The state of innovation in N.H. and beyond
For the past year or so, I have described the challenges our country faces in dealing with an equally challenged venture capital marketplace. I think it’s time to take a positive look at the state of innovation in light of a troubled economy, a contentious political landscape, and tight fiscal environment. On the national front, President Obama has demonstrated both his commitment to innovation by re-authorizing the America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act, or America COMPETES, which reauthorizes various programs intended to strengthen research and education in the United States related to science, technology, engineering and mathematics. COMPETES’ re-authorization does not, unfortunately, include a provision to support funding of a regional innovation cluster, or RIC, grant program that was to be piloted in this version of the act. As readers of this column know, I’ve been talking about the Obama administration’s interest in RICs. The House version of the act included a pilot of a series of grant programs designed to seed translation of R&D to early commercialization. In light of the desert of early stage capital and the alignment with RICs, it was disappointing-though not surprising in this political and economic climate-to see it eliminated. Regionally, New England has considerable assets to bear in the realm of innovation. Boston’s Route 128 belt is widely recognized for its academic, research, technology and entrepreneurship resources and institutions, historically fueled by one of the two largest concentrations of venture capital funds in the U.S. While the overall availability of capital has diminished considerably, the region’s enviable possession of this unique array of assets provides New England with cause for hope amidst the challenges. Granite State assets In New Hampshire, active venture capital funds such as Borealis Ventures and Harborlight Capital bring critical early-stage funding to the region. Innovation initiatives such as the University of New Hampshire’s Green Launching Pad, the New Hampshire Commercialization and Innovation Center, and the Dartmouth Regional Technology Center seek the promise of catalyzing new sectors and ventures, such as clean energy, technology, life sciences and medical device startups. New Hampshire also has several angel investment groups focused on supporting startups in the Granite State, though there’s a marked drop in investment activity, as noted by UNH’s Jeff Sohl in an October 2010 report on angel investing. Despite these essential assets to a vibrant innovation economy and notwithstanding New Hampshire’s strong historic track record in venture capital funded deals, I am quite concerned for the emerging venture and entrepreneurship ecosystem in the state, although not out of any negative view of the quality of its entrepreneurs or innovation capability. I worry that we stand to lose a good deal of the venture momentum built in the state by the handful of angel groups and venture capital funds that have fueled the startup community, many of which are at the back end of their investment cycle. It’s unlikely that there will be new New Hampshire-targeted risk capital funds emerging in the next 12 to 24 months, so I regret to say I think we’re in for a bit of an entrepreneurship dry spell without the catalytic potential that risk capital offers. In the absence of capital, I come back to clusters. As I’ve noted in the many articles I’ve written on the subject, clusters concentrate and connect resources and optimize for knowledge diffusion and innovation. Michael Gurau is president of Clear Innovation Partners, a Maine-based cluster development organization. He can be reached at email@example.com.