The United States of America is the most diverse and successful nation on earth, an engine of liberty and prosperity. It is a nation founded on the opportunities that freedom represents to all who sail to its shores. Since time immemorial, America has been THE "promised land" – a Mecca for people of various nationalities, races and religions, and economic origins to come and become settlers. From east to west, north to south, it is unparallel in its resources, natural beauty, people, and most of all, its alchemic way of turning dreams its reality.
It’s said that immigrants are the truest Americans, because it is by choice, not birth that they are here. A quick glance will reveal that today's most successful high tech companies have been founded and headed by "immigrants". Eminent examples to name a few: Intel's co-founder & former CEO Andrew Grove was born in Hungary; from Taiwan, came Yahoo's founder Jerry Yang. From Russia, Sergey Brin, who co-founded Google, while AMD's CEO, Hector Ruiz hails from Mexico. Locally, here in Dallas, we find Krish Prabu, former COO of Alcatel, Sanjiv S. Sidhu, the founder of i2 Technologies, and George Brody, founder and chief technology officer for GlobeRanger Corp. all hail from India, while the University of Texas at Dallas' VP of Research and Graduate Education, Dr. Da Hsuan Feng grew up in Singapore. These individuals all chose to become Americans, I believe for the underlying reason that the genius of the United States is principally an environment that fosters innovation and creativity resulting in unrestricted opportunities, which coupled with the concerted action of a progressive, open-minded self-governing people, presents a fertile breeding ground for entrepreneurship. Like the tens of millions before them and millions after, they chose to become part of our progressive society pursuing the "American" dream grounded in success and prosperity.
My own personal history is the same as the countless individuals attracted by its abundance. My parents immigrated to the U.S. in the 1960s, not necessarily in search of the "American Dream" but more for the freedoms that America offers. They, as many before them, as well as those after them, have sacrificed much to be here and raise a family that appreciates their adopted home. We have all flourished in America and do not defer whatever shortcomings we experienced or have on the advantages that later immigrants or the children of more established Americans had over us. The world and the human race migrate and change. I had learned early on from my father that success comes from hard work, and not from discontentment at other people's successes.
The attribution to diligent work ethics is what drives some immigrants to success, constantly striving to improve the quality of life for themselves and family. As a venture capitalist involved in the high-tech sector, I understand the need for technology companies to secure skilled, experienced workers. Many of these come from other parts of the world bringing with them their skills, unique points of view and culture.
The issue of outsourcing, off shoring, and H-1B visas for skilled workers is controversial. As an American, I support creating and preserving jobs, all which contribute to America's and the global economy. I do also care about "American Innovation". We cannot become complacent and outsource "American Innovation" and "American Ingenuity" to other countries. Instead of trying to figure out how to beat Asia or Europe, we need to try to "beat ourselves" and help other nations to succeed. The improvement of economies in other parts of the world results in an improved quality of life and creates other large sellers markets for America.
For the U.S. to maintain its edge in technology innovation and job creation a huge mental shift in the American psyche is required -- we must think globally! Second, we must improve our academic infrastructure, especially by promoting scientific and engineering programs, beginning at the elementary school level. We need to bolster both academic research and development with a clearly defined path to commercialization. Academic institutions are chartered to educate and conduct research but should also contribute to economic development. We need to get wireless communications and computers with high-speed Internet access or broadband into every household. Readers would be dismayed to learn that Japan, Korea, Singapore, Finland, all have household penetrations greater than the U.S. Furthermore, China has twice as many cell phone users as the U.S.!
We need to support free-trade-after all, this is a global economy. It’s interesting that some of Genesis Campus' Richardson based companies' initial customers where outside of the U.S. Both government and industry should provide for an improved organized health care system that reduces the costs for both employers, and employees. This is a major concern for start-up companies and employees. We also need to design an achievable plan for lessening U.S. dependence on foreign energy sources. America must lead the effort for a secure world, providing for a long and prosperous quality of living. In the short term, we should eliminate restrictions on an immigration system (such as the H-1B visa) that places limitations on the high tech industry (and other professions) bringing in the best and the brightest foreign talent. We should replace it with "conditional green cards" permitting the high tech industry a short-term relief to the current shortage problems facing U.S. high-tech industries (as well as health care) that rely on skilled workers. These tax paying workers would provide the high tech industry with the urgent hires they need, and would serve to protect U.S. workers more than the current H-1B visa approach that is failing miserably.
