucial requirement for the next generation of multicore processors. [Mike Vizard, eWeek]
As the water industry continues to search for ever more efficient ways to use water, the nature of the design problems is becoming more complex. Water utilities are now looking to integrate water, wastewater, recycled water and even storm water into a single network to minimize wastage and improve security of supply. This increased complexity is further influencing the need to incorporate AI into all aspects of water system design and operations...[Water on-Line]
Build it, they will come. Poet, the world's biggest ethanol producer, will move ahead with two new plants in Indiana despite the weakening market. [Indianapolis Star, Mar 14]
Wealth Creation First. Entrepreneurs recognize value where none existed before and must act if that value is to be realized. While it is essential that entrepreneurs act, it is less important that they understand the meaning of what they do. Indeed, many entrepreneurs do not. As a result of entrepreneurial action, the market economy creates great wealth but does not distribute it equally. Thus arises the contradiction of the market: the creation of social surplus, most notably in the form of intellectuals who parse the meaning of the market's success, often resentful that the active but unknowing entrepreneur is so richly rewarded. Inequality of wealth cannot be tolerated, and, for its remediation, they embrace the state. [Prof JP Beckwith, Wall Street Journal, Mar 14] There's no good use to arguing about equal distribution of poverty, which is why Communism basically fails.
Oil and the Euro still rising (18% over the past 12 months). The dollar has fallen below 100 yen for the first time since 1995. Swiss franc up to almost a buck. Smile when the foreigners come visiting because we need to sell them stuff, any stuff.
bughunter writes "Today GE announced the successful demonstration of the world's first roll-to-roll manufactured organic light-emitting diode (OLED) lighting devices (press release). This demonstration is a key step toward making OLEDs and other high-performance organic electronics products at dramatically lower costs than what is possible today. The green crowd is thrilled as well. Personally, as the parent of a 3-year-old technophile, I'm dreading the animated cereal boxes." [slashdot.org, Mar 11]
How Fat the FiOS Pipe? dynamator writes "I live about 550 meters from my Verizon central office. I pay for their higher-tier 'Power Plan' DSL service, which boasts 3 Mbps down and 758 Kbsp up. For the past year, I've enjoyed excellent performance on this line. However, this past month Verizon has been hooking up my neighbors with FiOS, their new fiber-to-the-home system, and guess what, my connection speed and dependability have taken a nosedive. What can I do to build the case that this is really happening? Will anyone, least of all Verizon, care? Are they making me a fiber offer I can't refuse?" We discussed a few times last year what Verizon may be up to. [slashdot.org, Mar 8]
A German solar equipment maker, Schott, plans to turn a plot of [New Mexico] desert real estate into its North American hub for production,... a 200,000-square-foot facility that will employ about 350 people [AP, Mar 4]
Trial Fuel Cell Market. his home and 2,200 others in Japan get electricity and heat water — with power generated by a hydrogen fuel cell. ... The oxygen the fuel cell uses comes from the air. The hydrogen is extracted from natural gas by a device called a reformer in the same box as the fuel cell. But a byproduct of that process is poisonous carbon monoxide. So another machine in the gray box adds oxygen to the carbon monoxide to create carbon dioxide, which — though it contributes to global warming — is not poisonous. ... Matsushita says the savings from using fuel-cell-generated power will vary by household and climate, but it promises a cost drop of about $50 a month. [Yuri Kageyama, AP, Mar 10]
R&D Reshuffle. Under the restructuring, HP will consolidate its research in 23 labs around the world. The 700-plus researchers in those labs will focus on 20 to 30 large research projects instead of the 150 or so smaller projects they've typically worked on in the past. [Bob Keefe, The Oregonian, Mar 7] Today's problem was yesterday's solution. Prediction: in less than a generation, the grand plan will reverse again. Why: lost corporate memory as new people don't know what was wrong with the old way.
Finding Good Workers. changes in manufacturing have reshaped factory protocols and job descriptions worldwide. The process has shaken up plants from China to Ohio. "I've got tugboats to build, and I can't hire enough qualified welders and diesel mechanics," said Ron Rasmus, the chief executive of Great Lakes Towing Co. of Cleveland. ... "Hiring good people is one of my greatest challenges," said Gary Gibb, president of Wrayco Industries, an expanding metal-fabrication business in Stow, Ohio. ... a Web site this year, www.jobmagnet.org, intended to pair metal benders, welders, machinists and assembly workers as well as office workers, accountants, marketing and IT specialists and managers with companies that need their skills. MAGNET's data show it's catching on, with almost 5,000 job seekers and more than 400 employers offering jobs. [Frank Bentayou, Cleveland Plain Dealer, Mar 7]
Even in capitalist heaven, The San Jose Mercury News laid off 15 newsroom staffers and lost five other editors through buyouts this week, shaving the editorial staff by about 10 % [SF Chronicle, Mar 9]
Shares of a Marlborough company that makes a colon cancer screening test that doesn’t involve a colonoscopy have soared since the American Cancer Society recommended the test. Shares of Exact Sciences were up 65 percent to $3.44 in midday trading today. [Boston Globe, Mar 7, 08]
A team of scientists, including Linda B. Buck, who shared the 2004 Nobel Prize in Physiology or Medicine, has retracted a scientific paper that described neural pathways in the sense of smell, after the scientists were unable to reproduce the results. [K Chang, New York Times, Mar 7] Rather than a monopoly on results, science insists on reproduction by competitors.
Seeking Storm Shelter. As the dot-com bust gave way to revival, many Silicon Valley engineers left large companies to join start-ups, drawn by excitement and the promise of fat payouts. ... a new flight to safety among tech-industry workers as the economy struggles. In growing numbers, these workers are gravitating to larger companies that they hope can better weather a downturn. ... an analysis by Moody's Economy.com found that big companies had the largest net job gains through early last year, outstripping job growth at small firms. [Pui-Wing Tam, Wall Street Journal, Mar 7]
The world's largest wind-turbine maker officially opened its first North American manufacturing plant on Colorado's northern plains, where it expects to produce blades for 600 turbines a year. Denmark-based Vestas Wind Systems will eventually employ about 650 workers at its 400,000-square-foot plant outside Windsor, [Denver Post, Mar 5]
Free but Loose. A cold front blew through West Texas on Feb. 26, temporarily lifting wind production. When it subsided, wind speeds dropped, turbines slowed and productivity dropped by 80% to 300 megawatts from about 1,700 ... "Wind needs a dance partner," says David Hawkins ... California's grid operator is seeking bids from wind consultants. [Rebecca Smith, Wall Street Journal, Mar 6]
Oil, corn, gold, and the Euro all hit records (in dollars). [Mar 5] Must be time to whine for higher SBIR ceilings.
The recession will collapse demand for copper. This substance has no OPEC propping it up. Go short. [AG Schilling, Forbes, Mar 10]
Oil edged past a 28-year-old record [Inflation-Adjusted 1980 Record] and gold approached $1,000 an ounce ... and China plans to boost defense spending by nearly 18% this year [Wall Street Journal, Mar 4] Do you suppose we need an adult president who has some feel about how to manage our presence in such a world? Washington and Hamilton are not coming back.
