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Week of July 10 - 16, 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.

Michigan Entrepreneurial Index

Michigan’s entrepreneurial climate needs significant improvement – soon. This assessment comes from a new Entrepreneurship Scorecard for Michigan published by the Edward Lowe Foundation. The report gives Michigan an overall entrepreneurial dynamism grade of D. This poor showing results from several factors. Michigan has not seen growth in the number of small businesses, and its performance in other key areas, such as university spin-offs, venture capital financing, or development of high-growth firms, also lags. The report concludes with a host of recommendations for improving Michigan’s entrepreneurial climate. These include getting the basics right (i.e. improving the state’s overall regulatory climate), providing incentives for risk capital formation, building peer-to-peer business networks, and encouraging the development of “green gazelles” – fast growing firms focused on solving environmental challenges. This Entrepreneurship Scorecard should be of interest to those outside of Michigan as well. It offers an excellent template—with clear metrics---for other states seeking to assess the state of their entrepreneurial economies.

Access a copy of the Entrepreneurship Scorecard, Michigan: Toward an Entrepreneurial Economy, 2005-2006.

Technology Trends for 2020

A new study from the RAND Corporation takes on a tough job -- assessing where new technologies will be in 2020. The study examines sixteen key technology applications (e.g. green manufacturing, rural wireless development, and genetically modified crops) and their impacts in 29 countries. The study predicts that rapid technological change will continue unabated over the next fifteen years. It also predicts that current advanced countries, such as the US, Germany and Japan will maintain their technological preeminence. However, the study notes that these nations must ensure that “laws, public opinion, investment in research and development, and education and literacy are drivers for, and not barriers to, technology implementation.” It also suggests that several economies will emerge as major technological players. This list includes China, India, and the scientifically proficient countries of Eastern Europe, such as Poland. Finally, the report notes that scientifically lagging (e.g. Egypt, Kenya, Pakistan) or scientifically developing economies (e.g. Mexico, South Africa, Turkey) will lack the capacity to capture the full benefits on ongoing technological change. These nations must make major efforts to eliminate existing impediments and to support investments that help them capitalize on critical applications such as solar technology, rural wireless development, and easy-to-use health diagnosis tests.

To access the 2006 RAND Corporation Research Brief, Global Technology Revolution 2020, visit http://www.rand.org/pubs/research_briefs/RB9179/. More detailed reports can also be accessed or purchased via links from this page.

Another Take on Technology Trends

RAND Corporation isn’t the only one looking at technology trends; WIRED magazine examines “Six Trends that are Changing the World” in its July 2006 issue. The six big trends are: peer production, unlimited video, personalization, green technology, open standards, and technology mergers and acquisitions. The last item on this list—technology mergers and acquisitions—may be of particular interest. It refers to the ongoing trend where large corporations use start-ups as de facto R&D labs. Instead of setting up an in-house laboratory, firms like Cisco and Microsoft scout the market for promising start-ups with innovative technology development underway. They then open up their wallets and purchase that firm. In the last year alone, Microsoft has purchased twenty-four different start-up firms. This trend may have some interesting implications for technology entrepreneurs. In the 1990s, the initial public offering was the holy grail for new start-ups. In this decade, the IPO may be replaced by the M&A as new firms are bought up by their larger publicly-held brethren.

“Six Trends that are Changing the World,” appears in the July 2006 issue of WIRED magazine and can be accessed on-line at www.wired.com/wired.

Visa Reform and the US Technology Industry

America’s high technology business executives are growing increasingly concerned about their inability to recruit and retain skilled foreign-born technologists and engineers. A new report from the AeA, a trade association for high technology industries, paints a gloomy picture of the current situation. The report notes that foreign-born scientists have always been a core part of the US industrial base. At present, one in four US-based scientists and engineers is foreign-born. In addition, nearly half of all US Nobel Prize winners (between 1901 and 1991) were foreign-born or the children of the foreign-born. Yet, attracting these skilled researchers is becoming more difficult. Demand for H-1B visas (used for highly skilled workers) is growing, while their availability shrinks. In fact, the cap for FY 2007 H-1B visas was met four months before the start of the fiscal year. AeA recommends a new policy approach that is more open and more flexible. It calls for expanding the number of H-1B visas granted each year, and also calls for special exemptions in cases where a foreign-born researcher can make a special contribution in key areas of science and technology. They also recommend that current rules are revised to make it easier for foreign students to enroll in US universities and to remain here permanently if they complete their advanced degrees.

The June 2006 AeA Competitiveness Series report, “Attracting the Best and Brightest to the United States: Reforming High-Skilled Visa Policy,” is available at: http://www.aeanet.org/publications/AeA_Visa_Reform.asp.

Guidance for Entrepreneurs on Selling a Business

For most entrepreneurs, deciding whether and when to sell their business is one of the toughest calls. To help them evaluate their options, Kauffman eVenturing features a new collection of articles on successful selling strategies. This new collection, written by financial experts and several entrepreneurs who have successfully sold companies, offers business owners practical guidance on timing and other difficult issues, such as deciding who to sell your company to, whether to seek a buyer yourself or use an investment banker, how to get the best price once you do decide to sell and how to tell your employees.

Read this month's collection on Kauffman eVenturing -- www.eventuring.org. 
 

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