recent research

Startups Look Beyond Money When Selecting VC-Backing

As competition increases within the venture capital industry to fund the next Google or Uber, the most highly desirable startups often have multiple investment offers and must decide upon the best. There are several factors that can affect evaluation of potential equity investors. For many startups, the decision may focus solely on the terms of the deal. However, there may be many more factors – outside of financial considerations – that impact the startup’s evaluation process.

Recent Research: Can Women Entrepreneurs Help Overcome Decline in U.S. Business Creation?

The U.S.s entrepreneurial culture, long celebrated as a key element in the country’s economic success, is being threatened by several long-term trends, according to a paper from the Brookings Institution’s Robert Litan and Ian Hathaway. Over the past 30 years, U.S. business starts have slid downward, with many experts and policymakers offering their own explanations for the trend. Litan and Hathaway examine the data and note two possible causes: regional population decline and business consolidation. Though these trends seem unlikely to change in the near future, a new survey by the Kauffman Foundation suggests that underutilized abilities of women entrepreneurs could help boost business creation if properly supported.

Mid-Career Executives, Personal Business Experience Drive Startup Success

In two recent academic journal articles from the United Kingdom (UK), the authors look at the characteristics that lead to successful entrepreneurs and startup firms. In both articles, the founders’ business experience – both corporate and entrepreneurial – was a strong indicator of startup success, sustainability, and job creation. Their findings indicate that national innovation policies and entrepreneurial programs in the UK should shift from focusing almost solely on faculty-led university spinoffs and millennials to a more inclusive approach that also supports mid-career professionals launching entrepreneurial ventures.

Recent Research: Is Bigger Better in Economic Development?

Over the past decade, two ideas have become more and more popular among innovation and economic development leaders. First, that maximizing collaboration between institutions, interest groups, stakeholders and communities is pivotal in building an innovation ecosystem that can succeed and grow over time. Second, that proximity matters, and by focusing on innovation networks at the regional or metro scale, rather than at the national or state level, initiatives can have a real, measurable economic impact. Though they seem complementary, these ideas are frequently in tension. The first suggests that increasing the number of partners leads to more successful initiatives. The second suggests that, at least in terms of geography, there should be some kind of limit on the scope of innovation initiatives in order to tailor them to the needs of a specific region.

Being Entrepreneurial in Your Storytelling

People often remember stories, and telling stories can be an effective way to communicate success. But, as researchers have found, there is a craft to organizational storytelling whereby the story must work in conjunction with both logical-rational elements and the emotive and motivational features of the people involved. This lesson is an important one for small businesses and startups seeking to gain traction and staying power with their audience or customer. It also resonates for TBED practitioners who often struggle with clear and concise messaging in promoting economic growth. Researchers at the University of Michigan (UM) Ross School of Business examined storytelling's role in entrepreneurial endeavors as part of a working paper released in September. The paper concludes with a set of take-aways for researchers, small business owners and entrepreneurs, including tactics for telling better stories.

How Do Local Tech Economies Affect University Research Output?

In tech-based economic development circles, universities are frequently thought of as engines for regional economic growth, engines whose effectiveness is determined by the volume of research conducted and the ability of faculty and staff to turn discoveries into commercially available goods and services. The authors of two recent academic articles suggest that regional economies are also a key determinant of university success. Steven Casper’s research suggests that social linkages between research faculty and local tech professionals improve university commercialization, while Friedrich Dornbusch and Thomas Brenner find that alignment between local tech industries and university research priorities increases the prevalence of successful university-private partnerships.

State Biotech Incentives Attract Jobs, But Do Less for Established Firms

States incentives for biotech research have proven to be an effective tool to attract star scientists, innovative firms and high-quality jobs, according to a recent academic article. Enrico Moretti and Daniel J. Wilson examined the performance of state biotech incentives in 11 states and found that these policies demonstrate an impressive ability to draw in firms and researchers from other states and create related jobs in construction and retail. These incentives, however, have little impact on patenting at academic institutions, and do not seem to increase productivity at established firms in the state.

Do TBED Policies Help or Hinder Knowledge Sharing?

A central tenet in the understanding of regional economic clusters is the idea that the closer two actors are to one another, the more likely they are to collaborate. This belief is based on decades of research done to examine knowledge spillovers and the effect of spatial proximity on tacit knowledge sharing. In a recent article, however, Jasjit Singh of INSEAD and Matt Marx of MIT differentiate the varying effects of crude distance on knowledge sharing compared to the effects of geopolitical borders. Despite the explosion of the Internet and advancement in communication, borders still matter.

Brookings: The Geography of U.S. Patenting Activity, Economic Growth

Invention is a driver of economic growth. That is the assertion of Brookings latest report on U.S. patenting and its effect on the country's economic prosperity entitled Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas. The U.S.'s innovative capacity and activity has increased steadily, but other nations are catching up and the U.S. must identify the implications of this fact to remain competitive. Authors Jonathan Rothwell, José Lobo, Deborah Strumsky, and Mark Muro compiled USPTO patent information from 1975 to 2012 detailing the quality of the patent, the metropolitan area of residence of the inventor, the industrial orientation of the patent and other relevant material. They found that high rates of patenting coincide with greater productivity, lower unemployment and the creation of publicly traded companies within U.S. Statistical Metropolitan Areas. The correlation is strong enough that the authors claim the effect of patents on growth is roughly equal to that of having a highly educated workforce.

Research Studies Find Skilled Immigrants Spur Innovation in Academia, Industry

Two recent academic research articles found that innovation at institutions of higher education and domestic firms are significantly impacted by an increase in the immigration of skilled and qualified immigrants. An article from Stuen et al. found the quality of immigrant students was the determining factor in their contribution to the production of knowledge at academic science and engineering laboratories. In an unpublished article from Kerr et al., the authors examined the impact of skilled immigrants on the employment structures and innovation rates of U.S. firms. The authors of these articles also provide several recommendations to increase the number skilled immigrants that include making student quality the key criterion for receiving a visa, repealing 2001 legislation that limited the number of student visas and business taking a more active role in advocating for immigrations polices (e.g., H-1B visa reform) that attracted skilled workers to the United States.

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