Self-regulation was always "best". Some of the top banking brains spent years designing rules to help financial institutions stay out of trouble. Their primary tenet: Banks should decide for themselves how much risk they should take on.... [D Paletta and A MacDonald, Wall Street Journal, Mar 4] And Germany is living through its own version of Enron and Tyco. The country's business elite are careening from one headline-grabbing scandal to another. Graphic: Crimes of Capitalism [Mike Esterl, Wall Street Journal, Mar 4]
Most businesses have heard of employee blogs by now, and a few are even starting to allow their workers to keep blogs. But what is the point of letting them do so in the first place? Chris Baggott, whose Compendium Blogware makes blogging software for businesses, says employee blogs ultimately should have a few very limited purposes, chief of which involves nothing more lofty than making the company come up higher in Google search results. ... People who blog tend to be very opinionated. But in a corporation, that doesn't fit very well, since corporations need to control their message. [Lee Gomes, Wall Street Journal, Mar 4]
A new Web site, www.biocrossroadslinx.com, offers a searchable database of comprehensive information about biotechnology and pharmaceutical contract service providers and related university programs. Thirty-five Indiana contract service providers are listed, along with educational partners. For more information, call Lori Leroy at (317) 238-2456. [Indianapolis Star, Mar 1]
Inward Global. British drug maker Shire PLC says it plans to go forward with a $394 million expansion in Lexington that is expected to create 680 jobs over the next eight years, one of the largest economic development projects in the state. [Boston Globe, Feb 14, 08] At $2 to the £1, it's a cheap US labor move.
The student union at Stanford University was buzzing Thursday with representatives from about 100 startups looking for the next Larry Page and Sergey Brin, and hundreds of students trying to pick out the next Google. It was the "Startup 101" job fair, chock full of companies run by - you guessed it - Stanford alumni and students. ... The job fair was part of Stanford's entrepreneurship week, which is when the university makes an extra effort to nurture and reward those students who come to the campus yearning to start companies. [Deborah Gage, San Francisco Chronicle, Mar 1]
When we force-feed $2 billion daily to the rest of the world, they must invest in something here. Why should we complain when they choose stocks over bonds? -- Warren Buffet
hundreds of billions of dollars would accrue to the inventor of an energy breakthrough. Silicon Valley certainly doesn't agree with Birol: Venture capitalists are pouring money into the competition to invent a technology that would be as significant as the transistor. It would be insane to presume to predict a winner. But the revolution is likely to come from one of the high-tech corridors in India, China, Europe, or the United States; the research arms of associated industries, like auto manufacturing; or the laboratories of Big Oil. [Steve LeVine, "the End of Big Oil", The New Republic, Feb 27]
businesses are having a hard time hiring workers, according to a newly released survey by the Connecticut Business and Industry Association. ... demographic challenges on two fronts: The population of young people in the state is declining, and the baby boomer generation is preparing to retire. [Mass High Tech, Feb 27]
Gottschalk's cartoon shows three men with the caption: We've invested our hearts and souls in this company. We're only asking you to invest ten million. [Wall Street Journal, Feb 26]
Rich in intellectual capital but saddled with attitudes that get in the way of leveraging it, Wisconsin needs to change its culture. So says G. Steven Burrill, the chief executive officer at Burrill & Co., a San Francisco venture capital firm whose funds invest nearly $1 billion in life sciences companies. Burrill says he isn't buying the state's standard argument - that it lacks the kind of capital available on the coasts to fund new companies. "There is more than enough capital in the world to do all the things that need to happen here, you just need to go get it," said Burrill. [Kathleen Gallagher, Milwaukee Journal-Sentinel, Feb 22]
Hablando Espanol en el sol. A Spanish company is planning to take 3 square miles of desert southwest of Phoenix and turn it into one of the largest solar power plants in the world. Abengoa Solar, which has plants in Spain, northern Africa and other parts of the United States, could begin construction as early as next year on the 280-megawatt plant in Gila Bend, about 50 miles southeast of Phoenix. The company said Thursday it could be producing solar energy by 2011. Abengoa would build, own and operate the $1 billion plant, named the Solana Generating Station. [Milwaukee Journal-Sentinel, Feb 22] Arizona Public Service is announcing plans today for a plant that will cover 3 square miles. The Solana Generating Station, to be built 70 miles southwest of Phoenix near Gila Bend, will produce enough electricity for 70,000 customers. ... The viability of this project, like many across the country, depends on the existing solar tax incentives, which are scheduled to expire at the end of the year. Congress must renew them. ... Solana will be built by a U.S. subsidiary of Abengoa, a Spanish company, for financial reasons. [Arizona Republic, Feb 21]
Dot.Com Crash Continues. Nortel Networks will cut 2100 additional jobs as a corporate turnaround continues to elude the telecommunications company. The latest announcement will undoubtedly cause a shudder among technology workers who survived the last economic recession that slammed Nortel's operations at Research Triangle Park. The cutbacks are the latest round of belt-tightening by the Canadian telecommunications giant, which has slashed nearly 70,000 positions -- two-thirds of its work force -- since 2001. [Raleigh News&Observer, Feb 28]
Up and Away Biofuel. Ever a showman, Virgin Atlantic Airlines [founder] Richard Branson opened a vial of jet fuel made with oil from coconuts and Brazilian babassu nuts and drank it, forcing a stiff smile. ... On Sunday, Virgin flew a Boeing 747 from London's Heathrow Airport to Amsterdam with one of the four engines burning a mixture of 80% jet fuel and 20% oil from naturally grown plants. [Scott McCartney, Wall Street Journal, Feb 26]
A new type of rubber developed by researchers in Paris can. When a rubberband made from the material is cut and the two ends are pressed together, they quickly form a strong new bond without glue or heat. (A video is here.) [Henry Fountain, New York Times, Feb 26]
A New Ethanol Path. Novozymes, a Danish company with its U.S. headquarters in Franklinton [NC], is the world's largest producer of enzymes, .. In the past decade, Novozymes has turned more of its attention to ethanol. Last year, the company generated about $200 million selling enzymes that break down corn kernels, the only crop now used in full-scale ethanol production. But that is last century's science. The next generation of ethanol production -- known as biomass conversion -- is the quest that scientists are pursuing so diligently in Franklinton and at Novozymes' second research hub in Davis, Calif. [Sabine Vollmer, Raleigh News&Observer, Feb 26]
An aluminum-rich alloy developed by Purdue University researchers can produce hydrogen by splitting water molecules, according to a news release from Purdue News Service. Perhaps more importantly, the alloy, which contains 95 percent aluminum and 5 percent of an alloy made of several other metals, is competitive economically with conventional fuels for both transportation and power generation. The other metals are gallium, indium and tin. Since the new alloy contains much less of the more expensive gallium than previous forms of the alloy, the hydrogen fuel can be produced more cheaply, the release said. [Indianapolis Star, Feb 26]
Buying Efficiency and Innovation. Technology stocks are trading at the lowest levels in more than a year. But industry leaders such as EA and Microsoft still generate heaps of cash. When long-term revenue growth is threatened, as it is now, deploying these riches into buying competitors is a reasonable response. Moreover, because they have high fixed costs but low marginal costs, combining companies can lead to thumping synergies that benefit the buyers' shareholders. Microsoft promises a minimum of $1 billion in annual cost cuts if it succeeds in buying Yahoo. Oracle has made more than 30 acquisitions in the past three years. Shareholders like the results: the stock is up 44% in that period, solidly outperforming the sector. [Wall Street Journal, Feb 26]
Windy Plains. twice as high as the Statue of Liberty, with blades that span as wide as the wingspan of a jumbo jet, and driven by Texas wind, with help from pontifcating politicians. Texas is rapidly turning into the capital of wind power. After breakneck growth the last three years, Texas has reached the point that more than 3% of its electricity, .. mega-entrepreneur Boone Pickens is planning to build the biggest wind farm in the world, a $10 billion behemoth that could power a small city by itself. [Clifford Krauss, New York Times, Feb 23] Lots of the turbines are visible in the moonscape of I-10 west of the Texas Hill Country.
