Tech Talk: Downtown is the Place to Be

Summarizing some recent tech/innovation stories:

Boston Massachusetts Institute of Technology

  • According to Brookings Institution research, downtown universities (compared to their peers) produce 80% more licensing deals, disclose 123% more inventions, receive 222% more income from licensing agreements and create 71% more start-ups.

Hidden in Plain Sight: The Oversized Impact of Downtown Universities identifies the following as the top 10 downtown research universities: Rochester University, MIT, Columbia, Penn, Carnegie Mellon, Johns Hopkins, Temple, Vanderbilt, Rice and the University of Washington.

“While research universities are of economic importance anywhere, they are particularly relevant to the economic vitality of cities because their geographic proximity to firms increases the interplay between companies and schools,” authors state.

  • Kiplinger reports on what it sees as the expansion of cellular service within the next year:

“Cellular service is headed to a slew of devices, via low-power chips that are cheap to make and easy to incorporate into larger products. Verizon and AT&T want to see them in security alarms, first aid kits, medical alert bracelets, collar tags for dogs, fitness trackers and more, adding new tracking and monitoring capabilities.

“The stand-alone cellular connections will help expand the Internet of Things. The LTE radio waves they use can travel long distances and reach deep into buildings so devices don’t have to rely on Wi-Fi or other networks.”

  • A complex formula involving 35 measures, developed by researchers at Xavier University’s Williams College of Business, comprises the American Dream Composite Index. The goal is identifying the extent to which people living in the United States achieve the American Dream.

With 100 being the national average, the following states and metro areas are reported in 2017 as achieving the American Dream to a greater degree than the rest of the nation:

States: Louisiana and Idaho (104 index score compared to 100 average); Washington and Colorado (102); and Ohio, Florida and New York (101).

Metros: Salt Lake City, Utah and Baton Rouge, Louisiana (107); York-Hanover, Pennsylvania and Toledo, Ohio (106); and Syracuse, New York, Boise City-Nampa, Idaho and Miami-Fort Lauderdale-Pompano Beach, Florida (105).

Small Business Owners Send Clear Message in Poll

Small business owners are confident, but economic growth is not following due to too many regulations and concerns about energy prices. Those are among the results in the latest U.S. Chamber small business survey. More than eight in 10 respondents want Washington to "get out of the way."

Concerns about regulations and energy prices continue to impede growth for small businesses, according to a recent poll commissioned by the U.S. Chamber of Commerce. The survey, conducted by Harris Interactive between March 27 and April 2, 2012, found that while small business confidence grew in the first quarter of 2012, small businesses continue to lose employees. 30% of small businesses reported laying off employees in the last year.

“This survey confirms that slow gains in economic growth are being undermined by uncertainty over rising gas prices, an onslaught of pending regulations, and stalled pro-growth bills in Congress,”  said Dr. Martin Regalia, the Chamber’s chief economist. “To deliver long-term confidence to small businesses, Washington should act to provide certainty and enact regulatory reform that will boost their ability to grow.”

The poll of 1,339 small business executives found that eight out of ten of small business owners cite higher energy prices as an immediate threat to the success of their business. Concern about gas prices has more than doubled in the last three months, increasing from 10% to 24%. The majority of small businesses (78%) do not think the administration is doing enough to keep prices low, increase domestic sources of energy, or support American job creation. Additionally, three out of four (73%) say the new health care law is an obstacle to hiring new employees.

Overall small businesses see Washington as the problem instead of the solution, with 81% asking Washington to get out of the way and 92% believing the business community is the best entity to lead the economic recovery.

Almost all small business owners (97%) say it is important to vote for a candidate who is a strong supporter of free enterprise; 84% say it is very important. Only 9% of small business owners approve of the job the Democratic Senate Majority is doing on the economy; 87% disapprove. The House Republican majority’s approval rating on handling the economy has increased from 40% approval in January to 46% in April.

“Small business owners are increasingly demanding accountability from members of Congress on how they vote on the issues that impact their operations,” said the Chamber’s Senior Vice President and National Political Director Rob Engstrom. “We’re seeing small businesses unable to hire, or worse, forced to let employees go because of the Senate’s refusal to take up job-creating measures like domestic energy exploration and regulatory reform.”

The survey defined a small business as a company with fewer than 500 employees and annual revenues of less than $25 million.  To read a complete copy of the Q1 Small Business Outlook Survey, please visit: http://www.uschambersmallbusinessnation.com/community/small-business-outlook-survey—march-2012

Report: Americans Saving Less, $pending More

Kiplinger.com issued a report indicating that, despite recent economic woes, the general trend in America remains that Americans are spending more and saving less. Whatever your thoughts on personal finance, this, of course, would seem to be good news for the business community:

In 2008 and 2009, consumer spending collapsed and the saving rate climbed. After hitting an all-time low of 1.4% in 2005, the rate averaged 4.2% last year and even briefly exceeded 6% during the month of May. But instead of some fundamental and lasting change in consumer psychology, the heightened thrift is better explained by cyclical forces that are already in retreat.

