Miscellaneous Stories 2011-2012

Stories that earlier appeared in Nelson's News
Note: Carl Nelson Consulting, Inc is not an investment adviser and may hold a financial interest or client relationship in companies discussed.

Looking for other older stories? Visit the archives


Cambridge is the action. this corner of Cambridge is at the center of a real estate boom. ...  roughly two million square feet of space is being built or renovated or is under city review here ... Most of that growth is connected to the biotechnology and pharmaceutical industries, including new buildings for Pfizer and Novartis. ....  “The intellectual firepower that is in Cambridge, between Harvard and M.I.T. and the number of companies, is quite remarkable.”   plus Amazon, Google, IBM, and Nokia. [Karen Weintraub, New York Times,, Jan 1, 2013] 

while the ongoing news headlines can be worrying for many people, it’s important to remember that markets are forward-looking and absorb information very quickly. By the time you read about it in the newspaper, the markets have usually gone on to worrying about something else.  .... if you are going to invest via forecasts, you need to realize that it is not just about predicting what will happen around the globe, but it is also about predicting correctly how markets will react to those events. That’s a tough challenge for the best of us.  [Jim Parker, SERVO Wealth Management, Dec 21, 2012] 

An eminent economist and a leading money manager have independently concluded that the U.S. economy will expand in the future at only half its long-term historical average. ... In a recent research paper, [respected economist Robert] Gordon argues that the pace of technologicalinnovation is doomed to falter. He also lists six "headwinds" that are bound to slow down U.S. economic growth. Among them: an aging population, increasing global competition and uncontrollable household and government debt. ... Mr. Gordon contends that earlier breakthroughs—railroads, electricity, the telegraph and telephone, the automobile and air conditioning, along with computers and the Internet—provided a much bigger economic boost than most of today's innovations will.    [Jason Zweig, Wall Street Journal, Dec 15] In times of crisis, when business leaders lose their self-confidence, they often look to political power to fill the void. Government is increasingly seen as the ultimate solution to tough economic problems, from innovation to employment. [Ronald Coase, Harvard Bus Rvw, Dec 2012]

Robots advancing.  The past two weeks have also seen the release of a new iPad guide to robots (featuring a hundred and twenty-six robots from nineteen countries), and a fresh investment in a Web site called robotappstore.com, in which you can download apps for your Roomba.  ...   A pacing item:  “Lots of people have been working on humanoid robots for decades, but the electric motors needed to drive a robot’s legs and arms are too big, heavy, and slow. Today’s most advanced humanoid robots are still big hulking pieces of metal that are unsafe to operate around people.”  ....  In virtually every robot that’s ever been built, the key challenge is generalization, and moving things from the laboratory to the real world.   [Gary Marcus, The New Yorker, Dec 13]

Research from the University of New Hampshire’s chemistry department has resulted in an exclusive license agreement for an anti-fatigue topical energy gel between the university and Wakeup a UNH start-up company, the university said  ....each application of this gel gives a person a “non-caffeinated boost for about an hour.”   [Chris Reidy, Boston Globe, Dec 12, 12]

LifeScience Alley the nation's largest state-based life science trade association, announced the formation of the Medical Device Innovation Consortium (MDIC), a public-private partnership with the FDA’s Center for Devices and Radiological Health (CDRH).  The move formalizes plans by LifeScience Alley and CDRH to bring leaders of industry, academia and government agencies together to advance medical device regulatory science.  The consortium will be administered through a new non-profit organization and will be governed by a national board of directors, including industry executives and government leaders.  [James Walsh, Minneapolis Star Tribune, Dec 3]

Novelty has been so endemic to life in the modern West that it is hard for us to fathom how much people once feared it. [Joyce Appelby, The Relentless Revolution, 2010]

Coming home. After years of offshore production, General Electric is moving much of its far-flung appliance-manufacturing operations back home. It is not alone. An exploration of the startling, sustainable, just-getting-started return of industry to the United States. [Charles Fishman, Atlantic magazine, Dec2012 ]  Productivity and Chinese inflation create a US insourcing movement. Fishman lists five drivers: cargo ship fuel prices, Chinese wage inflation, US natural gas boom, new US union priorities, US labor productivity (from mechanization). Make it where you sell it.

If you listened too much to economists, he said, you would never invest a penny. “Just remember,” [investing genius Dan Bunting] used to tell me with a smile, “the economic fundamentals always look terrible.”  [Brett Arends, Market Watch, Dec 1]  The same advice applies to listening to politicians running for election.

A new equities research platform is being introduced by Black Mountain Capital Management  (Braintree, MA). The company claims the new tool, called Stock Rover, provides professional,investor-grade investment research capabilities to the private investor market.  [Jim Schakenbach, Mass High Tech, Nov 28, 12]  If all useful information were known, there would be no need for a market. But no data collection can look into the minds of people who would buy and sell securities to predict their actions, epecially since they are adaptive creatures. Are Bloomberg and Goldman Sachs worried?

From Des Moines to Omaha to Kansas City — a region known more for its barns than its bandwidth — a start-up tech scene is burgeoning. Dozens of new ventures are laying roots each year, investors are committing hundreds of millions of dollars to them, and state governments are teaming up with private organizations to promote the growing tech community. They are calling it — what else? — the Silicon Prairie. .... lower costs and a work force focused more on building strong companies than moving on to the next big thing   [John Eligon, New York Times, Nov 21]

American manufacturing is coming back. Manufacturing jobs aren’t.  ...  Manufacturing contributed 20 percent of the growth in global economic output in the decade ending in 2010, the McKinsey researchers estimate, and 37 percent of global productivity growth from 1995 to 2005. Yet the sector actually subtracted 24 percent from employment in advanced nations.   [Neil Irwin, Washington Post, Nov 20]  Technologists and politicians need to adjust their arguments about what government should do.  Throwing money at technology, especially at small biz "job makers,"  could actually hurt total national employment more than help it. SBIR's jobs claim, in particular, are blind to the economic facts that most of the government money supports jobs only as long as the money keeps flowing. And then, by diverting the money to a favored political class from open competition for such "investment".

we are in the middle of a data-driven boom. Companies view investment in data and data-related equipment as absolutely essential, and continue to spend, fiscal cliff or no.  [Michael Mandel, innovation and growth blog, Nov 19]

America’s innovation advantage is fading rapidly; indeed, in a growing number of areas it has already turned into an innovation deficit. In “Innovation Economics” Robert Atkinson and Stephen Ezell, of the Information Technology and Innovation Foundation in Washington, DC, document this claim in laborious detail and also explain why it is happening....  America ranks eighth among OECD countries in the percentage of GDP that it devotes to R&D (2.8%)  [The Economist, Oct 13]

Fifteen new companies were launched Sunday night, the result of Startup Weekend Milwaukee 2012, a 54-hour marathon event where teams formed around initial ideas that participants presented on Friday.  It was the first Milwaukee-area Startup Weekend, a national event affiliated with the Ewing Marion Kauffman Foundation that brings together people with different skills for a crash course in how to share ideas, form teams, build products and launch companies.... By January, the parent organization will have had held 1,000 such weekends around the globe with 100,000 participants, said Jonathan Robinson, manager of entrepreneurship programs for the Kauffman Foundation. [Kathleeen Gallagher, Milwaukee Journal Sentinel, Nov 12]

"Oregon's Silicon Forest has experienced astoundingly high levels of trade-related job loss," said Elizabeth Swager, assistant director of the Oregon Fair Trade Campaign, which issued a report this afternoon on tech job loss during the past decade. It's an oft-told tale: The state's tech work force is 26 percent smaller today than it was at the peak of the dot-com bubble, according to figures from the Oregon Employment Department. Most of those lost jobs were in manufacturing, which Oregon once hoped would be a durable new, leading-edge industry in the state. [Mike Rogoway, The Oregonian, Nov 12]

Many jobs, few qualified candidates. Durham [NC] startups are maturing out of the early stage and making hires as they grow, but surprisingly, they’ve had a tough time finding candidates to fit the bill.... “Because there’s a nationwide sustained demand for engineers, if they go to work for a big company, they can earn a salary that the startups just can’t afford,” Holzwarth said. “And so, it is harder to find a person who is a fit for a startup where they like working on a small team, they like learning things and being self-motivated, self-started.”  [Monica Chen, Raleigh News & Observer, Nov 1]

Fishing in shallower waters. In the past, new pharmaceutical products have primarily come from their own internal research and development, mergers and acquisitions, research partnerships with biotech companies, and corporate venture capital investments. The new approach includes more emphasis on corporate venture capital, an increased number of collaborations with academia, the establishment of incubators, and using crowd sourcing techniques to provide grants. [Neil Santuria and Barbara Bry (serial entrepreneurs), utsandiego. com, Oct 2, 12]

First, some business profits. Newer start-ups attracting investor interest have more modest aims than their clean-tech peers of a decade ago. The new batch expect to generate revenue more quickly and cheaply, and are focusing on making existing industries more efficient and sustainable, building upon the clean-tech infrastructure such as smart meters that have become widespread. [Yulia Chernova and Emily Matlby, Wall Street Journal, Oct 18]  Government SBIR could help get more companies rolling by insisting on third-party validation in the form of co-investment at least by late in Phase II.

clever people have choices  THE world’s most valuable resource is talent. No country grows enough of it. Some, however, enjoy the colossal advantage of being able to import it. Rich, peaceful countries can attract clever immigrants. Unlike other useful imports, they cost the recipient country nothing. They come, they study, they work, they set up businesses, they create jobs: 40% of the founders of Fortune 500 companies are immigrants and their children. Yet they are only 23% of Americans.  Yet for more than a decade America has been choking off its supply of foreign talent, like a scuba diver squeezing his own breathing tube. [The Economist, Oct 13]  Yet, our nativists accept a growing relative mediocrity as long as it the mediocrity of the true American tribe - northern European invaders. 

America’s innovation advantage is fading rapidly; indeed, in a growing number of areas it has already turned into an innovation deficit. In “Innovation Economics” Robert Atkinson and Stephen Ezell, of the Information Technology and Innovation Foundation in Washington, DC, document this claim in laborious detail and also explain why it is happening. [The Economist, Oct 13] 

An entrepreneur: Lock Cromwell in a deep dungeon in the morning, and when you come back that night he’ll be sitting on a plush cushion eating larks’ tongues, and all the jailers will owe him money.  [Larissa MacFarquhar, New Yorker, Oct 15]  That was Thomas (not Oliver) Cromwell, henchman to Henry VIII. MacFarquhar was discussing the spectacularly successful historical novel trilogy on Cromwell by Hillary Mantel.

it's important to first debunk the popular misconception that U.S. manufacturing is in decline. In fact, U.S. manufacturing output (on a value-added basis -- meaning the value of finished products and not double-counting component parts) actually rose by 73% between 1993 and 2011, according to the U.S. Department of Commerce. U.S. manufacturing produces $1.7 trillion of value each year -- or 11.7% of GDP. According to the National Association of Manufacturers, for every $1 spent in manufacturing, another $1.35 is added to the economy. Another fact is that the United States remains the world's largest manufacturer, accounting for 24% of world manufacturing value added in 2010 -- a share greater than that of China (15%), India (2%), Brazil (1.7%), and Russia (1%) combined -- according to the United Nations Industrial Development Organization (UNIDO). The U.S. share of world manufacturing output, on a value-added basis, has remained fairly steady for about four decades.  [David Chavern,, U.S. Chamber of Commerce, Industry Weekly, Oct 10]  Happily and unhappily, America's innovation delivers growing productivity that makes the manufacturing more competitive on both price and quality. While reducing the labor content and growing business profit. Which bothers politicians who are expected to keep people happily employed for a rising standard of living by repealing the iron law that "cheap products need cheap labor."

In 1960, The United States was the world’s largest market. It had by far the most developed infrastructure, easily the best educational system and undoubtedly the most business-friendly government. It was the source of most innovations, from safe highways and comfortable suburban houses to computers and advanced pharmaceuticals. Those days are long gone.  [Edward Hadas, Reuters, Oct 10]  But the political campaigners decry the loss by the incumbents and promise that they can do better.  They ignore that today's problem was yesterday's solution, and that their solution will be tomorrow's problem. Besides they fish selectively in the ocean of economic data that can produce a "proof" of almost any idea. Believe nothing of what they promise. 

the psychological aftershocks of the [tidal wave] disaster have created a new sense of urgency among a small but growing number of young [Japanese] professionals and college students [who] are abandoning the path of the corporate salaryman to chart their own way by launching tech startups and connecting to Silicon Valley. ....  "In Silicon Valley, you can get $20 million (in startup funding) without owning a suit.  [John Boudreau, San Jose Mercury News, Oct 5, 12]  Like productivity advances in general, it's good news for business profits but not necessarily for US employment. Just watch our political campaigners dance around jobs by avoiding the ugly facts of world competition and pretending they can have some substantial influence for more and better US jobs.

A culmination of twelve months of data measuring the Illinois innovation economy finds improved economic growth in four sectors: dynamism, capital, talent, and business climate. Positive indicators include record growth in university startups and a significant increase in invention disclosures and patents awarded to Illinois universities. Additionally, venture capital funding reached a ten-year high of $1.4 billion in 2012. The state also recognizes room for improvement, including increasing the number of STEM degrees awarded to Illinois graduates and better aligning workforce skills with labor market demands. The report and accompanying video at: http://www.illinoisinnovation.com/innovationindex/ .[SSTI, Oct 3]

Facing an alarming economic slowdown, much of Asia needs to learn the lesson: service industries are the future.  [The Economist, Oct 6]

In a fascinating paper, economist Robert Gordon of Northwestern University speculates that productivity increases have peaked.  [Robert Samuelson, Washington Post, Oct 8]  Be smart, pay no attention to politicians' promising to create more growth. Vote for candidates who will do no harm to the economic system in which growth has space to happen; not for candidates promising good thing for interest groups.

yesterday's plan for the economy won't work for tomorrow ...  Erik Brynjolfsson and Andrew McAfee, digital-business specialists at MIT, describe the disconnect in grim detail in Race Against the Machine, their book about what might be called a third Industrial Revolution. They explain that massive increases in productivity due to the happy marriage of information technology and advanced manufacturing techniques are having a chilling, unprecedented effect on job creation.[David Rothkopf, The Third Industrial Revolution, Foreign Policy, Oct]

Solar seemed like such a good idea.  now China’s strategy is in disarray. Though worldwide demand for solar panels and wind turbines has grown rapidly over the last five years, China’s manufacturing capacity has soared even faster, creating enormous oversupply and a ferocious price war.The result is a looming financial disaster, not only for manufacturers but for state-owned banks that financed factories with approximately $18 billion in low-rate loans and for municipal and provincial governments that provided loan guarantees and sold manufacturers valuable land at deeply discounted prices. [Keith Bradsher, New York Times, Oct 5]

For more than a decade, start-ups have been getting leaner and meaner. In 1999, the typical new business had 7.7 employees; its counterpart in 2011 had 4.7, according to an analysis of Labor Department data by E. J. Reedy at the Kauffman Foundation, ... the implications for the American work force are worrisome, and may help explain why economic output is growing much faster than employers are adding jobs. On Friday the Labor Department will release the unemployment rate for September along with payroll gains, which economists predict will barely keep pace with new people joining the labor force. For decades, new companies have produced most of the country’s job growth. Without start-ups, the country would have had a net increase in jobs in only seven years since 1977. The number of people employed by new businesses peaked in 1999, the height of the tech bubble, and has fallen by 46 percent since then, to 2.5 million in 2011, creating a slow leak in job creation that has proved difficult to plug.  [Catherine Rampell, New York Times, Oct 5]  Despite the ugly facts of productivity for the national job count, the politicians will continue to base their fantasies on pervasive small biz myths of job creation. 

Much can be done to help the entire state, including enhancing infrastructure and fixing the atrocious gap in college attainment. Agriculture remains a powerful economic engine that can carry its own innovation. And many rural residents like their homes to be, well, rural. But the reality remains that all over the world, urban areas will remain the key innovation engines, no matter how much statewide policymakers want to please a wide constituency.  [Jon Talton, Seattle Times, Sep 24]  SBIR faces a political dilemma: the law envisions a national competition without regard to place but every state, no matter how sparsely populated, has two Senators who want "equity". But the ugly economic fact is that making innovation success requires the things that only happen together in urban areas: mobile labor pool, world class universities, industrial firms doing R&D, hordes of smart people and venture capitalists, etc.  Unfortunately for any success prospects for SBIR as a capital investor, the agencies that pass out the money care about none of the success factors, only whether the proposer can do the government work better and cheaper than the competitors. A good idea for government efficiency, but no a formula for innovation economic success.  So, the muddle will continue because Congress, even when awake, has no winning formula for investing in economic success from new ideas.

A new kudzu.  a champion energy crop that yields three times as much ethanol per acre as corn, a fast-growing field grass that’s ideal for making clean auto fuel without displacing scarce crop land. The N.C. Biofuels Center has been pushing for more than a year to grow the Arundo plant on a mass scale, touting it as a new cash crop and the prime energy source for a proposed $170 million biofuel refinery in eastern North Carolina.But the bamboo-like grass has a dark side. Some scientists have called Arundo “the plant from hell” and rank it among the world’s 100 worst invasive plants. ....   it can grow up to 10 inches a day, resprout from roots buried 9 feet deep, and burrow under roadways to infest neighboring fields. It’s nearly impossible to get rid of once established in some states. California has spent more than $70 million on eradication programs over the past two decades. [John Murawski, Raleigh News & Observer, Sep 25]  Will business profit dump its externalities on public cleanup?

Silicon Valley is in the grip of a mania where the desire to "change the world" with innovative software mingles closely with a hunger to hit a Instagrammatical jackpot. The best place to see this phenomenon is in an unassuming building in Mountain View, Calif., on a street called Pioneer Way. This is the headquarters of Y Combinator (the name, inspired by a mathematical function, was intended as a welcoming signal to math nerds). Led by a charismatic hacker champion named Paul Graham, YC, as it is known, is the most prestigious of a number of so-called boot camps, incubators and accelerators: a company that breeds other companies. Twice a year, YC's partners comb through applications from thousands of potential start-ups and choose a few dozen "founders" for its three-month program. It's the geek equivalent of getting into Harvard. In exchange for a small piece of the company, Y Combinator offers advice, freebies like cloud-hosting and connections to high-tech luminaries.[Steven Levy, Wall Street Journal, Sep 21]  On the other hand, Hartford is one of three cities (also Las Vegas and Greensboro) nationally to win a federal grant that will help fund a new program to help entrepreneurs and foster the growth of start-up companies.  The $1 million grant from the US Department of Commerce's Economic Development Administration will fund the Hartford Innovation Hub initiative, developed by the city to help spur economic growth.  The program seeks to attract, assist and retain entrepreneurs and advanced manufacturing companies in the city. The project also will identify and assist a small group of fledgling companies that have the potential to grow significantly in the city.  [Kenneth Gosselin and Jenna Carasso, Hartford Courant, Sep 21] Anyone want to guess the evaluation criteria and  the judges and whether there was any political input? Which incubator will produce more and better chicks?  Which will have an auditable  post-project accounting of investment and return?  What have previous Connecticut government-funded incubators returned?

It looks so easy from the outside. An entrepreneur with a hot technology and venture-capital funding becomes a billionaire in his 20s.  But now there is evidence that venture-backed start-ups fail at far higher numbers than the rate the industry usually cites. About three-quarters of venture-backed firms in the U.S. don't return investors' capital, according to recent research by Shikhar Ghosh, a senior lecturer at Harvard Business School.  [Wall Street Journal, Sep 20]  The miracle is that VCs keep pouring money into start-ups despite the odds. A government program with a 75% failure rate  (government thinks that way) would be shut down in a political heartbeat.  Which is one reason why SBIR has a high "success rate" and no discernible investment pulse.

Algeta ASA, a Norwegian company specializing in cancer therapeutics, said it has scheduled the official opening of its Algeta US office in Cambridge for Tuesday afternoon. The office will initially have a head-count of 12 employees with plans to grow. Algeta US president Jeff Albers said, “Algeta Group’s expansion to the US is an important step toward realizing our vision for building a global oncology company commercializing innovation.”  [Chris Reidy, Boston Globe, Sep 18]  Why would a Norwegian company come to Boston?  Smart labor pool, smart people to talk to, atmosphere of innovation, proximity to medical markets, close enough to kiss a VC, .....?  

