U.lab/CIM partnership explores the hand-held revolution

Patrick Crooks of CIM with UTS students at the u.lab. Picture by Jochen Schweitz

Imagine booking a hotel room over the web, and getting the door key electronically sent to your mobile phone as you arrive – no frustrating queuing or check in after a long trip. You get to your room, tap the phone on a panel and the air-conditioning and TV channels change to your preferences, and WIFI is automatically set up for your devices.

These are the industry transformations being explored and envisioned by UTS’s u.lab, through its partnership with Commerce in Motion, Australia’s first near field communications (NFC)-only incubator. Together, they aim to explore how near field communications can revolutionise industries such as health care, aged living, entertainment and retail.

u.lab is an emerging platform for innovation projects at UTS drawing on academic expertise from business, engineering, architecture, design and IT, using human-centred and design-led innovation methodologies. This semester graduate students are exploring commercially viable opportunities in an NFC enabled world. Commerce in Motion is providing sponsorship and technology expertise through the ongoing mentorship of founders Patrick Crooks and Mark Jones.

Mark Jones and Patrick Crooks of CIM at the u.lab. Picture by Jochen Schweitzer

Mark Jones and Patrick Crooks of Commerce in Motion at the u.lab. Picture by Jochen Schweitzer

Co-founder of UTS’s u.lab and Senior Lecturer in the Faculty of Engineering and IT, Dr Wayne Brookes, said, “The ability to tackle real-world problems with a new technology has elevated the program to a new level. Commerce in Motion is leading in the NFC field and their mentorship is invaluable. In turn, u.lab students can help them identify and commercialise potential applications of NFC.”

That’s not as easy as it sounds. Jones highlights one of the main challenges of emerging technologies: “NFC is the type of technology where ideas are like bellybuttons – everybody has one. The bridge between a frivolous idea and a great business is in the design of an elegant solution that meets specific needs. We aim at bridging that gap by combining our experience with u.lab methodologies.”

Brookes agrees that today’s leading technology companies are those who put as much emphasis on the user experience as they focus on building great technologies. “The best technologies are those that customers don’t even know that they are interacting with, and a human-centred approach utilising NFC as an enabler ensures this level of user experience can be achieved,” he said.

Apart from the learning outcomes for UTS students, the partnership hopes to yield further results, including the development of a NFC Futures design approach.

Today (31 October) student teams are revealing their proposals to the public at LauchPad, the bi-annual ideas pitching event at u.lab. The organisers hope that for some of the students this may be the seed for a successful start-up.

Commerce in Motion has demonstrated a deep commitment to NFC innovation through the growth of its own entrepreneurial portfolio, involvement in the Fishburner’s start-up community and the hosting and sponsoring of events such as Australia’s first NFC Hackathon and the u.lab NFC Futures program. Commerce in Motion also hosts a monthly NFC Developers Group Meetup and is publishing two guides on the use of NFC technology.

With the help of innovative companies, NFC can become a growth industry in Australia. “NFC is widely predicted to become a multi-billion dollar industry, responsible for over US $1trillion trade in the next five years,” Jones said.

“Australia is fertile ground with high smart-phone penetration and the wide prevalence of NFC enabled merchant terminals. We encourage industry leaders to participate in the NFC Futures initiative with us so that more Australian businesses can benefit from the transformation that is occurring.”

via newsroom.uts.edu.au


Off the beaten track | UTS News Room

 Nathan Wiltshire and Baptiste Bachellerie standing on Redfern street

Nathan Wiltshire and Baptiste Bachellerie know the importance of getting off the beaten track when travelling. The business partners are putting what they learned during their UTS masters degrees into practice with the creation of South of the Border – a new enterprise adding meaning to the way visitors experience Sydney.

Sydney Opera House, Uluru, the Great Barrier Reef; it’s iconic offerings like these that drew 5.9 million tourists to Australia in 2011. However, many, say Nathan Wiltshire and Baptiste Bachellerie, prefer to get under the skin of a city and into its communities, to find its pulse. 