"They said don't lose $2 million and blow the plant up, but otherwise do what you want to do." ,,, [Steve] Bytnar, 37 years old, plunged into the field of de-icing in the mid-1990s after Minnesota Corn Processors, a cooperative where he worked as a researcher was acquired by Archer Daniels Midland Co., Decatur, Ill., gave him free rein to experiment. [Christopher Conkey, Wall Street Journal, Feb 25]
Unlike the familiar photovoltaic cells of rooftop panels, which produce electricity directly from sunlight, the APS plant will use mirrors to capture and concentrate the sun's heat.
Installing solar panels on homes is an economic "loser" with the costs far outweighing the financial benefit, a respected University of California-Berkeley business professor said. The technology, using photovoltaic panels to generate electricity, is not economically competitive with fossil fuels and costs more than other renewable fuels, said Severin Borenstein, who also directs the UC Energy Institute. "We are throwing away money by installing the current solar PV technology," he said. Not surprisingly, the solar industry reacted strongly to the report. [Matt Nauman, San Jose Mercury News, Feb 21]
[MIT] Technology Review's 10 emerging technologies that its editors believe will be particularly important over the next few years. This is work ready to emerge from the lab, in a broad range of areas: energy, computer hardware and software, biological imaging, and more. Two of the technologies--cellulolytic enzymes and atomic magnetometers--are efforts by leading scientists to solve critical problems, while five--surprise modeling, connectomics, probabilistic CMOS, reality mining, and offline Web applications--represent whole new ways of looking at problems. And three--graphene transistors, nanoradio, and wireless power--are amazing feats of engineering that have created something entirely new. [MIT Technology Review, Feb 19]
The Sunshine Treatment. Researchers at Monash University, in Victoria, Australia, have found a way to coat fibers with titanium dioxide nanocrystals, which break down food and dirt in sunlight. The researchers, led by organic chemist and nanomaterials researcher Walid Daoud, have made natural fibers such as wool, silk, and hemp that will automatically remove food, grime, and even red-wine stains when exposed to sunlight. [Pachi Patel-Predd, MIT Tech Review, Feb 15]
I Don't Believe in Imaginary Property writes "For a long time now, lawyers and any serious law students have been bound to paid services like LexusNexis for access to case law, but that is slowly changing. Carl Malamud has posted free electronic copies of every U.S. Supreme Court decision and Court of Appeals ruling since 1950, 1.8 million rulings in all, online for free. While the rulings themselves have long been government works not subject to copyright, courts still charge several cents per page for copies and they're inconvenient to access, so lawyers usually turn to legal publishers which are more expensive but more convenient, providing helpful things like notes about related cases, summaries of the holdings, and information about if and when the case was overturned. This free database is not Carl's first, either. He convinced the SEC to provide EDGAR, and helped get both the Smithsonian and Congressional hearings online." [slashdot.org, Feb 19] Not entirely free: your lawyer will still charge you by the hour to gather the free data.
Our society is aging. Credit (or blame) better medicine, healthier lifestyles and, of course, the bulge of the 80 million baby boomers. As people age, many become risk averse. Is this what's happening to America? ... The world outside the U.S. is changing faster than ever ... So the impulse among a growing number of Americans is this: "I'm tired of the rat race. Let's withdraw from the world. The world is moving too fast for us. Let's just get off and rest." This is driving economic populism. ... We are becoming risk-averse wimps. [Rich Karlgaard, Digital Rules blog]
SoyChemist writes "Sociologists at the American Association for the Advancement of Science annual meeting have reported that China is making major investments in nanotechnology. Their aim is to 'leapfrog' past the United States in technological development by focusing on long-ranging scientific goals. So far, the Chinese government has poured about $400 million into the young field of research. Considering the low cost of equipment and labor over there, that is a very large sum of money, and China's investment is expected to 'rise considerably.'" [slashdot.org, Feb 18]
Business Good and Bad. Most chief executives of Massachusetts technology companies are optimistic about the state's business climate and expect to add jobs in the next year despite fears of a possible recession. [Boston Globe, Feb 16] Meanwhile at the national level, Using words like "sluggish" and "deteriorated," Federal Reserve Chairman Ben Bernanke gave a pessimistic assessment of the nation's economy ...job creation falling by 17,000 in January, the first such setback in more than four years. [AP, Feb 15] Soggy economics is not good news for Republicans who were at the national throttle, or so they claimed, for the last decade. Our two-party system works because the business cycle re-inforces the political cycle. No, neither party has the answers as they pretend. In reality, the politicians generally seek power and the delights of office by promising to reward interest groups.
Global Finance. Bangladesh’s [Yes, Bangladesh] Grameen Bank has made its first loans in New York in an attempt to bring its pioneering microfinance techniques to the tens of millions of people in the world’s richest country who have no bank account. [Daniel Pimlott, Financial Times, Feb 16] What will our politicians make of that, especially if the beneficiaries start to actually vote in decent numbers? Government leans toward the rich and old because the poor and young don't vote and don't contribute. One English capitalist observed [British] tax rates that left buyout executives “paying less tax than a cleaning lady’’.[Brian Groom, Financial Times, Feb 16] The American supply-siders succeed in their arguments for much the same approach because most people don't understand taxes and would rather simply complain that actually learn and do something.
what happens on Wall Street does eventually trickle down to Silicon Valley. ... flush with cash and optimism just six months ago. Now ... start-up companies and their investors are beginning to hunker down and tighten their belts. ... Among their worries: that a tough economy will slash big companies' spending on the products sold by start-ups. [Rebecca Buckman, Wall Street Journal, Feb 15]
be optimistic. Prosperity and profit still depend, above all, on human ingenuity. Wetware is still the main asset you're holding in any well-diversified stock portfolio. No serious student of science technology can be anything but bullish about the long-term prospects for profit and growth in the ingenuity-driven economy. [Peter Huber, Forbes, Feb 25]
America's vast research-and-development enterprise is being reshaped in significant ways. Corporations -- the biggest spenders on R&D -- are increasingly outsourcing research and development overseas. Many U.S. companies have sharply cut their funding of "basic," or fundamental, research in favor of shorter-term projects that could provide a quicker financial payoff. ... China has been increasing its R&D spending by 15% to 20% each year as it sprints to catch up with Western countries and Japan. [Gautam Naik, Wall Street Journal, Feb 14]
Thinking Global. in 2004, [CEO Immelt] moved G.E. Healthcare from Wisconsin to outside London, the home of Amersham, a company G.E. had just bought. Clearly, he liked the results. G.E. now has research centers in Munich, Shanghai and Bangalore, India. The unit that sells equipment and services to oil and gas companies is based in Florence, Italy. ...“Everyone talks about outsourcing manufacturing, but it is the high-level R.& D. jobs that are the great marketing tools,” Mr. Immelt said. “And I’m a salesman, remember. I know that you don’t get to sell things for long unless you are part of the culture into which you are selling.” [Claudia Deutsch, New York Times, Feb 14]
If you're not in a medical or tech sector and you're not located in a hotspot like Silicon Valley or Boston's Route 128 corridor, your chances of getting VC funding are virtually nil, Shane says.
I think in business, you just have to learn to take the right next step. Predicting where things can be in 5 years is too hard if your industry has an kind ofcomponent. [businesspundit.com]
Loving the Internet. The growing popularity of video on the Net has driven a traffic increase that's putting strains on service providers, particularly cable companies. To deal with it, they have had to change the way they convey Internet data. [Houston Chronicle, Feb 12] And impose some market mechanism for limiting video (mere words take up little bandwidth), especially the junk that has no redeeming social value. In Britain, People who illegally download films and music will be cut off from the internet under new legislative proposals to be unveiled next week. Internet service providers (ISPs) will be legally required to take action against users who access pirated material, The Times has learnt. [The Times (London), Feb 12]
Polaroid, which rode its once wildly profitable technology into the grave, is finally abandoning instant print pictures. It lost out when it did not adapt to digital photography.