Acqui-hire . Established technology companies increasingly are buying—and then shutting down—early stage start-ups, mostly to acquire their software-engineering talent.  [Sarah Needleman, Wall Street Journal, Sep 12]

As of this year, personal computers no longer consume the majority of the world’s memory chip supply.  .... IHS says that phones consumed more than 13 percent percent of memory chips manufactured, and it expects that figure to grow to nearly 20 percent by the end of this year. Tablets — including the iPad — consumed only 2.7 percent of the world’s memory chip supply.   [Arik Hesseldahl, allthingsd.com, Sep 15]

Exploit and protect the big roof. The solar industry is booming in the U.S., as homeowners in sundrenched states plant panels on their roofs and utilities build massive solar farms in the deserts of Arizona and California. America now generates twice as much solar power than it did a year ago. But solar electricity is all big at the mall. According to the Solar Energy Industry Association (SEIA), together, Walmart and Costco have installed more solar panel capacity on their store rooftops than the entire state of Florida.  [Alex Klein, Newsweek, Sep 13]

Another slowing technology market.  Intel said its revenue in the third quarter will likely be more than $1 billion less than it expected, as a series of woes multiply for personal computer makers that buy its chips....  cited slowing demand in emerging economies—a key source of sales growth in recent years—and softening sales of PCs to enterprises.  [Don Clark, Wall Street Journal, Sep 8]

Eras of invention, in which disruptive technologies are devised, tend to be followed by periods of innovation. The era of innovation can last decades or generations, while entrepreneurs figure out how to use the new technologies in one economic sector after another. James Watt dramatically improved the steam engine in the 1770s, but it was not until the 1830s that steam-powered locomotives and steam-powered factories began to transform the landscapes first of Britain and then of the U.S. and other nations.[Michael Lind, Apr 18]

Acqui-hire . Established technology companies increasingly are buying—and then shutting down—early stage start-ups, mostly to acquire their software-engineering talent.  [Sarah Needleman, Wall Street Journal, Sep 12]

The list of groundbreaking technologies that have been developed by US-funded research laboratories is long and illustrious: the Internet, global positioning systems, lithium ion batteries, and many wireless communications breakthroughs.  Now Allied Minds Federal Innovations (Boston, MA; no SBIR) is tapping into this legacy of innovation with a new business to commercialize military technology developed at Department of Defense laboratories and research centers. [DC Denison, Boston Globe, Sep 11, 12]  There are graveyards of investors with the same idea over the past few decades.  It always sounded better than it paid.

Another slowing technology market.  Intel said its revenue in the third quarter will likely be more than $1 billion less than it expected, as a series of woes multiply for personal computer makers that buy its chips....  cited slowing demand in emerging economies—a key source of sales growth in recent years—and softening sales of PCs to enterprises.  [Don Clark, Wall Street Journal, Sep 8]

Roger Altman’s op-ed in the Financial Times argues that although our current financial slump may have a few more years to run, we’re likely headed for another boom. [John Carney, CNBC.com, Sep 4]  Regardless of how dark the night, the sun always rises. As does the American economy.

boutique manufacturing operations relying on fewer workers, more computer code and mind-boggling machines are building complicated components and early iterations of electronics for the world. Look at companies like digital-sign-maker Altierre in San Jose and custom-part-maker IMG Precision in Livermore and many others. They've been hiring, and their Bay Area ambitions are showing up on our favorite economic score card: the state jobs report. [Mike Cassidy, San Jose Mercury News, Aug 31]

The problem for a polemicist is that it is almost impossible to change anyone's mind about anything [Katie Roiphe, Wall Street Journal, Sep 1]

Stasis or transformation. No more fundamental innovations are likely to be introduced to change the structure of [today’s] society .... Like every previous civilization, we have reached a technological plateau. — Jean Gimpel, technology historian, professor, and author... from his excellent 1975 book, The Medieval Machine; The Industrial Revolution of the Middle Ages, wherein he extrapolated history’s lessons to inform the future .......   We have failed to recognize that we are at a technological plateau. — Tyler Cowen, economist, popular blogger, and author of The Great Stagnation (2011)  [Mark Mills, The American, Aug 25] The famous economist Fisher said that the stock market was at a permanent high level in 1929. Mills however sees emerging grand transformations—Big Data, Wireless Broadband, Computational Manufacturing—are all an integrated part of the next great cycle of the information economy.

Businesses are getting more comfortable buying technology from start-ups and other small outfits, a shift that could usher in a period of slower growth for tech giants ... Many of these executives, who hold the purse strings to their company's tech budgets, said smaller companies are now quicker to embrace new computing models, have products that are easier to deploy and tend to respond better to customers than the giants.  [Ben Worthen, Wall Street Journal, Aug 23]

In a commentary in China Daily titled "Wake-Up Call for Industry," Zhang Monan writes that the "U.S. 're-industrialization' strategy and its acclerated efforts to 'return' to manufacturing in the wake of the global financial crisis are re-forging the world's manufacturing landscape."  .... She contrasts this with China, which has relied on a strategy of cheap labor and scale to become the world's "manufacturing workshop." But Zhang points out that China's labor costs have been rapidly increasing (19% annually from 2005 to 2010), narrowing this advantage with the United States. ...  "Given that the U.S. is on the threshold of a new 'technological and industrial revolution,' China should change its manufacturing strategy in order to overcome its insufficient technological innovation capacity and low competitiveness," she writes.  [Steve Minter, The Global Manufacturer, Aug 20]

it’s important to remember, as the Mock Turtle says in Alice in Wonderland, that arithmetic consists of four basic operations – Ambition, Distraction, Uglification and Derision. Of these, Distraction is likely to be the tactic employed most frequently this election season. The economic problems that America faces are fairly clear, but all the possible solutions are unpalatable. So the candidates will probably try to avoid getting too specific or, alternatively, divert discussions into debates over technicalities.  [Michael Sivy, Time, Aug 21]  All the SBIR advocates should prepare their uglification on why government subsidies are not just corporate welfare for when the capitalists take over government again.

Sikorsky Innovations, a technology arm of the Stratford helicopter manufacturer, is launching its second annual open challenge to entrepreneurs looking to develop new flight technologies. The program, called the Entrepreneurial Challenge Competition, is the company's effort to connect itself to the entrepreneurial community, while seeding ideas for new technologies.  This year the challenge asks groups of less than 10 full-time employees with no more than $5 million in annual revenues to find solutions for optionally-manned, complex flight; applications of vertical flight in new markets; ways to preserve, heal or stabilize damaged systems; cost and time reductions in production phases; and potential cost savings through the use of 3-D printers. ...   Winning teams will receive rent-free use of the Stamford Innovation Center for one year and the business services and mentoring programs that accompanies it, as well as participation in a 3-month Sikorsky education program.  [Brian Dowling, Hartford Courant, Aug 20]

A new wave of robots, far more adept than those now commonly used by automakers and other heavy manufacturers, are replacing workers around the world in both manufacturing and distribution. Factories like the one here in the Netherlands are a striking counterpoint to those used by Apple and other consumer electronics giants, which employ hundreds of thousands of low-skilled workers.“With these machines, we can make any consumer device in the world,” said Binne Visser, an electrical engineer who manages the Philips assembly line in Drachten. [John Markoff, New York Times, Aug 18]

While job growth in the South is relatively strong compared to the nation, many southern states are trapped in an economic cycle known as a low-wage/low-skill equilibrium, according to a new report from Georgetown University. This dangerous cycle may cause many southern states to lag a decade behind national averages in the proportion of jobs in high-growth growth industries. To catchup with the rest of the country, the report contends southern states must invest heavily in post secondary education and training.  [SSTI, Aug 15]Jobs now, foreign auto assembly plants welcome, says the South which is allergic to tax revenue needed to support high quality education. Just listen to the national debate about tax cuts and government spending championed by the conservatives with their power center in Dixie.

Following nature's lead, Hongrui Jiang (UWisconsin) studied the sunflower and came to develop a nanocomposite that can follow the sun because, like the flower, it responds to the light - and heat - the sun gives off. .... The Department of Energy has funded a variety of research projects, though not Jiang's, through a SunShot initiative to make solar power cost-competitive by 2020.   The polymer-based system Jiang's team has developed uses carbon nanotubes in combination with a liquid crystalline elastomer to absorb light. The movement of the solar system would take place as heat generated by the sunlight prompts the polymer to contract.  ...  Go to tinyurl.com/nanosunflower to see a video on the research.  [Thomas Content, Milwaukee Journal Sentinel, Aug 15, 12]

LaunchHaven to help design and perfect their business plans. The one-year-old New Haven (CT) group meets every third Thursday to mull ideas, match entrepreneurs with mentors and munch pizza.  "We get about 35 to 50 people at each meeting," said Derek Koch, founder  [Janice Posada, Hartford Courant, Aug 17]

We can only learn from accidents by having accidents. Therefore keep them small. --- Freeman Dyson, Aug 15

Patent before money. Across Silicon Valley, desks strewn with patent applications compete with gritty garages as the standard birthplace of new products. Startups no longer race headlong to develop prototypes as fast as possible. Instead, they must first protect them with bulletproof intellectual property portfolios that can take years to build. This is the fallout of an increasingly vicious patent war, where giants like Apple , Samsung, and Google clobber each other in court over smartphone designs, and patent trolls pounce on the rights to popular features.[Ashlee Vance, Bloomberg Business Week, Aug 9]

there are now about 8 million more working age Americans than when Obama became president. With a growing population, more jobs were needed just to keep the economy standing in place. [John Lott, Real Clear Markets, Aug 13]  No problem with stubborn unemployment - elect Romney and his magic wand that produces economic growth by doing nothing. 

Scientists [in Taiwan] have used nanotechnology materials to repair vital tissues damaged by heart attacks in animals, suggesting a new way to treat the same ailment in people.  The experiments, done in rats and pigs, led to the growth of fresh blood vessels and improved heart function without harmful side effects, the scientists said Wednesday in the journal Science Translational Medicine.  [Gautam Naik, Wall Street Journal, Aug 9]

Hewlett Packard said it will write down the value of its technology-services business by about $8 billion, underscoring both industry changes and singular pressures facing the firm. [Wall Street Journal, Aug 9]

our survey found that a substantial majority of workers polled (63%) believe the president has a big impact on job creation.  At the same time, fewer (55%) believe the president, Congress and the Fed can work together to create jobs. ....  Fully 70% of the respondents didn’t think U.S. chief executive officers were “working hard enough” or were committed to creating U.S. jobs. .... the private sector must maintain the freedom to source jobs globally based on market demands.  [translation: we're free to take government subsidy and still create jobs abroad]   [Bill Westwood, industryweek.com, Aug 1] No matter the political palaver on jobs, private businesses will create all the profitable wealth-creating jobs. The politicians will spend their energies accusing the other party of being the barrier to boundless wealth. Unfortunately, our choice is to elect one or the other of the prating tongues.

The credo of the C.E.O. today is: “You only hire someone — anywhere — if you absolutely have to,” if a smarter machine, robot or computer program is not available. [Tom Friedman, New York Times, Aug 8]  Which is good news for world-competitive technology developers but bad news for politicians hoping to "solve" the unemployment trends with conventional speeches. Now if only nurture programs like SBIR could find and kick-start potential world class tech'ers instead of life-style companies doing ordinary government R&D. But that's not going to happen as long as the mission federal agencies have complete autonomy for handing out the money.

In a world of slow innovation, ...  The economy grows slowly, and it becomes difficult to justify compensating risk capital if risks are not paying off.  The calculation changes, however, if we have big disruptive innovations. ... On the upside, disruptive innovations create a wave of high-growth companies that drive the stock market higher.  [Michael Mandel, Innovation and Growth, Aug 2]  In principle, SBIR was invented to discover and nurture innovation, although disruptive innovation was outside the understanding and comfort zone for politicians.  In practice, it set up a "fair share" scheme for small tech companies for direct government contracts by federal agencies that had no incentive for disruptive innovation. 

Economic relationships are poorly understood, complex and unstable. Cause and effect is uncertain: Does money supply influence nominal income or does nominal income affect velocity and the demand for and thereby the supply of money?  The ability of governments and central banks to influence economic activity is overstated. As economist Wynn Godley put it: “Governments can no more control stocks of either bank money or cash than a gardener can control the direction of a hosepipe by grabbing at the water jet.”  [Satyajist Das, Market Watch, Aug 2]  Meanwhile, political campaigning rolls on with no recognition of cause and effect for our economic problem. One side says the incumbent failed by not solving the problem created by the policies of the previous administration party that seeks to re-enter the office. Neither cites cogent economics and realistic recognition of the limits of economic policy. Bellow, rinse, repeat.

For a historian, all this technoptimism is hard to swallow. The harsh reality, as far as I can see, is that the next 25 years (2013-2038) are highly unlikely to see more dramatic changes than science and technology produced in the last 25 (1987-2012). [Niall Ferguson, Newsweek, Jul 30]  Although Ferguson has earned a pile as a popular historian, he is as blind about the future as the rest of us. He and we just don't know.

Don't blame foreign outsourcing. Even with important gaps in the data, the empirical literature is able to conclude that offshore outsourcing is unlikely to have accounted for a meaningful part of the job losses in the recent downturn or contributed much to the slow labor market rebound. The empirical evidence to date, while still tentative, actually suggests that increased employment in the overseas affiliates of U.S. multinationals is associated with more employment in the U.S. parent rather than less.  [Swangel and Mankiw, 2006]

Cisco Systems was the biggest decliner among Dow components, sinking 5.9% ... said it would lay off about 1,300 employees.[Wall Street Journal, Jul 25]

Many analysts ask if another big innovation—like the automobile or computer-- is coming and could save the economy. The problems are many new products are creating more jobs in Asia than in the West, and many technology companies are consolidating or facing extinction—consider the smart phone, Hewlett Packard and Yahoo.   [Peter Morici, Foxnews.com, Jul 24] Technology has to be mass produced at prices that buyers will pay. If American delivery costs exceed China's costs, the work will be done there.  USG employment programs will not matter.

A century ago [Thorsten] Veblen analyzed religion as the quintessential capitalist undertaking. It sells an inherently ephemeral product that cannot be quality tested. Most of the value of that product exists only in the minds of the purchasers, and most of that value cannot be realized until death.  [LR Wray, EconoMonitor.com]

Lake Region Medical, (Chaska, MN; no SBIR) with operations in Ireland, has become the first company in the Republic of Ireland—and the first medical device manufacturer in Europe—to be awarded a global standard in Operational Excellence, the company announced Tuesday. Lake Region won the Shingo Accreditation Bronze Medallion. The award was to Lake Region Medical’s New Ross manufacturing subsidiary, located in County Wexford, Ireland. The company employs 750 people at its plant and another 100 people at its International Research and Development Center in Galway.  ... makes minimally invasive medical devices for the world’s largest medical technology companies. The company was founded in 1947. [James Walsh, Minneapolis Star Tribune, Jun 26, 12] 

Another popular myth of modern times has had to do with the supposed “death of distance”, and the view that technological enhancements mean it doesn’t matter where workers migrate to. Moretti slays the notion with ease given his assertion that “a company’s success depends on more than just the quality of its workers – it also depends on the entire ecosystem that surrounds it.” More to the point, smart, innovative workers like to be around other smart, innovative workers.  [John Tamny,Forbes, Jul 22]  Tamny is reviewing Moretti's The New Geography of Jobs which opines that jobs are not going to return to the US even though corporate profits will do well. Our political system, though, clings to the idea that manufacturing jobs can be restored by electing the right president and Congress. Because that's what voters want to hear. Our political system enouragers followers, not leaders, of public opinion. America isn’t educating enough of our people well enough to get American-based companies to do more of their high-value added work here. ..... American students continue to do poorly in math and science relative to students in other advanced countries.  ....  The way we get good jobs back is with a national strategy to make Americans more competitive.... But big American-based companies aren’t pushing this agenda.... They want lower corporate taxes, lower taxes for their executives, fewer regulations, and less public spending.... [Robert Reich, Jul 18]  While those are all good things, the middle class will not thrive unless American workers compete on productivity with foreign labor.

A $6 million gift from a Fort Worth entrepreneur will be used to expand Texas Venture Labs, a two-year old entrepreneurship and incubator program for University of Texas (UT) graduate students, reports the Austin American-Statesman. The program connects students with Austin-area startups for help to them carry out market validation studies, financial analysis and due diligence projects. So far the lab has worked with 40 companies raising more than $25 million in investment capital, according to the article. The gift will be used to expand the existing program — now renamed Jon Brumley Texas Venture Labs — and to take the program to other UT campuses.  [SSTI, Jul 18]

A recent paper by the Kauffman Foundation — a nonprofit organization devoted to encouraging entrepreneurship — began with a fact: We don’t really know what leads to the creation of more businesses. In fact, firm creation is something of a mystery, as it’s been eerily stable over the past 50 years despite the radically different policies and economies we’ve had over that time. [Ezra Klein, Washington Post, Jul 19]  But politicians and government program beneficiaries will keep jawing as if they have the answers on small biz and its effect on the economy.

What a startup should be, [Xconomist and startup guru Steve Blank ] said, is a temporary organization designed to search for a repeatable and scalable business idea. A startup founder doesn’t need a five-year business plan, he explained, as long as that person has a strong sense of curiosity, resiliancy, and a willingness to “volunteer for everything.”  [Sarah Schmid, xconomy.com, Jul 18]

Some of chip colossus Intel's biggest customers and partners are exploring a competing microprocessor design, signaling the start of a much-anticipated tech donnybrook that analysts say could trigger a dramatic shift in the computer industry. The competitor: devices based on British firm ARM's energy-efficient design  [Steve Johnson, San Jose Mercury News, Jul 11]  The ARM business model involves the designing and licensing of IP rather than the manufacturing and selling of actual semiconductor chips. ...ARM technology is in use in 90% of smart phones, 80% of digital cameras, and 28% of all electronic devices.   [company website]

Science, too, has supply and demand.  three years after earning a doctorate in neuroscience, she gave up trying to find a permanent job in her field ... Just 38 percent of new PhD chemists were employed in 2011 ...  The reason: The supply of scientists has grown far faster than the number of academic positions.  ... declining investment in research and development have dramatically shrunk the U.S. drug industry ...    computer and petroleum engineering, seem to be booming  [Brian Vastag, Washington Post, Jul 7]

A $25 million federal grant will speed the construction of a solar manufacturing plant in San Diego, in an effort to boost U.S. competitiveness.  Semiconductor maker Soitec Solar (France) entered the concentrated photovoltaics business in 2009 with the purchase of Concentrix Solar, a spinoff of the Fraunhofer Institutes, a network of publicly funded research centers in Germany.  [Morgan Lee,, utsandiego.com, Jul 4]

A Chinese fund is looking to invest $100 million in state companies across a broad range of industries, the Wisconsin Economic Development Corp. said.  The agency will screen applications from companies and select as many as 25 to make presentations to PiYi Investment Management Co. Ltd.in September. PiYi (pronounced Pee-Yee) will make investments in the $2 million to $15 million range, said Scott Mosley, manager of foreign direct investments for the WEDC. The application deadline is July 18, he said.  "We have the ideas, we have the people. We just don't have the capital to fund high-growth companies," Gov. Scott Walker said. [Kathleen Gallagher, Milwaukee Journaal Sentinel, Jul 7]

Innovation, personified by the dour Watt, and entrepreneurship, personified by the ebullient Boulton: that was the quintessential partnership at the heart of the Industrial Revolution. --- Niall Ferguson, Civlization: The Six Killer Apps of Western Power

to boost entrepreneurship and technical skills at home. ... Encourage public schools to teach American children how to code just after they learn to multiply. [Marvin Ammori, The Atlantic Monthly, Jun 21]

Hot spot gets hotter. Average asking rents for Class B space in the South Boston Innovation District have jumped 40 percent in the past year, and a number of startups are avoiding the area in their search for new office space  [Mass High tech, Jun 21]

Xenetic Biosciences plc, a British drug company with a focus on developing treatments for rare diseases, plans to relocate its drug development operations to Massachusetts and hire up to six employees in the Bay State before the end of the year.   .....  partly a result of its belief that the state is ideally suited for life sciences companies looking to grow.  [Chris Reidy, Boston Globe, Jun 12]  A good R&D investment environment will attract business, but government subsidies are not likely to produce such an environment.

America's ethanol boom is stalling, and the effects are starting to spread across a farm belt that had grown accustomed to soaring growth, with ethanol plants closing in some towns[Wall Street Journal, Jun 12]

The first rule of successful prognostication is never to mention a number and a time in the same sentence.[Spencer Jakab, Wall Street Journal, May 30]

Got innovation? Just about every company says it does. ....A company's biggest potential for growth lies in disruptive innovation, he says, noting that the other types could just as well be called ordinary progress and normally don't create more jobs or business.  [Leslie Kwoh, Wall Street Journal]  Want SBIR for your "innovation"? Just claim it profusely because the agency needs to justify its choice of whatever you're doing that they want with money set aside for "innovation". 