It’s this iterative, human-centred approach that Wiltshire (a Bachelor of Management in Tourism and MBA graduate), and former classmate Bachellerie, are building on as part of South of the Border’s mission to create a more holistic model of tourism. With help from Core Member of UTS’s Cosmopolitan Civil Societies research centre Simon Darcy, the pair is researching what people really want to uncover about the local environment.

“It’s about learning the types of experiences visitors to cities really want and developing empathy to uncover these insights,” says Wiltshire. “We’ve found they cherish interactions with locals as a means of better understanding community culture, and after experiencing a way of life beyond the tourism precincts, they come away with so much more.”

Paris-native Bachellerie agrees: “I’m a regular traveller and I’ve always looked for more alternative experiences to the mass tourism on offer. I’m always searching out information from locals when I visit a new place, and in some cities it’s easier than in others.”

South of the Border is using design thinking and its human-centered approach to explore the concept of ‘shared value’ – creating activities that are mutually beneficial for tourists and locals. Last month they launched a pilot project in Redfern, where small groups of tourists interact with grassroots community initiatives and are guided by local individuals who share their own enriching stories of the area.

The project aims to give visitors an understanding of Sydney’s urban culture and its history, while economically supporting community work and making personal stories a matter of local pride. The South of the Border website, which is still being prototyped, aims to enable the wider community to get involved by adding their own stories online.

“South of the Border is an example of innovative entrepreneurship based on cross discipline cosmopolitan research that values local communities,” says Darcy. “It seeks to include them as part of a co-creation process where they’re not only valued, but economically rewarded for their involvement.”

Bachellerie believes tourism is the ideal vehicle for creating shared value in communities. “The way Sydney has been built over the years, with the different waves of immigration, means many of the city’s suburbs have a distinct history and taste. 

“Redfern, Cronulla, Parramatta – they all have a strong identity but they’re surrounded by stereotypes that aren’t necessarily true of the suburb. We want people to discover what the local people of these suburbs do, what projects the community is championing and the vision they have for their future.

“Sydney Harbour and Bondi Beach are wonderful to visit, but there are a large number of visitors who seek deeper meaning in their travels. So that’s where we want to facilitate nourishing connections between visitors and local community heroes.” 

Bachellerie and Wiltshire, who grew up in Sydney’s south, chose Redfern as the pilot suburb because “we’ve both lived in the area and know it’s a diverse suburb really rich in history and culture, yet it’s often misunderstood by people who don’t know any better. We really believe our concept has great potential to dispel misconceptions and break down those barriers and stereotypes,” says Wiltshire.

South of the Border also aims to change the traditional tourism distribution chain. “Inbound tour operators, a tour wholesaler, a retail travel agent, maybe even the concierge at a hotel – each of these are taking a percentage of the value you’re creating,” says Wiltshire.

“By leveraging the internet and building an online platform people can interact with, I think we can cut out all the middle men and use those extra funds to support the core of our social activities.”

Bachellerie agrees: “The companies we see on the tourism market these days are small family-operated and owned businesses who generally have very interesting stories to tell, but they find it difficult to grasp the international market.

“Or there are the big industry players who have access to any kind of market they wish to target, but may miss the more personal stories.

“I think we sit in between those two: we’re leveraging the distribution tools the big players use but with the more human-centred approach used by small business.”

Wiltshire adds, “Rather than using the traditional model of business where you have an idea and make a finished product before launching it to the market, we want to involve the community and potential users of our service the whole way along.”

Wiltshire and Bachellerie believe their masters studies at UTS have been instrumental in the development of this innovative tourism business model.

“In tourism there are so many stakeholders that need to be engaged if we’re going to manage to do anything,” says Bachellerie. “One strength of South of the Border is the team. There is now a family of 10 of us from many different nationalities and different streams of study at UTS. But we’re all brought together by this passion for travel and a desire to scratch the surface.”

Wiltshire is also using his experience with UTS’s international leadership program BUiLD to get the new enterprise off the ground.

