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April 30 - May 6, 2007

Where Biotech is Headed

Ernst & Young has completed its annual assessment of the global biotechnology industry and the news is very good. Capital raised by biotech firms grew by an impressive 42% in 2006, reaching a global total of $27.9 billion. US firms alone raised a record $5.4 billion in venture capital. Global public company revenues also reached a record level of $70 billion. The report dubs 2006 “the year of the deal,” as the value of mergers and acquisitions reached the second highest level in history. In the US, deals and alliances worth more than $23 billion were signed in 2006. Industry experts expect this heavy deal flow to continue in 2007 and beyond. Despite all this activity, the biotech sector is still not profitable but industry experts predict that the US biotech sector will reach profitability by the end of the decade.

Preliminary data on the report was released this month, with the full report to be released at this year’s BIO International Convention on May 8th. Learn more about the Ernst & Young report, Beyond Borders: Global Biotechnology Report 2007.

House Passes Legislation to Increase Access to Capital

Congressional Democrats have taken the first step forward in their Innovation Agenda, passing the Small Business Lending Improvements Act of 2007. Aimed at lowering the cost of financing, the legislation would create four new loan programs: a Rural Lending Outreach program; a Community Express program; a Medical Professionals in Designated Shortage Areas program; and, an Increased Veteran Participation program. While passed by the House, the legislation faces opposition from the Administration over
the inclusion of subsidies to reduce fees for lenders and borrowers in the 7(a) program.

Read the full text of the Small Business Lending Improvements Act of 2007.

Where the Tech Jobs Are

The latest edition of AeA’s eagerly-anticipated Cyberstates report was issued last week. The Cyberstates report offers a head count of where technology jobs and industries are located in the US. AeA, formerly the American Electronics Association, has an admittedly biased definition of “high-tech.” Computer manufacturing and consumer electronics are included, but other sectors, such as biotechnology, are not counted. So, the Cyberstates report doesn’t cover all tech sectors, but it does provide a good snapshot of what is happening in fields related to computers, information technology and communications. The big headline is that overall high-technology employment continues to grow, and rose by 3% last year. Even high tech manufacturing jobs grew—albeit slightly—last year. California, Texas, New York, and Virginia led the nation in high-tech employment in 2005. Virginia has the highest concentration of high-tech employment—partially attributable to its role as a headquarters for many government information technology contractors.

Learn more about the April 2007 AeA report, Cyberstates 2007. The full report is available for purchase.

The Power of Clusters in Rural America

A new Economic Development Administration-sponsored research report offers a comprehensive examination of how regional business clusters can help transform rural economies. The study takes a deep and comprehensive look at clusters across rural America, and it includes an analysis of clusters in every county in the US. Most clusters tend to be located in urban regions, but rural areas dominate in three not-surprising sectors: mining; agribusiness, food processing and technology; and forest and wood products. Nationwide, the clusters most closely associated with strong regional economic performance are: business and financial services, information technology and telecommunications, and printing and publishing. Overall, human capital is the most critical factor explaining differences in income growth between counties.

Access the January 2007 U.S. Economic Development Administration-sponsored report, [Unlocking Rural Competitiveness: The Role of Regional Clusters]

The report was produced by Purdue University’s Center for Regional Development, Indiana University’s Indiana Business Research Center, and the Strategic Development Group. In addition, the Indiana Business Research Center is maintaining a database with information on rural clusters.

The South Speaks Out... on Entrepreneurship

Recently, the Southern Rural Development Center (based at Mississippi State University) held a series of listening sessions across the South to hear from residents about how to create an entrepreneur-friendly climate in the region. SRDC has recently published the results of these sessions, and they offer interesting insights into the state of the South’s rural regions. Southerners seem to have a pretty good grasp of what needs to be done. Among the consensus recommendations for change are the following: cut red tape for new businesses, provide quality infrastructure, create new incentives to support new and emerging businesses, and launch entrepreneurship education in the schools and the college/university systems. Now, the challenge is to turn these goals into reality.

Access the 2007 Southern Rural Development Center report, Voices of the People: Strategies for Expanding Entrepreneurship in the Rural South.

Forbes’ Best Places for Business

While the SRDC report noted above recommended new strategies for entrepreneurship, it appears that many parts of the South are already getting the message. Forbes magazine’s annual list of the Best Places for Business is pretty heavy on Southern representatives this year. In particular, North Carolina is hot. The Raleigh area ranks as the number one metro area, while the state of North Carolina contains several other high-ranking metros, such as Durham, Charlotte, Asheville, and Winston-Salem. Other hot spots around the country include Provo (UT), Boise (ID), Des Moines (IA), and Knoxville (TN).

Learn more about Forbes magazine’s 2007 listing of the “Best Places for Business”.

Insure U for Small Business

Research conducted by the National Association of Insurance Commissioners (NAIC) in March revealed that many small businesses — defined as those with fewer than 100 employees — are exposed to serious risks that could be mitigated by a better understanding of insurance options. For example, while 71 percent of small businesses admit to being very dependent on one or two individuals, only 22 percent have Key Person insurance. Following up on that study, the NAIC just launched a website to assist entrepreneurs and small business owners with information on business risks and insurance options. The site provides basic information and tips in six categories: workers’ compensation; group health and disability; business property and liability; commercial auto; group life and key person life; and home-based business insurance.

Learn more about Insure U for Small Business.

The National Dialogue on Entrepreneurship is 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 entrepreneurship around the world. Subscribe now to receive your weekly copy. Archived issues are available online.

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All stories © 2007 The Public Forum Institute
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