By far the most important have been huge swings in household wealth. After all, it isn’t saving per se that matters most to people, it’s their total net worth. Whether that comes from saving or the appreciation of assets already owned is of little significance. And during the two-year period from the spring of 2007 to the summer of 2009, the combined effect of falling stock and house prices evaporated an astounding $17.4 trillion — or 26% — of household wealth.

In fact, movements in the saving rate closely track those shifting fortunes. The all-time high in household net worth occurred in the second quarter of 2007 and was followed nine months later by a record low saving rate of 1.2% in the first quarter of 2008. Three months after household wealth ended its swan dive, hitting bottom in the first quarter of 2009, the saving rate hit a 12-year high of 5.4%.

More recently, however, these same forces are still at play, though now in reverse. As the free fall in house prices gave way to stabilization over the past year and equity prices skyrocketed, household wealth recouped about one-third of its previous loss. And as it did, the saving rate eased from 5.4% to 3.1% last quarter. Increasingly, it seems clear that the new age of frugality was merely a passing fad.

None of this, mind you, is to say that households shouldn’t be saving more. So long as our government maintains large and chronic fiscal deficits, any shortfall in domestic private saving necessarily requires more borrowing from abroad — and that’s an unsustainable proposition. Ultimately, there’s a huge risk that foreigners will lose confidence in our ability to repay those debts, forcing Americans to do more of their own saving. But that’s more of a long-run problem that doesn’t seem especially impending at the moment. In the meantime, there’s shopping to be done.

Ball State Economist: Recession is Over

I would file this under "bold statement," although we all hope it’s true:

Michael Hicks, director of Ball State’s Center for Business and Economic Research (CBER), says today’s announcement that the economy grew by an astounding 5.7 percent in the fourth quarter of 2009 officially shuts the door on the recession.

The first estimate by the U.S. Commerce Department put fourth-quarter gross domestic product growth at its fastest pace since the third quarter of 2003. Hicks said the recession that began in late 2008 will be ranked the third or fourth worst post-World War II economic setback.

However, he points out the decline in wealth in homes and stocks was the worst since the Great Depression.

"The down side is that the third quarter annual growth rate of 2.2 percent, was disappointingly low coming out of such a deep recession," Hicks says. "While today’s numbers are good, they may well be revised downward significantly as we saw for the previous quarter."

"While this has not been the worst postwar recession, the recovery may well be. I’m expecting it to be late summer before we see the unemployment rate to show any permanent decline. Real job creation won’t materialize until nearer the retail holiday season later this year."

IU Prof Earns Nobel Prize in Economics

A big kudos to my alma mater down in Bloomington for having its eighth affiliated Nobel Prize (counting faculty and former students). Elinor Ostrom got the call yesterday morning about receiving the award and has been granting interviews since. The Indianapolis Star explains:

In a nutshell: Ostrom has dedicated her life to exploring how humans can better manage things such as water systems, forests, fisheries — and even themselves — by being active participants in decision-making and management of resources…

Her work, which she shared with her husband, Vincent, has developed during the past 36 years of research performed at the Workshop in Political Theory and Policy Analysis, which the Ostroms founded together. She served as its director until July when she stepped down to become senior research director.

The center has researchers in more than a dozen countries — working with forest managers in 13 nations, water resource officials in the Western United States, government reformers in Liberia and peace builders in Sudan.

The key to any success, Ostrom said Monday, has been the involvement of local people who are affected and have a vested interest.

"What we have ignored is what a community can do and the importance of real involvement of the people," said Ostrom, who first observed this in Los Angeles, watching how the community worked together to solve the problem of saltwater intrusion into the groundwater systems.

We’re No. 2 … in Economic Ranking

The World Economic Forum takes Geneva over Washington in its latest global competitiveness report. In other words, Switzerland tops the United States in the ranking of world economies. It is the first time out of the No. 1 spot for the U.S. since the rankings were revised in 2004.

Why the downgrade? The report cites banking system troubles, concerns about the "government’s ability to maintain distance from the private sector" and doubts about firms’ auditing and reporting standards.

The Swiss, who also dipped into recession and had to bail out their largest bank (UBS), were lauded for "capacity to innovate, sophisticated business culture, effective public services, excellent infrastructure and well-functioning goods markets."

In the banking category, Canada led the way. The U.S. was 108th (behind Tanzania) and the British 126th.

Public data and an executive opinion survey are used to compile the rankings. Behind the Swiss and the Americans are: Singapore, Sweden, Denmark, Finland, Germany, Japan, Canada and the Netherlands.

At the bottom were African countries Zimbabwe and Burundi. For Zimbabwe, the report cited "corruption, basic government inefficiency and the complete absence of property rights."