“BUiLD helped me focus on a more sustainable model of business, something that’s connected with community and social outcomes. That’s how I came across this idea of shared value.

“We see tourism as the ideal industry to champion sustainability on a global scale, and this idea of shared value is really intertwining business and the planet; it’s a mutually beneficial way to move forward long term.”

To get involved in the South of the Border pilot, visit facebook.com/SouthoftheBorderTours or visit www.gosouthoftheborder.co.

via newsroom.uts.edu.au


Success of Crowdfunding Puts Pressure on Entrepreneurs | via NYT


Kickstarter’s booth at the XOXO tech conference. Kickstarter has helped about 30,000 projects raise money. 


Published: September 17, 2012 

PORTLAND, Ore. — An effort to build a sleek aluminum charging dock for the iPhone generated fervor online when it was announced last December. The project’s creators raised close to $1.5 million through Kickstarter, a crowdfunding Web site, and promised to start shipping their Elevation Dock in April to those who had backed the project.

But last week Apple announced aredesigned iPhone that is not compatible with the dock — and because of manufacturing delays, some of the project’s original backers were still waiting to receive theirs. The designers are now scrambling to make an adapter and update the product.

“I’m just hoping to get mine before the iPhone 6 ships at this point,” one backer wrote on Kickstarter.

Crowdfunding sites like Kickstarter and IndieGogo are letting designers and other creative people connect with audiences who want to finance their dreams, and they are becoming increasingly popular. Nearly three million people have helped a total of 30,000 projects meet their fund-raising goals on Kickstarter, the largest such site, to the tune of $300 million in pledges.

But for the creators of these projects, getting the money is sometimes the easy part. They then have to turn their dreams into reality, with a crowd keeping an eye on their progress.

This new model comes with a host of potential pitfalls that are often difficult for project creators to anticipate, and hard for the armchair philanthropists who back them to grasp. Backers are essentially putting their trust in the project creators, giving them cash in return for the promise of a future reward.

Those who give a few dollars to a moviemaking project may get their names in the credits, while someone who puts up $100 to support development of a smart wristwatch might be promised one of the finished items.

Much of the time this works out. But some projects, including several prominent and in-demand ones, have run into missteps and lengthy delays. The permits for a new food truck might not come through. Or a gadget like the Elevation Dock might be harder than expected to manufacture and ship.

The rise of crowdfunding came up often over the weekend here at the debut of theXOXO Festival, a conference that focused on new models and outlets for creativity on the Internet. The conference was co-founded by an early Kickstarter employee, Andy Baio, who sold $400 tickets on Kickstarter itself to gauge interest in the event and raise money for it.

The relationship between creators and backers on crowdfunding sites is still being worked out. The backers play the role of philanthropists, investors, customers — or all of the above. And when promised rewards are slow to materialize, eager backers can get cranky.

“It’s definitely a lot of pressure,” said Eric Migicovsky, whose Kickstarter project to create a line of “Pebble” wristwatches with innovative displays raised more than $10 million — more than 10 times what he had hoped to get. “There are 65,000 people who have preordered a watch that doesn’t yet exist.”

Mr. Migicovsky hired someone to help manage his in-box — nearly 9,000 people have e-mailed him about the project — and to post updates. He originally hoped to start shipping the watches in September, a date that he has had to push back, although he declined to say by how much.

A study by Ethan Mollick, a professor of management at the Wharton School of the University of Pennsylvania, found that 75 percent of design- and technology-related projects on Kickstarter, most of which involve physical products, failed to meet their promised deadlines. In general, project backers seem to be understanding of hiccups and willing to wait as long as they are kept informed.

“The honeymoon period that we are experiencing around crowdfunding is beginning to come to a close,” said Wil Schroter, co-founder and chief executive of Fundable, a company that is applying crowdfunding to the venture capital process. “People realize there is real risk involved in investing in anything early-stage, whether it’s an idea, a charity or a product, and they’re starting to understand they aren’t buying off of Amazon.”