America is indeed a great land of opportunity and the immigrants of the new "mobile" economy are no different from the immigrants of the industrial revolution or the 20th century. Like the popular bumper sticker I see driving around Dallas: "I wasn't born in Texas, but I got here as fast as I could", this applies to lots of us, and we are all seeking to be part of and contribute to the American dream and success story.
Dr. Ray Baughman, director of the NanoTech Institute at The University of Texas at Dallas (UTD), will give a presentation Wednesday, Nov. 9, 2005 on the much-publicized breakthrough in the field of nanotechnology that he and his UTD colleagues, along with Australian collaborator Dr. Ken Atkinson of the Commonwealth Scientific and Industrial Research Organization (CSIRO), a national laboratory in Australia announced recently.
The team's work produced transparent carbon nanotube sheets that were stronger than same-weight steel sheets and had demonstrated applicability in a number of commercial areas. Dr. Baughman team's paper originally was published in the prestigious journal, Science, and subsequently was written about in newspapers and magazines around the world. The story was given Page One coverage in the Dallas Morning News.
Dr. Baughman will give his presentation from 6:30 to 7:30 p.m. in the Texas Instruments Auditorium (ECSS 2.102) of the south building of the Erik Jonsson School of Engineering and Computer Sciences on the UTD campus. The title of the presentation will be "Manufacture and Application of Multifunctional Nanotube Yarns and Textiles."
We extend our congratulations to Jim Von Ehr, Founder and CEO of ZYVEX, a pioneer and innovator in nanotech for his company being named a Runner-Up to the 2005 Company of the Year by Small Times Magazine. The awards honor companies and individuals in micro and nanotechnology that have made particularly noteworthy achievements during the previous 12 months.
While many think of “Nano” as the popular IPOD developed by Apple, or worse, machines gone wild as depicted in Michael Crichton's novel, “PREY, “nano” is more than one of today’s hottest products or scientific buzzwords. Nanotechnology is being heralded as THE next major technological development of our life-time. According to the U.S. National Science Foundation, the projected global market for nanotechnologies will reach $1 trillion or more within the next 20 years. Yet, much of the public does not know what is the significance of this nascent technology. After attending the Small Times’ Nano Commerce & SEMI NanoForum conference in Chicago this week, listening to what the experts from both academia and industry had to say, I’d like to share some insights that I’ve learned.
A common definition of nanotechnology is the creation and utilization of materials, devices and systems through the control of matter at length scales less than 100 nanometers. A nanometer is one-billionth of a meter; (One nanometer equals one thousandth of a micrometer or one millionth of a millimeter) for example a single page of a book is about 100,000 nanometers thick. Since materials, devices and systems are universal, it is evident that nanotechnology can effect virtually everything. Encompassing a broad range of applications, its’ potential is more than just to make some better, cheaper, faster. Nanotechnology will enable us to create products and applications that today we may only imagine.
Nanotechnology’s broad impact transcends industries. The university research community is actively pursuing hundreds of applications in nanomaterials, nanoelectronics, and bio-nanotechnology. Our own University of Texas at Dallas's Nano-Tech Institute is making significant achievements specifically with carbon nanotubes- yarns and sheets which are some thousand times stronger than steel relative to its weight. While most near term (1-5 years) applications of nanotechnology are in the form of nanomaterials, which include materials such as lighter and stronger nanocomposites, antibacterial nanoparticles, and nanostructured catalysts. Nanodevices and nanoelectronics are farther off, perhaps 5-15 years, and will have applications in medical treatments and diagnostics, faster computers, and in sensors. The most exciting applications in nanotechnology come from the cross-pollination of disciplines in biology, chemistry and electronics. Nanotechnology products include minimally invasive surgical tools and gene chips for early cancer detection and treatment.
