The Biggest Innovation Heist in History? Shanghaied!

Economic and industrial espionage has a long history.  Oddly enough, what is considered one of the earliest cases of industrial espionage was against China. In 1712, a Jesuit priest named Francois Xavier d'Entrecolles infiltrated Chinese manufacturers' system of making porcelain and then revealed it to European manufactures via a detailed letter. You can read all about it here.  Today, the tables are turned against us, and the traitors are our own people with a greed motive.

China is once again showing that the only business innovation they have a core competency is how to be thieves.  The Chinese economic espionage campaign has been in full operation mode  for years and "targets a swath of industries: biotechnology, telecommunications, and nanotechnology, as well as clean energy (Bloomberg).

Northrup Grumman's report to The U.S.-China Economic and Security Review Commission  details the extent of risk the USA currently faces.  "Death By China: Confronting The Dragon" is also a good treatment of the subject. 

So, this raises the issue of innovation.  What opportunities exist to develop counter-measures to the threats we face in a cybernomic war with China? Counter-security, and counter espionage are obviously ongoing.  What we need to develop more is technology security so that when the Chinese try to hack and steal trade secrets, the code or device they are working with erases, releases counter-code, and becomes non-functioning. 

We certainly do not want Iran or China sending more model airplanes to our Presidents mocking our requests to please not steal our innovations. 

Monday Startup: Stifled Innovation

I have worked with several organizations over the past 20 years that stifle innovation.  I aim to be a visionary leader.  For as long as I can remember I have been the one in a group who asks, "Why do we do what we do?  Why this way?  Why not another way?  Is there a better way?"  In order to create value for owners I have worked for, or accomplish the mission of non-profits I have led, I tend to see the big picture of where a strategy (or lack of one) is leading and then challenge the status quo.  

Right now, I am involved with two non-profits and both struggle with growth because of leaders who are unwilling to engage in creative destruction.  They are not willing to cannibalize their own outdated models and structures.  Both are doomed to die unless they change. 

 In many cases, I have seen two main reasons for this. 

First conservative agent/managers who do not want to rock the boat or fail in the eyes of their owners, thus they do not take risks which could add value to the owners in order to protect themselves instead.  Leadership that resists innovation and change out of fear and self protection develops a culture of non-innovation around them.  Other "yes men" who want to preserve their jobs do not have the courage (stones, balls, etc.) to challenge their bosses, thus group-think takes over. 

Second, ignorant decision makers who do not understand markets, market forces, or the competitive environment believe myths. I have observed owners who think consumers should buy their product or donate to their cause because they always have.  As long as there is money, people will want to see value associated with investment.  Risks must be taken to keep making things better whether profit in a business or a better world in the case of charities and non-profits.


Most often, organization and companies that resist change plateau and then experience a long slow decline.  Why do these change management issues occur?

•  Three Issues that Stifle Innovation, and How to Overcome Them (Innovation Coach) 
•  Is Your Culture Cryptonite for Innovators? (Innovate On Purpose)

• 7 Deadly Sins That Derail Innovation (The Globe and Mail)

   

Monday 3/5 Startup Cleveland Clinic Innovation

It's Monday.  Time to start up our thinking for another week ahead!

Last Friday, I spent the day at The Cleveland Clinic with a family friend whose wife was having vascular surgery. What an experience OF WELLNESS!  This is the hospital you want to be treated at.  

The excellence oozes everywhere.  Logic Junction's Wayfinder Touch Screen Avatar Kiosk was very helpful placed right on 2P at the entrance from the parking ramp.  Everyone who works there has clearly been trained to take care of people not only medically, but as ambassadors.  I had a nurse and a lab tech ask me if I needed directions when wandering around looking for which way to go to my destination.  We ate very healthy food in the building P lobby.  I wandered into an area where there was literature about their emphasis on 2012 medical innovations--I share them below. 

• Top 10 Cleveland Clinic Medical Innovations of 2012 (Cleveland Clinic)  Get the APP too! 
•  Cleveland Clinic extends innovation collaboration (Cleveland.com)
• Innovations in Surgery (Cleveland Clinic Center for Continuing Studies)  Also the educational webcasts are great innovative ways to educate people about their health!

Does Branding Still Matter--To a Five Year Old--Yes!

Startups Stuff... Word Press for Startups (How To), A Treasure List of Startup Links, Romney and VC Evil?

What I read today was first a great treasure list of startup links by Ty Danco. 

Also, since my wife is working on a startup business, here is a great link for startups on how to use Word Press to get your business rolling. 

In case you are not interested, however, I am posting a great article on venture capital jobs.  Since Mitt Romney is taking such a beating in the liberal wing of media-politics, the question is, should he be demonized for his time at Bain Capital? I would love to hear from you and have opened up the comments to make it easy to leave one!

Also, I am adding links in my blogroll to other great resources I find, so keep coming back for updates, and if you are a blog about innovation, entrepreneurship, or startups, send me an email.