Too much of a good innovation. FOR decades, the overuse of antibiotics has encouraged the evolution of drug-resistant bacteria which, though they have never broken out and caused an epidemic in the way that was once feared, have nevertheless been responsible for many deaths that might otherwise have been avoided. Now something similar seems to be happening in agriculture. The overuse of drugs against parasitic worms which infest stock animals means that these, too, are becoming drug-resistant. That is bad for the animals’ health and welfare, and equally bad for farmers’ profits.  This, at least, is the conclusion drawn by Ray Kaplan, a parasitologist at the University of Georgia who has just published a review of research on the problem. His results, which appear in Veterinary Parasitology, make grim reading. [The Economist, Jun 2]  Short term profit prevails over long term safety.

to the capital of capital  “We went to Silicon Valley because they understood how big we wanted to get,” Mr. Imbruce said, “and we moved back [to NYC] to fulfill that promise.” The recent burgeoning of New York’s Internet industry has forced some entrepreneurs — who, just a few years ago, might have felt they had little choice but to head west to pursue their dreams — to make a difficult choice. New York is now enough of an attractive alternative that a few West Coast-born start-ups are even packing up and moving east.  Silicon Valley answers:  “You can definitely build great companies elsewhere, but I have not seen anyplace in the world that builds true global franchises — technology-based franchises — like this place does,” said John O’Farrell, a partner at the venture capital firm Andreessen Horowitz, based in Menlo Park, Calif.   [Joshua Brustein, New York Times, May 29]  

Applications to some of the roughly 200-plus business "accelerators" world-wide have more than doubled in the past two years, as growing numbers of entrepreneurs seek them out for seed capital and advice.  Despite a sharp rise in the overall number of accelerators, the top-ranked programs, such as Y Combinator and TechStars, say they are drawing as many as 1,500 applicants for what may be as few as a dozen spots in each session, or class.  The roughly 12-week programs offer entrepreneurs seed funding and one-on-one mentoring to help develop their businesses, in exchange for an equity stake of around 6%.    [Sarah Needleman and Emily Maltby, Wall Street Journal, May 24]  Note that the economics for the accelerator is different than that for the biz. The accelerator only needs a tiny percent of  proteges to get acquired for a goodly sum.  

Hewlett-Packard plans to cut its workforce by 25,000 to 30,000 employees, a record number for the venerable tech giant as it grapples with declining revenue and profits. [Wall Street Journal, May 18] Trouble in techno-land as R&D giant shrinks. It's no longer the visionary company that H&P invented and ran.  

In a New York minute.  New York has the nation's fastest-growing tech sector and has surpassed Boston as the No. 2 hub, behind Silicon Valley, for Internet and mobile technologies, according to a report released Wednesday by the Center for an Urban Future.  .... in part because much of the innovation happening now is connected to industries that are centered in New York: advertising, fashion, financial services and media. ...  The 10 New York tech start-ups that received more than $50 million in funding between 2007 and 2011 include Gilt Groupe, an online designer fashion sales company; ZocDoc, a platform for finding and booking appointments with doctors; Tumblr; and Foursquare.   [Jennifer Maloney, Wall Street Journal, May 11]  Despite sky-high taxes and space rental, it pays to sleep near the clients. Look for more wailing by the fly-over states on share of government contracts, including SBIR, even though it is unlikely that many of the start-ups in Silicon Alley will be looking for government handouts. One company with 16 DOD and NASA Phase 2s, not in the aforementioned NY industries, in the last decade is Honeybee Robotics in mid-town Manhattan.  

The intrepid entrepreneurs at Thumbtack have today released a fantastically detailed and informative survey of small businesses across the United States. The full results are here, and for each state, the survey provides a detailed regional breakdown as well as specific comments from business owners. Outstanding stuff.  [Dane Stangler, growthology.org]

Entrepreneurs, at their best, solve problems. Some problems (trying to figure out a cheaper and more powerful source of energy) are more important than others (an improved search engine algorithm), or may seem so at first blush. Ex post, we may realize that solving one problem gave rise to a host of new challenges, but we probably wouldn't return to the prior state of affairs. This is the nature of economic progress. Actually, it's the nature of all human history: two steps forward, one step backward.  [Dane Stangler, growthology.org]

dandv writes with a story from VentureBeat about another entry in the race to escape national jurisdiction by offshoring work — literally offshoring, that is : Blueseed is a Silicon Valley company that plans on launching a cruise ship 30 minutes from the coast of California, housing startup entrepreneurs from around the world. These startuppers won't need to bother with U.S. visas, because the ship will be in international waters. They'll have to pay tax to whatever country they're incorporated in, though. So far, 146 startups said they'd like to come to the ship."  [slashdot.org, May 8]

SWIM for water [Today] a host of water startups and established companies will hold an all-day symposium to try and answer the question of how Massachusetts could become the global innovation leader of the $500 billion water industry.  ... dubbed the Symposium on Water Innovation in Massachusetts (SWIM)  [Don Seiffert, Mass High Tech, May 7, 12]

As Twain said: "Get your facts first, then you can distort them as you please."  You can be forgiven for a cockamamiee self-serving economic theory, but not for having no facts that fit it. In economics, though, there are so many facts that almost any two can be connected with such a theory, especially among the true believers.

Who's really recovering?  The stock market has doubled since March 2009, while corporate profits and exports have surged to records.  [Daniel Gross, author of coming book Better, Stronger, Faster]  Which political party best represents those winners but cannot even whisper the success in its restless search for things to complain about?

The success of many biotech companies over the last two decades suggests how such collaborations can work. Like clean-energy companies, biotech startups face a lengthy and expensive commercialization process for their products. But many have avoided that process by making themselves attractive targets for large pharmaceutical companies. The acquisition of startups by drug companies desperate to gain innovative new technologies has fueled much of the biotech industry's growth. These deals by large pharmaceutical firms, which recognized that their own research was inadequate and their drug pipelines were collapsing, gave venture capitalists a highly profitable way to cash out of their investments in biotech startups long before the fledgling companies had to deal with the expense and difficulty of scaling up or commercializing their technologies. In turn, these lucrative "exits" for venture investors provided strong incentives to invest in the next round of early-stage companies. "It is a virtuous cycle," Nanda says.  [David Rotman, Technology Review, M/J12]

Success has a thousand fathers. Success has a thousand fathers. [experts] pointed to the Google search engine, iPod technology, and the Human Genome Project as examples of how federal funding has aided transformational innovation and economic growth.  .....   The investment in knowledge represented by the federally funded Human Genome Project had a $796.3 billion economic impact from 1998 to 2010, according to a 2011 study by Battelle Memorial Institute.  [Earl Lane and Becky Ham, Science, Apr 27]  Unfortunately, no one can assign definite value to any piece of research before it starts, and the budget mavens are not proposing to zero out government science.  It's just standard pleading to oppose any proposed cuts to programs that employ smart scientists, and the steady accumulation of PhDs make the problem more acute every year. Stand by for much wailing as a lot of people are going to give up something to get government finance back on track.

We're looking for bold innovative strategies to pretty much maintain the status quo. -- Wall Street Journal cartoon caption. That's a variation in the old idea that we want a brand new idea that's been thoroughly tested. The dilemma is that the great and proved idea will be very expensive by then and in the hands of your competitors. But then life is full of uncertainty.

"What do you call a credit bubble built on a commodity bull market built on a much bigger Chinese credit bubble?" asks Société Générale strategist Dylan Grice in his latest research note. Sadly, the answer isn't funny for some living in the southern hemisphere.  "Leveraged leverage? A CDO squared? No, it's Australia."  [Wall Street Journal, Apr 26] 

Unemployment in global competitionU.S.-based multinational companies increased their work forces at home by 0.1% in 2010 while expanding overseas employment by 1.5%, the Commerce Department said.  The modest expansion of the global companies' employment in the U.S. came in a year when the private sector as a whole shed 0.6% of its U.S. workers.  ....  Since 1999, U.S.-based multinationals have cut U.S. employment by about 1 million, or roughly 4%, and added 3.1 million workers overseas, a 39% increase   [David Wessel, Wall Street Journal, Apr 19]  Don't be surprised if the partisan political battle for president never draws an accurate picture of the forces driving US employment.

Enduring myths.  this intense focus on small businesses may overstate the economic case. Big businesses actually employ far more people than small ones and, according to government data, the overwhelming majority of small businesses don't employ anyone at all.  ....  [Kelly Edmiston, a senior economist at the Federal Reserve Bank of Kansas City] says small-business jobs are far less stable than jobs at big businesses, in part because small businesses are created and also fail at such a high rate.  ....  tend to offer lower pay and fewer benefits.  ...  he actually concludes that in terms of economic development, it makes far more sense for states and cities to promote small business than to spend tons of money to try to lure a large factory into town.   [Tamara Keith, npr.org, Apr 18]  Not to worry: politicians will continue to tell people the enduring myths they want to hear.

Can't/won't escape continuous connection.    In a bid to capitalize on the growing market for fast Internet access on planes, Honeywell has signed a deal with satellite-operator Inmarsat to provide gear for airborne broadband connections. [Wall Street Journal, Apr 18]

Vijay Govindarajan and Chris Trimble's "Reverse Innovation," a book that offers provocative insights into the quickly changing dynamics of the global economy. As the subtitle has it, the authors advise companies to "create far from home" and "win everywhere."  ....  Cisco CEO John Chambers told me that he expects developing countries to account for 70% of his company's business a decade from now, up from 30% today. Chief executives at other multinationals make similar forecasts....  Govindarajan and Trimble make a persuasive case for a different model. They say that, increasingly, business success is coming from companies that use their knowledge and resources to create innovative new products for developing countries and then adapt those products to satisfy demands in the developed world. The traditional flow of innovation—from rich to poor nations—is moving in reverse.    [Alan Murray, Wall Street Journal, Apr 12]  More global competition for American myths of innate and permanent superiority in R&D and innovation.

[Harvard Econ students said] "Today, we are walking out of your class, Economics 10, in order to express our discontent with the bias inherent in this introductory economics course. We are deeply concerned about the way that this bias affects students, the University [sic], and our greater society."  ....  Today's economics is dominated by ideas, like the efficient market hypothesis, making such sweeping generalizations that they render human beings practically unrecognizable. Do people ever have "perfect information" or a complete understanding of their best interests?  ....   where economics finds itself today, stuck between failed methodologies and whispered realities. It can continue to produce elegant theorems that work only by ignoring obvious real-world situations and conditions.   [Eric Weiner, Institute for New Economic Thinking in New York, LA Times, Apr 11]  Conventional thinking in both R&D and Economics under question. 

Beware of freeware. Techdirt reports that the latest versions of Wikipedia's mobile apps have switched to OpenStreetMap from Google Maps. Says Techdirt's commentary: "One wonders how Google didn't see this coming — or if they did, what exactly their strategy is here. OpenStreetMap is gaining a lot of momentum, and in some areas even features much better data. The real lesson here is that there's never an incumbent that isn't at risk of being unseated, no matter how widespread the adoption of their product or service—especially if they make an anti-customer decision like Google when it put a price tag on Maps. The situation also points to the long-term strength of open solutions: while a crowdsourced system like OpenStreetMap never could have put together a global mapping product as quickly as Google did, over time it has become a serious competitor in terms of both quality and convenience."  [slashdot.org, Apr 8] 

Nearly every CEO and business leader I speak with says virtually the same thing: They are hesitant to make major investment decisions until they know how Washington intends to grapple with its huge deficits. That uncertainty is a major drag on job creation because the price of uncertainty for business is paralysis. Companies with healthy balance sheets that could be creating jobs are sitting on the sidelines, waiting to see if the federal government will begin increasing market stability by reducing long-term deficits.[Michael Bloomberg, Wall Street Journal, Mar 29]  If you're waiting for the magic pain-free (for you) solution to the national debt hole, there is no such solution. When the smoke clears, everyone will be paying something in lost benefits and higher taxes.

a closer look at China's supercomputers reveals a program that is far less of a threat to U.S. technological dominance than commonly believed. Chinese researchers say decisions about how supercomputers are used are often made by local politicians more interested in local development projects than breakthrough technology. China's bureaucrats meanwhile haven't figured out how to mount software development projects that come close to U.S. or European standards. Chinese scientists also lack the funding, and freedom, to explore technologies that haven't already been endorsed by the government, which can keep them well behind the cutting edge. [Bob Davis, Wall Street Journal, Mar 24]  Imagine that: politicians favor local benefits in deciding how government will "invest".  Just like Mississippi Senators deciding the Navy has to have ships built in Mississippi despite the Navy saying it doesn't need them.  Should we doubt that Mississippi Senators are not the least schooled in national maritime strategy? 

Only 42 percent of Americans believe that the U.S. will maintain its dominance in science and technology through 2020, according to a recent survey by Research America. Americans also appear to expect that this change will have dire consequences. Sixty-four percent believe that it is important that the U.S. lead in R&D, and 78 percent believe that S&T leadership is important to U.S. competitiveness. [SSTI, Mar 21]

With innovation key to the future of their businesses, two of the world’s largest drug companies are throwing in with Index Ventures to fund startups in the health care field. Johnson & Johnson and GlaxoSmithKline are forming a $200 million fund with the global venture capital firm to jump-start investing in the biotech field,   [Kent Bernhard, portfolio.com, Mar 21] 

downtown San Jose became the site of her third "Pitchcrawl," as investors hungry to find the next big thing trolled two startup incubators. ...  Investors then were armed with kitchen timers as aspiring Larrys, Sergeys and Zucks got three minutes to deliver their pitches. Call it speed-dating for geeks.  With 20 investors and roughly twice as many entrepreneurs, the room broke up into a grown-up version of Red Rover:   [Peter Delevett, San Jose Mercury News, Mar 21]  Don't you wish SBIR could simplify life for wannabes as easily?  Imagine a two-page teaser to the topic decider that would elicit a fast estimate that would tell companies whether they had any real chance. The work and expense would drop for both parties in the proposal process. One of my objectives in my public speeches and topic writing was to discourage no-chance proposals by clarifying what we did want - innovation with a future. 

Bonanza rising.  the stage is now set for a different kind of robots, one with a sophisticated brain and an unlimited tolerance for menial tasks. ...  In the next few years, thousands of "service robots" are expected to enter the health-care sector—picture R2D2 from "Star Wars" carrying a tray of medications or a load of laundry down hospital corridors. ...   a potential bonanza for software and application developers to write new programs for them, investors and industry watchers say ... At the forefront of the trend is one of the world's top robotics companies, which has announced it is making a major move into the health-care sector.   [Timothy Hay, Wall Street Journal, Mar 15]  As Alabama discovered when it booted out the immigrants, Americans don't like menial jobs.

WHERE do good ideas come from?
... one reason for 3M’s creative output. The company also encourages its employees to take risks, not only by spending masses on research (nearly 8% of gross revenue), but also by expecting workers to spend around 15% of their time pursuing speculative ideas. Most of these efforts will fail, but some, such as masking tape, an early 3M concept, will generate real profit for the company. The reason why this approach works—and why it has been imitated by other crafty companies such as Google—is because many breakthroughs come when people venture beyond their area of expertise. Often it takes an outsider to ask the kind of dumb questions that may yield an unconventional solution. .... as Albert Einstein put it: “creativity is the residue of time wasted.”   [The Economist, Mar 17]

[Paula Stephan] argues that universities have adopted the management practices of real estate shopping malls, allocating space to the highest bidder with little concern for the totality of the scientific enterprise, the balance between disciplines, or the integrity of inquiry. Research with uncertain outcomes is discouraged when researchers rely on grants for their salary; collaboration is less likely when scientists are in constant competition. [Maryanna Feldman revieiwng Stephan's How Economics Shapes Science, Science, Mar 9, 12]

Electrons and crowdsourcing conquer ink. In 1768, a Scottish engraver named Andrew Bell and a printer named Colin Macfarquhar set ink to paper to create three cross-referenced volumes known as Encyclopaedia Britannica.  On Mar 12, 2012, Encyclopaedia Britannica Inc. said it would stop printing its namesake books,  [Shalini Ramachandran and Jeffrey Trachtenberg, Wall Street Journal, Mar 13] A knowledge gap will thus arise from lack of editing of blogs and Wikipaedia and other crowdsourcing. 

Louisiana State Senator Karen Carter Peterson has again introduced a bill SB 374 to repeal the Louisiana Science Education Act, legislation passed in 2008 that allows science teachers to use supplemental instructional materials (for example, on intelligent design) if approved by the local school board. The repeal effort has garnered the support of 75 Nobel laureates. [AAAS, Mar 13] When it comes to religion as science, no number of Nobelists will have any effect on Bible Belt states.

China’s leaders know this, and are pouring billions of dollars into research and development. The current five-year plan calls for “indigenous innovation”, which the government thinks it can foster by subsidising “strategic” industries and strong-arming foreign firms to transfer intellectual property to budding national champions. That system of state capitalism worked when the aim was to copy and adapt other people’s ideas in the cheapest way possible. But can new ideas truly be created by fiat? Elsewhere governments have tended to run into two problems: the state is not a good innovator, and it gets in the way of others who are. Is China really so different? [The Economist, Mar 10]  In America, politicians with tax money to spend on constituents love to spout innovation,, small business, and jobs in the same sentence. What they cannot do is prove that any program combining the three elements has ever produced permanent economic benefit.

if nuclear power teaches one lesson, it is to doubt all stories of technological determinism. It is not the essential nature of a technology that matters but its capacity to fit into the social, political and economic conditions of the day. If a technology fits into the human world in a way that gives it ever more scope for growth it can succeed beyond the dreams of its pioneers. The diesel engines that power the world’s shipping are an example; so are the artificial fertilisers that have allowed ever more people to be supplied by ever more productive farms, and the computers that make the world ever more hungry for yet more computing power. There has been no such expansive setting for nuclear technologies.  [The Economist, Mar 10]

Research and innovation have led the Bay State’s economic recovery and remain strong, according to a new report from the Massachusetts Technology Collaborative’s John Adams Innovation Institute.  The report, called the Index of the Massachusetts Innovation Economy, examined such metrics as patents, academic publications, and venture capital funding in reaching its conclusions.  ....   The institute describes its mission as fostering the Bay State’s “innovation ecosystems.”     [Chris Reidy, Boston Globe, Mar 7]  Meanwhile, The chief executive of French drug maker Sanofi SA, which last year acquired Genzyme Corp. of Cambridge, said Tuesday that his company has established a presence in the Boston area because of its innovation ecosystem. Citing the area’s dense cluster of universities, hospitals, biotechnology start-ups, and venture capital firms, Christopher A. Viehbacher [said]“I think the most fertile environment in the world today is right here in the Boston-Cambridge area.”  [Robert Weisman, Boston Globe, Mar 7]

Duhigg writes, “In 2010, 82% of Alcoa locations didn’t lose one employee day due to injury…On average, workers are more likely to get injured at a software company, animating cartoons for movie studios, or doing taxes as an accountant than handling molten aluminum at Alcoa.” ... Aloca’s safety obsession required a way to share real time safety data between offices, so O’Neill had the offices linked up in a computer network. It seemed natural to employees to use that network to share other useful business information, so Alcoa was faster to respond to market demands and price information. Alcoa doubled their profit from aluminum siding because a worker suddenly felt important and “listened to” enough to make a suggestion about the way Alcoa set up the machines that painted the siding. Machines were redesigned to protect worker safety, and their new reliability meant more reliable aluminum and better products. Alcoa’s costs went down. Their stock price went up by 200%.  [Sarah Skwire, http://knowledgeproblem.com/, Mar 5]

Be skeptical for now, gentlemen. But remember every scientific truth goes through three stages. First, people say it conflicts with the Bible. Second, they say it has been discovered before.  Last, they say they always believed it.---- A character in Matthew Pearl's new novel The Technologists set in the first years 1868 of what would become MIT.

Eli Lilly, which boasts one of the largest pool of medical researchers in the country, wants help from a few more scientists. The Indianapolis company said today it is kicking off a new program to allow its scientists to collaborate more closely with with outside, academic resarchers in an effort to boost its drug pipeline.  [John Russell, Indianapolis Star, Feb 28]  Why is a big company seeking only big entities for help?  1. big understands big; 2. small companies don't have any competitive advantage in scientific competence.

Investment capital comes from everywhere. Since 2010, Chinese companies have invested more than $17 billion into oil and gas deals in the U.S. and Canada, according to data provider Dealogic, giving their energy-thirsty nation a long-coveted foothold in a region known for innovative new drilling techniques. [Ryan Dezember and James Areddy, Wall Street Journal, Mar 6] The idea that the government has to invest in private concerns because of a lack of investors should be held to a high standard for "market failure" and not just special pleading by the beneficiaries. SBIR's raison d'etre would not very well satisfy such a high standard, at least for the huge amounts being diverted from open competition. Although there is a "market failure" for some nursery-stage technology, the bulk of SBIR is going to R&D work that benefits only the federal agencies. 

In the eighth annual Connecticut Women of Innovation awards, the prize winner for Collegian Innovation and Leadership: Nicole Wagner, graduate student studying molecular and cell biology at UConn; chief executive of LambdaVision (NSF supported, no SBIR) [Janice Podsada, Hartford Courant, Mar 5, 12].....The funds are expected to help LambdaVision work with the Center for Innovative Visual Rehabilitation to run proof-of-concept studies on its protein-based retinal implant at the Boston VA Medical Center. The implant is intended to bring eye sight to patients with age-related macular degeneration and Retinitis Pigmentosa. ... created from the UConn R&D Corp., was founded in 2009 from technology developed by UConn biological and physical chemistry professor Robert Birge. [Michelle Lang, Mass High Tech, Oct 3, 11]  LambdaVision is an ultra-high-resolution visualization and networking instrument designed to support collaboration among co-located and remote experts requiring interactive ultra-high-resolution imagery. [LamdaVision  website]

We have no say in which companies choose to raise capital through the stock market. The number of listed stocks has declined dramatically over the years. Public companies have dropped from 7,450 in 1997 to 3,750 today, and this number continues to shrink each year.  ... Privately-held businesses are a major driver of our economy.[Rick Ferri, Forbes, Feb 27] 

federal applications, said more 100,000 direct at 1603-fundedprojects. but a wall street journal investigation found evidence far fewer. some plants laid off workers. Others closed.  .....  number jobs created or saved is largely based on formulas, mathematical models reports by recipients, rather than actual tallies. ....  40% funding, $4.3 billion, went 36 wind farms. during peak construction, they employed an average 200 workers apiece—a total of roughly 7,200 jobs. now, those projects employ about 300 people, according to the companies and economic development officials.On federal applications, companies said they created more than 100,000 direct jobs at 1603-funded projects. But a Wall Street Journal investigation found evidence of far fewer. Some plants laid off workers. Others closed.  .....  the number of jobs created or saved is largely based on formulas, mathematical models and reports by recipients, rather than actual tallies. ....  About 40% of the funding, $4.3 billion, went to 36 wind farms. During the peak of construction, they employed an average of 200 workers apiece—a total of roughly 7,200 jobs. Now, those projects employ about 300 people, according to the companies and economic development officials.  [Jeanne Dugan and Justin Scheck, Wall Street Journal, Feb 24]  Imagine if the WSJ got interested enough in SBIR's claims to go count noses and dollars after SBIR awards.