Kickstarter says it is not responsible for making sure a project is completed on time, or at all. It says project creators are legally obligated to fulfill their promises, but if they do not, Kickstarter has no mechanism for refunding the money that was pledged. The project creators can refund the money if they choose.

Sometimes project creators can be overwhelmed by the success of a crowdfunding campaign.

The four college students behind Diaspora, a project that aimed to build an open alternative to Facebook, began with the modest goal of $10,000. They raised $200,000from around 6,500 people. But after three years, they decided to start on another venture and turned the code over to anyone who might want to keep working on it. (One member of the team committed suicide last year.)

read more via nytimes.com


Forget the Web, Valley Start-Ups Get Real | By PUI-WING TAM and JESSICA E. VASCELLARO

A long-shunned Silicon Valley technology sector – consumer-electronics start-ups – is showing some surprising signs of life. One San Francisco couple is making a $359 kitchen appliance dubbed Nomiku, which people can use to “sous-vide” food. Jessica Vascellaro has details on The News Hub. Photo: Alison Yin for The Wall Street Journal.

A long-shunned Silicon Valley technology sector—consumer-electronics start-ups—is showing some surprising signs of life.

Entrepreneurs in California have quietly launched dozens of small hardware companies, designing everything from smart wristwatches to digital thermostats. The typical business plan: raise enough money to create prototypes in the U.S. that can be manufactured in Asia and sold online.

These consumer-electronics makers are attracting new interest as some of the Internet frenzy abates following spotty performances by newly public Web companies like Facebook Inc. FB +5.04% and Zynga Inc. ZNGA -0.33%

One team taking advantage of the shift is husband-and-wife duo Abe Fetterman and Lisa Qiu, who in June set up a hardware company in their two-bedroom San Francisco apartment. The couple is making a $359 kitchen appliance dubbed Nomiku, which people can use to sous-vide food—that is, cook meats and vegetables in airtight plastic bags in a water bath.

The couple didn’t take a traditional venture-capital route to launching Nomiku. In March, they flew to Shenzhen, China, to participate in a three-month program at hardware accelerator Haxlr8r, where they learned how to make a product prototype. In June, they decided to raise money through crowdfunding websites Kickstarter and AngelList.

Now they have snagged more than $580,000 through Kickstarter and are aiming to close on seed funding in the next few months. “Most hardware start-ups are going the same route as us,” said Ms. Qiu, 24 years old.

Alison Yin for The Wall Street Journal

A prototype of the Nomiku cooking device, attached to a pot.

The rebirth of these tiny consumer-electronics start-ups—often through similarly scrappy means—goes against conventional wisdom.

For years, such companies were stigmatized as expensive to fund and operate, given the costs of manufacturing and retail distribution. The consumer-electronics market is also dominated by giant companies such as Apple Inc., AAPL +2.63% Sony Corp. 6758.TO +2.16% and Samsung Electronics Co. 005930.SE -0.93%

But the economics of starting a hardware company have changed. Prototyping costs have dropped with the advent of 3-D printers and incubators that provide machining tools. Third-party services have sprung up to help start-ups navigate the manufacturing process in countries like China. And some factories are willing to do smaller product runs, allowing start-ups to turn out just a few thousand units at a time.

Rob Coneybeer, a venture capitalist at Shasta Ventures who has invested in smart thermostat maker Nest Labs Inc., said the cost of making a consumer-electronics prototype has dropped to $500,000 to $1 million today. That’s down from $20 million to $25 million a decade ago, according to industry estimates.

Today’s hardware start-ups also can cut costs by outsourcing manufacturing to Asia and selling directly to consumers over the Internet.

And they can avoid holding inventory and warehouses, thanks to more efficient shipping routes from Asia and the ability to manage orders through a website instead of guessing how much product to give a traditional retailer ahead of time, said Liam Casey, chief executive of PCH International, which handles manufacturing and fulfillment for large and small tech companies.

Crowdfunding websites like Kickstarter and AngelList have also helped to even the playing field with financing. All of this is “democratizing entrepreneurship” for hardware makers, said Naval Ravikant, co-founder of AngelList, a website where young companies can apply to seek “seed” money.

