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Archive for May, 2011

Let’s Get the Trans-Pacific Partnership Right


The Obama Administration is wisely moving forward with a landmark trade agreement, the Trans-Pacific Partnership (TPP). With origins in the Bush Administration, the TPP would increase regional economic integration between the United States and eight other Asia-Pacific nations: Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. The TPP represents a great opportunity for the U.S. to strengthen its trade ties with growing and dynamic markets but only if it truly raises the bar for fair, market-based trade. As spelled out in Gold-Standard or WTO-Lite?: Shaping the Trans-Pacific Partnership, a new report from the Information Technology and Innovation Foundation, as it stands the TPP unfortunately runs the risk of enabling, rather than curbing, a continuation of some of the rampant mercantilist trade practices that have hurt economic growth and invited skepticism of global trade.

In the old days, mercantilism and protectionism was as simple as erecting high tariffs and imposing import quotas. Now, it has become more sophisticated and complex: intellectual property theft, extensive use of non-tariff barriers, and abuse of anti-trust, regulatory, and tax policies are on the rise. The aim for the countries that use

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Innovation in Clean Energy and IT: The Same or Different?

At a Seattle climate event a couple weeks back, Bill Gates reiterated his long-standing argument for increased government support for clean energy innovation and R&D (transcript and video). Key quote:

In my view, you need a portfolio of investments, but the thing I think that’s the most underinvested in is basic R&D. That’s something that only the government, really, is going to do. Once you get further downstream, there are a lot of opportunities [for companies] … That upstream part is part of what makes me optimistic, even though we seem to have a political road-jam, at least temporarily, on some of the issues like carbon pricing. The innovation piece really is so important, and I do see good things happening, but the federal government should more than double what it’s spending on that piece.

This is a point he’s been making on his own and as a part of the elite American Energy Innovation Council, and it’s one we largely agree with: you’ve got to invest in innovation to make cleantech work. If you only worry about pushing the existing menu of clean technologies out the

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Human Genome Illustration

Investing in Innovation Pays Off: New Study Shows 14,000 Percent Return on Human Genome Project

Two new reports released last week provide some of the most compelling evidence yet for the importance of federal investments in science and technology innovation. Amid the bitter and protracted negotiations over this fiscal year’s federal budget, U.S. investments in science and innovation were largely spared from the deepest cuts some federal programs faced. But they may not be safe for long as Congress considers making further spending cuts in the fiscal year 2012 budget beginning in October against the backdrop of debate this summer over raising the national debt ceiling.

That’s why it is critically important that members of Congress on both sides of the aisle distinguish between federal “spending” and “investments.” What many fiscally conservative lawmakers omit in their zeal to slash spending is that many federal programs actually have positive rates of return, meaning they bring in more revenue—to the government, economy, or both—than they cost the taxpayer. To put it another way, some federal investments are profitable to the public balance sheet and save the taxpayers money in the long run.

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Public-Private Clean Energy Innovation at Work: The Massachusetts Wind Technology Testing Center


Many clean energy advocates focus primarily on “deployment, deployment, deployment.” Yet a recent development in Massachusetts provides a reminder that there’s much more to clean energy technology commercialization than flat subsidies for production. Last week, the Massachusetts Clean Energy Center (MassCEC), a state agency dedicated to clean energy industry development, officially opened the Wind Technology Testing Center(WTTC) in Boston Harbor. The WTTC, which will work with manufacturers to test large turbine blades to facilitate commercialization, is a joint project of the state of Massachusetts, the Department of Energy, and the National Renewable Energy Lab (NREL), and received major funding through the Recovery Act.


The center is capable of testing turbine blades up to 90 meters, which makes it the first such testing facility in the U.S. and the largest in the world. Previously, according to the Department of Energy, blades larger than 50 meters could only be tested in Europe. Some additional details from MassCEC (also see the Governor’s Office Flickr feed, as well as the New England Clean Energy Council’s photos, of the impressive facility):

When completed the WTTC will provide three

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New Forms of Private-Company Liquidity: Regulate or Orchestrate?

An oft-noted reason for lackluster venture returns is the lack of liquidity for private companies backed by venture capital.  For all kinds of reasons — regulatory, structural, madness-of-crowds — the IPO market for venture-backed startups has been essentially shut down for years.  Which means:

  • Valuations for companies that do exit are depressed becuase M&A buyers know there is not alternative
  • Companies need more capital to get to liquidity, which focuses investors on “certified” mega-hits rather than a broader range of innovation
  • Backers of venture capital firms shift their assets to less innovative but more lucrative asset classes, including (depressed) public stocks.

In the last two or three years a new form of liquidity for private companies has emerged, principally in the form of online marketplaces for private companies.  These companies — such as SharesPost and SecondMarket — are handling increasing volumes of transactions and, as importantly, providing another form of liquidity for private companies and their investors.  See the Q&A in Quora for some opinions about the scope and efficacy of these new media.