Today the majority of nanotechnologies commercially used are based on nano-sized particles. For example, sunscreen containing nanoscale Zinc Oxide. The particles' small size makes them invisible (clear lotion) to the naked eye, eliminating the white coating so on the noses of the lifeguards we have seen so often at the beach. Other uses of nanoparticles have also made a breakthrough in the clothing industry such as in Eddie Bauer's stain-resistant Nano Care ™ khakis. Small hair-like particles are used to coat the surface fibers of the fabric, creating a stain-repelling surface. Healthcare companies are now marketing antimicrobial bandages coated with silver nanocrystals which kill off bacteria. Silver nanoparticles coating on the surfaces of many new refrigerators, such as Samsung’s RS-series; air conditioners, and laundry washing machines now offer antibacterial and antifungal agents. Materials with nanostructured features, like the nanoporous aerogels in Shock Doctor’s Aerogel footwear inserts provide more than twice the insulation against cold as inserts made from conventional microfiber materials. Nanocomposites are also seeing commercial use. In sporting goods, Zyvex, a Richardson Texas based, pioneer and innovator of nanotech is supplying Easton Sports with carbon nanotube composite material for baseball bats, hockey sticks, and bicycle frame and handlebars. This makes the equipment lighter, stronger, as well as reducing vibration. Some automobile manufacturers such as Toyota are beginning to use nanocomposites in bumpers that makes them 60% lighter and twice as resistant to denting and scratching. In the biomedical field, manufacturing artificial bone composites from nanocrystalline calcium phosphates, will enable composites made of the same mineral as natural bone, yet have strength in compression equal to stainless steel. So maybe Superman, “the man of steel” is more appropriate to be called “Nano-Man”!?
One use of nanotechnology that I personally have great interest in evolves around the cellular phone. Nanotech’s innovations would provide consumers with lots of qualitative benefits including better displays, faster loading and saving of digital media, the ability to recharge the phone from (sun and indoor) light and a reduced price of the device itself driven by reduced component counts and manufacturing costs.
(Editor's Note: The following article, written by Roman Kikta, is based on his presentation to 30 executives at the MTBC CEO Forum on April 29 at Ericsson. The CEO Forum Series, sponsored by Stanton Chase, is an invitation-only program specifically designed for the CEO or president of a technology company to provide them with the opportunity to meet with their peers for a roundtable discussion of ideas and issues. The theme of the 2005 CEO Forum Series is "Re-Building The Technology Economy In North Texas.” Kikta is the managing partner of Genesis Campus, an early stage venture capital fund, and a past speaker at the 3rd Friday Technical Luncheon. )
The impact of venture capital on the U.S. economy is colossal -- it has been estimated that “venture capitalists have created nearly one-third of the total market value of all public companies in the United States” according to the National Venture Capital Association (NVCA). Venture-backed companies between 1970 and 2003 employed more than 10 million American workers and generated almost $2 trillion in revenue in 2003; this represents approximately 9.4 percent of total U.S. jobs and revenues.
More than $100 billion was invested in the tech-fueled bubble at its pinnacle in 2000. Since then, the venture capital industry has plunged back to Earth after the tech bubble burst to a more stabilized annual range of $15 billion to $20 billion. With an improving economy and a refocus on fundamentals for investment opportunities, VCs are at least for now on the road to recovery, while the aftermath of the tech party still lingers for some like a bad hangover.
Venture capital investors from Boston, through to the DFW Metroplex, to Silicon Valley invested a total of $20.9 billion into 2,876 deals in 2004 according to Thomson Venture Economics/ National Venture Capital Association. This marks a reversal from a three-year downward trend and was an increase from $18.9 billion invested (and 249 more deals than) in 2003. The increase in 2004 was largely attributable to late-stage investments jumping to $7.2 billion in 2004 compared to $4.9 billion in 2003. Additionally, the first quarter of 2005 marked the 12th consecutive quarter of venture investing in the $4 billion to $6 billion range. Furthermore we are seeing signs of competition among some of the top firms for deals.
Investments in the life sciences sector (biotechnology and medical devices industries, together) increased during 2004, totaling $5.6 billion in 578 companies, the largest dollars and deals in four years. The software industry hit a three-year high during 2004, attracting $5.1 billion. Software represented 24 percent of all venture capital dollars while pure telecommunications investing fell to $1.9 billion in 2004, the lowest figure in eight years. The networking industry fell slightly to $1.6 billion, a seven-year low. Semiconductor investing continued its steady, if modest, recovery rising to a three-year high of $1.6 billion in 2004. Most other major industry categories were comparable to prior year levels.