A newly formed Madison (WI) company aiming to use its technology to destroy certain cancerous tumors has snagged $4.5 million of venture capital, along with a former high-level GE Healthcare executive. NeuWave Medical Inc. started in January under the leadership of Laura King, who previously ran GE Healthcare's $1.2 billion interventional division. [Kathleen Gallagher, Milwaukee Journal-Sentinel, Feb 8,08]
the cross-fertilization that has made Silicon Valley the world's leading incubator for both information technology and life sciences. Despite the recent economic turndown, venture capital in both sectors is at record levels. [Scott Duke Harris, San Jose Mercury News, Feb 10]
Think about the road tripper who pounds an energy drink to stay awake on a long-haul drive: He gets a short-term jolt, and then gets even sleepier. Similarly, the economy is about to start chugging the Red Bull of interest-rate cuts and tax rebates, which could briefly lift it from its doldrums. ... Once the stimulus cocktail wears off, home prices seem likely to keep falling, weighing on consumer balance sheets, confidence and spending. ... credit will be harder to come by ... "What we're facing right now is years of subpar financial-market performance in the U.S.," warns Howard Simons, strategist at Bianco Research LLC. [Mark Gongloff, Wall Street Journal, Feb 11]
"What is intelligence?" Apple co-founder Steve Wozniak asked his audience at the Houston area's first Up Experience conference in Stafford. His answer? A robot that could get him a cup of coffee. [Purva Patel, Houston Chronicle, Feb 8]
Many communities dream of becoming the next Silicon Valley. [Seattle] is actually doing it. Stroll through the hip Fremont District .... Google recently opened a research lab here, its second in Microsoft’s backyard. Technology start-ups are sprouting up amid quirky neighborhood landmarks ... More young companies are moving in downtown, near the art galleries and bookstores around Pioneer Square. Still others are spreading into the surrounding suburbs. ... the University of Washington, in fact, is one of the big draws. ... “Now tons of companies are spinning off people,” said Ed Lazowska, a computer scientist who holds the Bill and Melinda Gates Chair at the University of Washington. Veterans from Amazon, Microsoft, RealNetworks and other established companies are leaving to form start-ups and venture funds, he said. “We’re finally at the stage of becoming a perpetual-motion machine.” [John Markoff, New York Times, Feb 8]
Packing Them In. Intel has built a new chip packed with a record 2 billion transistors, more than doubling the processing power of a line of its chips for supercomputers [AP, Feb 5]
Drug companies need to reassess the way they do business, and collaborations and partnerships are likely to proliferate as firms seek to develop new drugs. That was a key finding presented to a panel of industry leaders convened by the Tufts Center for the Study of Drug Development and PRTM, a management consulting firm. [Chris Reidy, Boston Globe, Feb 5]
Longtime economy and market watcher Ed Yardeni, who heads his own research firm, said it best in a recent note to clients: "I don't recall so much policy stimulus and so many bailout plans thrown at the economy so fast before there was compelling evidence of a recession." It all raises a new question for the outlook: Does this megadose of anti-recession medicine fit the disease? [James Cooper, Business Week.com, Jan 31]
Talk to folks on Wall Street, and you sense panic. This could be the Big One ... But, "The further you get from Wall Street, the better things look," says economist Mark Vitner, who works at a Charlotte, NC bank. [Wall Street Journal, Jan 31]
Helping the Results Along. Dr. Zigler had more than a medical interest in the outcome. So did doctors at about half of the 17 research centers involved in the study. They stood to profit financially if the Prodisc succeeded, according to confidential information from a patient’s lawsuit settled last year. [Reed Abelson, New York Times, Jan 30]
as Scott A. Shane puts it in "The Illusions of Entrepreneurship," we imagine "a jet-setting, Silicon Valley-residing engineer who, along with a couple of his buddies, has raised millions of dollars of venture capital to start a new company to make a patent-protected gizmo." Such people do exist, of course, and more power to them. But reality is less glamorous than that. ... "Each year in the United States more people start a business than get married or have children. And as much as 40% of the US population will be self-employed for some part of their work life. ... According to Mr. Shane, "every year only about 7% of new companies in the United States are started in . . . high technology, and only about 3% of business founders consider their new businesses to be 'technologically sophisticated.' " ... "local, state and federal governments in the United States . . . have adopted a wide array of policies to increase the number of entrepreneurs." These policies include transfer payments, loans and subsidies, bankruptcy protection, lower tax burdens, and exemptions from regulations. And they are generally a bad idea. [Nick Schulz, Wall Street Journal, Jan 30] But politicians cannot resist pretending they are helping a class of voters with specific interests. There is a living to be made in DC and the state capitals shilling for small business handouts.
If It Only had a Heart. Can scientists program war-fighting robots to behave more ethically in battle than emotion-driven human soldiers? If so, what is the scientists' social responsibility for the destruction their inventions might wreak? ...Organized by the Computer Professionals for Social Responsibility, the group of civilians, military, academics and human rights workers engaged the key question: "What should socially responsible computer professionals do in a time of high-tech warfare?" [Tom Abate, San Francisco Chronicle, Jan 29] The socially responsible technologists must remember that war has its own logic, and practitioners of war will adapt any available means to their ends without regard to the intentions of the inventor.
[PC Mag] Columnist John C. Dvorak seems to be taking on all office workers in his latest column, proclaiming that no one works at 100 percent. He says this because he believes that products trying to measure impact on productivity are nonsense, since no one can actually measure productivity in an office where we employees aren’t working nonstop for 8 hours. [Ziff Davis News, Jan 24]
At Davos, sovereign wealth funds get all the attraction as, Silver Lake Partners' Glenn Hutchins said he and his private-equity brethren "have returned to the obscurity that we so richly deserve." [Alan Murray, Wall Street Journal, Jan 28] The business downside comes in a crisis when the foreign governments vote their shares. For decades, Mr. Summers and like-minded U.S. officials have traveled the globe preaching the virtues of privatization. In the postcommunist world, they sought to improve economic efficiency by wresting control of businesses from government. So it's jarring for them to see businesses suddenly selling sizable stakes in themselves to government-controlled funds. Meanwhile, Pennsylvania likes buyouts, Smaller companies in remote parts of the United States are also being bought out. "The U.S. dollar is getting weaker and weaker, and many medium to small U.S. companies are in economic crisis. So they need investments from China. It is very good timing," said Yu Dan, a representative for the state of Pennsylvania in China. [Ariana Cha, Washington Post, Jan 28]
Many people have been in a funk this week, fretting over the possibility of a harsh economic downturn. They should cheer up, says the Economist in its characteristically contrarian fashion, because behind the gloomy headlines lies a world that is more peaceful and prosperous than ever. The newsweekly notes the souring of attitudes as U.S. economic conditions have grown increasingly unsettled. Americans are becoming more isolationist, and opposition to immigration is growing. In many countries, majorities of people believe globalization hurts them personally. But those views are belied by evidence showing that conditions are improving in many places. The newsweekly draws that conclusion by looking at three areas: social conditions in poor countries; poverty alleviation; and the incidence of wars. [Wall Street Journal, Jan 26] The sitting president (such as GHWB 41) always delivers such a message that is denied by the challenger who plays on local fears, as did WJC 42 "It's the economy, stupid." Politicians are never the place to look for the truth.
