Week
of February 2 - 6, 2004
Welcome
to the National Dialogue on Entrepreneurship and E-News, an electronic
newsletter sponsored by the Kauffman Foundation of Kansas City for
followers of the entrepreneurial economy. Through E-News, we bring you
short summaries and analyses of various trends driving the innovation
economy. Please feel free to share this with friends and colleagues. To
subscribe, visit www.publicforuminstitute.org/nde/join/
Advancing Enterprise in the UK
Britain’s Chancellor of the Exchequer Gordon Brown has long been a fan of entrepreneurship, and has pushed to encourage the growth of new enterprises in Great Britain. Last week, he sponsored a star-studded conference to further publicize this work. Participants in the Advancing Enterprise forum included Bill Gates, Alan Greenspan, Arun Sarin (CEO of Vodafone), and Jean-Pierre Garnier (CEO of GlaxoSmithKline. The basic message was clear. Britain’s future prosperity depends on its ability to nurture innovation and new wealth creation. But, getting there is the hard part. In his remarks to the forum, Brown supported further cuts in capital gains tax rates, streamlined regulations and host of interesting ideas for fostering a “deeper and wider entrepreneurial culture.” Among the proposed ideas are:
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Creation of a Queen’s Award for Enterprise. Queen Elizabeth will visit outstanding examples of new enterprises in all regions of the country in July.
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An annual competition for the British City of Enterprise.
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Creation of 2000 new Zones of Enterprise in distressed areas.
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Expansion of entrepreneurship education offerings for all secondary school students.
To learn more about the event and the broader Advancing Enterprise effort, visit
http://www.hm-treasury.gov.uk/documents/enterprise_and_productivity/enter_conf/ent_entconf_index.cfm
The Last Word on Venture Capital 2003
The National Venture Capital Association (NVCA) has released its final data for US venture capital (VC) investing in 2003. Total VC investment for 2003 reached $18.2 billion invested in 2,715 different companies. That’s a fairly sizable drop from 2002’s total dollar amount of $21.4 billion. However, there is some good news within this overall drop. VC investment rose rapidly (more than 11%) in the 4th quarter of 2003. The VC business still remains technology intensive. Overall life sciences investments (in both biotechnology and medical devices) reached $4.89 billion, accounting for 27% of total investment. Software firms captured $3.6 billion, or 20% of total investments. Other big industry categories included telecommunications, networking, and semiconductors. Investing in early stage companies also slowed in 2003, accounting for 26% of all companies. This figure is a slight drop from 2002’s total. Despite the declines, interviewed venture capitalists remain somewhat bullish. As the market for initial public offerings and mergers and acquisitions heats up, venture investors will enjoy a wider range of exit opportunities from previous investments. As they cash out of these earlier deals, funds can be deployed toward new companies and other investment opportunities.
To access the latest VC data, visit the NVCA website at www.nvca.org
Technology Collaboration in the Nation’s Capitol
A new study for the Washington Board of Trade finds that the region around Washington DC needs to do a much better job in capturing the benefits of extensive local investments in R&D. The region’s R&D base is strong, but very narrowly focused---more than 82% of all local R&D spending comes from the federal government. Yet, local institutions such as federal research labs and universities still do a very poor job of commercializing research. Washington DC area universities generate significantly fewer licenses and patents than do institutions in other technology-intensive regions like California and Massachusetts. The report recommends that local labs band together in a demonstration project to test new ideas for generating economic output from such research. It also suggests that these facilities seek to spin out 2 or 3 new companies from research facilities—the development of these firms would then serve as a model for additional new company formation in the region.
To view the Washington Board of Trade report, Technology Commercialization in Greater Washington: 2004 Benchmark Study, visit
http://www.bot.org/html/news/TechCommReportFULL.pdf
The State of Technology in Massachusetts
The Washington DC area is not alone in expressing concerns about its technology future; a new study of Massachusetts’ technology community raises some red flags about the future of R&D in the Commonwealth. In The R&D Funding Scorecard, the Massachusetts Technology Collaborative argues that the state’s traditional competitive advantage in R&D funding is eroding. Massachusetts continues to attract federal R&D funds, but other states are attracting such investment at faster rates. A slowdown in funding via the Small Business Investment Research (SBIR) program is especially worrisome, as these funds typically generate new entrepreneurial activity. The report recommends that state leaders focus on increasing the state’s share of SBIR funds, and also work to increase federal investments in Massachusetts’ life science firms. In particular, new funding streams for the Department of Homeland Security offer great opportunities for this business sector. The report’s basic message is to warn against complacency; Massachusetts’ continued technology leadership will not continue without concerted action by both public and private sector leaders.
The Massachusetts Technology Collaborative Report, The R&D Funding Scorecard: Federal Investments and the Massachusetts Innovation Economy, (by Robert Kispert) is available at:
http://www.masstech.org/innovationoutlook/Federal.pdf
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