Regional economic development groups have taken up the idea of economic “gardening”. The philosophy there is that regions should focus on core strengths and home-grown businesses, rather than squabbling with their neighbours in an effort to win a new car plant. ...  the effects of start-ups on employment may be modest. Perhaps as a result of the recession, the number of new companies that actually employ people is declining. [The Economist, Feb 24]  But the small biz myth endures of wholesale job creation, while the question of longevity  of the jobs is quashed.

we idealize America’s present culture of innovation too much. In fact, our trailblazing digital firms may not be the hothouse environments for creativity we might think.  ....  Bell Labs produced a startling array of other innovations:  transistor, silicon solar cell, laser, communications satellites, fiber optic cable systems, Unix and C, ....  Steven Chu, secretary of the Department of Energy, won a Nobel Prize in 1997 for his work at Bell Labs ... Revolutions happen fast but dawn slowly. To a large extent, we’re still benefiting from risks that were taken, and research that was financed, more than a half century ago.  ..... [History does not support] a belief that small groups of profit-seeking entrepreneurs turning out innovative consumer products are as effective as our innovative forebears.    [Jon Gertner, New York Times, Feb 26]  The SBIR advocates make self-serving claims that their kind creates jobs and an economic future. Congress goes along with little apparent thought beyond the politics.

Prizes can reward such unexpected developments, whereas all too much funding of research and development merely perpetuates the predictable.  [Matt Ridley, Wall Street Journal, Feb 25] 

to borrow a phrase from P.J. O’Rourke, age and guile can still beat “youth, innocence and a bad haircut”. It is one thing to invent a clever new product but quite another to hire employees or build a sales machine. And even when it comes to breakthrough ideas, age may still be an asset.  .... Why finance a 40-year-old (with a family and mortgage) when you can back a 20-year-old who will work around the clock for peanuts and might be the next Mr Zuckerberg? ....  There were twice as many successful founders over 50 as under 25, and twice as many over 60 as under 20.    [The Economist, Feb 24]

global [solar] panel-manufacturing capacity has grown 12-fold in five years, but about a third of that lies idle. ... The ability of low prices to spur demand is weak because solar-panel sales are so reliant on subsidies.  ....  Germany may cap subsidized purchases at a fraction of last year's level, according to Navigant Consulting. Canadian province Ontario also announced subsidy cuts, as did suddenly cash-strapped Spain and Greece. [Spencer Jakab, Wall Street Journal, Feb 23]  Austerity hurts subsidy beneficiaries, except of course SBIR that wanted and got a bigger piece of a shrinking pie. But politicians being politicians, it's inevitable that they'll devise ways to dole out favors [John Tammy, realclearmarkets.com]

Ben Einstein is raising money and laying the groundwork for a new accelerator program, Bolt, that would focus exclusively on entrepreneurs who want to design physical products.  [Scott Kirsner, Boston Globe, Feb 17]

Wake Forest BioTech Place debuted Tuesday as a symbol of collaboration as much as a promise of transformative life-science research in the community.  The 242,000-square-foot facility is the biggest project - at a cost of $100 million - ...    considered the largest capital investment in downtown Winston-Salem history.  ....  two floors filled with rows of lab space for biochemistry, microbiology, immunology, physiology and pharmacology.  It also contains an incubator space to entice startup companies and researchers wanting to be near prominent Wake Forest Baptist Medical Center researchers.  [Richard Craver, Winston Salem Journal,  Feb 22]  Now if the nativist enemies ofimmigration would realize the potential of some bright foreign sci-tech folks ....

Christopher Columbus didn't know where he was going when he set out and he didn't know where he had been when he got back. But was Amerigo Vespucci, who died 500 years ago today and after whom America was named, any better informed?  [Peter Popham, The Independent, Feb 22]

from 1991 to 2008 as an "Age of Optimism" because all the world's major powers had reason to be satisfied with the way the globalized world system was working for them. ...  Since then, it has become much harder to argue that globalization has created a win-win world. Instead, Americans are beginning to wonder, with good reason, whether a richer and more powerful China might mean a relatively poorer, relatively weaker United States. [Gordon Rachman, Foreign Affairs, Feb 12]  One contributor to that satisfaction was the extra money spent in the economy from government deficit finance. 

The share of American workers in the science and engineering professions fell slightly in the past decade, ending what had been a steady upward trend in the proportion of workers in fields associated with technological innovation and economic growth. ....  The drop could result from a number of factors, said Mark Mather, a demographer at the PRB, including a decline in manufacturing in the past decade. Factories often employ large numbers of engineers in their design and production processes.  [Conor Dougherty and Rob Barry, Wall Street Journal, Feb 17] 

in America our policymakers have also been forced to reduce symptoms rather than cure the underlying disease – because that disease is a 30-year addiction to debt-fueled consumption and we don’t know how to quickly create new, sustainable engines for economic growth.  As a result, most economic policy in the U.S. in the past three years has bought time by supporting consumer spending.  [pimco.com, Neel Kashkari, Feb 15]  And no beneficiary of a government handout is volunteering to take less than the most they can get.  Let the other guys practice sensible public economics.  

Help on the way.  Nexteer Automotive (Saginaw MI); no SBIR)  Saginaw's biggest remaining industrial employer, was on the verge of closing less than three years ago, its 3,000 or so jobs in danger of evaporating, when the Chinese showed up. ... In 2010, Pacific Century Motors, controlled by Aviation Industry Corp. of China and Beijing E-town International Investment Co., an investment arm of the city of Beijing, bought the money-losing auto-parts maker from its corporate parent, General Motors , for about $450 million.  ...  Today, few people in town are wringing their hands about the Chinese. Inside a 59-year-old factory at Nexteer's sprawling complex, contractors are ripping out antiquated machine lines and installing new equipment to produce an electronic steering system for the next generation of GM's large pickup trucks and SUVs. The company, for years known as Saginaw Steering Gear, has hired more than 100 engineers in Saginaw last year and is looking for 80 more this year. ... Today, few people in town are wringing their hands about the Chinese. Inside a 59-year-old factory at Nexteer's sprawling complex, contractors are ripping out antiquated machine lines and installing new equipment to produce an electronic steering system for the next generation of GM's large pickup trucks and SUVs. The company, for years known as Saginaw Steering Gear, has hired more than 100 engineers in Saginaw last year and is looking for 80 more this year.    [Joseph White and Norihiko Shirouzu, Wall Street Journal, Feb 11]  Reverse outsourcing. 

Less may be more.  U.K. drug maker AstraZeneca PLC said Thursday it would eliminate another 7,300 jobs, bringing its total cuts over the past five years to nearly 30,000.....  Among other economies transformed the company into a leaner organization that is now outsourcing much of its drug research, making it one of the starkest examples of an industrywide trend. AstraZeneca is ripping up some of its research roots in Europe and North America and forging more virtual research alliances with academic institutions and small biotech companies.  [J Whelan and S Stovall, Wall Street Journal, Feb 3]  Another opening for SBIR companies funded by NIH which actually reads commercialization stories and demands a serious twelve page plan for Phase II SBIR proposals.

Their business models depended on using radically new technologies to bring down the cost of making solar panels, ignoring the truism that new technologies are initially almost never cheaper than well-optimized existing processes. And neither company had products innovative enough to induce most customers to pay a premium price. Evergreen and Solyndra faced many unexpected market changes—among them a sudden drop in silicon prices and the overproduction of solar panels—but the ability of competing companies to continue lowering their manufacturing costs for more conventional solar panels shouldn't have been a surprise  [David Rotman, Technology Review, J/F12]

The Nasdaq Index rose to an 11-year high of 2906, although still well below its all time Y2K high or 4572 that arrived in pretty much a straight line from 56 in  1974. Older folks remember that 1974 was a glum year for stockholders.

"The scale of energy is so big it's very tough to say energy is going to get solved by small companies," says Banholzer. It's not until you've actually begun manufacturing that you "get a look at your true costs and warts," he says. In energy businesses where a demonstration plant might cost $500 million, "the venture-capital model breaks down," he adds. "The big question is: can small companies ever compete with big companies in this area?"   .... But it also true that small companies are working on some of our most promising technologies, especially at the intersection of new materials and energy. If those technologies can be produced economically, they could greatly expand existing markets. The challenge for the startups, then, is to figure out a way to make their technologies using current manufacturing know-how while developing products that are radical enough to disrupt established technologies.  [David Rotman, Technology Review, J/F12]

According to Mr Kahneman, the chances of an American small business surviving for five years are just 35%. But ask individual entrepreneurs about their prospects and 81% think they have a better than seven-in-ten chance of success.  This self-confidence may be innate, just as most people think they are better-than-average drivers.  [The Economist, Jan 28] 

A typical large company cannot make changes fast enough when the market shifts, people can they are the ones who typically take their ideas and form a company around them.  [commenter, Tech Review, Jan 12]  Which is the only compelling reason for government to fund R&D in small companies, but only in companies that are market driven and actually agile. For standard government R&D, there is no compelling reason to favor small companies who are no more competent than other entities in their field Their claims of market failure are all convenient myth. 

If at first, ... a friend took [novelist Robert Harris] to see a hedge fund in London that was relocating to Geneva, partly because it could recruit people from the Large Hadron Collider.  [Edward Platt, Newsweek, Jan 30]  Harris's latest imagines software that can sense panic in a financial world.

A correspondent can foresee a day when wireless connectivity using LTE renders landlines redundant. Clearly, fixed and mobile communications are converging. [The Economist, Jan 7]

Merely counting pennies is no way to measure national prowess. Research spending is an input, not an output. many a clever gizmo produced by well-endowed Japanese corporate labs has turned out to be worthless. Useful innovation means fresh thinking that creates value.   [The Economist, Jan21]  If you cannot sell your SBIR "innovation" to a decent size market, what have done except make the governemnt wiser?
“Her great virtue,” Larkin told an interviewer in 1979, “is saying that two and two makes four, which is as unpopular nowadays as it has always been.”
  [Julian Barnes, New York Review of Books, Feb 23] on Margaret Thatcher The Iron Lady

It's totally implausible to think that there's going to be a surge in manufacturing jobs. [Laurence Katz, Harvard economist]  Nevertheless, we are in a polirtical campaign in which promises do not have to match facts.

it small so much new businesses typically power job growth during economic recoveries. trouble is, that engine isn t firing on all cylinders this time around. even as pace company closings returned normal, prerecession levels by end 2010, the formation of start-ups continued to lag behind. [Kelly Evans, Wall Street Journal, Feb 3]  One of the myths of SBIR is that the money helps create jobs by funding small biz, when the facts are that the mission agancies that control most of the SBIR money keep funding companies that have been feeding on SBIR for three decades with little record of economic growth contribution.  But then, myths are the power speech of politics.

while over three decades Kodak’s Rochester-area employment dropped to fewer than 7,000 jobs from 61,000, the community itself gained a net 90,000 jobs. That’s because the Rochester economy is more diverse than most realize — in part, surprisingly, because of Kodak. The high-skilled workers it let go over the years created a valuable labor pool for start-up companies, particularly in optics and photonics.It also helps that Rochester has a strong higher-education sector, which has likewise been supported by Kodak. The University of Rochester became a leading research center through gifts from Kodak’s founder, George Eastman, who also gave generously to the Rochester Institute of Technology.  [Duncan Moore, New York Times, Feb 3]  The ugly reality of technology as an industry is that government subsidy of tech in anotherwise tech sterile enviromment will not produce magical economic growth, only local votes for as long as the subsidy lasts.

Trees don't grow to the sky. More than half of its users access Facebook through a mobile device, like these users in Jakarta, Indonesia. But Facebook serves no ads on its mobile products. That's a problem. Other vulnerabilities include Facebook's dependence on Zynga for revenue, the inevitable decline in user growth rates, and the concentration of governing power held by Mark Zuckerberg[hris O'Brien, San Jose Mercury News, Feb 2]  Software attracts competitors who have little capital barrier,and the established company has little to hold its customers. All of which is one reason that government subsidy, like SBIR, isn't needed for software if economic growth is the object.

idea sharing is what EvoNexushopes to foster in its new downtown [San Diego] incubator for young technology companies.  .... trying to mimic the success of the South of Market neighborhood in San Francisco, where a hub of software and Internet companies has sprouted.  .... So far, six companies have graduated from the University City-based EvoNexus program. They have raised a combined $55 million in venture capital.  Mike Freeman, [utsandiego.conm, Jan 31]

Arkwright's real claim to fane was that he was successful [arranged, combined, and used the inventions of others] . the first who knew how to make something out of other men's inventions .. to raise the necessary capital, he must have displayed remarkable business ability, together with a curious mixture of cleverness, perseverance, and daring. [Paul Mantoux, The Industrial Revolution in the Eighteenth Century, 1928]

In January 2012, we sit again on the cusp of three grand technological transformations with the potential to rival that of the past century. All find their epicenters in America: big data, smart manufacturing and the wireless revolution. ... Information technology has entered a big-data era. Processing power and data storage are virtually free. ...  Smart manufacturing. This is the first structural shift since Henry Ford launched the economic power of "mass production."...  the unfolding communications revolution where soon most humans on the planet will be connected wirelessly. Never before have a billion people—soon billions more—been able to communicate, socialize and trade in real time. [Mark Mills and Julio Ottino, Wall Street Journal, Jan 30]  

More and more people around the world are becoming entrepreneurs, according to a Global Entrepreneurship Monitor 2011 report. The world’s “innovation-driven” economies saw an increase of 22 percent in early-stage entrepreneurship in 2011, as measured by the number of people operating a business that’s less than 3.5years old.  ... In the United States, such activity increased 60 percent last year from 2010.  [Olga Kilzan, Washington Post, Jan 29]

Japanese-owned factories and skills account partly for the fact that manufacturing production in the U.S. has not declined, as some doomsayers claim, but has in fact expanded by about one-third over the past decade. There hasn't been a corresponding increase in factory employment—there has been a decline—because robotics (also pioneered by Japan) have made production more efficient.
  [George Melloan, Wall Street Journal, Jan 27]

Entrepreneurial North Carolina companies with high growth potential have created 40,560 jobs over the past two decades.  [says] Durham-based CED, an entrepreneurial support group. The study represents the first such accounting ever compiled, said Joan Siefert Rose, CED's president.  ...  of the 1,823 entrepreneurial companies formed since 1992 in North Carolina, 78 percent were "bootstrapped," or self-funded, either by design or because they were unable to raise outside funding. The 397 companies that did attract venture capital or other sources of private capital raised a total of $7.7 billion. [David Ranii, Raleigh News & Observer, Jan 26]  No mention of the net job growth in and by these companies by accounting for jobs that soon disappeared. Advocates and politicians for favorable government treatment of small biz love such one-sided numbers. Oh, never mind, we have a democracy in which giant banks and small companies (with as many as 500 employees) beg for and get government favor in return for helping politicians get re-elected. We've survived for 220 years with voters who know next to nothing about economics.

For human-computer conversations, 2012 is going to be a great year. We might actually start having proper, fluent exchanges with robots, chatting away as if we're the same species. All this is very fitting, as it's the centenary of Alan Turing's birth. He was the AI pioneer who suggested we'll one day create computers so lifelike and responsive, we won't be able to tell them apart from humans. ... The robotics guru David Hanson predicts even greater things for 2012. He says we'll pile so much information into our robots that they will burst spontaneously into life and become sentient, self-determining beings, evolving in ways we cannot imagine.    [Jon Ronson, The Guardian (England), Jan 21]

There is still a good amount of money going toward late-stage development of drugs people started working on 10-15 years ago. But there is an alarming drop in support for today’s cutting-edge biotech startups. Last year, just 153 U.S. biotech and medical device startups got their first round of financing, the lowest amount of seed investment activity in 15 years, as reported by Ryan Flinn of Bloomberg News. ....  cuts, cuts, cuts. The National Institutes of Health, the primary government agency that supports basic biomedical research, used to write checks for one out of every three grant applications, but it’s now down to about one out of every six, NIH director Francis Collins said earlier this month at the JP Morgan Healthcare Conference. Pharma companies are cutting back on R&D, firing workers left and right, and leaning on cheaper outsourced vendors everywhere they can. As many as one-fourth to one-half of biotech venture capitalists are thought to be slowly going out of business, as they are unable to raise new investment funds.  [Luke Timmerman, xconomy.com, Jan 23]

In the information sector, American domination continues to mount, contrary to predictions of decline over the past two decades. Although high-tech manufacturing has shifted largely to Asia, Americans rule the increasingly strategic software sector.   American-based companies, who constitute more than two-thirds of the world’s 500 largest software companies, including  nine of the top ten.  Outside the U.S., there are no significant equivalents of Apple ,Google, Microsoft, Amazon and Facebook. Hollywood, for its part, rules the entertainment world, producing 40% of world’s audiovisual exports, a dominion that troubles China’s President Hu Jintao, who recently complained  that the “cultural fields” represent “the focal area” for Western “infiltration”.  [Joel Kotkin, Forbes, Jan 19]

The ten largest economies in Asia now spend roughly $400 billion a year on research and development (R&D)—as much as America, and well ahead of Europe’s $300 billion. China’s investment leapt 28% in a year, propelling it past Japan to become the world’s second-biggest spender. ... But Research spending is an input, not an output. Many a clever gizmo produced by well-endowed Japanese corporate labs has turned out to be worthless. Useful innovation means fresh thinking that creates value.   [The Economist, Jan 21]

PerkinElmer, a global manufacturer with more than 500 employees in Shelton, is eliminating close to 75 jobs as it moves four product lines to England and Singapore.  [Mara Lee, Hartford, Courant, Jan 20]  Regardless of how many jobs in high tech companies shift offshore, the myth remains that government subsidy of high tech will save US employment. Like all subsidies, the rationales are invented to serve the beneficiaries. Which is why SBIR awards can accumulate to many tens of millions in companies that show no downstream economic return other than paying for the temporary jobs. And as long as the federal agencies can exercise complete autonomy in awarding the money, the zero-sum game will continue.

A survey of nearly 10,000 alumni of Harvard Business School found that 66 percent of respondents believe that the US is falling behind when it comes to competing in the global economy. Asked to evaluate how the trajectory of the US business environment compares with emerging markets, just 8 percent or respondents see the US pulling ahead. HBS professors Michael E. Porter and Jan W. Rivkin designed and conducted the survey  [Chris Reidy, Boston Globe, Jan 18]

 Competition escalating.  Although the long decline of manufacturing employment in the United States is often attributed to the cheaper wages in developing countries, China and developing countries in Asia have in recent years sought to lure more sophisticated manufacturing operations — and better jobs — by expanding their engineering prowess through government investment in education and research.  The decline in U.S. manufacturing as a share of the nation’s economy and employment over the past decade “is not solely due to low-wage competition,” the president’s Council of Advisors on Science and Technology wrote recently. “We cannot remain the world’s engine of innovation without manufacturing activity.” [Peter Whorisky, Washington Post, Jan 17]  What's more Global, U.S.-based companies such as 3M Co., Caterpillar Inc. and General Electric Co. have spent billions of dollars in recent years to expand their overseas research labs. Such companies aim to tap a broader pool of scientific talent, tailor products to overseas markets and curry favor with foreign governments by doing more research abroad. ...  In the six years through 2009, about 85% of the growth in R&D workers employed by U.S.-based multinational companies has been abroad, according to the National Science Board,  [James Hagerty, Wall Street Journal, Jan 18]  In this political season, pay no attention to the campaign nonsense of ideas for solving America's declining competitiveness with more high paid manfacturing jobs through lower taxes. Americans want cheap goods without accepting the reality that cheap goods need either cheap jobs or fewer jobs.  Foreign countries are willing to provide the cheap jobs without medical insurance or pensions.  Our technology gains raise productivity whose purpose is to make more and better goods with fewer jobs.  The political system has no solution because its goal is votes from bribing constituents with favored policies. And SBIR advocates are just one of the many constituent groups seeking advantage with no economic proof of its value.

