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Week of July 25 - July 29, 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. 

Federal Science Dollars: Where Will the Money Go?

While we are still in the midst of Fiscal Year (FY) 2006, many federal officials are in the thick of planning for next year’s budgets. Science and technology officials are no exception. Earlier this month, the White House Office of Science and Technology Policy provided guidance to federal agencies on R&D priorities for next year, and the memorandum offers some useful hints about the Administration’s R&D spending priorities. In addition to presenting general guidelines for inter-agency collaborative research, the memo also identifies the “big 3” research spending priorities for next year: homeland security, the National Nanotechnology Initiative, and high-end computing and networking. Other hot topics include understanding complex biological systems, the physical sciences, and energy and the environment.

The July 8, 2005 memorandum on “FY 2007 Administration Research and Development Budget Priorities,” from John Marburger, Director of the Office of Science and Technology, and Joshua Bolton, Director of the Office of Management and Budget, is available at: http://www.ostp.gov/html/budget/2007/ostp_omb_guidancememo_FY07.pdf

Strengthening America's Communities Initiative: An Update

In his February 2005 budget proposal, President Bush recommended a major update of federal economic development policy under the Strengthening America’s Communities Initiative (SACI), which has not changed in 40 years.

An advisory committee released a report last week following public meetings in Fresno (CA), Kansas City (MO), and Clearwater (FL) offering recommendations for new Commerce Secretary Carlos Gutierrez. Underscoring globalization, the report points to entrepreneurship and innovation as the two keys to success in economic development providing the “twin engines for wealth creation and a rising standard of living.” The report calls for making higher education a bigger partner, tying federal assistance to performance rather than entitlement, and re-focusing resources where the need is greatest in areas demonstrating the greatest potential for improvement. Specific recommendations include: increasing technical assistance funding for innovation-based strategy development; requiring long-term, innovation-based, regional and community development strategies as a prerequisite for follow-on federal assistance; the replacement of entitlement grants with performance-based challenge grants within 10 years; and, to create effective forums for propagation and sharing of best practices in economic and community development. The program will consolidate dozens of existing federally funded programs.

For a copy of the report, or to learn more about the Strengthening America’s Communities Initiative, visit http://www.commerce.gov/SACI/

New Fund for African Entrepreneurs

This month’s events around the G-8 meeting in Scotland and the Live 8 concerts have generated much discussion about how to eradicate global poverty. Fortunately, these discussions have not just generated more talk -- concrete proposals are coming forward, too. The latest example is the East Africa Small Enterprise Fund, a joint program developed by the Shell Foundation and GroFin Capital, an Africa-based financial firm. This $100 million fund will not operate like a typical micro-enterprise fund; it is not designed to back new start-ups. Instead, the fund is intended for African entrepreneurs with potential to become important regional and global players. Entrepreneurs can access the fund for amounts ranging between $50,000 and $1 million. The fund will begin operations in Uganda and Kenya, and then roll out to other parts of sub-Saharan Africa. It represents one of the first times that private financiers and development agencies have cooperated in a fund that will combine finance and technical assistance to help nurture African entrepreneurs.

Learn more about the East Africa Small Enterprise Fund

Using Economic Performance Measures to Track Government Progress

Entrepreneurs must perform according to concrete economic performance measures every day: sales, revenue, productivity, and the like. Federal agencies should do the same, but this is often easier said than done. A new report from the Government Accountability Office (GAO) finds that federal government agencies do a poor job of using economic performance measures to assess their work and results. GAO convened an expert’s workshop to examine government agency use of economic performance measures, and how these assessments could be improved. The panel found that few agencies use such measures (such as cost-benefit analysis) in developing regulations or assessing program performance. This shortcoming has many causes, but is largely due to the fact that agency leaders fail to demand such measures or to fund such assessments. The failure to effectively assess performance can be especially dangerous in new program areas such as homeland security. The panel recommended that federal agencies provide more support for efforts to assess program results using economic performance measures. They also suggest that an outside group, such as the National Academy of Sciences, might consider developing general guidelines for the federal use of economic performance measures.

The July 2005 Government Accountability Office (GAO) report, Economic Performance: Highlights of Workshop on Economic Performance Measures (GAO-05-796SP), is available at: http://www.gao.gov/new.items/d05796sp.pdf

A Different Take on Entrepreneurial Hotspots

Business Week Online has taken a different look at entrepreneur-friendly communities. Instead of simply ranking places that perform well on certain measures, BW Online has opted to take a closer look at five places that are doing well, but may not be found at the top of traditional rankings of the “best cities for business.” The profiled communities are a diverse lot: Medford, OR; Newark, NJ; Orlando, FL; Provo, UT; and Waitsfield, VT. This list includes small towns and large metro areas. What does the group have in common? They tend to be near a major college or university, host a diverse mix of cultural and recreational activities, and have a strong infrastructure to support new and growing businesses. According to the authors, the bottom line is that there is no longer a “recipe” for supporting and recruiting growing businesses. Each community must develop its own approach based on unique local assets and competitive advantages.

Read the July 12, 2005 Business Week Online Special Report, “Rewriting the Location Rulebook.”

First UEP center opens in Kansas City

The first pilot program in a nationwide effort to develop one-stop economic empowerment centers to support minority entrepreneurship and business development recently opened in Kansas City, Missouri. This is the first center to launch through Urban Entrepreneur Partnership (UEP), an initiative of the White House, National Urban League (NUL), Business Roundtable, and the Ewing Marion Kauffman Foundation. The Kansas City Urban Entrepreneur Center, which is being funded and launched by the Kauffman Foundation, will serve as a model for subsequent UEP pilot centers to be opened as part of a nationwide program announced last year. Additional cities designated are Atlanta, Cincinnati, Cleveland, and Jacksonville, with Milwaukee and Baltimore being explored.

Each center will be administered by local NUL affiliates. The UEP centers are designed to provide business training, intrusive coaching and mentoring, and financing and procurement opportunities to minority and urban business owners. The Kansas City center has started with select group of minority entrepreneurs who are serving as test cases for future entrepreneurs that will go through the program in Kansas City and the other five cities.

For more information visit: http://www.kauffman.org/items.cfm?itemID=628

House Science Committee Provides Leadership on Tomorrow’s Entrepreneurs

Continuing its recent series of hearings emphasizing the role of federal policy in promoting entrepreneurial activity, the House of Representatives Committee on Science last week demonstrated that it clearly understands the importance of high-growth entrepreneurs and the “innovation ecosystem.” Recognizing the committee’s lead in focusing lawmakers’ attention on high-growth entrepreneurship, the committee chairman Rep. Sherwood Boehlert (R-NY) noted that other members of Congress need to become more savvy and sensitive to the importance of innovation and entrepreneurship. His speech was so inspiring, another committee member joked that “those of us who did not have religion acquired it.”

Witnesses, including Johns Hopkins University President William Brody, Cisco Systems Chairman John Morgridge and IBM Vice President Nicholas Donofrio called for:

• Increasing federal support for long-term research and development (R&D)

• Tax policies that would reward private industries for doing the same

• Increased investment in math and science education

• A legal frameworks that promoted intellectual property and robust technology.

A webcast and testimony from the proceedings is available at:
http://www.house.gov/science/hearings/full05/july%2021/index.htm.

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