The Big List: The Best and Worst Startup Stuff in 2011 (OnStartups.com)

Word Press For Startups (47 Hats)

Venture Capital: MBA's Dream Job? (Startup Economy)

Monday Startup: Secrets of Going Viral on Social Media, 10 Tips to Go Viral

I have been working on a podcast and webcast for What's New America. Going viral and social media are in my mind every day as our traffic is growing.  Thank you for coming and visiting us often by the way!!!  Let's start the week with some real fuel for our thought engines as we wait for NASCAR rain date!  Go Danica!!!

• "The Hidden Secrets of Social Media and Viral Advertising" (Jonah Peretti)

• Here are 10 Tips from BuzzFeed to Make Your Content Go Viral (Both Sides of The Table) 

• Fostering The Next Generation Of Social Entrepreneurs Through Service (FastCoExist)
  
• American Innovation: Nope, Not Dead Yet (The Atlantic)
   
• Building the Company Versus Building the Business (Only Once)
  
  

Watch Bloomberg The Mentor

This is how we grow a real recovery! Watch "The Mentor." http://www.bloomberg.com/tv/shows/the-mentor/

Obama and The R Pack: Pass a 100% Capital Gains Tax Exemption for Startups!

Politicians have a great opportunity to win votes and re-election in the 2012 general election cycle: pass legislation to promote investment in small businesses!

A permanent capital gains tax exemption in C corporations alone will generate a 15% increase in real return to investors.  Startup businesses under five years old account for almost all net growth in jobs in the USA over the past 25 years.

This is the kind of policy that can grow GDP and jobs.  Obama's proposal to permanently exempt startup capital in C corps is also good economic and political strategy.  The R Pack (Santorum, Romney, Gingrich, and Paul) would do well to make this a leading issue in an economic driven election.  We need leadership first, competition and name calling last!

Equal credit on the R side goes to Senators Moran and Warner's "Startup Act," and on The D the "Small Business Tax Extenders Bill" (text) introduced by Senators Snowe and Landrieu.

Write your Congressman: Senate and House (or call).

Encourage them to support these proposals and pass them immediately.  Let them know putting jobs for Americans first will go a long way in keeping their job on The Hill.  Tell them blogs like this are WATCHING what they do and making sure the blogosphere and social networks are aware.As a CFO who in former years served as a campaign manager for a New York candidate running for Congress, I know both sides of this issue.   President Obama is truly on the right track here, as are these leaders in the Senate and House. 

Legislators need to look for ways to spur investment and capital flow to small businesses beyond the provision to C corporations to S corps, LLPs and LLCs. 

Section 1202 of the Internal Revenue Code allows 100% exclusion from federal taxable income of gain realized (up to $10,000,000) by investors who made qualified investments after September 27, 2010 and before January 1, 2012.  

Joe Wallin does a great job of laying out the technical tax laws on this.   

• President Obama Proposes to Expand and Make Permanent Zero Capital Gains on Small Business Investments.  (Startup Law Blog)

• Capital Gains Tax Exemption for Investment in Startups Would Help New Companies Cross the "Valley of Death.  (Kauffman Report)

The Job Leak in America

The message I put forth over and over is simple: Innovation and entrepreneurship are the keys to a growing economy or individual business.  This is especially true during a recession and tepid recovery period which he have been in the past four and a half years. 

The study "Starting Smaller; Staying Smaller: America's Slow Leak in Job Creation" by the Kauffman Foundation suggests that the country faces a fundamental employment challenge that pre-dates the recession by many years.  This is a long-term trend that the researchers call a slow jobs "leak."

New businesses continue to generate most of the economy's net job gains.  A "job leak" occurs when new firms start up with fewer workers than historic norms, and add fewer workers as they grow.
 
I am surprised The Republican presidential candidates  have not been on top of this!  This is another indictment of the failed policies of the past two administrations--Bush and Obama--both have presided over "job leak."

Analysis of government data shows that since the middle of the last decade and perhaps longer, the growth path and survival rate of new businesses means they are generating fewer and fewer new jobs. The cohort of new firms that started in 2009, for example, is on course to contribute one million fewer jobs in the next decade than historical averages would suggest. 

• Starting Smaller; Staying Smaller: America's Slow Leak in Job Creation (Kauffman)
  
  
  
  
  
  
  
  

Innovation and Entrepreneurship Defined

Periodically, I like to share the basic definitions of what this blog is about.  New people come to read, and somewhere buried in the archives are the basics.  I always believe that in anything we do in life, success always come as a result of mastering the basics. 

Joseph Schumpeter coined the term “creative destruction” to describe the process by which innovation causes a free market economy to evolve.  Creative destruction occurs when innovations make long-standing arrangements obsolete, freeing resources to be employed elsewhere, leading to greater economic efficiency. 

An entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur is an agent of change. Entrepreneurship is the process of discovering new ways of combining resources.