“There’s no crisis of capitalism,” says Meghnad Desai, emeritus professor at the London School of Economics. “There’s a crisis of western capitalism, which has gone geriatric. The dynamic capitalism, with its energy, innovation and sheer greed for growth has moved east.”  [David Pilling, Financial Tines, Jan 16]

Between January and September last year, roughly 240 new high-tech and biotech enterprises were launched in San Diego County, positioning 2011 to be the best year for tech startups since the recession began, according to Connect, a support organization for the local tech industries. .... Last year, venture capitalists invested around $200 million per quarter in San Diego firms - less than half the rate they were investing before the recession began. And there’s no sign of the situation improving anytime soon.   [Dean Calbreath, signonsandiego.com, Jan 15]  SBIR could be a boon to startups if the federal agencies cared about economic impact of its investments.  But the agencies have no interest in anything other than their own efficiencies and programs. 

Foreign policy is like hitting a baseball: if you fail 70 percent of the time, you go to the Hall of Fame.  [Robert Kagan, The New Republic, Jan 12]

We are today living in what the scholar Shoshana Zuboff has labeled “the age of the smart machine,” in which technology is increasingly able to substitute for more and higher human functions. Every great advance for Silicon Valley likely means a loss of low-skill jobs elsewhere in the economy, a trend that is unlikely to end anytime soon.  [Francis Fukuyama, Foreign Affairs, J/F12]

Invent a robot, make more enemies than friends. The United States faces a protracted unemployment crisis: 6.3 million fewer Americans have jobs than was true at the end of 2007. And yet the country's economic output is higher today than it was before the financial crisis. Where did the jobs go?  ....  new research is showing that advances in workplace automation are being deployed at a faster pace than ever, making it more difficult for workers to adapt and wreaking havoc on the middle class: the clerks, accountants, and production-line workers whose tasks can increasingly be mastered by software and robots. [David Talbot, Technology Review, J/F12]  Go ahead, ask the USG for a subsidy to develop a tech tool that raises productivity (=cuts manufacturing labor), especially if you can prove large commercial demand to a gullible government. As economies mature, manufacturing jobs sooner or later shrink, with or without globalization [as] people tend to spend less on goods and more on services [and] productivity growth tends to be higher in manufacturing than in services. ... U.S. workers who lose their jobs due to globalization have to take a 20 percent pay cut, on average, to get their next job, the worst decline of any country in the Organization for Economic Cooperation and Development (OECD)    [Richard Katz, Foreign Affairs, Jan 12]  Regardless of the economics, the politicians will talk as if they know how to fix the jobs situation. In fact, their explanations and policies tell that they know next to nothing and expect voters to respond to their focus-group tested patter.



Building out the US economy and resuscitating America's social contract with workers and the non-financial sector will require a massive shift in thinking and policy about industrial and domestic innovation policy.  China is is driving realities in the global economic sphere today; not the United States -- and America, to revive its economy, needs to figure out how to drive Chinese-held dollars (along with German and Arab state held reserves) into productive capacity inside the United States while not giving away everything. [Steve Clemons, The Atlantic, Dec 28] Massive shifts means abandoning the earmarking for interest groups (like SBIR recipients) and using economic criteria for government support of inovation.  Oh, don't worry; as long as politicians are elected to office, interest groups will get their claimed fair share.  in a culture that’s gone from speaking to shrieking, bad news is more welcome than good news.  [Allan Sloan, Wash Post, Dec 31]   2011 was the year that Americans were constantly told to avoid getting their hopes up. ...   Why can't we have 24 hours to enjoy the declining unemployment rate, the faster housing starts, the soaring stock market, the burgeoning GDP?  [Joe Queenan, Wall Street Journal, Dec 31]

Tougher plants than thought.The Environmental Protection Agency said Tuesday that a tiny fraction—less than one-tenth of 1%—of renewable fuels required to be used in the U.S. next year will come from cellulosic biofuel, based on projected production volumes, despite a congressional target that the fuel made from plant stalks and other inedible materials account for more than 3% of the total. The disappointment gets worse as "Once again, refiners are being ordered to use a substance that is not being produced in commercial quantities—cellulosic ethanol—and are being required to pay millions of dollars for failing to use this nonexistent substance. This makes no sense," he said. The developers were glad to get the federal subsidies after promising delivery and are now hoist on their own petard for failing to deliver. At least SBIR never imposes such penalties on failure.

Thriving and complaining. we have a structural jobs issue, but not an issue of making things and innovating. American manufacturing remains highly productive and a significant component of economic vitality, but it employs far fewer people (12 million or so and declining) and far more technology. It is a pillar of the statistical economy but not of employment. So too are the wondrous new worlds of Silicon Valley and social media, which thrived in 2011 and will continue to into 2012, but which primarily benefit those already doing well (if you can afford an iPhone and use one, you tend to have a college degree and do not face the same job challenges as a high-school-educated construction worker). In the year ahead, the gap between the digital haves and have-nots is likely to grow along with income inequality, but in a country of 300 million people, the number doing well exceeds the number struggling by a considerable margin. Not a reason to back-pat, but not cause for ritual group-excoriation either. [Zachary Karabell, The Daily Beast, Dec 27]  The complaints come from a population still living in the dream of post-WWII prosperity and demanding more government than they are willing to pay for. While their elected representatives have no great incentive to tell them that their dreams will not be coming true. Even programs like SBIR engage in the same illusion that more money can be diverted into their pockets without hurting the government programs that pay the bills.  More for me, and send the bill to ..... 

The Flaum Eye Institute at the University of Rochester Medical Center has launched a new initiative to accelerate the development and commercialization of new technologies.  Called theExcubator, the initiative builds on the region’s history of innovation in eye care, optics, software, and engineering to launch a new generation of technologies to treat diseases of the eye, officials said.   The Excubator will be a private company jointly owned by URMC and private investors, and it is designed to reduce the steep risk normally associated with high-tech startups by placing these ideas in the hands of businesses with a proven record of developing new technologies.  [Rochester Business Journal, Dec 22] 

In 1980, Abraham Karem, an engineer who had emigrated from Israel, retreated into his three-car garage in Hacienda Heights outside Los Angeles and, to the bemusement of his tolerant wife, began to build an aircraft. The work eventually spilled into the guest room, and when Karem finished more than a year later, he wheeled into his driveway an odd, cigar-shaped craft that was destined to change the way the United States wages war.  The Albatross, as it was called, was transported to the Dugway Proving Ground in Utah, where it demonstrated the ability to stay aloft safely for up to 56 hours — a very, very long time in what was then the crash-prone world of drones.  Three iterations and more than a decade of development later, Karem’s modest-looking drone became the Predator, the lethal, remotely piloted machine that can circle above the enemy for nearly a day before controllers thousands of miles away in the southwestern United States launch Hellfire missiles toward targets they are watching on video screens.  [Peter Finn, Washington Post, Dec 23]  If SBIR had existed in 1980, Karem couldn't have got one since he was not a US citizen in a political world that favors home cooking, however mundane.

Despite economic travails, the U.S., Europe and Asia all are expected to boost spending on research and development in the coming year, though not at the rate seen in 2011, a new report said.  global R&D spending is forecast to increase 5.2% to $1.4 trillion in 2012, according to Battelle Memorial Institute. [Gautam Naik, Wall Street Journal, Dec 16]

More questionable side effects.   A Philadelphia jury has awarded three women $72.6 million in compensatory damages [from Pfizer] over their use of a hormone replacement drug, and more could be coming when punitive damages are determined.  ...  dozens of lawsuits after a study found Prempro users had a much higher incidence of breast cancer.  [AP, Dec 8]  Every test of a new drug risks missing long term side effects, as every protit-making pharmaceutical firm knows. Yet the industry presses its supporting politicians to hurry along the clinical trials and other screening tests of the effect of a new molecule on the human body.  

“lean start-up.” Its foremost proponents include Eric Ries, an engineer, entrepreneur and author who coined the term and is now an entrepreneur in residence at the Harvard Business School, and Steven Blank, a serial entrepreneur, author and lecturer at Stanford.  [Steve Lohr, New York Times, Dec 6]

many of our students are looking at the growth story in Asia, in particular, and they see something happening that happens only once in a lifetime and they don't want to miss it,'' says Pulin Sanghvi, assistant dean and director of the career management center at Stanford's Graduate School of Business. ...   Stanford's business school has seen a spike in the number of graduates leaving the United States to start their careers  [Mike Cassidy, San Jose Mercury News, Nov 21]  A thought experiment:  why should the US limit its innovation SBIR nursery program to US-owned companies, most of whom are doing run-of-the-mill R&D for government agencies, when competitive foreign entrepreneurs are available and willing to innovate?  The answer is that SBIR is little more than eye-wash for Congress's wish to be seen helping American small biz.  If the program still limited the work to the US but allowed owners other than US citizens, the jobs would still be here (there's no limit on nationality of the workers, only the owners). 

More science, more trouble.  According to a report published by the U.K.'s Royal Society, there were 7.1 million researchers working globally across all scientific fields—academic and corporate—in 2007, a 25% increase from five years earlier. .... The number of research journals has jumped 23% between 2001 and 2010, according to Elsevier ... And  ... one of medicine's dirty secrets: Most results, including those that appear in top-flight peer-reviewed journals, can't be reproduced. [Gautam Naik, Wall Street Journal, Dec 2]

on the edge of town, Apple recently completed a massive $1 billion data center to help power its cloud computing products. Total new full-time jobs running the facility: 50. [Michael Rosenwaold, Washington Post, Nov 24] Productivity leads to more profits and fewer jobs, a long term challenge for politicians pretending to solve the unemployment problem. Their proposals are all bilge, as companies delight in taking the handouts meant to attract investment. Just as SBIR companies will take handouts with zero prosepcts of creating permanent jobs and other economic activity after the SBIR money runs out.

Rick also reports that Fred Patterson, consultant and great friend of SBIR is seriously ill with a form of cancer. Fred has joined a web site called Caring Bridge, that allows him to communicate with friends and family. He would very much appreciate hearing from you. You can reach him at www.caringbridge.org/visit/fredpatterson or if you'd rather just drop a private note to him, you can use fredsjourney@gmail.com

American solar panel makers, though, have had trouble competing with the Chinese, whose export industry has helped push wholesale solar panel prices down sharply — to $1 to $1.20 a watt of capacity today, from $1.80 in January and $3.30 in 2008.Three American solar companies that together represented one-sixth of American manufacturing capacity in the sector went bankrupt in August .... Four other American solar companies have laid off workers and cut output since spring of last year.  [Keith Bradsher, New York Times, Nov 21]

Arguably, the defining economic event of the 20th century was the rise of the American middle class.  Fortunes were made by entrepreneurs who built companies to serve this American middle class.  Car companies, energy companies, electronics companies, pharmaceutical companies, financial services companies…  Indeed, much of the Fortune 500 grew up by serving America’s growing middle class.  Today, most American entrepreneurs continue to be focused on building businesses that are fundamentally about serving the American middle class ... except for one thing: the defining economic event of the 21st century is likely to be the rise of the global middle class.  ....   I’d bet on entrepreneurs in emerging markets, the folks who deeply understand the growing global middle class — because they’re a part of it.  [Josh Green, venturebeat.com, Nov 6]  But since global middel class doesn't vote in America, our politicians don't try to understand them.

Over the last decade, most of the industry has been slashing research and development in favor of M&A and megadeals; many of the blockbusters coming off-patent were created by companies that no longer exist. "One current challenge the industry faces is that the wave of consolidation really leaves only about a dozen multinational pharma companies that have global reach. That's it," says Mr. Lechleiter [Eli Lilly CEO]. (Down from 30 or more not so long ago.)  [Joseph Rago, Wall Street Journal, Nov 19]

Not only is there an ongoing revolution in genomics and systems biology, Mr. Lechleiter continues, we increasingly have the tools to make use of this basic research and commercialize it. "A process that used to take years and years and rely too much on serendipity and conjecture can now be accomplished in a period of time that looks closer to months and months." Researchers are more "mission driven and deliberate" and, with a biological target, can "come up with a viable clinical candidate, something that we could hope to take into human testing" faster and with more confidence than ever before.  [Joseph Rago, Wall Street Journal, Nov 19]

the worshippers of this economic religion, built entirely on the altar of innovation, delude themselves if they think that high-tech manufacturing is of little value today. After all, we still live in a world of things -- from cars and cutlery to computers and cell phones -- and somebody still has to make them. If the U.S. doesn’t, then obviously it buys them from countries that do.That explains why the $30 billion trade surplus in high- tech products that the U.S. enjoyed 10 years ago has become a $56 billion deficit.The consequences of America’s offshoring craze run far deeper than trade deficits. The wholesale transfer of production offshore has also weakened the nation’s engine of employment, crippled its ability to bounce back from the recession and seriously eroded not only middle-class prosperity, but also our capacity to invent the products, and make the medical advances, of tomorrow.  [Henry Nothhaft, Bloomberg, Nov 15]  Nothhaft goes on to recommend a antional manufacturing get-well program with a multitude of federal tax handouts to manufacturers, especially start-ups. Which would match similar handouts by our foreign competitors to their manufacturers. A bonus would be its boon to tax lawyers and accountants as another zilliuon pagers are addded to the tax codes for the politicians to rail against in campaigns. 

The euro will not be safe until Europe answers some fundamental questions that it has run away from for many years. At their root is how its nations should respond to a world that is rapidly changing around them. What will it do as globalisation strips the West of the monopoly over the technologies that have made it rich, and an ageing Europe starts to look increasingly like the western peninsula of a resurgent Asia?  [The Economist, Nov 12] The global race is on, and  feel-good R&D programs will not suffice.  Although private firms can do whatever they want, public funding should advance ideas and technologies with a serious future impact on economic activity.  Funding run-of-the-mill stuff with SBIR, fior example, wastes most of the 3% diverted to the political handout. Of course, a free-market government should not be reducing business risk, only high technical uncertainty.

[Wenzhou] spearheaded Chinese manufacturing, building export industries around cigarette lighters, buttons and shoes, and transforming itself into a seedbed of investment capital. Its nouveaux riches captivated the rest of China with a special brand of unapologetic consumption, whether they were buying shanghai apartments, shanxi coal mines, or french wine.  Now, trust-based financing networks took the place of banks Wenzhou fueled its binge collapsing face slowing exports, a trend made worse europe s economic woes. property prices are down. Captains of industry have fled from debts, sometimes escaping loan sharks by taking their own lives, local authorities say. " Add to that strikes, heavy-handed policing, food scares and grisly score settling—for an annus horribilis in the Zhejiang province city of 9.1 million.  [James Arerddy, Wall Street Journal, Nov 15]

In the 1760s, a backwoods British potter named Josiah Wedgwood joined big-city merchant Thomas Bentley and created one of the world's first design-driven companies. Wedgwood and Bentley were remarkably like Jobs and Steve Wozniak, the co-founder of Apple Inc. Wedgwood and Wozniak were both geeks with deep knowledge of the technology. Bentley and Jobs were design futurists who could imagine how consumers might respond to new products.  Both companies came to dominate their industries through a combination of entrepreneurial drive, technological innovation and aesthetic savvy.  [Regina Blaszczyk, Bloomberg, Nov 11]

Tektronix laid off an unspecified number of Oregon employees this week as its parent company [Danaher] cuts costs to prepare for "more challenging" times ahead. ...  Danaher eliminated hundreds of Tektronix jobs after acquiring the company four years ago. ... Additionally, Tektronix sent an unspecified number of production jobs to China in 2009. It also cut employee salaries from January of that year until March 2010. ....  Tek, founded in 1946, is the grandfather of many Oregon technology businesses. It had 4,500 employees when Danaher acquired it in 2007,... . It won't say how many remain. [Mike Rogoway, The Oregonian, Nov 4]

[Brink Lindsey] said the number of new employer businesses created annually began falling after 2006, dropping 27 percent by 2009. Additionally, the average number of employees per new company has been trending gradually downward since 1998, while the pace of job growth at new businesses during their first five years has been slowing since 1994. So we have fewer startups hiring fewer people and tending to grow more slowly during their first five years. ..  But what if new enterprises are boosting productivity without boosting jobs? My hunch is that job gains may be stalled because technology has enabled existing employees to be more productive and has eliminated some jobs altogether. So what’s needed is the next step, in which startups and new businesses move beyond existing businesses and figure out the way to build something truly different that would take advantage of the Web and lower capital costs to create new industries instead of just remaking the old.   [Stacey Higgenbotham, Bloomberg Business Weeek, Nov 3]

Blockbuster video adversely affected the capital of movie theaters, Netflix adversely affected the capital of Blockbuster, and the combination of faster Internet speeds and tablet devices may depreciate the organizational capital of Netflix.  [Arnold Kling, The American, Nov 3]

without its major corporations the U.S. economy would not be, and would not remain, the largest and richest in the world. Big businesses invest significantly more in research and development than smaller firms. And they are far better placed to capture economies of scale and scope, which is crucial to making U.S. goods and services competitive abroad. Large companies account for more than 70 percent of U.S. exports. ...  The largest firms pay about 50 percent more and provide 10 percent more working hours per week than small companies.  [Gary Hufbauer and Matrin Vieiro, Foreign Affairs, Nov 4]

The Internet's impact on global growth is rising rapidly. The Internet accounted for 21 percent of GDP growth over the last five years among the developed countries MGI studied, a sharp acceleration from the 10 percent contribution over 15 years. Most of the economic value created by the Internet falls outside of the technology sector, with 75 percent of the benefits captured by companies in more traditional industries. The Internet is also a catalyst for job creation. Among 4,800 small and medium sized enterprises surveyed, the Internet created 2.6 jobs for each lost to technology related efficiencies. [McKinsey report, May 11]

ideas are inherently unprofitable.  The U.S. Patent and Trademark office issues nearly 160,000 patents a year for everything from nanotechnology to jet-powered surfboards. Yet a mere 1 percent—just 1,600—reach the marketplace, according to the patent office. ...  what makes a company good at invention often makes it poor at capitalizing on the invention itself. ... [Steve] Jobs was so taken with the idea that he figured out how to manufacture the $400 Xerox mouse for $15. Today, Apple is a $66 billion company, with revenues three times those of Xerox. (Xerox did get stock in Apple for its troubles.)  [Matt Reilly, Bloomberg Business Week, Oct 27]

Technology has destroyed at least as many manufacturing jobs as China ever has or will. [Zachary Karabell, thedailybeast.com, Oct 28]

The question therefore arises of not how to stop the China export juggernaut but whether the country has a significant shelf life left as a major manufacturer.  ....  A number of multinationals as well as companies from Hong Kong, Taiwan and the Chinese mainland are moving some of their production to nearby Southeast Asian countries, particularly Vietnam and Cambodia, where wage rates are often a fraction of those in China.  [China Daily, Oct 26]

Mayor Thomas M. Menino said today that Comcast Corp. has begun to expand the availability of its advanced fiber network in a section of the South Boston waterfront that Menino has dubbed the Innovation District. The City of Boston is seeking to convince technology and biotechnology companies that they should relocate all or some of their operations to the Innovation District, and those types of businesses often require broadband services such as Comcast provides. [Chris Reidy, Boston Globe, Oct 27]Building on a decade of work by the Coalition for Plant and Life Sciences, BioSTL launched last month to provide funding and support for emerging bioscience companies. The group also will dedicate resources such as training and recruiting entrepreneurs and increasing venture capital investment to collectively benefit partner organizations working to increase bioscience activity in the region. Washington University in St. Louis, BJC HealthCare, and the St. Louis Life Sciences Project each committed $2 million per year for five years, totaling $30 million to launch the effort. A majority of the funds will be dedicated to pre-seed and seed investments to support new company formation   [SSTI, Oct 26]

Pull the plug and watch the crash.  After years of staggering growth, the clean-energy industry is headed for a crisis. In most of the Western countries leading the industry, the public subsidies that have propelled it to 25 percent annual growth rates in recent years have now become politically unsustainable. Temporary government stimulus programs -- which in 2010 supplied one-fifth of the record investment in clean energy worldwide -- have merely delayed the bad news. Last year, after 20 years of growth, the number of new wind turbine installations dropped for the first time; in the United States, the figure fell by as much as half. The market value of leading clean-energy equipment manufacturing companies has plummeted and is poised to decline further as government support for the industry erodes.  [David Victor and Kassia Yanosek, Foreign Affairs, J/A11]  Companies that live on subsidy die when the gravy train stops, which explains the near panic of the SBIR "technology coalition."

a simple reality: small businesses are, on the whole, less productive than big businesses, and though they do create most jobs, they also destroy most jobs, since, while starting a business is easy, keeping it going is hard. This is true around the world.  [James Surowiecki, The New Yorker. Oct ]

China now claims three-fifths of the world's solar-panel production capacity. Chinese solar-panel manufacturers such as JA Solar, now the world's largest, say companies from Silicon Valley and elsewhere blundered by betting on new technologies instead of focusing on making panels cheaper to produce. "It's not a pure technology business," said JA Solar Chief Executive Peng Fang, whose workforce grew from 4,000 to 12,000 last year. "If you invest in it as technology first and [cost reduction] second, you miss it. You need to reverse that."   [John Boudreau, San Jose Mercury News, Oct 23]  If commercial succeess is the goal, think cost.