Fight Fire With Fire. As generics firms evolve from mere copycats into innovators in their own right, many such firms—led by Israel's Teva, India's Ranbaxy and Dr Reddy's Laboratories—are vigorously challenging patents. ...as the industry's sagging share valuations suggest, the new-drugs pipelines at big firms have run dry. ... but Big Pharma has found a loophole. It is pre-emptively launching generic versions of its own branded pills, which wipes out those six months of monopoly profits and undermines the economics of generics firms. [The Economist, Jan 24]
Jack Welch transformed General Electric Co. from an old-economy manufacturer into a modern conglomerate, in part because of his insistence on a culture of straight talk, according to a book by his former speechwriter. [Boston Globe, Jan 27]
Who knows? investment-newsletter editors, who, on average, are usually wrong about the market's direction; they are currently bearish.... corporate insiders, who usually get it right, and they are mostly bullish. [ Mark Hulbert, New York Times, Jan 27]
The price/earnings ratio for tech stocks, based on projected 2008 earnings, is a relatively cheap 15.7 times. But investors clearly believe earnings are going to weaken a lot more than analysts do. Cautious words from Apple and Intel were all that was needed to set sellers off and running. [Scott Patterson, Wall Street Journal, Jan 24]
A Coming Liquidity Trap? The U.S. financial crisis is starting to look eerily like Japan's, which has some currency traders asking the previously unthinkable: Could the U.S. dollar slowly be turning into the Western equivalent of the yen? [Mark Gongoloff, , Wall Street Journal, Jan 28] Unthinkable, therefore possible.
George Soros, the man who famously broke the Bank of England 15 years ago, said it’s going to be difficult for either Britain or America to avoid recession. He sees the upheavals as part of the long-term shift of global power and influence from Europe and the US to China and India. [William Kay, The Sunday Times (London), Jan 27] May you live in interesting times - an ancient curse.
Selling the Family Silver. governments in the Persian Gulf, China and Singapore have snapped up $37 billion of stakes in Wall Street, the bedrock of the U.S. financial system. Lawmakers and the White House are welcoming the cash, and there is hardly a peep from the public. This is no accident. The warm reception reflects millions of dollars in shrewd lobbying by both overseas governments and their Wall Street targets -- aided by Washington veterans from both parties, including big-time Republican fund-raiser and lobbyist Wayne Berman. Also easing the way: The investments have been carefully designed to avoid triggering close U.S. government oversight. [Wall Street Journal, Jan 25]
Science fiction has become the last bastion for the literature of ideas, says journalist .... By questioning society's basic rules and speculating on how other worlds might work, on the other hand, science fiction can raise fresher, more provocative questions. [Clive Thompson, Wired]
DeviceGuru writes "Harvard University's tiny microrobotic fly, hailed by its creators as 'the first robotic fly that is able to generate enough thrust to takeoff,' will be showcased at New York's Museum of Modern Art starting Feb. 24. The life-sized 'Flybot' reportedly has a wingspan of 1.2 inches (3 cm) and weighs a mere 0.002 ounces (60 mg). This project of the Harvard University Microbotics Lab has received funding from DARPA, the U.S. Defense Advanced Research Projects Agency, which hopes to gain access to micro-miniature surveillance technologies." [slashdot.org, Jan 22]
As the market saturates, Yahoo co-founder Jerry Yang has concluded hundreds of employees will have to be fired to help the slumping Internet icon recover from years of misguided management. [AP, Jan 23] Trees don't grow to the sky, although the market-driven SBIR companies would love to have Yahoo's dilemma. The other SBIR companies will still grovel for the government handouts.
Stimulus Stimulant. Starbucks, the company that popularized the $4 cup of coffee, is testing a $1 cup and free refills of some of its offerings. [WSJ, Jan 23]
One of the world's fastest-growing economies is also the world's fastest-growing supporter of scientific R&D. Right, China. overall, the rapid rise in Chinese science is good for China and the rest of the world, and the global scientific enterprise should do all it can to help. More science means more knowledge, which most people applaud unless the benefits go to someone else, like an international competitor. an annual growth rate of 18% over the past 5 years (the United States, Japan, and the European Union grew at a combined average rate of about 2.9%) Fortunately for the xenophobic, such trees do not grow to the sky; rapid rates from a low base plateau at some sustainable level. [Alan Leshner and Vaughn Turakian, Science, Dec 7]
Intel will no longer produce silicon in California
In high-income countries, between 10 and 40 percent of early-stage entrepreneurs expect 25% or more of their customers to come from outside their country, said [the ninth annual Global Entrepreneurship Monitor Global Report], which also found that the more burdensome a country's business regulations, the lower the entrepreneurs' expectations for growth. [Chris Reidy, Boston Globe, Jan 18]
The University at Albany's College of Nanoscale Science and Engineering will begin collaborating with IMEC, a leading European research lab that has long been considered a major rival.... Scientists from IBM Corp. and ASML Holdings NV, a Dutch lithography tool maker, will also participate. [Albany Times-Union, Jan 22]
"You get what you measure," says panel member Arthur D. Collins Jr., chairman and former chief executive of Medtronic ... The report to be released by the Commerce Dept. on Jan. 18, called Innovation Measurement: Tracking the State of Innovation in the American Economy, amounts to a sharp turn in the US system of economic statistics .. aggressive proposals for measuring innovation better. [Michael Mandel, Business Week, Jan 28] Perhaps Commerce could also take on measuring SBIR's performance in a way that shows Congress that good politics doesn't make good economics.
Despite a focused five-year effort to build its life-sciences industry, Indiana continues to lag other Midwestern states in one key metric: the number of life and physical scientists employed in the state. [Indianapolis Star, Jan 22]
Picturephone v. iPod. Great innovations have foundered over human stubbornness. ... Adaptable humans usually trade one technology for another, rather than reject any and all. To be accepted, innovations must deliver benefits — enough benefits to make change worthwhile. ... Killer apps are sought-after innovations because people get addicted to them and make behavioral changes that might otherwise be unthinkable. ... Dependency drives profits, the ultimate arbiter — for some — of an innovation’s success. [GP Zachary, New York Times, Jan 20]
Selling the Companies, Not the Goods. For much of the world, the United States is now on sale at discount prices. ... Last year, foreign investors poured a record $414 billion into securing stakes in American companies, factories and other properties through private deals and purchases of publicly traded stock, according to Thomson Financial, a research firm. That was up 90% from the previous year ... Five million Americans now work for foreign companies set up in the United States, Mr. Kimmitt said, and those jobs pay 30% percent more than similar work at domestic companies. ... The soaring price of oil and a widening trade deficit underscore how the American economy is increasingly vulnerable to decisions made far away. [Peter Goodman and Louise Story, New York Times, Jan 20] Two obvious places where the government has failed to help - one big: oversight of the hedge fund industry, and one small: SBIR funding of market-dead, life-style companies.
what are the implications of the rise of state capitalism? Will mutual interests in a global economic system limit any new rivalry between the west and Russia and China? Will economic freedom eventually produce political freedom in these countries? Or is the era of free markets fading away? And will new alternative to the western model continue to thrive? Dr Kagan and Mr Rachman will answer your questions on all aspects of illiberal capitalism live online on Tuesday January 22 from 2pm GMT (9am ET). Post a question now to email@example.com or use the Financial Times online submissions form [Financial Times, Jan 19]
The website used by pilots and aircraft personnel to discuss theories on incidents and pass on information and gossip, pprune.org (the professional pilots rumour network), went down under the sheer weight of would-be users yesterday [The Guardian, Jan 19]
You don't make money in the stock market by assuming whatever just happened will happen again. You make money by figuring out what's going on and why, every day, and acting accordingly — and, if possible, being right. [Donald Luskin, Smart Money, Jan 18]
A German company is the latest international technology firm to set up shop at the University at Albany's College of Nanoscale Science and Engineering. Berlin-based Atotech specializes in metals and chemicals used by various industries. It employs more than 3,000 people worldwide. [Larry Rulison, Albany Times-Union, Jan 17]
, a major supplier of computer chip-making equipment, is jettisoning 1,000 jobs, a 7% cutback that suggests some manufacturers are hunkering down for a recession. ... biggest retrenchment since November 2002 [AP, Jan 15] While Intel's profit jumped 51% on higher processor sales and lower costs, but the results fell short of Wall Street's expectations. Shares plunged more than 15% in late trading. [Wall Street Journal, Jan 15]
California's small firms may be key to helping the state weather a potential economic downturn, says Marty Keller, the state's small-business advocate. ... for the state's estimated 3.3 million small firms ... he plans to focus on procurement, regulatory flexibility and cost, disaster preparedness and economic development, particularly in clean energy and high tech. ... California ranks near the bottom of the 2007 small-business survival index. How can you change that? Regulatory flexibility. When a small business expresses to us a concern about the potential impact that a proposed regulation may have, we will contact that agency and make sure it is satisfactorily answering the concern. You have a small staff -- just one person. Is that enough? It's deceptive. [Cyndi Whalen, LA Times, Jan 17] Somehow, I doubt that regulations dominate the birth and death rate, or success, of California's small businesses.
