Friday, May 02, 2008

Good News: Progress in Our Entrepreneurial Economy

If you want some good news about the entrepreneurial economy in the Pittsburgh Region, read the 2007 Community Report from Innovation Works, released at their Annual Meeting last night in Lawrenceville. Innovation Works is our region's principal agency for helping grow technology startup companies.

Last year, Innovation Works helped 237 companies and invested $6.1 million in 67 companies, which is an impressive contribution to the region's economy. But even more impressive was the track record of the companies they've helped in the past. Those companies have received $122 million in follow-on funding from other sources, mostly private capital. 65% of the region's venture capital investments were made into the companies to which Innovation Works gave early-stage funding. That means that Innovation Works is one of the critical stages in the economic development pipeline that takes creative technology ideas and turns them into well-capitalized companies.

The companies that Innovation Works has funded have created 365 net new jobs. While that may not sound like a lot, remember that these companies all started from essentially nothing -- just an entrepreneur with an idea -- and are all less than 10 years old. The potential for future job creation is tremendous.

Behind the numbers are some impressive stories -- here is the sampling of successes among these entrepreneurial companies that Innovation Works cited:

- Aethon grew to 100 employees, and has 100 hospital clients for its robotic Tug.

- BPL Global acquired Serveron, bringing the company to more than 100 employees, and closed on $26 million in venture funding.

- Clearcount received FDA clearance for the world's first RFID (radio frequency identification) surgical sponge counting system. (And since Medicare and many insurers are now saying they won't pay hospitals for errors such as leaving a sponge in someone after surgery, the market for this could be huge.)

- ImpactGames partnered with the Peres Center for Peace to help distribute 100,000 copies of its Peacemaker software product to Israelis and Palestinians.

- Knopp Neurosciences was granted FDA orphan drug designation for its clinical developments related to ALS (Lou Gehrig's Disease).

- nanoLambda won the 2007 Nanotech Ventures Award in electronics from the Nano Science and Technology Institute.

- Plextronics set a world record for efficiency of solar cells and closed on more than $20.6 million in new investment.

- Powercast's technology was chosen "Best of Show for Emerging Technologies" at the 2007 Consumer Electronics Show, beating out major companies like Sony.

- Redpath Integrated Pathology was awarded Medicare reimbursement coverage for its Pathfinder TG cancer diagnostic.

- TalkShoe now has more than one million podcasts downloaded from its website each month.

- Thorley Industries signed a $215 million partnership with Hasbro to develop a new product line.

- Vivisimo's products won InfoWorld's award for "Best Enterprise Search" for the third consecutive year, beating out companies such as Google.

Not just one, but a dozen different companies achieving world-class milestones.

As Rich Lunak, Innovation Works CEO, said at their Annual Meeting last night, the next step is getting as many of these companies as possible to the next stage: to become major, market-leading companies that can do for the region what companies like Westinghouse, Fore Systems, Respironics, and others have done -- create hundreds of jobs, attract suppliers, and spawn additional startup companies. That will require support well beyond what Innovation Works can do -- it requires companies and individuals across the region to buy these companies' products, invest in them, and provide them with the kind of workforce and business climate they need to grow.


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