Venture capital for consumer electronics remains scant compared with the plethora of cash available for Web companies, but investments into hardware start-ups are rising. Venture capitalists put $262.6 million into consumer-electronics companies last year—a fraction of the $5.2 billion that went into consumer Web firms—but that was up more than 50% from $130.4 million in 2010 and $108.8 million in 2009, according to VentureSource.

With the recent choppy performance by some Web companies, several investors said there’s more attention on consumer-electronics makers.

“With what’s happened to daily-deals companies and social companies, people are realizing that a barrier to entry [with hardware] is a good thing,” said Brian O’Malley, a venture capitalist at Battery Ventures who invested in headphone maker Skullcandy Inc. SKUL -5.58% “If there isn’t a lot of intellectual property in a business, others can be fast followers.”

Some Silicon Valley hardware makers have raised large rounds recently. Square Inc., the maker of a mobile credit-card reader, this month raised a new round of funding that valued it at $3.25 billion, people familiar with the matter have said. E la Carte Inc., a Palo Alto, Calif., company that makes tablets for restaurants, snagged $5 million last year, while camera maker Lytro Inc. raised more than $35 million last year.

Others are launching through Kickstarter and other means. Smart wristwatch maker Pebble Technology Corp. of Palo Alto raised $10.27 million from Kickstarter in May. Incident Technologies, a Santa Clara, Calif., company that is making a digital guitar, raised $350,000 on Kickstarter and $1 million on AngelList earlier this year.

Idan Beck, CEO of Incident Technologies, said as more small hardware companies have grabbed consumer interest through Kickstarter, they are proving there’s a market for newfangled devices.

“We used to have to spread a much wider net [to raise money] because of an aversion to funding hardware,” he said. “But now there’s a congregation of people interested in the product category.”

Not all of these start-ups will be able to scale up. The San Francisco-based maker of WakeMate, a smart wristband that helps people wake up, suffered production delays in 2010 and safety issues last year, and has since stopped making new products. Unplugged Instruments, a Silicon Valley start-up that was making a next-generation electronic guitar, also closed after failing to raise money this year.

For Ms. Qiu and Mr. Fetterman at Nomiku, the key is stretching out the cash they have raised. So far, the couple has spent $20,000 to make the prototype of their Nomiku machine. They plan to go into production in the next few months, while also seeking to other financing.

“We’ve thrown everything to the wind to commit to this,” said Ms. Qiu.

—Ian Sherr contributed to this article.

Write to Pui-Wing Tam at pui-wing.tam@wsj.com and Jessica E. Vascellaro at jessica.vascellaro@wsj.com

A version of this article appeared August 18, 2012, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Forget the Web, Start-Ups Get Real.


The Invisible Bike Helmet: An Airbag On The Go | TechCrunch

People die trying to look cool. Vanity is the sad reason why people don’t wear bike helmets. So two Swedish women set out to invent “the invisible bicycle helmet”, They’ve succeeded, and the end product isn’t a made of clear plexiglass and there’s no lightbending-stealth technology. In fact it’s not really a helmet at all.

Hövding is a rapidly-inflating airbag that deploys from a collar around your neck when you’re in an accident. Here’s how it works, and a video demonstrating this amazing, but still expensive, invention.

The invisible bicycle helmet uses rechargeable battery-powered accelerometers and gyroscopes that detect the typical motions involved in a bike crash. They trigger a tiny gas inflator which instantly fills a nylon airbag with helium. The bag forms a hood around your head that cushions the impact of the street, a car, or anything else you slam into.

The product and company named Hövding began as the industrial design master’s thesis of two students, Anna Haupt and Terese Alstinat, at Sweden’s Lund University. After five years of research and $10 million in funding, they’re now selling the invisible bike helmet. It’s not cheap, though.

Hövding costs $600 and only works once. There’s also been some complaints about the design and an early version had trouble with the zipper.