Employers claim there is a severe shortage of IT workers in the US [but] the IT labor market is clearing and none of the indicators demonstrates a systemic shortage ... the gains for IT workers were hardly robust and don't indicate any significant scarcity. [Ron Hira, Information Week, Jan 12]
some prominent cardiologists say the results of two recent clinical trials have raised serious questions about the value of lowering cholesterol ... In the last 13 months the failures of two important clinical trials have thrown that hypothesis into question. First, Pfizer stopped development of its experimental cholesterol drug torcetrapib in December 2006, when a trial involving 15,000 patients showed that the medicine caused heart attacks and strokes. That trial — somewhat unusual in that it was conducted before Pfizer sought F.D.A. approval — also showed that torcetrapib lowered LDL cholesterol while raising HDL, or good cholesterol. Torcetrapib’s failure, Dr. Taylor said, shows that lowering cholesterol alone does not prove a drug will benefit patients. [Alex Berenson, New York Times, Jan 17]
Rensselaer Polytechnic Institute's revenues from licensing agreements has doubled in the past year ... getting technology out of the laboratory and into the marketplace--has been a major push at Rensselaer in recent years. ... estimates Rensselaer has an average of 40 active deals a year [Richard D'Errico, The Business Journal (Albany), Jan 11]
It's the money. The trend toward finance appears to be accelerating. A survey of the Class of '07 last spring by the campus newspaper, the Harvard Crimson, found more than one-fifth of the men -- and about one-tenth of the women -- who took jobs, as opposed to going to graduate school or other pursuits, headed to investment banks. The lure is obvious. Comparing graduates with similar SAT scores, grade-point averages, gender, age, occupation and everything else they can measure, Mr. Katz and Ms. Goldin find Harvard grads who work in finance earn 195% of the pay of those who work elsewhere. [David Wessel, Wall Street Journal, Jan 17] Why engage in wealth creation of innovative development when they can get rich by shuffling other people's wealth for a fee. Until the bubble collapses. It's good news for mediocre SBIR firms who don't have to worry about real competition.
There were 66,921 hot spots in the U.S. last year, up 56% from 2006
the crisis of the future will be a crisis of prosperity [as] more than 2 billion people in China and India alone are becoming upwardly mobile consumers. ... eat more meat needing a lot more grain ... clean water for showers, dishwashers and washing machines, creating a groundwater crisis ... consume lots of energy [for which] China is building about one coal-fired plant a week [Michael Gerson, Washington Post, Jan 16]
Just Do It. energy experts say that the new technologies required to meet the new [CAFÉ] standards are minimal ... such as continuously variable transmissions and better tires. [Peter Fairley, MIT Tech Review, Jan 15]
The next bubble in the U.S. economy should be taking hold right about now, says entrepreneur and investor Eric Janszen [who] runs iTulip, an investment Web site premised on the idea that the financial sector has locked the U.S. into a damaging cycle of bubbles that are disconnected from the actual health of the economy. ... the alternative-energy industry's expansion is showing some of the same patterns that allowed values to swell far beyond their true worth during the dot-com and housing booms. For starters, green energy is popular with the media and with politicians -- "energy security" has become a catchphrase for both Democrats and Republicans. It has received favorable legislation involving loan guarantees and subsidies, just as the Internet got a sales-tax amnesty in the 1990s and deregulation allowed banks to offer more credit to potential homeowners. [Harper's, Feb 08]
Buy more oil, sell more banks. sovereign funds have invested over $50 billion in weakened banks. That is a small amount compared with the $2 trillion in these funds, to say nothing of additional trillions in central banks and other related entities. But no one likes to lose money, even funds that have very long investment thresholds. “At some point these investors will say no,” said Mr. Yardeni. “So far these investment have been value traps as opposed to good value.” Yet with oil prices increasing, sovereign funds and other government-sponsored funds are likely to generate investment surpluses approaching $8 trillion in the next five years, according to McKinsey & Company’s research arm. [Landon Thomas, New York Times, Jan 16] The xenophobic de-regulating Republican free-marketeers have brought us irresponsible financial shenanigans leading to US banks' begging for maybe foolish foreign ownership investment.
Frontline Wireless, which wanted to build an innovative cellular network for both private use and local public safety agencies, has collapsed because it could not raise enough money [required deposit of $128M] to bid in the government auctions of wireless spectrum that start later this month. [Saul Hansell, New York Times, Jan 9]
Data Never Die. Demand for storage capacity continues to grow at a rate of nearly 60 percent, according to IDC, a Framingham-based firm that specializes in market intelligence. [Boston Globe, Jan 8]
Aerva Inc. and LocaModa Inc., both of Cambridge, have created technology that lets people use cellphones to send messages or pictures to video screens scattered around late night hot spots and other venues where people socialize. [Carolyn Johnson, Boston Globe, Jan 1]
[several] Multinational companies will unveil today what they call a patent-sharing plan for companies to donate intellectual property that improves the environment. ... the "Eco-Patent Commons," builds on the experience of the open-source software movement ... Nokia is donating a patent for methods of recycling obsolete cellphones into noncommunicating calculators and personal digital assistants. ... any company can join the commons by contributing a patent. But all patents offered are available to anyone in the world on a Web site that will be maintained by the World Business Council. [Wm Bulkeley, Wall Street Journal, Jan 14]
GM is taking a stake in an Illinois startup alternative fuel producer that claims to be able to make ethanol ...at half the cost of making gasoline. ... Coskata was formed in 2006 by venture capital firms that licensed a fuel-making process developed by researchers at two Oklahoma universities. The tiny startup has spent 18 months in "stealth" mode while scientists refined the technology ... GM favored Coskata's technology for several reasons: It can be deployed anywhere because it uses multiple nonfood sources, and perhaps even scrap from GM assembly plants; the process consumes less than a gallon of fresh water per gallon of fuel produced — far less than corn-based ethanol; and carbon dioxide emissions can be cut by 84% compared with gasoline, according to an analysis by Argonne NL. [Jeffrey Tomich, St Louis Post Dispatch, Jan 14]
Market turmoil promises the life-sciences sector a bumpy 2008. Increasing pressure on federal regulators to strengthen drug safety, a shifting political landscape and jittery investors could make it hard for biotech companies to raise money from the stock market. But Big Pharma, the major drug firms eager to inject some life into their withering product pipelines, may provide the funding that biotechs need to develop new drugs. [Angel Gonzalez, Seattle Times, Jan 12]
Companies like Pfizer have laid off thousands of chemists over the past year. Instead, they're turning to biologists for drug development. [Jack Hough, Smart Money, Jan 10]
If global growth resumes apace, tech shares should lead the market higher. Semiconductor stocks now trade at close to five-year lows, based on trailing sales and projected earnings. [Greg Zuckerman, Wall Street Journal, Jan 13] But Food and energy prices might be driving the inflation rate a bit above the Fed’s comfort zone, but that is nowhere near as terrifying as the prospect of a major, protracted recession. That prospect now looms larger than even a few months ago [Irwin Stelzer, Jan 13]
the formation of Silicon Valley involved serendipity more than intentional design. The co-inventor of the transistor and the founder of the valley’s first chip company, William Shockley, moved to Palo Alto, Calif., because his mother lived there. [John Markoff, New York Times, Jan 13] Now it's a juicy target: The annual mating ritual between elite business schools and the talent-hungry technology industry this year lured a record 115 master of business administration candidates from MIT's Sloan School of Management in Cambridge to the hillside campus of VMware Inc., one of Silicon Valley's hottest companies. [Robert Weisman, Boston Globe, Jan 14]
Slow Starting Cars. Three senior executives and more than a dozen other employees have been ousted by Tesla Motors as the Silicon Valley electric-car company struggles to get its much-delayed roadster to market. [Matt Nauman, San Jose Mercury News, Jan 13] Each of the last three agencies that received state funding to build a [hydrogen] fueling station has decided not to pursue the project, including Pacific Gas & Electric's recent decision to abandon building a key Bay Area fueling station in San Carlos. In addition, three stations have recently closed, including one in Richmond that served county buses and was dismantled this week. ... PG&E officials said they've shifted hydrogen to the back stage and now consider it a distant technology [Kimberly Kindy, San Jose Mercury News, Jan 13] Maybe hydrogen will make another political appearance in the state-of-the-union address as a way to change the subject.