Money spent isn't the measure. A report expected to be released Monday by consulting firm Booz & Co., says that few of the biggest R&D spenders crack the top 10 in terms of being considered "innovative" by their peers.  ...  The idea is to focus more on patient needs and marketplace trends in product development, says Dr. Mikael Dolsten, president of world-wide research and development at Pfizer. The company also plans to cut its R&D budget, currently over $8 billion, to as low as $6.5 billion as it focuses on fewer, targeted disease areas. Diversified technology company 3M, which spends relatively little money on its research and development, landing at number 86 on Booz's spending list, allows employees to spend 15% of their time exploring side projects. It also offers seed "grants" to encourage innovation. [Wall Street Journal, Oct 24]

Corey Wride came up with the idea for Movie Mouth, a company that uses popular films to teach foreign languages, when he was working in Brazil. He noticed that the best English speakers had picked it up from film stars, not school teachers. But people without a flair for languages find the “Brad Pitt” method tricky—actors speak too fast. So Mr Wride invented a computer program that allows users to slow films down, hear explanations of various idioms and even speak the actors’ lines for them. [The Economist, Aug 6]

American manufacturing companies cannot fill up to 600,000 skilled positions, even as unemployment numbers hover at historic levels, according to a survey released Monday from Deloitte & Touche and The Manufacturing Institute. [Rick Barrett, Milwaukee Journal Sentinel, Oct 17]

Entrepreneurs boost the economy by exploiting new ideas and business models in order to turn a profit. The ones that do this well don't stay small; they grow rapidly, helping to disseminate new technologies and create jobs. If your economy has a lot of small firms, that's an indication that some part of this process is broken.  ...  the OECD report on entrepreneurship, there are some worrying signs for Americans in the data. New firm formation is surprisingly and disappointingly low, for instance. It's good that the American economy enables successful businesses to grow rapidly, but it's problematic that there isn't a greater level of small business formation. I think there's a connection between obstacles to entrepreneurship, a shortfall in new firm formation in America, and the disappointing job creation performance of America's tech sector. [free exchange blog, The Economist, Sep 13]  If Congress ever wants SBIR and such handouts to generate economic asctivity beyond the government money, it will have to re-write the rules about investment criteria.

According to research funded by the charitable Kauffman Foundation, in 1980-2005 firms less than five years old created 40m net new jobs—equivalent to 100% of the net new jobs created in the entire American private sector. Alas, this magnificent hiring machine is sputtering. In the past three years—ie, roughly since the financial crisis of 2008—the number of new companies formed each year fell by nearly a quarter, and with it the rate of job creation by start-ups: from 3m new jobs a year on average to 2.3m in 2009. Had the rate of job creation remained what it was in 2007, there would now be nearly 2m more people employed in America BUT,  The study recommends that public resources currently aimed at small firms in general, such as those deployed by America’s Small Business Administration, should be concentrated on the gazelles. Success is far from guaranteed. The government has a lousy record of picking winners, as voters were reminded when Solyndra, a green energy firm for which the government guaranteed $535m in loans, went bust in August .[The Economist, Oct 8]

For most of this year, a start-up fever, fueled by Facebook Inc. and others, has gripped Silicon Valley. But as the number of tiny Web companies riding the frenzy has mushroomed, some in recent weeks have found it tough to procure new funding, investors and entrepreneurs say.That is pushing some entrepreneurs to look for "bridge" financing to keep forging ahead, or to cut the valuations they are seeking, the people add. The average valuations of young companies have dropped recently to $3 million to $5 million,  [Pui-Wing Tam, Wall Street Journal, Oct 13].

Mazda will stop producing vehicles with its signature rotary engines in June next year because of poor sales and the costs of meeting emissions standards.   .... introduced its first rotary engine car in 1967 and is the only automaker in the world that makes rotary engine vehicles  [Yuri Kageyama, AP, Oct 8]

A considerable amount of that cash has been accumulated in the last two years — and the totals exclude the substantial sums the companies hold abroad in foreign subsidiaries. Of course, it can be sensible for businesses to have a source of emergency cash, but many appear to be stockpiling so much that it’s hard to imagine what emergency they fear. To cite just one example, Google is holding more than $39 billion in cash. [Richard Thaler, New York Times, Oct 9]

Awesome, or commoditized.    We’re quickly moving to a new world where the wealth gap is compounding and increasing. We’re moving to a world that is going to look a lot like Hollywood: a few people enjoying insane success … and everyone else spends their days waiting tables. ... three forces that will drastically change work, compensation, and our value to each other forever: 1. A productivity boom will automate B- and C-player work. 2. Globalization will commoditize B- and C-player work. 3. A-players can have much more impact.  [Auren Hoffman, xconomy.com, Oct 5]

Do you remember back in the late 70′s, when the economy sucked, and no private entity would fund new technologies like computer startups Apple and Microsoft, so the government had to step in to provide the needed investment?  Yeah, neither do I.  [Warren Meyer, coyoteblog.com, Oct 6]

Productivity  When North Carolina's newest furniture factory is up and running, Mr. Cochrane expects to accomplish with 135 employes what it took 250 to do in the past. [John Bussey, Wall Street Journal, Oct 7]  Signs of manufacturing returning from China to the US where technology is cheaper than labor plus transport.  A study by McKinsey suggests that clean energy may produce jobs for highly skilled engineers, but it will not produce many jobs for U.S. manufacturing workers. ...  Sunil Sharan, a former director of The Smart Grid Initiative at General Electric, wrote in The Washington Post [Feb 26, 10] that the Smart Grid, while efficient and environmentally beneficial, will be a net job destroyer. For example, 28,000 meter-reading jobs will be replaced by the Smart Grid’s automatic transmitters. [David Brooks, New York Times, Oct 7]

Five computer chipmakers, including
IBM and Intel, plan to create a hub for nanotechnology in New York, committing $4.4 billion over five years for the venture. One part of the project, led by IBM, will spend $3.6 billion to develop two next-generation computer chips that are used in supercomputers and consumer devices. The other part focuses on the silicon wafers used to create microchips.  [Bloomberg Business Week, Sep 29]

Diversion and spin.  More than half of $4 billion in federal funds disbursed this year to spur small-business lending by community banks was used to repay bailout funds that the banks received under the government's Troubled Asset Relief Program. .... Despite the numbers, Deputy Secretary of the Treasury Neal S. Wolin said in a statement that the small-business lending fund has injected "billions of dollars" into communities all across the nation, "spurring small business growth and job creation."   [Emily Maltby and Angus Loten, Wall Street Journal, Oct 6] 

immigrants have founded 52% of Silicon Valley’s companies and created millions of American jobs. This won’t be the case in the future. [Vivek Wadhwa, Washington Post, Oct 4]  Whenever the economy slumps, nativists raise the walls against any foreigners in classic tribal instincts.

Researchers in Singapore have developed a flexible membrane that is not only more flexible than lithium ion batteries, but potentially more efficient as well. As Matthew Humphries puts it: "A lithium-ion battery costs $7 to store one farad of charge. The energy membrane reduces that down to 62 cents."  [Dan Costa, geek.com via PCmag, Oct 3]

at the same as we have all been pursuing learning for entrepreneurs, it isn’t clear that we have reaped much learning as to what exactly constitutes good or effective entrepreneurship education. Part of the reason for the continued proliferation of different methods is that no one really knows what works or doesn’t. [Carl Schramm, Forbes, Sep 28]  No worry, the SBIR people know the answer - government MONEY for them.

Wilson Greatbatch [92], whose invention of the implantable cardiac pacemaker has kept millions of hearts beating in rhythm, died ...received more than 150 national and international patents, including one for the pacemaker, which was first implanted in humans in 1960. Today, hundreds of thousands of people worldwide receive them every year.
  [AP, Sep 27]

Since the recession ended, businesses had increased their real spending on equipment and software by a strong 26%, while they have added almost nothing to their payrolls. [Kathleen Madigan, Wall Street Journal, Sep 29]  Technology sells but there will be fewer consumers to drive a consumption economy.  Eventually, government will adjust its thinking on how to handle the US economy in the face of productivity. Until then, expect much misguided speechmaking.

"Dr. Copper"  prognisticates. Copper prices have plunged 23% this month—a decline of 20% or more is commonly considered a bear market. ... far exceeded the slide in the stock market, ...  has been a good predictor of stock performance before, notably, in the peak of the financial crisis.  [Dicolo, Day, and Cheng, Wall Street Journal, Sep 29]

China's official statistics are like those of most governments only more so -- biased to make current conditions seem better than they are and often deeply contradictory.  [Jim Jubak, Sep 27]

Businessweek.com has dubbed Raleigh simply "the best American city." ...   edged out Arlington, Va., and Scottsdale, Ariz., for the top ranking. [John Murawski, Raleigh News & Observer, Sep 22]the US aerospace industry has for all practical purposes ceased research and development work on manned aircraft. All the projects now on the drawing board revolve around pilotless vehicles. Meanwhile, law enforcement agencies around the country eagerly await the moment when they can start operating their own UAVs. [Christian Caryl, New York Review of Books, Sep 29]

Twitter Inc. investor Union Square Ventures is laying the groundwork to raise another $150 million to $200 million that it could plow into new technology companies, people familiar with the plans said. ... Total capital raised by U.S. venture firms in the first half hit $8.14 billion, a 20% increase over the same period last year; yet, only 50 firms were responsible for that amount, compared with 81 a year ago. .... In the last two months, Union Square has invested in at least six start-ups    [Ante, Kreutzer, and Wilmer, Wall Street Journal, Sep 15]  But Union Square invests in business risks, not technology performance risks.

Doctors removed a billion of his T-cells — a type of white blood cell that fights viruses and tumors — and gave them new genes that would program the cells to attack his cancer. Then the altered cells were dripped back into Mr. Ludwig’s veins.At first, nothing happened. But after 10 days, hell broke loose in his hospital room. He began shaking with chills. His temperature shot up. His blood pressure shot down. He became so ill that doctors moved him into intensive care and warned that he might die. His family gathered at the hospital, fearing the worst.A few weeks later, the fevers were gone. And so was the leukemia. There was no trace of it anywhere  [Denise Grady, Nedw York Times, Sep 13]

working from home will not be so isolating if home is next door to where potential workmates live. As Richard Florida argues in “The Rise of the Creative Class”, talented knowledge workers are choosing to cluster together in cities such as New York, Los Angeles, London and Shanghai so they can interact with each other easily, both formally and serendipitously.  [The Economist, Sep 10]  The same applies to start-up companies in fly-over states and such.

PerkinElmer yesterday said it has agreed to buy Caliper Life Sciences for about $600 million in a deal joining two Massachusetts companies that sell imaging and diagnostic products and services to biomedical and environmental science labs worldwide. ... Caliper (one SBIR) was the name of a California company that acquired Hopkinton-based Zymark Corp. in a 2003 “reverse merger’’ that moved the acquiring company’s headquarters to Massachusetts.  [Robert Weisman, Boston Globe, Sep 9, 11]

For the third consecutive year, Switzerland ranked first in the forum’s annual competitiveness survey, which assesses countries based on 12 categories including innovation, infrastructure and the macroeconomic environment.The United States, which topped the list in 2008, continued its decline, also for the third year in a row, falling one place to fifth. The weaker performance was attributed to economic vulnerabilities as well as “some aspects of the United States’ institutional environment,” notably low public trust in politicians and concerns about government inefficiency.  [Matthew Saltmarsh, New York Times, Sep 8]

the launch of the first Austin Startup Week, with five days of new product demos, entrepreneurs pitching their businesses and a "startup crawl," where more than a dozen companies will be serving up drinks and tours.The idea is to spotlight Austin's emerging tech businesses and the people behind them. ... modeled after Colorado's Boulder Startup Week, which was started two years ago  [Lori Hawkins, Austin American Statesman, Sep 4]

Then there are the long-term structural problems plaguing the economy. There’s strong evidence to suggest that the rate of technological innovation has been slowing down. In addition, America is producing fewer business start-ups. Job creation was dismal even in the seven years before the recession, when taxes were low and Republicans ran the regulatory agencies. As economist Michael Spence has argued, nearly all of the job growth over the past 20 years has been in sectors where American workers don’t have to compete with workers overseas. [David Brooks, New York Times, Sep 2]

A [Milwaukee] warehouse will be converted into a research lab and offices for water technology business start-ups, a project that could spur development of a nearby business park that targets water-tech companies. ....   will include a water flow lab provided by Badger Meter Inc., which businesses and University of Wisconsin-Milwaukee researchers can use to run tests to help convert ideas into products.  [Tom Daykin, Milwaukee Journal Sentinel, Sep 2]

The bankruptcies of three American solar power companies in the last month, including Solyndra of California on Wednesday, have left China’s industry with a dominant sales position — almost three-fifths of the world’s production capacity — and rapidly declining costs.... Some American, Japanese and European solar companies still have a technological edge over Chinese rivals, but seldom a cost advantage, according to industry analysts.  [Keith Bradsher, New York Times, Sep 2] As countless SBIR awardees discover, sweet tech is not enough for economic success. SBIR's economic problem is that the proposers pretend economic success and the government pretends to believe them.  we’ve got the weakest market for start-up companies in two decades. Capital is flowing not into ventures but into hedges. [Bret Swanson, Forbes, Aug 30]

Saying that Austin's pool of technical workers is becoming tapped out, 30 Austin high-tech CEOs are heading to California this month in search of talent. ... According to the technology council, several dozen Austin companies are recruiting technical talent, including software engineers, data engineers and information architects.   [Lori Hawkins, Austin American Statesman, Aug 31]

indigenous innovation measures have been counterproductive for China itself. Instead of inducing technology giants to shift leading-edge R&D work to China at a faster pace, its effect has been exactly the opposite.   China today hosts about 1,000 foreign-owned R&D labs. Yet, with rare exceptions, these labs focus primarily on local adaptations of innovations developed elsewhere, rather than the development of leading-edge technologies and products for global markets. Tech company executives are eager to leverage the quality and scale of China's talent pool. However, given the indigenous innovation measures, they do not trust China as a secure location for leading-edge R&D. [Anil Gupta and Haiyan Wang, Wall Street Journal, Sep 1]

Companies making batteries for electric vehicles appear headed for a shakeout as government subsidies to foster the emerging industry could result in a glut by the middle of the decade.  Industry watchers say some companies will be acquired as the sector consolidates, while others won't generate enough sales to achieve critical size and will go out of business. "There's clearly going to be overcapacity around 2014 and 2015, if you just take the number of vehicles that will be produced and do the calculation of how many batteries will be needed," says Oliver Hazimeh, partner and head of the global e-mobility practice at PricewaterhouseCoopers LLC's PRTM Management Consulting  [David Pearson, Wall Street Journal, Aug 31]Widely grown corn plants that Monsanto Co. genetically modified to thwart a voracious bug are falling prey to that very pest in a few Iowa fields, the first time a major Midwest scourge has developed resistance to a genetically modified crop.The discovery raises concerns that the way some farmers are using biotech crops could spawn superbugs. ... The finding adds fuel to the race among crop biotechnology rivals to locate the next generation of genes that can protect plants from insects. Scientists at Monsanto and Syngenta AG of Basel, Switzerland, are already researching how to use a medical breakthrough called RNA interference to, among other things, make crops deadly for insects to eat.  [Scott Kilma, Wall Street Journal, Aug 29]  Never ending battle with evolution.

Jobs is a great entrepreneur for another reason. Lots of ninnies can give customers products they want. Jobs gave people products they didn’t know they wanted, and then made those products indispensable to their lives.    [Nick Schulz, nationalreview.com]

the next wave of major innovation will probably rely on the world’s current scientific leaders, many of whom are based in the United States. Recently, though, Americans have not been getting the job done, and it’s starting to sink in that the real story is the truth on the ground — not the published numbers.  [Tyler Cowen, New York Times, Aug 20]

if investors flee stocks it could make it harder for small, niche companies, such as ones in the biotech or clean energy sectors, to tap the public markets for capital. Or more of those companies might take their capital-raising business overseas to places like Hong Kong, which would be another blow to Wall Street.  "The market we are operating in is markedly different from five years ago," says Andrew Lo, a professor of finance at the MIT Sloan School of Management, who frequently writes on hedge fund trading strategies and markets. "We are seeing extraordinary emotional reactions from central banks, politicians, regulators and investors. That kind of reaction is not conducive for building long-term wealth. We have an environment that is highly unstable."  [Matthew Goldstein, Lauren Tara LaCapra, Jennifer Ablan and Joseph Giannone, Reuters, Aug 19]

H-P is exploring a spinoff of its PC business, an about-face that highlights how growth has pivoted from the computers that so long ruled the industry toward software and mobile devices. [Wall Street Journal, Aug 19] HP was a premier R&D company before it got itself entangled in PCs, especially when Carly Fiorina had the bright idea to buy Compaq and make HP a cheap compter commodity firm. The last guy who knew what HP should do was Lew Platt who was replaced by conescutives genius executives each with a different big idea that together gutted HP of any long term strategy of strength. If you drive down the Beijung street, you'll see the IBM (which invented the PC) computer business under the name Lenovo

Materials scientist, applied physicist, and entrepreneur John Rogers, 43, of the University of Illinois, Urbana-Champaign, has won the $500,000 Lemelson-MIT Prize for 2011. The award is given to a scientist whose inventions offer innovative solutions to real-world problems.Rogers's inventions tend to be hybrids that blend biology, electronics, nanomaterials, and optics. They include a photovoltaic technology that uses tiny ball lenses to focus sunlight onto solar cells. Rogers and colleagues are developing this technology, which produces a highly efficient conversion of sunlight to electrical energy, through Semprius, a company they launched in 2006.Rogers launched another company, mc10 (Waltham, MA; one SBIR) , in 2008 to commercialize his designs for “stretchable electronics,” silicon-and-rubber medical devices that can curve and twist to map the electrical properties of the heart or the folds of the human brain.

MassChallenge, the startup accelerator program based in South Boston, said Tuesday that the 111 companies that made up its inaugural 2010 class of finalists have raised a combined $90 million over the past 12 months. The program said in a release that the startups have also created 500 jobs over the same period.  [Kyle Alspach, Boston Business Journal, Aug 11]

MassChallenge Inc. said its inaugural class of 111 start-ups has collectively secured about $90 million in funding and created 500 jobs over the past 12 months. The nonprofit describes its mission as seeking to catalyze a start-up renaissance by providing support such as free office space to early-stage entrepreneurs. [Chris Reidy, Boston Globe, Aug 10]

Even as Wall Street trembles, the market for investing in tech start-ups remains white-hot. Still, some investors are proceeding with extreme caution. ... Limited partners say they are wary because venture capitalists are investing in start-ups at valuations several times higher than a year ago.  ... “One thing we’re learning now is we want more and more transparency; we want to spend time asking questions,” he said. “These funds last twice as long as the average American marriage, so you really need to understand your partners.” For instance, he shows up at the doorsteps of start-ups that a venture firm has financed but that are not on the firm’s reference list.   [Claire Cain Miller, New York Times, Aug 10]

for those who believe that the decline in the stock market reliably predicts a new recession, remember the famous dictum of the late economist Paul Samuelson: "The stock market has predicted nine of the last five recessions." ... No one has ever become rich by being a long-term bear on the fortunes of the United States, and I doubt that anyone will do so in the future. This is still the most flexible and innovative economy in the world.  [Burton Malkiel, Wall Street Journal, Aug 7]

Approval is only one step. Drug makers are facing higher hurdles to build sales of newly approved drugs, as insurers make it harder to win coverage, more doctors are wary of possible side effects and government is tougher on marketing.  ...In the early 2000s, a new drug could expect to garner a 5.8% share of the market one year after hitting pharmacy shelves, according to Target Rx, a market research and consulting firm. From 2006 onward, this fell to 3.3%    [Jeanne Whalen, Wall Street Journal, Aug 1]

Profit up, jobs down. Merck's second-quarter earnings more than doubled, helped by a tax benefit and growth in pharmaceutical sales, and the company said it plans to cut another 12,000 to 13,000 positions by the end of 2015. [Wall Street Journal, Jul 28]

Shrinkage.Boston Scientific is reporting a nearly 50 percent increase in second-quarter profit and says it will cut up to 1,400 employees to streamline operations ... [while it] will spend five years and $150 million to build up its business in China    Meanwhile, Massachusetts has developed a technology labor shortage, one that could undermine a vital sector that helped pull the state from the last recession and is driving its recovery. [Boston Globe, Jul 28]

But more than 95% of the Chinese [patent] applications were filed domestically with the State Intellectual Property Office—and the vast majority cover "innovations" that make only tiny changes on existing designs. A better measure is to look at innovations that are recognized outside China—at patent filings or grants to China-origin inventions by the world's leading patent offices, the U.S., the EU and Japan. On this score, China is way behind. [Anil Gupta and Ha1yan Yang, Wall Street Journal, Jul 28]

one of the first stories I covered during the U.S. technology boom of the 1980s. The first venture capitalist I talked to said that the disk drive company he had funded "only needed 10% of the market." So did the second venture capitalist and the third and the fourth. By the time I got to the 20th disk drive company that needed just 10% of the market, I knew this investing boom wasn't going to end well. And it didn't. Atasi went bankrupt. Cogito Systems went bankrupt. Data Storage International, ditto. Integral Peripherals. JT Storage. Ministor Peripherals. Tulin. Microscience International. During the product's history, about 200 companies made disk drives. Today the industry is down to just three major players. [Jim Jubak, momen.msn.com, Jul 7] A favorite line in SBIR commercialization strategies, assuming we can capture 5% of the XXX market, should be, and sometimes is, rejected by government reviewers, the few who actually care whether your predictions are valid.

