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Week of March 20 - 26, 2006

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.

Immigration Policy and the Attraction of Talent

Much research highlights the close connection between open immigration policies and entrepreneurial activity. By encouraging immigration and the free flow of people and ideas, nations and regions can help promote innovation at the same time. Flexible immigration policies have been a key ingredient in America’s economic success. Yet, after 9/11, borders have tightened and many observers fear that talented foreigners will move elsewhere. A new policy statement from NAFSA: the Association of International Educators highlights the potential downsides of these trends. NAFSA’s basic claim is that current US immigration policies are based on concepts first developed fifty years ago. As a result, the rules are inflexible and thus block streamlined, effective and regular movement across borders. In today’s globalized world, researchers and foreign talent are likely to move across borders on a regular basis. The US needs policies that allow for both temporary and permanent resident status for these types of workers and managers. Specifically, NAFSA urges Congress to revise the current visa cap system to increase the flow of foreign talent in the US and to loosen current rules for the provision of student visas. Both of these steps will make it easier for foreign students to be educated, and hopefully, become entrepreneurs, in the US.

To view the March 2006 NAFSA Policy Statement on Immigration Reform and Attracting Foreign Talent, visit http://www.nafsa.org/press_releases.sec/press_releases.pg/immigration_reform_stmt

Large vs. Small Firms: New SBA-sponsored Research

What’s the difference between fast growing large firms and smaller gazelle companies? That was the question pondered by researchers in a new study released by SBA’s Office of Advocacy. Innovation and Small Business Performance compared the performance (between 1984 and 1997) of INC. 500 firms with a group of 500 large, fast-growing, publicly-held companies. The researchers found that high-growth firms (both large and small) are concentrated in a few key industries. Fifty-four percent of fast-growing small firms could be found in ten industry sectors. These same ten sectors accounted for 40% of large firms. Sixty percent of small firms were in the service sector—compared to 28% of large firms. Manufacturers comprised the largest group (between 30-38%) of the larger firms. The researchers find that as the technological intensity of an industry increases, the impact and number of small fast-growing firms is likely to increase. Meanwhile, production intensity is associated with greater impact from larger firms. These findings provide further evidence of the role of new entrepreneurial businesses as drivers of technological innovation and creative destruction in the economy.

To view the March 2006 Small Business Administration Office of Advocacy-sponsored report, Innovation and Small Business Performance: Examining the Relationship between Technological Innovation and Within-Industry Distributions of Fast-Growth Firms, by Jonathan T. Eckhardt and Scott Shane, visit
http://www.sba.gov/advo/research/rs272tot.pdf

Clean Tech Investments

If you asked a group of venture capitalists about “the next big thing,” you’d likely get a varied list that would include things like biotechnology, nanotechnology and health care. We can now add clean technologies to that list. The Cleantech Venture Network has been tracking the field for some time. They define cleantech as a series of technologies that allow us to make more valuable use of natural resources and to reduce ecological impacts of this use. Thus, fields as diverse as manufacturing, energy, agriculture, logistics, and information technology, can have strong “cleantech” components. The Cleantech Venture Network has been measuring investments in cleantech, and they reported earlier this month that the total 2005 venture capital investment in cleantech reached $1.6 billion, a 34% increase from 2004. This total puts cleantech into fifth place (behind biotechnology, software, medical and telecommunications) in the ranking of sectors favored by VC investors. While the Cleantech Venture Network does have a pretty expansive definition of “cleantech,” their numbers do indicate that green technologies are becoming more attractive to investors.

To learn more about the Cleantech Venture Network and to access its publications, visit
www.cleantech.com. 

[NOTE: Most publications and materials require payment.]

The Better World Project

Technology transfer is making a better world. It may sound a bit simplistic, but it’s true. Many leading innovations, including the Google search engine and the PSA test for prostate cancer, were developed in universities and then spun out into innovative products and businesses. In an effort to publicize these important innovations, the Association of University Technology Managers (AUTM) has unveiled the Better World Project, a media campaign to publicize the role that technology transfer plays in promoting innovation and entrepreneurship. AUTM’s Better World website includes a number of great resources, including several books that present case studies of how important breakthroughs made it from the lab to the marketplace. The site includes a searchable database of more than a hundred products that have emerged via the technology commercialization process.

To access the Association of University Technology Managers Better World Project website, visit http://www.autm.net/betterworldproject.cfm

House Dems Question Small Business Budget

Democrats on the House Small Business Committee are expressing concern over the administration’s proposed budget for the Small Business Administration (SBA). In a new report, they note that the budget plan proposes cuts to three-quarters of the 100 small business programs operated by the US Government. Within this group, nearly half of the programs were slated for outright elimination. According to the report, this year’s budget continues a four year pattern of cuts to SBA programs. The Committee’s ranking member, Rep. Nydia Velazquez (D-NY), has vowed to fight the cuts and plans to continue pressing for the continuation of federal investments in key SBA programs.

To view a press release regarding the House Small Business Committee Democrats’ review of the FY 2007 Small Business Administration Budget plan, visit http://www.house.gov/smbiz/democrats/PressReleases/2006/pr030206.htm. 

Collecting Data on Current State Programs to Foster Innovation Capital

A new set of surveys by the National Association of Seed and Venture Funds (NASVF) are looking to capture key data from state policymakers on winning strategies for fostering innovation capital. The report is expected to show that states are natural incubators for many new venture capital programs and incentives with pre-seed or validation funds, angel networks, creative tax incentives, and other innovations taking root across the country. Preliminary survey results will be released on May 18 in Washington, DC at the State Venture Capital Symposium – sponsored by the Ewing Marion Kauffman Foundation, the Federal Laboratory Consortium for Technology Transfer and the National Science Foundation.

NASVF is still accepting survey responses via their website – www.nasvg.org. 

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All stories © 2006 The Public Forum Institute
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