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Week of July 11 - July 15, 2005

Welcome to the National Dialogue on Entrepreneurship, an initiative of the Public Forum Institute made possible by a grant from the Kauffman Foundation of Kansas City. Through NDE-news, we bring you short summaries and analyses of various trends driving the innovation economy. Subscribe now to receive your weekly copy. Archived issues are available online. Links to the day's entrepreneurship stories from across the nation and around the world are posted each weekday on the NDE main page - bookmark it and stay informed about the latest entrepreneurship news. 

Assessing Small Business Research Programs

The Government Accountability Office (GAO) has recently released its latest look at the federal Small Business Innovation Research (SBIR) program – which requires large federal agencies to devote a portion of their R&D budgets to small businesses – and the grades are pretty good. Since the program was started in FY 1983, the SBIR program has invested more than $15 billion in roughly 76,000 research projects undertaken by small businesses. GAO finds that the SBIR program has generally met its stated goals. It has funded high-quality research, stimulated competition, and promoted commercialization of research. But, the picture isn’t all positive. GAO also notes that it has been difficult to develop comprehensive metrics for SBIR performance. In particular, much debate still arises over what is meant by “commercialization.” The SBIR statute does not define commercialization, so each agency uses a slightly different approach. Moreover, GAO evaluators also warn against a total reliance on commercialization as a measure of program success. If funds are only provided to products and ideas with immediate commercial market value, much high risk and high value-added research could be underfunded.

The June 2005 Government Accountability Office report (GAO-05-861T), Federal Research: Observations on the Small Business Innovation Research Program, is available at http://www.gao.gov/new.items/d05861t.pdf

Too Much Work-Life Balance?

For all of you hard-charging entrepreneurs out there, be careful what you wish for. In New Zealand, it appears that entrepreneurs may be taking the quest for work-life balance too far. An article in the July 2005 edition of INC Magazine looks at the situation in New Zealand, one of the world’s most entrepreneurial countries. The problem is that New Zealand produces lots of lifestyle entrepreneurs, but not enough growth-oriented businesses. This latter set of firms produces most of an economy’s innovations and new jobs. In the case of New Zealand, these firms are also most likely to enter into global markets and to look beyond their small home market. In an effort to stimulate more high-growth enterprise, the government and national universities are seeking to encourage New Zealand’s firms to be more aggressive in their expansion plans. New Zealand already has a favorable tax and regulatory climate, so much of this work entails using the bully pulpit to encourage and support aspiring exporters.

“The Trouble with Lifestyle Entrepreneurs,” by Daniel McGinn appears in the July 2005 edition of INC Magazine, and is available at www.inc.com. To learn about the business development efforts of New Zealand’s Department of Trade and Enterprise, visit www.biz.org.nz

Is the sun setting on the West?

While the United States is still commonly accepted as the world leader when it comes to entrepreneurial innovation, the emergence of market economies in China, India and other nations in the East may have already begun tipping the balance of economic – and geopolitical power – away from the U.S.

That shift in power will be the focus of an upcoming NDE briefing on July 19, 2005. A new book by acclaimed international trade expert Clyde Prestowitz challenges the commonly accepted belief that the U.S. remains the dominant global economic power. The book, Three Billion New Capitalists: The Great Shift of Wealth and Power to the East will be featured at the briefing.

Register Now!

The Coming Entrepreneurial Boom... in Japan

According to the latest edition of the Japan Entrepreneur Report, a new e-zine covering new business activity in the country, Japan is poised for a boom in new entrepreneurial ventures. In the newsletter, Allen Miner of Sunbridge Corporation argues that the Japanese economy is now at a critical turning point. As the information technology industry moves away from general-purpose computers to digital consumer devices (like the iPod and specialized cell phones), Japanese businesses and innovators are well positioned to prosper. Japanese firms excel at design and at customer responsiveness. These traits will aid them in capturing new markets in coming years.

To access the Japan Entrepreneur Report, visit http://www.japanentrepreneur.com/

More Research on Microenterprise

The newest study on the impact of microenterprise comes from Henry Chen and Signe-Mary McKernan, researchers at the Urban Institute. In a new research brief, they provide a useful compendium of current small business subsidy programs. By their count, the Small Business Administration provided more than $340 million in subsidies for small businesses in FY 2002 (the latest data available). The authors identify numerous studies that show a close connection between small business support and new jobs, businesses, and the like. However, they also note that more rigorous research is needed. One study that employed a true experimental research design found that microenterprise training reduced the amount of time one spent on unemployment, but did not increase employment or wages. Finally, the report notes that many microenterprise programs are caught between two competing goals: promoting economic development and increasing an individual’s self-sufficiency. Because these objectives can sometimes compete, the report recommends that policy makers develop separate programs (and metrics) to achieve each goal.

The June 2005 Urban Institute Report, Small Business and Microenterprise as an Opportunity and Asset-Building Strategy, by Henry Chen and Signe-Mary McKernan, is available at: http://www.urban.org/UploadedPDF/311188_small_business.pdf

Kauffman Foundation    The Public Forum Institute

National Dialogue on Entrepreneurship
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Mark Marich, Editor

All stories © 2005 The Public Forum Institute
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