SSTI Digest

This week, the Information Technology & Innovation Foundation (ITIF) hosted a debate between ITIF’s President Robert Atkinson and Andrew McAfee, principal research scientist at the Center for Digital Business in the MIT Sloan School of Management and co-author of Race Against the Machine. The lively debate revolved around the impact of technology innovation on the U.S. labor market in an attempt to answer a complex question — is technology innovation a job creator or job killer?

Andrew McAfee argued technology innovation is leading to job loss and the pace will only speed up due to the rapid rate of technology innovation. In their recent book, Dr. McAfee and co-author Dr. Erik Brynjolfsson claim technology-driven productivity, specifically in the information technology and robotic fields, has reduced the need for middle-class workers in the well-paying manufacturing sector and is rapidly spilling over to knowledge-based fields (e.g., law, medicine).

The European Commission is offering a €500,000 (US$655,700) prize to accompany designation of an "iCapital" — the single city in the Union, which is building the best "innovation ecosystem", connecting citizens, public organizations, academia, and business. Should the U.S. federal government follow suit? Probably not without modifications.

Inherent in the competition's design is the belief that all successful geographically based innovation systems have an array of local, publicly backed initiatives and programs that support the creation of an environment allowing others to innovate and public-private interconnections. Whether accurate or not, there is considerable disagreement in the United States as to how active a role the public sector should play in supporting innovation, commercialization and technology-based entrepreneurship. Congressional appropriations for regional innovation initiatives are insignificant when compared to the federal investments made in other forms of development. States and municipalities, however, have led the creation and support of technology-based economic development in America.

The Obama administration is seeking closer economic cooperation with Latin America to enhance opportunities for startups and SMEs in the U.S. and across the hemisphere. This week, the U.S. State Department is launching the Small Business Network of the Americas to promote international cooperation between TBED institutions in the Americas.

The State Department will launch the Small Business Network of the Americas (SBNA) International Sister Center Program on September 11th in Orlando, Florida. The SBNA was established in partnership with the U.S. Association of Small Business Development Centers (SBDCs) and organized by the Department of State to convene representatives from SBDCs, startup incubators and accelerators, universities, and other organizations from across the Western Hemisphere that promote entrepreneurship and innovation.

The U.S. Department of Defense Office of Naval Research has announced a $30 million investment in Energy Excelerator, an accelerator for cleantech companies within the Pacific International Center for High Technology Research (PICHTR). Energy Excelerator originally launched three years ago with $10 million in seed funding from the Department of Energy. The new funding will be used to expand the accelerator’s capital and entrepreneurial support programs for clean energy startups in Hawaii and the Asia Pacific region. Read the announcement...

The field of technology-based economic development strives to provide opportunities and support for budding entrepreneurs and technology-based startups in hopes of strengthening our economies. But, policymakers and governments have much to gain directly from the pool of talented tech entrepreneurs. Technology startups are tapping into the $142 billion public sector market and are helping governments reduce costs and improve their services through innovative web applications and, in some cases, total system overhauls.  Late last week, the city of San Francisco launched an Entrepreneurship-In-Residence program for the city in partnership with the White House, the first of its kind.

Under a new set of proposed rules issued by the U.S. Department of the Treasury, companies will be able to claim the federal research and experimentation (R&E) tax credit on eligible expenditures regardless of any subsequent actions taken by businesses with the purchases. The change would allow businesses to claim the credit on research expenses used to create prototypes, pilot models and process improvements.

Previously, there was some debate about whether or not the sale or a prototype or product resulting for qualifying research expenditures would preclude deductions or amortization of those expenses. The proposed rules clarify that if the expenditure would otherwise qualify for the R&E credits, then businesses may claim them for any kind of tangible property, regardless of the success, failure, sale or use of the product.

Georgia Tech has launched a crowdfunding resource for university-based students and faculty. Originally announced in the spring, Georgia Tech joins several other universities that are using crowdfunding to finance commercialization and the development of startups based on university research. The field has become common and relevant enough that an online community has started tracking this growth.

Georgia Tech’s new crowdfunding site, Georgia Tech Starter, launched last week will allow science and engineering researchers an alternative source of funding in a time of restricted government grants. Unlike other crowdfunding services, online investors in the research will not receive any tangible rewards, although they may receive a tax deduction. In addition, the university will provide project review, administration and facility upkeep, which makes the fee paid to Georgia Tech significantly higher at 35 percent than other crowdfunding sites. Currently, only members of the Georgia Tech community can utilize Georgia Tech Starter, although this may expand in the future.

America is moving back to its cities. A majority of people on this planet live in metropolitan areas with one million people moving to cities and metros every five days. In the U.S., the nation’s top 100 metropolitan areas account for two-thirds of the nation’s population and generate 75 percent of national GDP. This is more than a trend, according to Bruce Katz and Jennifer Bradley of the Brookings Institution … this is a revolution. In The Metropolitan Revolution: How Cities and Metros are Fixing Our Broken Politics and Fragile Economy, Katz and Bradley claim that metropolitan areas are leading the nation in reform and innovation, and challenging the traditional federalist hierarchical structure that places federal and state governments on top with local and metropolitan areas at the bottom.

The Stanford Technology Ventures Program has launched a new program for Ph.D. students that provides training in entrepreneurship and innovation. But unlike other entrepreneurship programs the Accel Innovation Scholars Program takes a holistic approach, training students to prepare for roles that support regional innovation ecosystems.

The year-long program, housed within Stanford’s School of Engineering, was created to service doctoral program students who are eager to learn how to evaluate the commercial availability of new technology and bring commercially viable products to the marketplace. Stanford’s engineering students traditionally graduate into careers in large companies. The program is designed to provide students with a strong background in entrepreneurship and innovation to contribute to the dynamic growth of large companies or encourage them to join or launch their own startups.

Foundations increasingly are tapping into the unique skills of institutions of higher education by partnering with them to support entrepreneurial growth within their surrounding communities. These foundations view institutions of higher education as the ideal partners to provide education and business services necessary for entrepreneurs to reach their potential. Several foundations recently have announced funding to support entrepreneurship development activities at universities including the Ratcliffe Foundation and the Allstate Foundation. The Blackstone Charitable Foundation also announced that it is accepting applications from institutions of higher education and nonprofit organizations to pilot, expand or replicate entrepreneurship initiatives.

The Great Recession forced a number of U.S. manufacturers and service providers to look outside national borders to not only succeed, but to survive in the face of a weak domestic market. In their latest report, On the Threshold: Refocusing U.S. Export Assistance Strategy for Manufacturers, Stone & Associates argues that the U.S. must focus on bolstering manufacturing exports as a way to lessen U.S. reliance on its domestic market, reduce the trade deficit, and foster job creation. Rather than focus on macro-level strategy, the report centers on firm-level measures that export assistance organizations can take to aid small- and mid-sized manufacturers (SMMs) in increasing their exports.

New legislation passed by the California legislature would expand the state’s Innovation Hub (iHub) program, which supports commercialization and entrepreneurship at a regional level. The program initially was launched in March 2010 through the state’s Business, Transportation and Housing Agency. Under the new bill, administration of the current 12 iHubs and any future hubs would formally be moved to the Governor’s Office of Business and Economic Development, which has informally overseen the project in more recent years. The updated legislation also allows the office to issue proposals to designate new hubs, including hubs that would overlap current hubs as long as they have a distinct focus on separate industry sectors. A new state treasury account also would allow the iHubs program to collect funds from private sources. Governor Jerry Brown now has 30 days to sign or veto the bill. Read the legislation...