China is much further from world economic leadership than we may have thought. Furthermore, poverty in China remains severe; the data revisions imply that China has 300 million workers — about the size of the entire United States population — earning less than a dollar a day. Given these weaknesses in the Chinese economy, the yuan may not be so undervalued after all. [Tyler Cowen, New York Times, Jan 13]
Mercurial Lamps. Our national legislators are banning traditional incandescent light bulbs, which were invented by Thomas Edison more than 120 years ago. By 2014 these bulbs will be illegal. ... if CFLs are so great, why do we need a law to force us to buy 'em? ...But there's a more immediate problem: Each CFL bulb contains about 5 mg of mercury, a highly toxic and indestructible substance. Billions of these bulbs will be everywhere. If one breaks, you've got a problem, especially if you have small kids or pets roaming around. [Steve Forbes, Forbes, Jan 28] One firm got a Navy SBIR to safely dispose of fluorescent bulbs at sea - Air Cycle (Broadview, IL).
If you're young, the 1970s seem like ancient history. Before the heavy volatility erupted last summer, the sophisticates said that derivatives, collateralized debt obligations and other new securities had soothed the market permanently. Not quite. These Wall Street darlings went on to be the cause of the trauma. [John Rogers, Forbes, Jan 28] The 70s stagflation could return, as soon as this year. Then after some years of pain, a new Ronald Reagan could ride in and take credit for the inevitable recovery.
one thing the [electric] car people won't be charged up about: batteries. For all the hoopla, nobody yet has figured out how to make a small enough battery that will hold a big enough charge for these new cars -- and not be a risk to burst into flames. ... The competition pits big Asian battery makers against a gaggle of small start-ups, most of them based in the US [Norihiko Shirouzo, Wall Street Journal, Jan 11]
Feeding Polarization. Nicholas Negroponte, prophesied the emergence of the Daily Me – a fully personalised newspaper. It would allow you to include topics that interest you and screen out those that bore or annoy you. ... The result is group polarisation, which occurs when like-minded people speak together and end up in a more extreme position in line with their original inclinations ... given people’s new power to create echo chambers, the result will be serious obstacles not merely to civility but also to mutual understanding and constructive problem solving. The Daily Me leads inexorably also to the Daily Them. That is a real problem for democracy. [Cass Sunstein, Financial Times, Jan 10]
In addition to more wind farms and solar-electric plants, [Xcel Energy, Colorado's largest utility] plans to investigate development of a large-scale solar-thermal power plant — technology some analysts believe could eventually displace fossil-fueled generation. [Denver Post, Jan 9]
The Consumer Electronics Show, which is ostensibly dedicated to all that is dazzling and new in gadgetry, has managed to somehow become rather dull. [Lee Gomes, Wall Street Journal, Jan 9]
They Ignore Economics. As recent polls have shown, Americans are quite anxious about the future and pessimistic about the economy’s direction, but still fairly satisfied with their own financial situation. The anxiety suggests people may be ready for a sharp break from Mr. Bush’s economic policies. The satisfaction suggests they may want more modest changes. [David Leonhardt, New York Times, Jan 9] Smart politicians know that people vote their wishes with apparent ignorance of the underlying economics. Lower taxes cannot pay for long wars, higher Medicare, more highway lanes, and more handouts to small business. On the realism side, the U.S. Chamber of Commerce, the nation's largest business group, said that it might support tax increases in 2008 targeted at improving aging U.S. roads, bridges and railways. [AP, Jan 9]
What They See. Face-to-face interviews of an apparently random sample of the Pakistani population were conducted in August 2007 for Terror Free Tomorrow, a non-partisan Washington policy organization (www. TerrorFreeTomorrow.org). Those interviewed were asked questions about Al Qaeda and other issues facing Pakistan. The results indicate that more than a third of Pakistanis have a favorable view of Al Qaeda, the Taliban, and bin Laden, and that President Musharraf is the least popular political leader in Pakistan. Respondents also have a decidedly unfavorable view of the US-led war on terror, for they believe that its real purpose is to kill Muslims, break Muslim countries, and achieve other related goals. [Becker-Posner blog, Jan 6]
Novel Inspiration. British exec Luke Johnson compiled a shortlist of the best novels featuring entrepreneurs I have read over the decades. The Three Stigmata of Palmer Eldritch by Philip K Dick. Reminiscences of a Stock Operator by Edwin Lefèvre. Mildred Pierce by James M Cain. Atlas Shrugged by Ayn Rand. Nostromo by Joseph Conrad. The Paper Palace by Robert Harling. The Way We Live Now by Anthony Trollope. What Makes Sammy Run? by Budd Schulberg. ... Two points stand out from my list. First, most of the books are American – probably because their culture celebrates business in a way we do not. Second, several of the entrepreneur characters are villains, not heroes. Join the debate Do you agree with the list? Which fictional novels do you think are the most inspiring for entrepreneurs? [Financial Times, Jan 9]
Where's the Money? National health spending soared above $2 trillion for the first time in 2006 and has nearly doubled in the last decade, amounting to an average of $7,000 a person, the government reported [Robert Pear, New York Times, Jan 8] The boomers, the pig in the population python, will be buying more and more medical attention for the next thirty years.