Its been said its better to be wrong in the same way as everyone else than to be right alone. That's certainly true for economists. Unfortunately, that is a bad thing for anyone who listens to economists.[Mike Kimel, angrybearblog.com]

we should cheer the development of Asian innovation, not cry about it. In the long view, the benefits to scientific progress, economic growth and political stability far outweigh the short-term threat to Western high-tech supremacy.  ...  Silicon Valley is an engine of economic growth because it has achieved a critical mass of smart technical people, deep-pocketed investors and, crucially, a culture that encourages these players to take risks in pursuit of the next big idea. They can make big bets because they can rely on enforceable intellectual property laws to protect truly novel ideas. ...  Yes, they're gaining on us. But even if Western nations wind up with a smaller share of the pie in the decades ahead, the pie will be much bigger.  [Nathan Myrhvold and Edward Jung, Wall Street Journal, Jul 23]

a growing threat to small businesses. Hackers are expanding their sites beyond multinationals to include any business that stores data in electronic form. Small companies, which are making the leap to computerized systems and digital records, have now become hackers' main target. ...  With limited budgets and few or no technical experts on staff, small businesses generally have weak security.  [Geoffrey Fowler and Ben Worthen, Wall Street Journal, Jul 21]

With the talent base of the area's universities in mind, Tom Castelloe has launched The Braintree (Raleigh, NC)  (), a website he's calling "the Facebook for research."  The company's goal is to connect specialized researchers with businesses and individuals in need of their expertise. ... : You start by creating a profile, and then you post a request including what kind of research needs to be done, when it needs to be completed and how much you're willing to pay for it. Researchers then place bids on your project. The 250 researchers who have registered on the site so far have specialties ranging from clinical psychology to pharmaceuticals to environmental hazards, to name a few. [Eden Stiffman, Raleigh News & Observer, Jul 11, 11]

To produce rapid growth, most capital must be allocated by markets. The effect of $4.5 trillion of borrowing since 2009 is that foreigners and Americans are buying Treasury bills instead of investing in the next Google, Oracle, Wal-Mart or biomedical company. Today, foreigners are financing food stamps and the next bridge to nowhere while Americans are building state-of-the-art production systems abroad. This is the real pernicious "crowding out effect" of the federal government's borrowing.[David Malpass and Stephen Moore, Wall Street Journal, Jul 6]

Charles M. Vest, president of the National Academy of Engineering, warned of a “national nightmare” should the country fail to renew its culture of innovation. “We know what the problems are,” Vest said. “We know how to solve them. [But] we must develop the political will to do so.” ... [competing countries are] dramatically increasing their investment in research and development and forming government agencies to guide the efforts. The United States, meanwhile, is only now developing a comprehensive innovation strategy.  [AAAS Science policy alarm ringing, Science, May 27] Actually it is not the least bit clear that throwing more federal money into science will cure the imagined innovation shortfall any more than federal money will cure any other national ill.  Organization, incentives, and attitudes matter just as much in developing economic value from from tech advance.  We got to be top world innovation dog before government got involved in paying for science and technology. 

On 1 June, a reading of [actor Alan Alda's play Radiance: The Passion of Marie Curie, with Maggie Gyllenhall reading the part of Curie, will kick off the World Science Festival in New York City. The play covers the interval between Curie’s two Nobel prizes, during which she was reviled for “what people thought were transgressions in her personal life,” Alda says. The Nobel committee grudgingly included her with husband Pierre and Henri Becquerel for the physics prize in 1903 but demanded that she sit in the audience at the award ceremony “as if she was Pierre’s assistant,” Alda says. “It was misogyny.” Because of an illicit romance after Pierre’s death, in 1911 she was almost denied her second Nobel, in chemistry, for her work in radioactivity. “There’s an arc to her character,” Alda says of those 8 years. “You see her gather her forces against tremendous obstacles.”  [Science, May 27]

we must relearn how to value our dirt. This exhibition thus gives us a glimpse into a choice of possible futures: life in a recycled paradise or grim existences eked out on a planetary garbage dump. [Science, May 27]  When in London the sceitifically curious can always find soemthing interesting a the Wellcome Collection on Euston Road nesar Euston Station. The current hit show is Dirt The Filthy Reality of Everyday Life Kate Forde, James Peto, and Lucy Shanahan, curators thru August.

The oldest ethanol plant in Indiana is cutting about 30 jobs this summer and the company that owns the plants is up for sale. ... New Energy  officials say the layoff of about 25 percent of the employees from the ethanol plant in South Bend will take place in July. The plant opened in 1984 will have about 100 workers after the layoffs. ...  troubles with corn availability and an oversupply of ethanol.  [AP, Jun 21]

The Wieden+Kennedy advertising firm is launching a technology-oriented business incubator at its Pearl District offices, joining some of its most prominent clients and some of the city's best-known technologists. The venture, the Portland Incubator Experiment, began informally two years ago in vacant space in W+K's offices. It helped spawn a handful of tech startups.... No Oregon company has held an initial public stock offering in nearly seven years, and a long string of promising Silicon Forest companies have moved away in search of talented employees and better funding opportunities.   [Mike Rogoway, The Oregonian, Jun 29]

China has repealed a policy favoring Chinese producers in government purchases of computers and other technology that triggered complaints by foreign companies and governments that it violated free trade [AP, Jun 30]

Color has become a warning sign for investors, entrepreneurs and analysts who fear there is a bubble in start-up investing. They say it shows that venture capitalists, desperate to invest in the next Facebook or LinkedIn, are blindly throwing money at start-ups that have not shown they can build something useful, much less a business that can provide decent returns on investment. [Claire Cain Miller, New York Times, Jun 19]

An increase in the number of students dropping out of US universities to follow their dreams and launch start-up companies in Silicon Valley may be the latest sign of an internet bubble, according to industry experts. ... Harj Taggar, a partner with Y Combinator, an incubator founded in 2005 that funds young entrepreneurs, said applications from students were rising. He noted that there was strong interest from angel investors who were “willing to fund these 18 and 19-year-old kids”. Part of the reason, he said, was that it was a lot cheaper to start an internet business today than during the internet bubble of the late 1990s. Laptop computers have become less expensive and web-based companies do not have manufacturing costs. Young people without families or mortgages were also willing to live in cheap apartments, eat noodles and work long hours, he said. [April Dembosky, Financial Times, Jun 25]

As Fletcher explains, physics, politics and the price of gasoline have always conspired against the improvement of battery technology. We might get a better battery someday, and if we do it will probably come from China, which has become the hub of advanced energy production. But don’t hold your breath. The fundamental problem with batteries is the existence of gasoline. Oil is cheap, abundant and relatively easy to transport. Most importantly, it has a high “energy density” — meaning that it’s phenomenally good at storing energy for its weight. Today’s best lithium-ion batteries can hold about 200 watt-hours per kilogram — a measure of energy density — and they might theoretically be able to store about 400 watt-hours per kilogram. Gasoline has a density equivalent of around 13,000 watt-hours per kilogram.  [Farhat Majooo, Washington Post, Jun 23]

Gadgets come, gadgets go. Research In Motion. BlackBerry maker that revolutionized the way workers communicate but has struggled to find a second act, saw investors abandon the company in droves Friday amid fresh concerns about its future. ...  worth more than $80 billion three years ago, ended the day worth less than $15 billion. ... slow to match innovations in Apple's iPhone and devices powered by Google's Android software. [Wall Street Journal, Jun 18]

A study published online [Jun 13] in the Archives of Internal Medicine indicates these expensive devices provide little benefit to almost 40 percent of patients suffering from heart failure. ...  This comes on the heels of a study published earlier this year in the Journal of the American Medical Association suggesting a sister device called implantable cardioverter defibrillators (ICDs) are overused.  [Janet Moore, Minneapolis Star Tribune, Jun 14]

Growth has been less than expected, tax receipts have run behind schedule and government-promised changes have been slow to produce results. ...  nation may be spiraling toward a calamitous default with investors ...  another round of austerity measures  [Anthony Faiola and Howard Schneider, Washington Post, Jun 15]  It could be the future in the US, and it is the present in Greece, the cradle of democracy, as the money runs out that sustained a pleasant life style on government borrowing.  

The number of business start-ups per capita has been falling steadily for the past three decades. Workers’ share of national income has been declining since 1983. Male wages have been stagnant for about 40 years. The American working class — those without a college degree — is being decimated, economically and socially. In 1960, for example, 83 percent of those in the working class were married. Now only 48 percent are. ... The Republican growth agenda — tax cuts and nothing else — is stupefyingly boring, fiscally irresponsible and politically impossible. .. As for the Democrats, they offer practically nothing. They acknowledge huge problems like wage stagnation and then offer... light rail! Solar panels! ... Mentally, they are living in the era of affluence, but, actually, they are living in the era of austerity. They still have these grand spending ideas, but there is no longer any money to pay for them and there won’t be for decades. Democrats dream New Deal dreams, propose nothing and try to win elections by making sure nobody ever touches Medicare. [David Brooks, New York Times, Jun14] What’s your growth agenda? And no, there is no evidence that more SBIR would have any effect on national economics. It would merely help the beneficiaries who get the handouts, but only as long as the handout lasts.What elected officils do also depends on their main objective. If it is re-election and the chance to pay off their supporters, they will not solve any national strategic problems. What do you tell your politicians besides more SBIR?

Despite initial enthusiasm a decade ago, investors are now wary of stem cell startups, preferring to see if companies like Geron and Advanced Cell Technologies succeed with their clinical trials, Eliason says.   Until then, “investors are not going to invest,” he says. “This is not like information technology. This is not like making [a smart phone application] that gets you eight times return on investment.”  [Thomas Lee, xconomy.com/detroit, Jun 8]

A rising tide in the tech start-up world has not lifted all boats, and some Silicon Valley entrepreneurs are struggling to keep their companies afloat. Right now, the biggest trap in the start-up cycle are the so-called expansion rounds, investments of $5 million to $10 million that fledgling companies use to finance their growth. .... This capital is critical to young companies that have exhausted most of their seed money but have yet to turn a significant profit. But investors are less willing to jump in at this point, looking instead for either brand-new ideas or proven companies.  [Kevin Roose, New York Times, Jun 7]  The message for government subsidy programs for new ideas is that a technology idea even if successful can easily die for lack of exploitation capital. If SBIR wants its good ideas to get somewhere, it has to point its investments to entrepreneurs who show they can attract the needed capital. And, no, the typical commercialization strategy is all wishful thinking sketched out for a gullible federal agency.  The sectors once called "high tech" (but almost everything involves high tech now) are not creating large numbers of American jobs, as retired Intel Chief Executive Andy Grove has pointed out. As companies "scale up" they are no longer doing much hiring of Americans. [Jon Talton, Seattle Times, Jun 2]  Productivity, working age population, and unemployment rise in tandem.

Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.  The scaling process is no longer happening in the U.S. And as long as that's the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs. ...  Today, manufacturing employment in the U.S. computer industry is about 166,000, lower than it was before the first PC, the MITS Altair 2800, was assembled in 1975. Meanwhile, an effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers  [Andy Grove, Bloomberg News, Jun 2] If SBIR is ever to be a job creation engine, it must invest in companies, technologies, and entrepreneurs that have a large economic future if the technology works as envisioned. Pumping money into government R&D, in either large or small companies, will do no visible economic good. Almost all the chatter and self-dealing advocacy for SBIR assumes a link between investment and economic future that does not exist.

[UMd professor] John Haltiwanger thinks he may have discovered one reason why the private sector is not creating more jobs this far into the so-called recovery, ... The U.S. economy has become less dynamic and entrepreneurial. .... In job creation, it turns out, it is not size that matters but the age of the firm. Small businesses don’t create all the new jobs — young ones do. ... The culprit, Haltiwanger suspects, has been the measurable slowdown in business startups and the unusually slow job growth among those all-important young and fast-growing firms.  [Steve Pearlstein, Washington Post, Jun 1] Serious business economists consistently show that most small biz pleading is political junk food, tastes good to the politicians and can be supplied cheaply in endless quantities, and SBIR is right in there with its own brand of economic nonsense to beg government subsidy of uncompetitive businesses. And the more the federal agencies use SBIR for their internal R&D, the less impact SBIR will have on the entrepreneurial economy.

A Spanish firm which once employed 130 people assembling solar panels in Otay Mesa has moved manufacturing to Tijuana.  Siliken Solar's move to Tijuana was prompted by lower labor costs there and a lack of interest in American-made products, said Jorge Molina, director of plant operations. [Onell Soto, signonsandiego.com, May 23]

An eager young crowd of 700 people packed New York City's Webster Hall nightclub recently ..  to watch pitches from a bunch of technology start-ups. ... audience was thick with A-list venture capitalists [and] executives from HP, Microsoft  and Amazon [and], as well as local businessmen ...  The 11 start-ups got eight minutes each on Demo Day ... A few weeks after the show, eight of the 11 companies are close to raising money  [Spencer Ante, Wall Street Journal, May 27]

Angst about the dollar – which has fallen 11.5 per cent on a trade-weighted basis over the past six months – extends beyond ideological conservative political circles. ... the traditional political response in the US whenever the currency depreciates. But it is now accompanied by warnings from America’s creditors, many of which are widely rumoured to be eyeing large purchases of US real assets such as property and companies. [Financial Times, May 19] Whether a dollar decline is good or bad depends on your particular trade situation.  Nevertheless, decline always generates political heat with no light. And politicians typically appeal to the lowest common denominator of public thinking.

Accident investigators have successfully downloaded all of the information captured by the flight-data recorder aboard the Air France jetliner that mysteriously crashed into the Atlantic Ocean two years ago [Wall Street Journal, May 17] Cheers for Honeywell which made the boxes that protected 25 hours of data for two years in 13000 feet of water.

SOME time after the dotcom boom turned into a spectacular bust in 2000, bumper stickers began appearing in Silicon Valley imploring: “Please God, just one more bubble.” That wish has now been granted. Compared with the rest of America, Silicon Valley feels like a boomtown. Corporate chefs are in demand again, office rents are soaring and the pay being offered to talented folk in fashionable fields like data science is reaching Hollywood levels. And no wonder, given the prices now being put on web companies. [The Economist, May 12]

Chinese venture capitalists invest in established industries, such as hotels and agriculture, or in copycat technologies. Multinational managers grumble privately that China’s “research and development” projects involve far more development than research. And the government’s vast investment in innovation is more than offset by its failures. Squabbles over standards discourage companies from placing long-term bets. Lax intellectual-property rights penalise cutting-edge research. The power of the state prompts firms to spend more time grovelling to politicians than grappling with original thoughts. ... the Chinese regime’s obsession with “independent innovation”. This is leading it to pour resources into dubious innovation champions while at the same time strewing obstacles in the path of the vast majority of private-sector companies. [The Economist, May 7] six startups that are developing new technology tools for the financial services industry started a 12-week program of mentorship, networking, and seed funding from New York City Investment Fund, a 15-year-old fund founded by Henry Kravis  [Arlene Weintraub, xconomy.com/new-york, May

"If we didn't import from China, we'd import from somewhere else,... Chinese imports help increase the choices for Americans and keep inflation down. ...  It is difficult to make a comprehensive plan. It is even more difficult to implement the plan. I believe that the challenge before China is one of evolution, evolving to an economy where there is more innovation, higher value added products, less reliance on exports, more on domestic consumption." [Henry Paulson, speaking in China, reported by China Watch, an advertising supplement]

Why then, why Britain? During the Industrial Revolution technological progress and innovation became the main drivers of economic growth. But why was Britain the technological leader? We argue that one hitherto little recognized British advantage was the supply of highly skilled, mechanically able craftsmen who were able to adapt, implement, improve, and tweak new technologies and who provided the micro inventions necessary to make macro inventions highly productive and remunerative.  Meisenzahl and Mokyr [NBER Working Paper 16993] add to the endless historical theorizing on the sources of the Industrial Revolution.  Meanwhile, Allen [Econ History Review, May 11] says British wages were very high by international standards, and energy was very cheap. This configuration led British firms to invent technologies that substituted capital and energy for labour. If you think you know and have some "obvious" policy prescription for the US, think again. Everything is more complex than politics can honestly admit.  Most policy prescriptions, like more SBIR, are just self-serving with rationales derived from torturing history until it confesses.

[Purdue University] Researchers have developed an aluminum alloy that could be used in a new type of mobile technology to convert non-potable water into drinking water while also extracting hydrogen to generate electricity.  ...  The alloy contains aluminum, gallium, indium and tin. Immersing the alloy in freshwater or saltwater causes a spontaneous reaction, turning the water into steam and generating hydrogen and aluminum tri-hydroxide until the aluminum is used up. The hydrogen could then be fed to a fuel cell to generate electricity, producing potable water. [Emil Venere, wateronline.com, May 4]

[Silicon Valley] investments in tech firms with business products rose at a slower rate to $2.3 billion from $1.9 billion a year earlier, according to research firm VentureSource. The overall pool of money raised by such companies is larger than that raised by their consumer-oriented counterparts because business-focused firms, which range from makers of networking gear to designers of computer chips, often require greater investments to get their ventures off the ground. ... The shift away from business-oriented technology start-ups has been gathering steam over the past few years. ... At the same time, investments in start-ups targeting consumers surged. Funding for these companies more than tripled to $4.8 billion in 2010 from 2006  [Ben Worthen, Wall Street Journal, May 6]

As soon as we solve one problem, another one appears. So let's try to keep this one going as long as possible. [cartoon, Wall Street Journal, May 4] So also with government R&D contracting, never finish solving the problem.

the ideal of clean, abundant electricity and transportation fuel holds enormous promise for American consumers, businesses, workers and our environment. On the other hand, it's not hard to find people who are opposed to subsidies on principle. For many of us, subsidies represent a corruption of the free market that we cherish. [Josh Prueher, Wall Street Journal, May 4] A bad subsidy is one that you don't get a piece of.

With anti-immigrant sentiment building across the nation, and clouds of nativism swirling around Washington, D.C., skilled immigrants are voting with their feet. ... even U.S. permanent residents and naturalized citizens ... India and China are experiencing an entrepreneurship boom. And they are learning to innovate just as Silicon Valley does.  ...  My estimate is that 150,000 have returned to India and China, each, over the past two decades. [Vivek Wadhwa, venturebeat.com, Apr 28]  To hear why they are leaving, listen to any so-called conservative Republican rousing the base.

In technology pursuing technology failure, the French have found the remains of the deeply drowned Rio-Paris flight of June 2009.  The deep submersibles found and recovered the memory unit of the flight data recorder system.  If they can read that data they can know what went wrong with the sophisticated flight control system.

Silicon Valley chief executives continue to be upbeat on the economy but decidedly gloomy about the state of the state, ... including state budget gridlock and public employee pension costs. [Pete Carey, San Jose Mercury News, Apr 22] The CEOs dream of all the usual solutions for political conflict without realizing that where power is concerned, any solution will be manipulated to produce gridlock anyway. Today's problems were yesterday's solutions, and vice versa.

America has proved to be more entrepreneurial than Europe in large part because it has embraced a culture of “failing forward” as a common tech-industry phrase puts it: in Germany bankruptcy can end your business career whereas in Silicon Valley it is almost a badge of honour.  ... Businesses cannot invent the future—their own future—without taking risks. [The Economist, Apr 16]

Forget today’s green technologies like electric cars, wind turbines, solar cells and smart grids, in other words. None meets what Mr Khosla calls the “Chindia price”—the price at which people in China and India will buy them without a subsidy. “Everything’s a toy until it reaches that point,” he says.  Mr Khosla has a different plan to save the planet. He is investing over $1 billion of his clients’ money in “black swans”—ideas with the potential for sudden jumps in technology that promise huge environmental benefits, easy scalability and rapid payback. The catch? Mr Khosla expects nine out of ten of his investments to fail.  [The Economist, Mar 12]  Could a federal agency ever bring itself to bet those kind of odds with Congress always looking for success statistics? One huge problem with SBIR is thinking of success rate instead of total return.

But the numbers coming from banks such as Wells Fargo, hurt by continued weak loan demand, contradict the buoyant market for corporate buying of tech products.  [David Callaway, MarketWatch]

Just-in-time or just-in-case.  As U.S. auto assembly lines grind to a halt for want of components that usually come from now-disabled factories in northeastern Japan, business strategists may be forced to rethink the way globalized companies do business. ...  Almost every manufacturer, from your local maker of wedding dresses to Boeing and Caterpillar, is a global company, because its production relies critically on parts or other inputs made or designed outside its home country. ... A shortage of freight cars, a dock strike, a factory closure due to lack of water, a riot that keeps a supplier’s employees from getting to work  [Mark Levinson, Foreign Affairs Newsletter, Apr 21]

Austin is the U.S. market that is most conducive to the creation and development of small businesses, according to the latest On Numbers rankings. Oklahoma City is second in the current standings, followed by Charleston, S.C., Charlotte and Seattle. ... The highest scores in our study went to areas that have prosperous economies, are expanding rapidly, and are densely packed with small businesses.  [Austin Business Journal, Apr 12]

Major biotechnology companies, long a staple of the Boston area’s economy, are finding it harder to remain independent. ...  driven by an unforgiving regulatory environment and the failure of the world’s largest pharmaceutical companies to develop new drugs.  [Robert Weisman, Boston Globe, Apr 13] Capitalism develops its own economic demand for innovations.