But considering the potential hospital bills, and you know, the risk of death, it might be a good investment for fashion-forward bikers. Really you should just be confident and realize that wearing  areal bike helmet doesn’t make you uncool. But if that’s too much to ask, at least consider a Hövding.

via techcrunch.com


Planting Entrepreneurial Innovation in Inner Cities – Daniel Isenberg – Harvard Business Review

Remember just a decade ago when the term “inner city” basically meant “dead city,” conjuring up images of destruction, dereliction and despair? Today, inner cities are “in” — innovative, hip hotbeds of convenient culture, commerce and connection. Scholars such as Richard Florida and Edward Glaeser, among others, are showing that although increasing problems accompany increasing density, urban access to the good things of life increases even faster. The centripetal force of today’s cities is pulling the ambitious and educated back in, and increasing cities’ innovative capacity, without sacrificing (at least some would argue) their inclusiveness.

Entrepreneurs, too, are moving downtown: London, Boston, Barcelona and Buenos Aires are balancing the suburban pull of Silicon Valley and Route 128. Venture capitalists are close behind. Smart mayors, such as Boston’s Mayor Menino and New York’s Mayor Bloomberg, are fostering holistic entrepreneurship ecosystems to strengthen and accelerate the trend. Nor do you have to be a mammoth metropolis to have an urban entrepreneurship policy: led by Mayor Jorge Rojas, this month a dozen public and private institutions in the city of Manizales, known throughout Colombia for its concentration of universities and safe environment, in partnership with the Babson Entrepreneurship Ecosystem Project, launched a four-year initiative to dramatically increase the concentration of high growth entrepreneurship in the city.

What are we learning about what cities can do to foster entrepreneurship and innovation?

Develop an inclusive vision of high growth entrepreneurship. On the one hand, it is a reality that a small number of extraordinary entrepreneurial successes have a disproportionately stimulating effect on the environment for entrepreneurship in a city, such as the impact of Skype on Tallinn, Estonia. By definition, only a few can be extraordinarily successful, and city leaders need to communicate a coherent message to those “elites” about how important they are to your city’s future, that you need them there and will work to make it attractive. At the same time, the influx of ambitious, highly educated, opportunity-seeking entrepreneurs may risk creating social divisiveness. This can be countered with a strong message to entrepreneurs that they need to play a role in community building. With the encouragement of City Hall, entrepreneurs in Boston’s Innovation District created Innovation District Entrepreneurs After work (IDEA) to organize community events.

In parallel, you need to tirelessly communicate a coherent message to all of the stakeholders and residents, highlighting the entrepreneurial benefits of dignified job creation, quality of the environment, and innovative capacity. Boston’s Mayor Menino and his staff developed and have repeated hundreds of times the mantra of the Innovation District: “Live, work, play.” An intense social media strategy, combined with direct outreach, has led to numerous joint activities between the naturally less-affluent, creative Fort Point artists’ community and the Innovation District.

Use best processes, not best practices. As one of the leaders of the Innovation District put it to me, “We are a ‘platform,’ not a program.” An ecosystem exists in nature when numerous species of flora and fauna interact in a dynamic, self-adjusting balancing act. Thus, in cities, you need to provide a broad platform to support the inclusive vision, encouraging restaurateurs, designers, neighborhood groups, schools and universities, real estate developers, law firms and architects, chambers of commerce and other government agencies to interact with each other in innovative ways. Best processes are more important than best practices.

Boston’s Innovation District was launched with clear vision and commitment, but, surprisingly, one of its keys to success was that it had no detailed plan, budget, organizational structure, nor even an officially designated team. The fuzziness was a counter-intuitive advantage in engaging diverse stakeholders to define for themselves the role they would play. The mayor and his staff were inspirational facilitators, not controllers. They were not shy about making specific proposals and asking for investments from the private sector, but more as a way to concretize the projects’ feasibilities than to push particular programs.

