Category Archives: new business formation

Links, end of September

Information Technology (IT)

This is how the “Shell Shock” bug imperils the whole internet

It’s a hacker’s wet dream: a software bug discovered in the practically ubiquitous computer program known as “Bash” makes hundreds of millions of computers susceptible to hijacking. The impact of this bug is likely to be higher than that of the Heartbleed bug, which was exposed in April. The National Vulnerability Database, a US government system which tracks information security flaws, gave the bug the maximum score for “Impact” and “Exploitability,” and rated it as simple to exploit.

The bug, which has been labeled “Shell Shock” by security experts, affects computers running Unix-based operating systems like Mac OS X and Linux. That means most of the internet: according to a September survey conducted by Netcraft, a British internet services company, just 13% of the busiest one million websites use Microsoft web servers. Almost everyone else likely serves their website via a Unix operating system that probably uses Bash.

Microsoft’s Bing Predicts correctly forecasted the Scottish Independence Referendum vote

Bing Predicts was beta tested in the UK for this referendum. The prediction engine uses machine-learning models to analyse and detect patterns from a range of big data sources such as the web and social activity in order to make accurate predictions about the outcome of events.

Bing got the yes/no vote right, but missed the size of the vote to stay united with England, Wales, and Northern Ireland.

Is the profession of science broken (a possible cause of the great stagnation)? Fascinating discussion which mirrors many friends’ comments that too much time is taken up applying for and administering grants, and not enough time is left for the actual research, for unconventional ideas.

What has changed is the bureaucratic culture. The increasing interpenetration of government, university, and private firms has led everyone to adopt the language, sensibilities, and organizational forms that originated in the corporate world. Although this might have helped in creating marketable products, since that is what corporate bureaucracies are designed to do, in terms of fostering original research, the results have been catastrophic.


Climate Science Is Not Settled The Wall Street Journal piece by a former Obama adviser and BP scientist inflamed the commentariat, after publication September 16, on the eve of the big climate talks and march in New York City. See On eve of climate march, Wall Street Journal publishes call to wait and do nothing for a critical perspective.

This chart, from NOAA, is one key – showing the divergence in heat stored in various layers of the oceans –


Nicholas Stern: The state of the climate — and what we might do about it TED talk.


The public response to the Ebola epidemic is ramping up, but the situation is still dire and total cases and deaths are still increasing exponentially.

Ebola outbreak: Death toll passes 3,000 as WHO warns numbers are ‘vastly underestimated’

“The Ebola epidemic ravaging parts of West Africa is the most severe acute public health emergency seen in modern times.Never before in recorded history has a biosafety level four pathogen infected so many people so quickly, over such a broad geographical area, for so long.”


Global Economy

What Does a ‘Good’ Chinese Adjustment Look Like? Michael Pettis argues that what some see as a “soft landing” is in fact a preparation for later financial collapse. Instead, based on an intricate argument regarding interest rates and the nominal GDP growth rates in China, he proposes a reduction in Chinese GDP growth going forward through control of credit – in order to rebalance the Chinese consumer economy. Pettis is to my way of thinking always relevant, and often brilliant in the way he makes his analysis.

What Went Wrong? Russia Sanctions, EU, and the Way Out

Washington, Brussels and Moscow are in a vicious circle, which would spare none of them and which has potential to undermine global recovery.

Venture Capital

22 Crowdfunding Sites (and How To Choose Yours!)


Links, middle of June

Optimizing the current business setup does not appear to be triggering significant new growth – more like a convergence to secular stagnation, as Larry Summers has suggested.

So it’s important to document where the trends in new business and venture capital, as well as patents, are going.

The good news is you are looking at this, and via the Internet we can – with enough fumbling around – probably find a way out of this low to negative growth puzzle.

Declining Business Dynamism in the United States: A Look at States and Metros– Brookings Institution research shows more firms exited than entered business in all states and in virtually all metropolitan areas for more than a decade.


Job reallocation is another measure of new business formation, since startups mean new hires. It has fallen too.


The Atlantic monthly blog on this topic is a nice read, if you don’t go through the Brookings report directly. It’s at The Rate of New Business Formation Has Fallen By Almost Half Since 1978.

The policy recommendation is reforming immigration. Apparently, about half Silicon Valley startups over some recent period were headed by entrepreneurs who were not born in the US. Currently, many positions in US graduate schools of engineering and science are occupied by foreign students. This seems like a promising proposal, but, of course, drat, Eric Cantor lost his bid in the Virginia Republican primary.

The Kauffman Foundation has an update for 2013 Entrepreneurial Activity Declines Again in 2013 as Labor Market Strengthens. There is an interesting report attached to this story exploring the concept that people starting new businesses is related to the level of unemployment.

National Venture Capital Association statistics show that venture capital funding recovered from the Great Recession and has stabilized, but by no means has taken up the slack in new business formation.


There’s also this chart on venture capital funds –


Of course, EY or what used to be called Ernst and Young produces a fairly authoritative annual report on venture capital activity globally. See Global Venture Capital Insights and Trends, 2014. This report shows global venture capital activity to have stabilized at about $50 billion in 2013.


U.S. Firms Hold Record $1.64 Trillion in Cash With Apple in Lead – meanwhile, the largest US corporations amass huge cash reserves, much of it head abroad to take advantage of tax provisions.

Apple, whose cash pile surged to $158.8 billion from $5.46 billion in 2004, now holds 9.7 percent of total corporate cash outside the financial industry..

Firms in the technology industry kept $450 billion overseas — 47 percent of the total corporate cash pile held outside the U.S.

Federal Spending on Science, Already Down, Would Remain Tight

The Obama administration, constrained by spending caps imposed by Congress, suggested on Tuesday a federal budget for 2015 that would mean another year of cuts in the government’s spending on basic scientific research.

The budget of the National Institutes of Health, the largest provider of basic research money to universities, would be $30.4-billion, an increase of just $200-million from the current year. After accounting for inflation, that would be a cut of about 1 percent.

Three other leading sources of research money to universities—the National Science Foundation, the Department of Defense, and the National Aeronautics and Space Administration—also would see their science budgets shrink or grow slower than the expected 1.7-percent rate of inflation.

Over all, federal spending on research and development would increase only 1.2 percent, before inflation, in the 2015 fiscal year, which begins on October 1. The portion for basic research would fall 1 percent, a reduction that inflation would nearly triple.

Latest Patent Filing Figures – World Intellectual Property Organization The infographic pertains to filings under the Patent Cooperation (PC) Treaty, under covers the largest number of patents. The World Intellectual Property Organization also provides information on Madrid and Hague System filings. Note the US and Japan are still at the top of the list, but that China has moved to number 3.


In general, a WIPO report for 2013 documents, IP [intellectual property] filings sharply rebounded in 2012, following a decrease in 2009, at the height of the financial crisis, and are now even exceeding pre-global economic crisis rates of growth.