Of the top regions garnering the largest amounts of venture capital in 2004, more than half experienced an increase in investing over the prior year. Silicon Valley captured $7.1 billion, up 13 percent over the prior year. New England secured $3.1 billion, climbing 6.6 percent from 2003, while Texas has just over $1.09 billion invested, which was a slight decline from the $1.16 billion invested in 2003. According to Ernst & Young/VentureOne, the Dallas-Fort Worth Metroplex had in 2004, a total of 30 deals for $320 million invested. Already in the first quarter 2005, $91 million has been invested in 10 companies.
The industry is witnessing the development of frenzied fundraising activity for venture capital commitments although the road ahead remains uncertain for many of these, especially those not in the top ranks in terms of investment track record. Since the beginning of this year, there have been more than 290 firms on the fundraising trail, as compared to 170 funds raising $17.6 billion in 2004.
“The successful raising of capital (from limited partners) is only a quarter of the journey for a VC firm … we still have to identify high-potential opportunities, invest and successfully exit,” according to Michael J. Buckland, partner at Dallas-based Mobility Ventures. “Furthermore, technology today is global in nature and to remain relevant, venture capitalists must have a global perspective and presence, especially in Europe, China and India, augmented by solid domain expertise and operational experiences.”
The venture community is retreating to the basics, toward a realism that centers on entrepreneurs building substantial and sustainable businesses which may take several years to develop prior to going public or being acquired, rather than two or three years, which was the expectation during the tech-boom. Investors now want a company to be well on its way to $100 million in annual revenue before it goes public.
While institutional investors have a keen interest in top performing firms, there is a limit to how much money can be put to work. Following the tech plunge, new quality deals dried up, forcing venture firms to return billions (release on capital commitment obligations) in un-invested capital. According to VentureOne, venture firms have an estimated $60+ billion in capital “overhang” that has not been invested. Today, the top tier firms are raising new funds of $250 million to $500 million, half the size of those raised during the tech frenzy, when billion-dollar funds were commonplace. Nevertheless, industry veterans contend that there are still too many venture dollars chasing too few worthwhile deals.
“Many of the Telecom Corridor's emerging companies now find their best customers in Asia and specifically in China, where U.S. technology products are in high demand,” states Ed Cantwell, CEO of Richardson-based InnerWireless, a leader in building wireless systems, who has recently landed a major contract in China with a leading Beijing facility.
While the opportunities that are developing in Asia, notably China and India, are markedly different from the opportunities in the United States, they have not been places to find leading-edge opportunities in technologies. The tide is turning.
Wu-Fu Chen, a leading entrepreneur and venture capitalist and a founder of Genesis Campus, claims that “the free flow of ideas and capital have created entrepreneurial hot spots around the globe, specifically in Asia, challenging venture firms to follow or risk being left behind.” Adhering to his own advice, Chen foresaw the globalization of venture opportunities four years ago and sponsored a new, independent venture fund and incubator called Acorn Campus-Shanghai to invest in China-grown opportunities.
As the venture-capital turnaround that took root in 2004 continues, VCs are valuing entrepreneurial skills, industry knowledge and operational experience first and foremost. While investing in “telecom” has become a dirty word in many a VC's vocabulary, some seem to forget that telecommunications are the backbone of a connected society having an effect across many industries.
Telecom makes possible the internet and with technologies and applications including wireless and broadband, has and continues to redefine how we live, work and play. It provides us with convenient any time, any place personalized connectivity. For example, today's ultra-fast access to your own office network, permanent video-links between different teleworkers, virtual teams, virtual offices and virtual organizations - at almost zero cost, using existing phone lines, computers, and wireless devices or instant access to thousands of Web TV stations, all offering video on demand, virtually any feature film can be downloaded and watched at the touch of a button.
The Telecom Corridor® area seems to be well positioned as a center of technological innovation. While it offers the single largest concentration of the world's leading high-tech and telecommunications companies, including Nortel, Texas Instruments, Samsung and Alcatel, it also has its share of seasoned entrepreneurs that are coupled with a highly skilled labor force in such areas as wireless, nanotechnology, energy, technology, and mobile applications including content, entertainment and security. Without question, the companies of the Telecom Corridor® area are contributing to the United States' edge in innovation and technology development.