Venture project to invest $3.5bn in start-ups

Intel Start-up Venture

One of the major concerns surrounding the global economic crisis was the damage it could do to enterprise in the US, particularly in the tech sector. Technologists have been worrying for some time, even before recession hit, that the United States was falling behind in the global innovation stakes.

It has been evident for years that heavy investment in technology education and innovation by nations such as China and Taiwan has left America fighting tooth and nail to maintain its competitive edge.

Thus, Intel Corp. CEO Paul Otellini has just announced the company and a group of 24 venture firms are committing $3.5 billion to US technology companies over the next two years.

In a kind of Marshall Plan for the US tech economy, the Invest in America Alliance hopes to put American technology industry back at the sharp end of global innovation. A number of the world's largest tech firms are still US-based, such as Google, Microsoft and Intel itself, but the fears that began circulating a few years ago that the number of successful tech start-ups was starting to wain turned to full blown panic mode when the financial crisis hit.

"Investments in education and research"

Intel, the world's largest chip maker, are spearheading the venture with an investment of $200 million and in a speech at the Brookings Institution in Washington this week, Otellini expressed his personal concerns over the downward trend in the US technology industry:

"Unfortunately, long-term investments in education, research, digital technology and human capital have been steadily declining in the US.

"So, too, has the commitment to policies that made us such an entrepreneurial powerhouse for more than a century."

Other countries, including China, India, Taiwan, Finland, Korea and the Netherlands, have become "far more potent competitors in the next phase of the global economy," he said.

Another key aspect of the Alliance's plan is to create more jobs in the tech sector, as a result Google, Cisco Systems, Microsoft and 13 other employers pledged to add jobs in 2010 - specifically by hiring 10,500 graduates of American colleges, largely those with computer science and engineering degrees.

Less than ten percent of US graduates have degrees in engineering compared with over one-third in India and China, and foreign students returning home after gaining their degrees is also a growing problem.

Encouraging enterprise

Some huge companies, including Kleiner Perkins Caufield & Byers, Venrock and DCM have promised to invest chunks of their funds in start-ups founded in the US.

But Intel have often proved to be the industry leader in stimulating activity and have singled out particular sub-sectors ripe for investment, including molecular diagnostics; bioinformatics; electric vehicle ecosystem and wireless infrastructure. Intel itself has made over 1,350 investments in US businesses totaling $6.2 billion over two decades.

Investing in start-ups, not just in the tech industry but across all sectors, leads to the creation of jobs and the encouragement of enterprise, both vital to stimulating a sustainable economic recovery and making America the patent capital of the world once more.

Related Articles:

Start-ups step up in Silicon Valley | Economy grows but unemployment stays | How the recession made manufacturing

Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

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