Cost of capital on the rise. The European Central Bank became the first monetary authority in a major developed economy to raise interest rates since the global financial crisis struck—a sign that the long period of easy credit is beginning to come to a close.  [Brian Blackstone and David Wessel, Wall Street Journal, Apr 8]

A pharmaceutical startup with one foot in the Triangle and another in China has raised $100 million in financing from investors, an astounding sum for a company just a few months old.  It helps that the new company, Ascletis (ineligible for SBIR) , was co-founded by Chinese real estate billionaire Jinxing Qi, who also is an investor in the business. .. Ascletis isn't the only pharmaceutical enterprise whose efforts span from the Triangle to China. The nonprofit Hamner Institutes for Health Sciences, based in RTP, is working with Chinese businesses and a medical research park in China to develop and test new medicines in both countries. Ascletis is focusing on treatments for cancer and infectious diseases. The company has eight employees - two in the Triangle, five in China and Wu himself, who is shuttling between the two countries  [David Ranii, Raleigh News & Observer, Apr 7, 11]

Boston, eat your heart out. Google Inc. won't be building its state-of-the-art fiber-optic data network here, or anyplace else in Massachusetts. The giant Internet search company announced today that Kansas City, Kansas has captured the prize. [Hiawatha Bray, Boston Globe, Apr 1]

Renewable energy still hasn't outgrown criticisms that have dogged it for years: It remains too expensive to compete head-to-head with fossil fuels, and it is too dependent on government subsidies. Most renewable energy faces another major obstacle. Much of it remains intermittent—and technical advances that could make it a reliable, full-time power provider remain elusive. [Russell Gold, Wall Street Journal, Mar 31]  But for lovers of government subsidy programs, it's still a goldmine. More, they say, more and bigger SBIR (but not big enough to have a real impact for the best economic prospects. Just a steady flow of sub-critical handouts to mediocre companies.

Private investors in China are quickly moving to put money into China's growing life-sciences and medical industries as the country pushes to improve its health-care system.  In the past two years, China has moved 500 million people onto its basic health-care rolls, and in the next five years the country is expected to provide a more robust health program for more of its citizens, according to David Wang, a managing director at trans-Pacific venture-capital firm WI Harper Group. ...R&Dcenters also have shifted from the U.S. and Europe to India and China, said Yi Shi, the managing director of Lilly Asian Ventures, the venture-capital arm of drug company Eli Lilly [Wall Street Journal, Mar 31]

San Diego’s innovation economy continues to move mostly sideways, with venture capital investments plunging and employment improving slightly among high technology and life sciences startups, according to a report today from Connect, the nonprofit group for technology and entrepreneurship. [Bruce Bigelow, xconomy.com, Mar 29, 11]

Officials at North Carolina's first ethanol plant say they are halting production temporarily in hopes that high corn prices will drop.  The Fayetteville Observer reported Friday that Clean Burn Fuels in Hoke County will place an undetermined number of its 40 workers on furlough for two to three months until production resumes. Company President Jack Carlisle said corn prices have doubled in the past few months largely because of increased demands from developing countries. Meanwhile, ethanol prices have risen only a quarter of that amount. [AP, Mar 12, 11]

What of the nine decades to come? Here, speculation begins. Telekinesis will be commonplace, with appliances controlled by brain scanners; microscopic sensors will continuously monitor cells for signs of danger, extending human life span; internet-enabled contact lenses will tag anything and anyone in sight, enabling omniscience on demand. In short, by the dawn of the 22nd century man shall, in the eyes of his early 21st-century forebears, wield godlike powers. Hyperbole aside, such claims are not that far-fetched. After all, technologies seen as humdrum today, like cars, aircraft, computers and mobile phones, might have inspired similarly divine awe a century or so ago.  [The Economist. Mar 12]

Someday carbon cars.  the use of carbon fibre is turning into a critical area of competitive advantage for carmakers. Although it is much lighter than metal for parts,  The difficulty is that carbon fibre can be an expensive and labour-intensive material to work with.  Customers for high-performance products like aircraft wings, racing cars and tough mountain bikes [and anything military] are prepared to pay the extra cost for added performance. But to take these performance gains to broader markets producers need to find ways to make carbon fibre more suitable for high-volume production. ... BMW has been extremely impressed with the potential of carbon fibre, so far. The company has been working with SGL on a type of injection-moulding process that can produce parts in minutes, and be handled mainly by robots.  [The Economist, Mar 5]  Many an BMDO (MDA) SBIR dollar once went into carbon-carbon and metal-carbon composites. 

The first new drug to treat lupus in more than half a century won [FDA] approval ... The drug, Benlysta, is also the first product approved for its developer, Human Genome Sciences  (no SBIR), which has accumulated losses of more than $2 billion since its founding in 1992. GlaxoSmithKline will help market the drug. [Andrew Pollack, New York Times, Mar 9, 11]

America is the most enterprising big economy.  ...  On the list of all countries great and small, Denmark comes top and America slips to third. Four of the five Nordic countries are in the top ten. This suggests that it is possible to combine crackling enterprise with a big welfare state. [Says the Global Entrepreneurship Monitor] focuses on the outcome—business creation—rather than the policies that foster it   [The Economist, Feb 26]

"If you have an idea, it's really easy to make stuff now."  Alibaba.com, a Chinese e-commerce company ;that finds factories]... which has about 60 engineers in its Santa Clara, Calif., office, has identified the U.S. as its top investment priority.  [Joseph Galante, Bloomberg News, Mar 6]

Seeking fame?  The Intel Science Talent Search is considered the nation’s most elite and demanding high school research competition, attracting the crème de la milk-fats-encased-in-a-phospholipid-and-protein-membrane of aspiring young scientists. Victors and near-victors in the 69-year-old contest have gone on to win seven Nobel Prizes in physics or chemistry, two Fields Medals in mathematics, a half-dozen National Medals in science and technology, a long string of MacArthur Foundation “genius” grants — and now, an Academy Award for best actress [Natalie Portman] in a leading role. .... While carrying out her investigation into a new, “environmentally friendly” method of converting waste into useful forms of energy, and maintaining the straight-A average she’d managed since grade school, Ms. Portman already was a rising movie star.  ... the major role of Queen Amidala in the Star Wars prequel trilogy that rocketed her to international fame. And then she went on to Harvard University to study neuroscience and the evolution of the mind.  ...  You can be a scientist, but if you want your name in lights, you’d better play one on TV.    [Natalie Angier, New York Times, Mar 1]

"Charlie and I believe that those entrusted with handling the funds of others should establish performance goals at the onset of their stewardship. Lacking such standards, managements are tempted to shoot the arrow of performance and then paint the bull’s-eye around wherever it lands." -- Warren E. Buffett, chairman of the board, in Berkshire Hathaway Inc.'s annual shareholder letter. [Industry Week]

Today MVP RV (Riverside, CA) is on the verge of hiring 1,200 workers and boosting production by some 30,000 motor homes to 40,000 this year. The difference is a $310 million investment from a Chinese entrepreneur who sees Asia as an untapped market for American-made RVs.  ....  It isn't clear how much of the Chinese investment funds go to small businesses. Many of the deals with small businesses are under $10 million and involve Chinese investors looking for early-stage U.S. partners as an entree into the U.S. market and for exporting goods and services back to China,, says Siva Yam, president of the U.S.-China Chamber of Commerce.  Recent deals have involved clean-energy, automotive, aerospace, information-technology and health-care industries, he says.  [Angus Loten, Wall Street Journal, Mar 1]

CSR, a British chip maker, agreed on Monday to buy the Zoran Corporation (no SBIR), a maker of technology for digital photography and video, for about $679 million in stock.  The deal is an effort by CSR to keep pace in the burgeoning market for smartphones with advanced cameras that can upload photos and video to various social media.  [M de le Merced, New York Times, Feb 22, 11] Even the British are coming.

Medtronic, the world's largest medical device maker, said today it will lay off up to 2,000 workers as part of a restructuring effort to make up for anemic sales of its implants.  [Matthew Perrone, AP, Feb 22]

 Intel is investing about $26 million in six mobile technology startups ... CloudMade (Menlo Park, CA) startup that provides tools to developers of location-based applications.  ...  InVisage Technologies (Menlo Park, CA) startup that is developing a custom semiconductor material, replacing silicon, for image sensors ... Beijing-based Borqs, New York-based Kaltura, Toronto-based SecureKey Technologies and Reading, England-based VisionOSS Solutions [Frank Russell, San Jose Mercury News, Feb 14]

there are literally thousands of high-paid job openings in San Diego County just waiting for the applicants with the right skills, according to the leaders of the local high-tech community. But they say that finding those applicants can be a challenge, partly because of the area’s high cost of living and the lingering perception that San Diego’s more of a beach town than a Silicon Valley South.  [Dean Calbreath, signonsandiego.com, Feb 12]

Small outsourcing.  technology makes it easy for even a tiny business to outsource projects to Pakistan, China and other developing nations. These tend to be “knowledge-based” jobs, from designing a simple website to doing financial research, in which the final work product can be delivered electronically. ...  By 2015, U.S, companies will move 3.3 million service jobs to offshore locations, accounting for some $136 billion in wages  [Tanya Mannes, signonsandiego.com, Feb 13]

Seeking comfort rather than wealth. that low-hanging fruit is exhausted, Cowen continues, and since 1974, the United States has experienced slower growth, slower increases in median income, slower job creation, slower productivity gains, slower life-expectancy improvements and slower rates of technological change. ....   For the past few decades, Americans have devoted more of their energies to postmaterial arenas and less and less, for better and worse, to the sheer production of wealth.  [David Brooks commenting on Tyler Cowen's idea that the US has reached a tech plateau, New York Times, Feb 15]

Frugal innovation.  Weigao’s labs are a steaming cauldron of creativity. Medtronic, a giant American maker of medical devices, entered a joint venture with the Chinese firm two years ago. Its designers and engineers work side by side with local talent, and have already launched half a dozen inexpensive, novel products that Medtronic would not have made on its own.  [The Economist, Jan 22]  While SBIR competitors clamor for more government money per award to maintain a "proper" work place, Chinese competitors turn down the thermostats and turn out the market-clearing innovations. The US firms can only insist on high awards because the awards themselves are more political than economic and therefore have no market competition.

The nonprofit group NC IDEA is seeking to hand out a new round of grants of up to $50,000 to startup technology companies. .....   has awarded $1.9 million to 52 companies across the state since 2006 ... for North Carolina-based companies and entrepreneurs [in] information technology, medical devices or material sciences ...  Go to www.ncidea.org for more information  [David Ranii, Raleigh News & Observer, Feb 11]

To prosper, get to a city.  Cities magnify people’s strengths, Glaeser argues, because ideas spread more easily in dense environments. If you want to compete in a global marketplace it really helps to be near a downtown. Companies that are near the geographic center of their industry are more productive. Year by year, workers in cities see their wages grow faster than workers outside of cities because their skills grow faster. Inventors disproportionately cite ideas from others who live physically close to them.  [David Brooks, New York Times, Feb 8]

Pfizer toasts Sandwich. Pharma giant Pfizer will close its 2400-job research center where Viagra was invented in Sandwich, England. Productivity, efficiency, and beggar-thy-neighbor come to mind as grounds for closing such foreign operations to satisfy home politicians. [The Times, Feb 3]

Pfizer said it will significantly cut research spending and shift billions of dollars to buying back stock [Wall Street Journal, Feb 2]

Turn about as fair play. an "intricate web" of new rules "considered by many international technology companies to be a blueprint for technology theft on a scale the world has never seen before."  The 44-page report, "China's Drive for 'Indigenous Innovation': A Web of Industrial Policies" (  http://www.uschamber.com/reports/chinas-drive-indigenous-innovation-web-industrial-policies  ), maps the complex set of new initiatives that foreign companies face. ... [the Chinese ministries say]  "re-innovating" or "assimilating" foreign technology, that's no different from what Japan and Western countries did when they industrialized&  [Jonathan Bussey, Wall Street Journal, Feb 2]

Think global.  Like their larger counterparts, [small American businesses] are drawn by new markets that are often growing much faster than those at home. Their forays abroad are made possible by technologies like file sharing and video conferencing, which allow managers to communicate easily across continents. Though these technologies aren't new, their price has fallen sharply over the past decade. [Justin Lahart, Wall Street Journal, Jan 27] Such thoughts are only for market-driven companies, not SBIR junkies who keep advocating for more SBIR from a government that doesn't care about profits and markets.

Massachusetts once again topped the State Tech and Science Index developed by the Milken Institute, ...  The index seeks to gauge a state’s research-and-development capabilities, and such measures as industrial, academic, and federal R&D funding, small business innovation research awards, and human capital capacity are factored into the rankings, The Milken Institute's top 10 list this year is: 1. Massachusetts  2. Maryland  3. Colorado  4. California  5. Utah  6. Washington 7. New Hampshire  8. Virginia 9. Connecticut 10. Delaware  [Boston Globe, Jan 26] Got an open mind about where to put your R&D company?  Look for good tech schools, educated people, established tech companies, and mobile labor pool. Oh, and don't focus on government handout programs that can be a trap that puts you on thankless road to the government's unstable objectives. And don't fret taxes; low tax states have lowball environments for high tech business.

The real answer to the China challenge, like the competition from Japan in the 1980s, must come from the United States, the industrial policy thinkers say. A mix of several ingredients will undoubtedly be sought: skillful government policy, smart private-sector strategies, national investment in research and development for long-term innovation, and improved performance of the American education system. In short, all the things the United States should be doing anyway, but with an added measure of urgency because of the global competition that China epitomizes — an economic Sputnik. [Steve Lohr, New York Times, Jan 22]  Skillful government and long-term innovation will make a tough challenge for our politicians whose horizon only extends to the next election and whose public utterings target domestic political consumption.

What sense does it make to view our current woes as stemming from lack of competitiveness? It’s true that we’d have more jobs if we exported more and imported less. But the same is true of Europe and Japan, which also have depressed economies. And we can’t all export more while importing less, unless we can find another planet to sell to. ....  ultimately, we’re in a mess because we had a financial crisis, not because American companies have lost their ability to compete with foreign rivals.  [Paul Krugman, New York Times, Jan 24]  Buzzwords like "competitiveness" make good politics but sloppy economics. Besides, in a globalized world, the interests of nominally “American” corporations and the interests of the nation, which were never the same, are now less aligned than ever before. Companies like GE and IBM improve their competitiveness by moving more operations overseas while the Chinese buy American companies. Ultimately, private sector jobs are in an international competition.

First can be lonely. Contrary to popular belief, being the first to market rarely pays off, a new research paper concludes.  Pioneering firms commonly die young because consumers aren't ready to embrace their business models, according to authors Stanislav Dobrev, a professor at the University of Utah's David Eccles School of Business, and Aleksios Gotsopoulos, a professor at Boston University School of Management. And since market forerunners lack predecessors to look to for guidance, the unprecedented decisions they make often end up fatal.   [Wall Street Journal, Jan 20]

R&D Partnerships You need $200,000 to build a prototype. You could form a limited partnership in which a subsidiary of your company is the general partner and the limited partners are individual investors. LPs put up cash in return for a majority interest in the partnership; your company handles the R&D while the LP books the costs. Limited partners get paid a royalty (or perhaps a cut of the profits) when the product generates revenue, and often the payments ebb after a prenegotiated level of return. LPs also get the right to convert their interest in the LP to equity in your company. These arrangements were a popular (and tarnished) tax shelter for high-net-worth investors in the 1980s, but the concept remains sound.  [Dileep Rao, Forbes, Jan 17]  Or you can go to the government's handout SBIR, which doesn't really care about your financial success, and get free money for doing something a federal agency thinks it wants and needs form another set-aside program. You will have to compete with firms that have no future after the SBIR.

Capital Invasion. Ni Pin runs the U.S. operations of a Chinese company called Wanxiang International, an auto parts giant with worldwide revenue of $8 billion. Over the past decade, Wanxiang America has purchased or invested in more than 20 U.S. firms and now employs more Americans - 5,000 at last count - than any other Chinese company. [John Pomfret, Washington Post, Jan 19] First they lent us money to buy their cheap goods. Would more SBIR as currently practiced make any difference?  Just ask the beneficiaries if they would like more free money.

Teradici (Canada), developer of desktop virtualization and display technology, announced a strategic investment and development agreement from In-Q-Tel, the investment arm of the CIA and U.S. intelligence community. Terms were not disclosed (duh). ...  founded in 2004 and takes advantage of graphics algorithms and high-performance computing to try to reinvent how PCs are used, deployed, and managed.  [Greg Huang, xconomy.com, Jan 13, 11]

The Austin Technology Incubator and the State Energy Conservation Office are seeking applicants for two new clean energy incubators at Texas Universities. Recipients will receive $200,000 each to launch the incubators, which will help aid the commercialization of clean energy technologies and foster the growth of companies in the clean energy sector in Texas. ATI’s Clean Energy Incubator says that over the past two years it has identified a pipeline of more than 200 clean energy companies and worked closely with 15 of them. Those companies have raised about $20 million in investment capital. Applications are due by Jan. 21. For information on how to apply go to www.ati.utexas.edu/cei-rfp.  [Lori Hawkins, Austin American Statesman, Dec 6]

China’s president Hu Jintao has raised questions on the role of the US dollar in the global monetary system on the eve of a state visit to Washington, saying “the current international currency system is the product of the past”.  [Richard McGregor, Financial Times, Jan 16]  We have a lot of financial aspects anchored to a disappearing past.

[The Tevatron] will also be remembered as a fount of technological development whose influence spread far beyond high-energy physics. The development, in partnership with industry, of superconducting magnets for Fermilab’s machine, said Young-Kee Kim, deputy director of the lab, helped pave the way for cheap M.R.I. machines for hospitals. [Dennis Overbye, New York Times, Jan 18] The Tevatron at Fermi Lab (Illinois) is to close this year.

Dot.com redux? financiers and investors alike are casting their gaze back to Silicon Valley, in what is shaping up as an echo of the dot-com craze that minted millionaires on both coasts over a decade ago.  ... the technology-oriented Nasdaq-100 index on Monday surpassed its 2007 highs to put the measure at its highest point since February 2001, the waning days of the dot-com bubble.  [Cheng Tam, and Das, Wall Street Journal, Jan 8]

Private markets close off this exchange of information, making it likelier that prices are wrong, letting bubbles brew. Private capital is funding highly valued startups beyond Facebook, including gaming site Zynga and social-coupon company Groupon. Having these companies grow to huge sizes without disclosing their performance beyond a small group of private investors means we are losing the benefits of public-market disclosure. [L Gordon Crovitz, Wall Street Journal, Jan 10]

carbon fiber is too expensive for widespread use—it costs at least four times as much as steel by weight. That's why its use has been limited to luxury vehicles such as the Audi R8 and racing cars, along with some airplanes and golf clubs.  Now, researchers hope to make automotive-grade carbon fiber using a process similar to how knitting yarn is created. The development could lower the price of carbon fiber by as much as 25%.  [Mike Ramsey, Wall Street Journal, Jan 6]

Ever more competition.  [Korean] Samsung Group said Wednesday it plans to carry out record investment and hiring this year as it seeks to extend global dominance in products including flat screen televisions and memory chips. ... will invest 43.1 trillion won ($38.4 billion) in 2011 for an increase of 18 percent over last year. Samsung also said that it will hire 25,000 people for a gain of 11 percent over 2010.  ... with 12.1 trillion earmarked for research and development  [Kelly Olsen, AP, Jan 5]

alphadogg writes "DRAM chip prices reached a one-year low on Tuesday and approached their cheapest ever due to a post-holiday oversupply. The cheap memory chips are pushing PC prices lower too, a Taiwan-based trading platform said. Prices for commodity 1-Gbit DDR3 DRAM chips dropped to an average of $0.84 per unit from historic highs around $2.80 in April and May last year, said Ivan Lin, publicist and editor with DRAMeXchange. Prices hit a record low of $0.81 per chip in March 2009, according to the exchange's daily surveys." [slashdot.org, Jan 4]

"We preserved cash" over the past few years, said Jim Flaws, chief financial officer of Corning. "Now we're turning around and feeling comfortable about our outlook and spending it." ... investing $300 million to expand its research and development center near its headquarters in Corning, N.Y., adding about 100 researchers and Ph.D.s. It also is spending $800 million on a liquid-crystal display factory in China and building more LCD capacity in Taiwan. [James Hagerty and Dana Mattioli, Wall Street Journal, Jen 3]

The purpose of a prediction column isn't to be accurate a year from now. No one remembers what I write the day after they read it. [Joel Stein, Time, Jan 10]

Growth market. China's online population hits 450 million, up 20% in one year [Tini Tran, AP, Jan 3] That's half again the entire US population. What's more, they're putting up 30-story condo buildings for all those newly urban people.

helping small high-tech companies get from idea to market