There are some ticklish regulatory issues with these exchanges, having to do with the gray

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Against the Current

Every so often a "news" item appears that gets the most important facts so upside down one is reminded of Thomas Jefferson's comment that   “… nothing can now be believed which is seen in a newspaper. Truth itself becomes suspicious by being put into that polluted vehicle” (Thomas Jefferson, June 11 1807, letter to John Norvell). The May 20 article in the Washington Post gives us a contemporary example that once again reaffirms the wisdom of the Founding Fathers.

The occasion is the imminent "threat" of increased availability of a nutritious, healthy, safe food with a lower carbon footprint and reduced environmental impact compared to competing products. It's difficult to make that out from the article, but we're talking about transgenic, or "genetically modified (GM)" salmon.

The offending piece in the Washington Post opens with an assertion that does violence to reality stating, "In the absence of a federal law requiring labels for genetically modified food…". What's wrong with this statement?

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Devotees and Detractors: What’s Wrong With the China Innovation Debate


With its latest five year plan, China has made the promotion of innovation and high tech industry growth a central part of its economic strategy. As a result, there has been increasing attention within the U.S. to the issue of Chinese innovation and innovation policy. As part of the strategic and economic dialogue the Obama administration and the Chinese government are engaged in discussions about Chinese (and U.S.) innovation policy. A broadening number of books, articles, op-eds, speeches and forums are focused on Chinese innovation policy, particularly on whether it poses a threat to the United States economy.

Understanding what the Chinese are doing and what the U.S. response should be (if any) is a critically important question whose answer will shape U.S. economic prospects for decades. Unfortunately however, the debate and dialogue about Chinese innovation policy is about as informed as the Miller Beer Less Filling-Tastes Great debate.

On one side are the detractors. These are the folks who look at China’s heavy-handed statist practices, its lack of respect for intellectual property, its massive subsidies of technology and argue that there is simply no way for this model to

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The Growing Demand for Spectrum

I’ve written a column for CNET on spectrum policy, “Meeting the need for spectrum,” addressing some of the arguments we hear about spectrum demand and supply. Some advocates insist that the demands of mobile broadband users for increased data capacity can be met without allocating the additional spectrum recommended by the National Broadband Plan, but that’s not realistic. While it’s certainly true that spectral efficiency has steadily increased for the past 100 years, the rate at which it increases is considerably slower than the rate at which demand is currently increasing. The rule for spectrum is “Cooper’s Law,” which stipulates a doubling of efficiency every 30 months. Contrast that with Moore’s Law forecasting a doubling of semiconductor capacity every 18 months and you see part of the problem. Factor in the demand growth that comes about as people trade in dumb phones for smart ones and you see the problem in full.

In the fairly near future, smart, mobile devices will become ubiquitous, and we won’t even recognize them as phones.  Cars will become rolling mobile networks, and we’ll have smart mobile devices embedded in our eyeglasses

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Public Sector Clean Energy Innovation at Work: High Efficiency Solar Energy

This is the second in a series of short posts describing emerging domestic clean technology businesses born out of the United States public-private based innovation system.  The goal is to understand where U.S. clean technologies come from, what policies best supported them, and understand potential weaknesses in the U.S. energy innovation system.  The first in the series – on thin-film solar – can be found here.

One of the many emerging clean technology success stories in the United States is Suniva, a high efficiency solar manufacturing company based in Georgia.  Their emergence is noteworthy for two reasons: its use of breakthrough innovations used by the information technology sector and its support from and partnership with the public sector.

Suniva’s history started at the Georgia Tech University Center of Excellence for Photovoltaics Research and Education (UCEP), a Department of Energy funded project under EEREs Solar Energy Technologies Program.  UCEPs goal is to conduct RD&D that increases the efficiency of silicon-based solar cells.  But the project is unique in that it doesn’t just stop at exploratory research.  Instead it bridges the basic science and engineering knowledge-base of

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Technology Economics: The Real Business Impact of Technology Leaders – the “Rubin 300”

Rubin Worldwide has identified a group of 300 firms that demonstrate technology leadership across several key industries, which we refer to as the “Rubin 300.” It is our hypothesis that these firms, as a result on business-results focused technology investment, will demonstrate better performance vs. their peers.

In earlier studies, we examined the differences in performance of the Rubin 300 (in a theoretical index called the Technology Leadership Index, or TLI) vs. traditional indices such as the S&P500 and the Dow Jones Industrial average. Our findings were that from January 2006 to December 31, 2010, the TLI has consistently outperformed the S&P500 and, since the beginning of 2010, has begun to surpass the DJIA. Since the beginning of the study, the TLI has averaged a 1.2% difference in value from the DJIA, 6.7% from the S&P500, and -2.3% from the Fortune 500.

This early research has begun to support the hypothesis that organizations that leverage technology efficiently do in fact create value to the shareholders. However, the stockmarket is not based on business results alone and can be impacted by unrelated market conditions and market sentiment. For this reason we

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