Taking Technology Through the "Valley of Death,"
Physicists Don't Fear Risk

As the History of Physics Entrepreneur-ship (HoPE) project transitions from the interview phase to the analysis phase, new and intriquing insights have begun to bubble to the surface. The project staff have completed 114 interviews with physicist entrepreneurs, 11 interviews with univers-ity intellectual property transfer offices, and two interviews with venture capitalists throughout the U.S. With field trips to Georgia and Colorado remaining on the agenda, we expect to interview another ten to fifteen physicist entrepreneurs and five or six venture capitalists. We’ll then spend the last year of the three-year study coding and analyzing the interviews and other resources and compiling our findings.

Some trends are obvious even though they await formal analysis. That physicist entrepreneurs do not feel they are taking great risk in their entrepreneurial activity is among the most suprising. Physicists are highly skilled in risk analysis and few, if any, appear inclined to venture into activity at which they do not feel confident they will succeed even though they are aware that they are bringing new technologies through what entrepreneurs call the "valley of death." Physicist entrepreneurs do not perceive themselves as great risk takers. Rather they are confident that the innovative technologies they have created will solve important social and commercial problems.

Two other issues surprised us by the degree to which they influenced physics-based innovation in the US. The role of the federal SBIR/STTR programs in providing resources to enable high tech innovation appears critical. SBIR/STTR grants play at least two important roles. At one level they provide critical seed funding for ideas and innovations that have not yet reached a stage that will attract venture capital or angel investment. At another level they provide an essential resource for companies whose technologies are nearly fully developed but have not yet found their proper market and for whom venture capitalists are either unwilling to provide further investment or the founding physicists are unwilling to further dilute their share in the technologies they are transitioning to the marketplace. In both cases the SBIR/STTR programs play essential roles in enabling American innovation and in creating well paying high-tech American jobs.

Finally we were surprised at the degree to which immigrant entrepreneurs appear to play a role in physics based entrepreneurship. Of the 114 entrepreneurs interviewed thus far, nearly one third migrated to the United States, many, but not all, to complete their education here. China and India provided the most immigrant entrepreneurs with six each, followed by Germany and Russia with three each. Japan and Korea both provided two physicist entrepreneurs while Argentina, Brazil, Columbia, Egypt, England, Iran, Ireland, Italy, Jordan, Poland, Romania, Taiwan and Turkey filled out the list of source lands for immigrant physicist entrepreneurs. Another five of the 76 American-born physicist entrepreneurs identified their parents as immigrants. Almost as significant was the view, both by entrepreneurs and venture capital of the importance of immigration to maintaining American competitive advantage. One angel investor told us that venture capital is beginning to move abroad because American immigration policy is discouraging the best and brightest from coming to or staying in the United States. Another immigrant entrepreneur, who began his company in the 1990s, now employing more than 700 and the technological leader in his field, told us that since 9/11 it was easier for foreign students trained in the US to return to their homelands to begin companies; taking the technologies they had developed with them.

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