Last month, Stanford University materials scientists unveiled a nanowire electrode that could more than triple lithium batteries' energy storage capacity and improve their safety. The development, reported in the scientific journal Nature Materials, stems from the labs of nanowire innovator Yi Cui and battery expert Robert Huggins at Stanford's Materials Science and Engineering Department. The researchers show that nanowires of silicon just a few atoms across can function as high-capacity electrodes, absorbing and releasing about 10 times more lithium ions than the graphite electrodes that are commonly used today. [Peter Fairley, MIT Tech Review, Jan 4]
Energizer Holdings, The country's No. 2 battery seller is introducing a new line of flashlights and head lamps for "extreme outdoorsmen," as well as home lights that keep running if the power goes out. The idea is to attract consumers with high-intensity, energy-efficient technology [LED], which commands a higher price and fatter profit margins than standard incandescent technology. ... Energizer's sales volume of lithium batteries jumped more than 30% in the year [Jeremiah McWilliams, St Louis Post Dispatch, Jan 5]
"A journey by jet to the sun would last 21 years, at which point passengers should be advised that contents in the overhead compartment may have melted.” .... a consistently gripping hi-sci read, [John Cornwell, reviewing Natalie Angier's The Beautiful Basics of Science, The Sunday Times, Jan 6]
portable computers are finally taking over. Last year, for the first time, U.S. consumers bought more of them than desktops. Sixteen of the 20 best-selling PCs on Amazon.com this holiday season were laptops. U.S. corporations are expected to make laptops the majority of their computer purchases in 2008. [Michelle Quinn, LA Times, Jan 7]
About 300 companies will showcase their work at the JPMorgan Annual Healthcare Conference [in San Francisco], including efforts to make a vaccine against cancer, antibodies to fend off Alzheimer's disease and drugs to help the obese lose weight. The invitation-only event is in its 26th year [Bernadette Tansey, San Francisco Chronicle, Jan 7]
Eternal Hope. A Silicon Valley startup is promising to blanket San Francisco with free wireless Internet service, reviving a crusade that crumbled last year after two much larger companies, EarthLink Inc. and Google Inc., scrapped their plans to build a high-speed network for Web surfing. Meraki Networks Inc., whose financial backers include Google, hopes to complete the ambitious project within the next year by persuading thousands of San Francisco residents> to set up free radio repeaters on their rooftops and in their homes. [Michelle Liedtke, AP, Jan 4]
The [San Jose] Mercury News is well on its way to rethinking its role for the future, said its new editor as it struggles to compete with the Internet for advertising. Trouble in the capital of entrepreneurial technology capitalism.Two USAs is Too Much. Growing prosperity in China threatens to place intolerable burdens on the world's natural resources, ...Unless world leaders find ways to fundamentally restructure the international economy, the world will be unable to produce enough energy, food and other resources to satisfy Chinese demand, said Lester Brown, president of the Earth Policy Institute. According to Brown's analysis, per capita income in China will equal that of the United States by 2031 if the Chinese economy continues to grow at its current pace. [Jeff Nesmith, Cox News Service, Jan 4]
A typical talk on BBC’s Radio Three might start by bemoaning the consumer society, with its passion for shopping and the rush to make pointless purchases. It might then bemoan the nervous strain in the quest for economic growth and the lack of time or energy for more worthwhile activities. But then comes a more interesting twist. All this frenzy of pointless activity is required, it is said, to keep the economy going. Without it, the implication is, production would dry up and jobs disappear, and we would wallow in semi-permanent depression. [Samuel Brittan, Financial Times, Jan 3, 08]
Thirteen nano-level university laboratories across the country — including the NanoTech User Facility at the University of Washington — are hiring themselves out to businesses eager to make their mark in the millennium of the minuscule. The intimidatingly named National Nanotechnology Infrastructure Network, begun in 2004, is funded, in part, with $14M a year from the NSF. [Ben Dobbin, AP, Dec 31]
More Shape Memory. Roland Piquepaille writes "The U.S. National Science Foundation (NSF) has recently reported that two research teams have developed a new porous foam of an alloy that changes shape when exposed to a magnetic field. The NSF states that this new material is able to remember its original shape after it's been deformed by a physical or magnetic force. This polycrystalline nickel-manganese-gallium alloy is potentially cheaper and lighter than other materials currently used in devices ranging from sonar to precision valves. It also could be used to design biomedical pumps without moving parts and even for space applications and automobiles."
Lucas123 writes "According to a Computerworld survey of IT managers, data storage projects are the No. 2 project priority for corporations in 2008, up from No. 4 in 2007. IT teams are looking into clustered architectures and centralized storage-area networks as one way to control capacity growth, shifting away from big-iron storage and custom applications. The reason for the data avalanche? Archive data. In the private sector alone electronic archives will take up 27,000 petabytes (27 billion gigabytes) by 2010. E-mail growth accounts for much of that figure."
Oil prices ended 2007 less than the cost of a ballpark hot dog away from three digits, but that milestone looms with undaunted global demand. Light, sweet crude closed out the year at $95.98 a barrel — a 57% surge over the year-end 2006 [Houston Chronicle, Jan 1]. Tech advances needed in efficiency of use.
When You're Hot, ... Colorado stocks collectively powered past U.S. equity indexes in 2007, spurred by the state's booming energy and biotechnology sectors. The Bloomberg Colorado Index, a price-weighted collection of stocks based in the state, rose 17.7 percent last year. ... the Standard & Poor's 500 index grew 3.5 percent. [Andrew Vuong, Denver Post, Dec 31] But next door, The Salt Lake Tribune/Bloomberg Index, which was established on Dec. 30, 1994, gave up 14.8% last year for its worst annual performance ever. [Salt Lake Tribune, Jan 1]
Even More Knowledge. so where can you find some real facts online? Some sources. [James Knight, The Sunday Times, Dec 30]
Startup Weekend, a mini-conference where attendees create and start a company in a weekend, is coming to Seattle on Jan. 25-27 for a session at Adobe's Fremont campus. Registration is $20, and participants receive shares of the company they start. Startup Weekend, an organization run by Boulder, Colo., entrepreneur Andrew Hyde, gets 5 percent of the company. He's held similar events in 13 other cities since July. [Brier Dudley's blog, Seattle Times, Dec 18]
Use Cobalt? The price of cobalt, a rare metal used in products such as batteries for mobile phones and hybrid cars, has surged to record levels amid booming demand and supply problems in the war-stricken Democratic Republic of Congo. Cobalt prices soared nearly 60 % last year , the highest since a modern market for cobalt trading started to develop in the 1970s. [Financial Times, Jan 2]
The boom in industrial production of the 1930s did signal growth, but not necessarily growth of a higher quality than that, say, of a Soviet factory running three shifts. [Amity Shlaes, Wall Street Journal, Dec 31] The SBIR advocates make the same kind of argument that the New Dealers made in the 1930s: let public capital in political enterprises substitute for private capital in market-driven enterprises. With the same apparent result: temporary jobs paid by the government.
As 2009 dawns we can toast the nation's willingness to address longstanding problems head-on and to forge a new consensus out of adversity. U.S. stocks have never been this cheap relative to the rest of the world. And it's been a long time since real estate has been this affordable. [Igor Greenwald's early review of 2008, Smart Money, Dec 31]
Europe is awash in bio-diesel thanks to large subsidies and low demand. The industry is in trouble, under pressure from soaring costs, disappearing tax breaks, less-costly imports and waning public support. .... Now even Green lobbies are also turning against biodiesel [because] growing crops for biodiesel puts too much pressure on land and food prices. [John Miller, Wall Street Journal, Dec 28] When subsidies encourage production that the market doesn't want, the government wastes the money (except for buying the producers' support.) The same ugly economics applies to subsidies like SBIR for products with no market future.
You’re in for very bad weather. In 2008, your television will bring you image after frightening image of natural havoc linked to global warming. ... Unfortunately, I can’t be more specific. ... Long-term climate models cannot explain short-term weather. [John Tierney, New York Times, Jan 1] Climate and weather modeling needs a whole new math of numerical computing. Incremental improvements in such computing won't solve the problem since they usually just take advantage of faster computers built elsewhere.
Got a Great Story to Tell? New printing technologies are making published authors of legions of aspiring writers, ... On-demand publisher Lulu.com has churned out 236,000 paperbacks since it opened in 2002, and its volume of new paperbacks rose each month in 2007, hitting 14,745 in November. Retail giant Amazon.com got into the game in the summer, offering on-demand publishing through its CreateSpace, which was already letting filmmakers and musicians burn DVDs and CDs. [Candace Choi, AP, Jan 2] Avoid those niggling editors.