Look for the Silver Lining

Editor's Note

April / May 2009 By: Bob Cochnar Volume 7 Number 2

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It probably is not a good idea to pay acute attention to the fortunes (if that's the word) of the Dow Jones Industrial Average or your 401(k) if you want to avoid stomach cramps. By and by our economic ship will right itself (it always does). Meanwhile, why not look on the bright side of life, as one of the Monty Python troupe put it in Life of Brian.

Admittedly, this does sound a tad Pollyannaish given current circumstances and yet entrepreneurs searching for funding shouldn't consider throwing in the towel as several articles in this issue point out.

To begin with, the Obama stimulus package has provided the Department of Energy with about $39 billion to spend—fast. Companies and entrepreneurs in the alternative energy sector as well as fossil fuels should be taking a close look. Tom Michael, Innovation's Washington Bureau chief, has a report (Page 7).

Canny entrepreneurs have known about the Small Business Innovation Research (SBIR) grants, a Small Business Administration program, for a number of years and have taken advantage of it. Last year the program awarded more than $2 billion to some 6,000 companies. Each year, eleven government agencies set aside 2.5 percent of their R&D budgets for small businesses. A company can compete for up to $850,000 in grants over two years. Check out Sherry Robinson's article (Page 9).

And did you know that at least 30 states provide investment capital to businesses? Several of the programs—even though budgets have been trimmed—are sizeable: New Mexico, $536 million; Texas, $290 million; Ohio, $212 million; and Michigan, $204 million, among others.

The rules vary from state to state; the box (Page 28) accompanying Eric Billingsley's article offers contact information.

While venture capitalists aren't big risk-takers these days, they still have plenty of money that needs to be put to use. Dean Takahashi's article (Page 30) notes that "companies with traction, sound business models and some runway will look attractive—€¦but the companies need to have a plan for two or three years down the road."

So it's not uniformly awful out there.

Norman Augustine, the retired chairman and CEO of Lockheed Martin, was chairman of the National Academies of Science committee that published the major report, Rising Above the Gathering Storm, which formed the basis of the America Competes Act, which is now law. In our cover story, Augustine argues that as dangerous as our economic problems are, equally dangerous is the "increasing deterioration of the ability of Americans to compete for jobs in the global marketplace —€”whether that marketplace happens to be in disarray, as it is at the moment, or in a more vibrant condition as it has been in the recent past." The answer, he says, is innovation. Please read his article, which begins on Page 13.

Oops. In an article about the Battelle Memorial Institute published in the February-March 2009 issue, we inadvertently transposed the captions on photos of Erik Pearson and Alex Fischer. We also reduced Mr. Fischer's name to "Fisc." Our apologies.