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Week of May 10 - May 14, 2004Welcome 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/ Did you know that links to the day's entrepreneurship stories from across the nation and around the world are posted each weekday at www.publicforuminstitute.org/nde? Bookmark it and stay informed about the latest entrepreneurship news. |
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Collegiate Entrepreneurs’ Competition Colleges across the world are embracing entrepreneurship education, and lots of interesting programs are cropping up. One of the most effective, and longest-running, efforts is the Venture Capital Investment Competition (VCIC), headquartered at the University of North Carolina-Chapel Hill. Since 1998, VCIC has sponsored a competition for some of the country’s leading business school students. This year’s competition (the 7th annual) was held in late April, and the 2004 champs hail from the University of Washington. VCIC is not a classic business plan competition. Participants instead role-play as a hypothetical venture capital firm that must assess a wide range of potential investments. Their decisions are judged by a panel of venture capitalists and other experts. Unlike The Apprentice where backstabbing appears to be encouraged, VCIC teams are judged not just on good business decisions, but also on issues of teamwork and strategy. The University of Washington team took home the top prize of $15,000 as well as some great networking contacts. Other honored schools include the University of Pennsylvania’s Wharton School, the Massachusetts Institute of Technology, and the University of Virginia’s Darden School. |
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New Study on Networks New entrepreneurs are often distinguished by their heavy reliance on peer and mentor networks to gain access to funding, advice, and customers. But, entrepreneurs are not alone. New network-based organizations are transforming society, in both a negative sense (e.g. Al Qaeda) and a positive sense (e.g., the Internet). The power of networks is becoming understood, but what does it all mean? Lots of interesting authors tackle that topic in a new report from the UK-based think tank, Demos. Network Logic: Who Governs in an Interconnected World? (edited by Helen McCarthy, Paul Miller and Paul Skidmore) examines the many ramifications of the “network society.” The book is chock full of interesting observations on how politics, business, and society are changed by the emerging network structures. Take the case of innovation. Innovation is no longer about a single person developing a major breakthrough or insight through a proverbial “Aha!” moment. Instead, innovation has itself become a “networked” activity; good ideas emerge in cultures that foster collaboration and openness. This implies, according to the authors, that public and private organizations should consider new ways to “manage” innovation. Instead of simply letting “a hundred flowers bloom,” some mix of tight and loose controls may make sense. Some common standards or rules are created, and then few rules are placed on various applications or products tied to those common standards. The Internet, Linux, and wireless technologies have developed in this manner, and future innovations may follow a similar path. |
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Innovation Down Under Australia’s economic development professionals are becoming increasingly concerned about the nation’s slow rates of innovation and entrepreneurship, according to a new report from the Committee for Economic Development of Australia (CEDA). A new CEDA study offers a report card on Australia’s innovation performance, and the grades aren’t yet top of the class. The Australian economy is fairly flexible and dynamic. For example, Australia shows high levels of entrepreneurial activity in a series of studies under the Global Entrepreneurship Monitor project (www.gemconsortium.org). However, the overall economy remains highly dependent on resource-based commodities, and performs poorly in key measures of innovation (R&D spending, patenting activity, etc.). So, what to do? CEDA recommends that government agencies support more aggressive public and private investment in leading sectors like biotechnology, nanotechnology, and IT. Creating a true Australian innovation system will complement the many competitive advantages that already exist for the nation’s economy. |
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How Common are Stock Options? Congress and various business leaders remain engaged in a heated debate over the accounting treatment of employee stock options. As this debate rages on, it behooves us to examine how stock options are actually used in the marketplace. How many companies use them and how many employees receive them? A new study, by researchers Joseph Blasi, Douglas Kruse, and Richard Freeman, finds that stock options holdings are more common than many have previously supposed. Overall, 14 million Americans (13% of the private sector workforce) hold options packages. Of this group, 79% identify themselves as managers. Fifty-nine percent have annual salaries of less than $75,000. Not surprisingly, computer industry workers are most likely to hold options; wholesale and retail sales personnel (11%) are the least likely to hold options. The survey also finds that the truly broad use of stock options is still rare. Only 16% of publicly held companies granted options to more than half of their employees. |
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Foundation for Enterprise Development (FED) |
If you want to learn about the world of employee ownership, FED and the Beyster Institute are great places to start. The organizations were begun under the leadership of Dr. J. Robert Beyster, the founder of the Science Applications International Corporation (SAIC), one of the US’ largest employee-owned companies. Employee ownership has worked well at SAIC, and FED’s mission is to help others learn from the experience of both SAIC and other firms who use stock options or employee stock ownership plans (ESOPs). The organizations offer technical assistance, consulting, training and reports on these various tools and managerial approaches. They also produce a monthly newsletter with useful news about the state of employee ownership. |
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the National Dialogue on Entrepreneurship: Mark Marich, Editor - mark@pfidc.org |
