If you encounter problems viewing this email go to http://www.publicforuminstitute.org/nde/news/nde-news.htm

May 14 - May 20, 2007

The Need for Improved Data on New and Small Businesses

Following the culmination of a three year study, the National Academies, the nation's leading scientific advisors, are calling for significant improvements to the mechanisms the government uses to collect information on entrepreneurship. The current business data systems from the federal government do not adequately measure dynamic economic trends, particularly for new businesses. In order for policymakers and researchers to fully understand business births and deaths, worker flows, and growth of productivity and innovation – and their role in the larger economy – the report puts forward recommendations that relate loosely to three data and measurement needs: 1) to increase the statistical system's capacity to measure activities of small and young businesses—especially those positioned in fast-growing and innovative sectors of the economy; 2) to improve the coverage and depth of business data through more effective coordination and integration of existing information sources; and, 3) to shift the legal and organizational environment to accommodate data sharing and confidentiality protections in ways that enables the kinds of efficiencies envisioned by the panel to occur.

Download the executive summary of the report, Understanding Business Dynamics: An Integrated Data System for America's Future.

Purchase a hard copy of the report from the National Academies website.

Inc.’s Hot Cities

Inc. magazine’s annual list of boomtowns is out on the web and in the May 2007 issue. The 2007 Boomtowns list includes sixty cities deemed hot for business by Inc.’s editors. This listing places heavy emphasis on recent job growth figures so it tends to be skewed toward locations that also are enjoying rapid population growth. As a result, cites in the West and the South regularly rank very high on the list. Florida is home to six of the top twenty cities. The list is divided according to city size with separate rankings for large, medium, and small cities. When the rankings are combined, the top ten list (in rank order) is as follows: St. George (UT), Yuma (AZ), Prescott (AZ), Fort Myers (FL), McAllen (TX), Naples (FL), Las Vegas (NV), Sarasota (FL), Morgantown (WV), and Bend (OR).

Access the article, “Boomtowns ‘07” or check it out in the May 2007 issue of Inc.

Using Tech Know-How to Enhance National Security

An interesting and innovative new Pentagon program is seeking to engage venture capitalists (VCs) in an effort to identify new technologies or ideas that could help strengthen existing military and homeland security programs. The Defense Venture Catalyst Initiative (DeVenCI) taps the expertise of leading technology investors. Through a series of workshops, seminars, and other meetings, leading Defense Department officials and VCs collaborate to identify promising technologies that may exist in small start-ups who lack any experience dealing with the Pentagon. The VCs serve as “consultants” or technology scouts, while the DeVenCI team serves as the liaison for entrepreneurs and investors. This promising program is another example of innovative ways to improve public-private collaboration in the national security field.

Learn more about the Defense Venture Catalyst Initiative

Measuring Intangibles

As the knowledge economy becomes a more central component of our overall economy, intangibles (i.e. items such as intellectual property, brands, and human capital) become a more important component in a company’s and a region’s economic success. While that basic point is widely understood, the real challenge with intangibles is how to measure them. The value of tangible assets, such as physical property or financial assets, is fairly easy to measure. Measuring the value of new ideas or intangible assets like “goodwill” or strong brand is more complicated. And, getting this right matters. According to one estimate, US gross investment in intangibles could be as high as $1 trillion. A new Athena Alliance report examines recent efforts to develop consensus measures for intangible assets. The report offers a very useful guide into recent studies from the Organization for Economic Cooperation and Development (OECD), the US Securities and Exchange Commission, the Financial Accounting Standards Board, and other researchers.

Access the April 2007 Athena Alliance report, Measuring Intangibles: A Summary of Recent Activity, by Kenneth Patrick Jarboe.

Hot Markets for Venture Capital

A recent Knowledge@Wharton article summarized an interesting discussion among venture capitalists (VCs) at the 2007 Wharton Economic Summit. The topic concerned where VCs are likely to make their next “big bets.” In general, VCs are pretty bullish. While no one expects a return to the late 1990s boom, a lot of big deals, such as Google’s purchase of YouTube, means a lot of fresh cash infusions for many VC investors. Cleantech is probably the hottest area right now. Personalized medicine is also gaining attention among some investors. Finally, as the reality of global warming hits home, more investors are examining new opportunities tied to clean water production, distribution and conservation.

Access the May 2, 2007 Knowledge@Wharton article, “Where the Next Big Bets Lie for Venture Capitalists.”

Bank Lending to Small Business

Small business owners have always benefited from entrepreneur-friendly banks, but it also appears that being entrepreneur-friendly is good for the bank’s bottom line, too. A new Small Business Administration Office of Advocacy-sponsored study finds that small business lending adds significant value to the loan portfolios of all types of banking institutions. This effect is most pronounced for smaller banks, making small business lending a profitable niche. These results apply only to commercial and industrial loans. Small commercial real estate loans do not have the same value increasing effect for small banks.

Access the May 2007 US Small Business Administration Office of Advocacy-sponsored study, “The Value to Banks of Small Business Lending,” by Joe Peek.

Practical Advice for Entrepreneurs

Entrepreneurs searching for information on starting and growing their business have a new tool at their disposal. The Biz Info Library, launched during EntrepreneurshipWeek USA, is an online collection of articles featuring practical, results-focused information. Along with some of the top publishers on small business and entrepreneurial success, content providers include world-renowned authors and leading business experts. The online collection is a collaborative effort of The James J. Hill Reference Library, the Ewing Marion Kauffman Foundation and the Edward Lowe Foundation and is free to all users.

Access the Biz Info Library.

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.

National Dialogue on Entrepreneurship

All stories © 2007 The Public Forum Institute
Content from this newsletter may be reproduced for non-commercial purposes with proper attribution to the National Dialogue on Entrepreneurship and a link to www.publicforuminstitute.org/nde.