One element of “best process” in fostering entrepreneurship ecosystems is experimentation. As Mayor Menino put it, “We’ll experiment with alternative housing models. We will test new ideas that provide live/work opportunities to entrepreneurs and affordable co-housing for researchers…. We’ll give architects and developers the challenge to experiment with new designs, new floor plans, and new materials. Our mandate to all will be to invent a 21st century district that meets the needs of the innovators who live and work in Boston.” Experiment. Test. Invent.

Define principles, not clusters. Innovation, creativity, design, sustainability, experimentation, entrepreneurship, inclusiveness: these are example principles to be infused into the city’s collective consciousness. But don’t prioritize specific sectors. One of the drawbacks of popular cluster strategies is that prioritizing sectors serves as a signal to entrepreneurs about where they should seek opportunity: currently, clean tech and mobile applications, for example, are de rigeur. Tomorrow it may be space travel. But you should ask, not tell. It is the entrepreneur’s job, not City Hall’s or that of a consulting firm, to learn how to identify opportunity, usually where most people think it doesn’t exist. In fact, many of the great opportunities defy definition and lie in the creative “inter-sectors”: health care and the environment; real estate development and information technology and cleantech; education and mobile communications.

Invest time, not money. Nothing is free, but one of the big temptations is for governments to step into the ubiquitous resource void with capital for either the ventures themselves, or financial incentives for capital providers, or direct funding of space for entrepreneurs. This is to be avoided: better to spend your energy persuading the stakeholders that it is worth their while to make those investments. In Boston, the mayor called on the major real estate developers to set aside a percentage of their developments for entrepreneurship and innovation. This led to the attraction of MassChallenge, the world’s largest startup competition and accelerator, which received a free floor in a new office building. This also led to the allocation of portions of high-end condominium developments to less lucrative, convenient live/work space for entrepreneurs, as well as the 12,000-square-foot Boston Innovation Center. At first, the developers seemed to be appeasing the mayor in exchange for City Hall’s good will in issuing permits. But as they are experiencing for themselves the impact of the Innovation District’s attractiveness and growth on the value of their properties, the investment is seen as enlightened self-interest.

Instead of hard cash, hardwire your calendar for entrepreneurship. Your time is one of the scarcest resources you can invest. Look at your schedule: how do you allocate your 70-hour-plus work week? Even just one hour for entrepreneurship out of the 70 will go a long way. Go to office openings of new ventures, make a congratulatory call to those who raise money, write a thank you note to the entrepreneur who hired a few engineers or a high school summer intern. Invite an entrepreneur for a short chat and a chance to have a photograph with you. Have a monthly breakfast meeting with a different group of entrepreneurs to solicit their ideas for how the city can be better for them. Ask, don’t tell. Celebrate the success.

Fight the battle for talent, not capital. Although entrepreneurs will always complain first about the chronic difficulty of raising money, the smart ones know that talent is the more important battle to win, because money follows talent. Make your city an amazing place for the most talented entrepreneurs, innovators, and creative people to come to seek their futures, to live, work and play in. The coffee shops, environmental art, evening bars, museums, bicycle lanes and rent-a-bikes, all build the buzz. In every city I work with, I start by asking entrepreneurs where they really want to be — and the unfailing consensus is uncanny: entrepreneurs need to crowd around these urban watering holes. In Boston it has become the Seaport. In Istanbul, it is Beyoglu. In Manizales, it is El Cable. Invite colleges and universities to establish presence or hold classes there, as Babson has done in the Innovation District, and as Harvard’s Kennedy School has done with its program for innovation policy makers. Successful later-stage ventures that need dozens and hundreds of talented people, and provide dozens of jobs, will take notice, and will not be able to afford to stay away.

Building on urban entrepreneurship policies such as these, and creating new ones, is the keystone for creating jobs and reinvigorating the global economy.


The role of universities and other higher education facilities as innovation incubators needs to be more strongly supported | via SMH Malcom Malden

Brain drain is more a practical reality

Today’s detailed look by Good Weekend magazine at the emergence of a large, interconnected community of Australian information technology entrepreneurs on the US west coast raises the inevitable question: is there a way to stop the brain drain?

