SSTI Digest

A little money has gone a long way, when you consider the initial size of venture capital investments each year, the $2.1 trillion in revenues captured in 2005, and the nearly 23,000 venture-backed companies that have received investments. In fact, 16.6 percent of the 2005 U.S. gross domestic product (GDP) was directly attributable to the $2.1 trillion in revenues received by venture-backed U.S. companies, while the $23 billion of VC invested in 2005 only equaled 0.2 percent of GDP.

 

Those figures are reported in Venture Impact: The Economic Importance of Venture Capital Backed Companies to the U.S., prepared by Global Insight and the National Venture Capital Association. In fact, the third edition of the Venture Impact report concludes that venture-backed companies outperform other firms in job creation, revenue growth and overall contribution to state economies.

 

As renewable energy and environmental technologies emerge as some of the promising industries for high-tech economic development, more cities are seeking new ways to boost clean technology research and businesses. Austin, San Jose, Berkeley, Pasadena and Boston have been singled out for their efforts to promote cleantech industries by SustainLane Government, a nonprofit Internet-based organization that provides current practices and news about municipal sustainability. These cities have all found novel approaches to assisting start-ups and commercializing research in one of the fastest-growing industries for venture capital investment.

 

SustainLane defines cleantech industries as those involving energy generation, management and efficiency, wind and air related technologies, advanced transportation, and green building technologies. The group's concept of an ideal model for cleantech development combines three elements:

Browsing the business section of a bookstore may yield dozens of titles purporting to explain the process of innovation. This newsletter and most others serving the nation’s policymakers and science and technology communities have covered reports calling for a national innovation strategy. Unfortunately, most meetings on the subject have to begin by developing a working definition of the term innovation that most can accept. The use or overuse of the word, particularly in calls for needing more of it or business books on how to do it, threatens to reduce innovation to a meaningless buzzword that loses hope of having any real value.

 

Fortunately, slightly removed from political circles, there are those interested in understanding the basis of innovation and discovery with a scientific grounding. The National Science Foundation (NSF) recently released the proceedings of an August 2006 workshop exploring what is known about how innovation and discovery occurs on the individual and team level. The panelists' conclusion? Not much, particularly related to understanding engineering and design.

Information technology (IT) permeates almost all aspects of the economy and is what really drives economic growth, according to a report released this month by the Information Technology and Innovation Foundation (ITIF). The report’s authors, Robert Atkinson and Andrew McKay, believe the diffusion of information technology increases worker productivity 3-5 times more than non-IT capital. In Digital Prosperity: Understanding the Economic Benefits of the Information Technology Revolution, they collect and synthesize various reports citing the influence of IT, separated into five key measures: productivity, employment, efficiency of markets, quality of goods and services, and the innovation of new products and services.

 

Atkinson and McKay offer guiding principles for policymakers to help sustain IT-based growth, including:

The federal government distributed $23.8 billion in R&D obligations to universities and colleges in fiscal year 2004 — a 4.4 percent increase from the FY 2003 total of $22.8 billion, according to new National Science Foundation (NSF) data. In its report, Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions: Fiscal Year 2004, NSF details all categories of direct federal science and engineering support to institutions of higher education in the U.S.

 

Single-year snapshots can be misleading, so SSTI has prepared a table using the NSF data that shows the state rankings for total federal academic R&D obligations and percent change over the five-year period of 2000-2004. Nationally, federal R&D obligations grew by 37.7 percent over the period but some states saw much larger changes. Among these states, Hawaii showed the largest increase in federal R&D obligations at 108.3 percent, followed by Nebraska (85.2 percent), North Dakota (81.5 percent), Tennessee (73.9 percent) and Kentucky (60.9 percent).

 

Eric Cromwell announced he is resigning as director of technology development for the State of Tennessee.



Frank Dinucci announced he will step down in April 2007 as president of Connecticut Innovations.



C. Robert Eaton is resigning as president of MdBio, effective March 31, 2007, to pursue other opportunities in the private sector.



Bill Goetz, chief of staff in the North Dakota Office of the Governor, has been selected to be chancellor of the North Dakota University System, beginning July 1, 2007.



Oleg Kaganovich will resign as CEO of the Sacramento Area Regional Technology Alliance (SARTA) in June 2007, but remain a member of SARTA's board of directors.

Eric Cromwell announced he is resigning as director of technology development for the State of Tennessee.