The answer is more complicated than you might think. Australia should, of course, do more to foster innovation, and its commercial development. Links between higher education, research and development and the capital markets need to be reinforced.

Last night’s $US100 billion-plus listing of Facebook, a company begun by Mark Zuckerberg at Harvard University, is a reminder of what is possible, and what is at risk as Asian governments build their own R&D machinery, and changes the Labor government has made to drive more R&D funding down to smaller companies are a step in the right direction.

Australians with talent will always have very good reasons to fly out, sometimes for good, however. Lamenting the fact that Australians travel to Silicon Valley or San Francisco’s burgeoning high-tech precinct to further their IT careers is a little bit like worrying that our best golfers and tennis players move overseas to compete on a global circuit.

When it comes to attracting the best IT talent, America has several things going for it that Australia doesn’t. One is market depth: its home consumer end-market is 311.6 million strong, 14 times larger than Australia’s. Its GDP is $US14,600 billion, outpacing Australia by a similar multiple, and its capital markets are deeper and more willing to risk capital in start-ups than its economic weight suggests.

The sheer size of the northern hemisphere markets, and the US market in particular, offers two things. Easier developmental funding, and, when the product is developed, a deeper customer base. Australia can’t overcome that easily.

An innovation survey that the Gillard government released half way through last year highlighted another long-term issue. Australia’s innovation tends to be second-hand: an adaption or development of primary innovation, rather than a ground-breaking ”invention”.

In the IT industry and other technology-driven sectors this is also a reflection of reality, however. The US is the heartland of the IT boom and the main incubator of new IT ideas and start-ups, partly because the IT revolution is founded on intellectual property that US citizens own. The rest of the world can make money using it, but it’s an inherently less rewarding proposition.

Australia is still doing reasonably well in the R&D league tables. Last year’s innovation report put Australian research and development spending by businesses in 2008-09, the last year for which a global comparison was available, at 1.35 per cent of GDP. That was below the OECD average of 1.63 per cent, but it still put Australia in 12th spot out of 33 nations, up from 14th place a year earlier.

And Australian businesses at least excelled as innovation ”modifiers” – companies that take products and processes that already exist, and develop, modify and market them. Almost two-thirds of Australian companies rated highly on this measure in the innovation survey, compared with 23.8 per cent in Germany, 41.2 per cent in Japan, and 19.1 per cent in Britain, for example.

Can we do better? Of course. Might we produce a Silicon Valley effect of our own? Perhaps – it has happened before: Finland got one, for example, when Nokia surged to global leadership in mobile phones (a lead it then lost as Apple’s iPhone ushered in a smart-phone revolution that Nokia had failed to anticipate).

One thing that is clear is that the role of universities and other higher education facilities as innovation incubators needs to be more strongly supported – and in this area, there is new threat, not just to smaller economies like Australia’s, but to the traditional brain-drain magnet, the US: the odds are reasonably short that the next Mark Zuckerberg is studying now at a university in China.

China’s R&D spending has been expanding for several years at a compound rate of about 10 per cent a year, about four times faster than America’s. Last year it overtook Japan to be the world’s second-biggest R&D spender. The US is still spending roughly three times as much, but by 2008 only four of the top 10 private sector recipients of patents in the US were American. Five of the others were based in Japan, and the other, Samsung, was Korean.

America’s share of global university enrolments also fell from 20 per cent to 13 per cent between 1990 and 2010. China’s share of enrolments doubled in the same time, to 15 per cent, part of a conscious R&D seeding strategy that emphasises science and engineering degrees that feed the innovation pipeline. Last year they accounted for 40 per cent of all degrees in China, compared with 12 per cent in the Group of Seven industrialised nations (the US, Germany, France, Britain, Japan, Italy and Canada).

Australia, the US and other Western governments are aware of the long-term challenge that Asia’s rise as an R&D powerhouse presents.

The ability of northern hemisphere governments to respond has been compromised by the global financial crisis and the debt overhang and economic slump it has caused, however.

Australia is in better shape: but with the major parties politically committed to a rapid return to a budget surplus, a concerted push is still in the mail.