Now that the Jumpstart Our Business Startups (JOBS) Act has been signed into law, the hope is that regulatory restrictions to fund startups and small businesses through the Crowdfunding will open up new avenues for raising funds that were otherwise restricted.

In a recent interview done by Rafe Needleman on CNET (see video), the pros and cons of the Crowdfunding provision in the JOBS act were discussed with guests George Zachary, Chance Barnett, and Tim Rowe. On balance the consensus of this panel would indicate that the law will be a catalyst for growth for startups and in particular for high-tech firms looking to jumpstart development by raising early rounds.

What is still an unknown is whether certain sectors like medical devices, biotechnology, nanotechnology and others that require a longer runway to commercial success, will benefit. Many post meltdown investors do not have the patience or stomach to endure a protracted product development cycle that some of these areas require.

Even though the JOBS Act does not directly impact jobs as such, the collateral effect over the longer term will be that more jobs will result from the additional capital to permit the formation, continuation and stability of startups.  Firms that have established some level of success after initial funding, could go  public via an I.P.O., sooner and with less restriction thus benefiting the initial investors and expanding further the viability of the jobs created.

As statistics show conclusively, the engine of new job creation is powered by newly formed companies. So it would follow that jobs at all organizational levels from the executive ranks to non-management will increase as money fuels new startups.

New advanced functional materials are being explored by start-up nanotechnology, medical device and electronics firms for their surprisingly versatile applications. One of the areas getting attention from these companies is silk.

Fibers from cocoons and spider’s webs may seem as unlikely candidates for next-generation e-readers, displays and implantable medical devices but researchers in the U.S., Europe and Asia have been experimenting with new renewable and abundant organic materials that permit low cost production, high functionality and environmental—biocompatibility .

The Heidelberg Institute for Theoretical Studies is a private research institute focused on Information Technology and its applications has published information on the properties of spider’s silk and their potential for application in electronic and mechanical systems. Dr. Frauke Gräter from HIT was quoted as saying: “Silk fibers exhibit astonishing mechanical properties. They have an ultimate strength comparable to steel, toughness greater than Kevlar and a density less than cotton or nylon. Because silk fibers continue to outperform their artificial counterparts in terms of toughness, many studies have tried to understand the mechanical characteristics of these extraordinary natural fibers.”

In the U.S. scientists from Iowa State University have discovered that spider silk does is 800 times better than any other organic material ever tested at conduct heat. Because the silk is also very strong and stretchable, it could have a number of applications in human technology. In the future spider’s silk could be used in applications such as flexible heat-dissipating materials for electronics, bandages that stay cool, and clothes for hot climates in addition to gene therapy, bioadhesives, and microneedles.

In Asia at Tsing Hua University a team of researchers have conducted studies using silk worm cocoons for application in OTFTs or organic thin film transistors and have succeeded to the point of filing patents on their discoveries. Similarly these devices have application in a wide range of technologies as RFIDs, flexible displays, implantable medical devices etc..

With the worldwide thirst for highly advanced technology products seemingly unquenchable, producing these breakthroughs quickly and affordably with minimal environmental impact could depend on biomimicry. This could be the next thing for executives at science and tech based companies to pay special attention to.

An important step forward in the development of this technology was announced recently that may permit sterilizable flexible electronic transistors to be used as implantable electronic medical devices.

The exceptional mechanical flexibility of organic electronic devices is expected to launch a range of new applications and opportunities in electronics, such as flexible displays, robotic sensors, and biological and medical electronic applications. Flexible electronic devices are also being used as solar cells that use organic electronics to harvest energy to power other devices.

Because these devices use conductive organic polymers, the plastic itself has very low production costs in high volumes making it potentially lucrative as an alternative to traditional electronics. However, certain technical challenges remain that has prevented these devices to be widely available in the commercial market.

These devices embody the confluence of a range of technologies as advanced materials, nanotechnology, and advanced electronics. As these devices are fabricated on at the nanoscale, a significant challenge regarding the fabrication of flexible thin-film transistors has been their thermal stability which is a vital factor for their viability for biomedical applications. Among other things thermal stability allows for these devices to be able to endure various sterilization processes without it altering the material functionality. Flexible organic electronic devices could be very useful for medical device makers for a variety of applications for long term minimally invasive implantable devices.

Breakthrough Technology

An international research team based in Japan through The University of Tokyo has succeeded in manufacturing on a polymeric film the world’s first flexible organic transistor that is robust enough under high temperature medical sterilization process. The significance of this research could accelerate the commercialization of a range of medical device applications.

Global Competition

Currently there are joint development projects ongoing in the U.S., Europe and Asia to develop, perfect and mass produce flexible organic thin film transistors or flexible OTFTs that can be used in a range of applications.

Competition for expertise in advanced functional materials development and nanoscale assembly is on the rise driven by advances in nanomaterials and nanoassembly that only a few years ago made this technology still out of reach. As a consequence, executive recruitment at the C-suite and technical management levels for individuals who have the capacity to bring these technologies out of the lab and into commercial viability is steadily rising.

With the funding for new high tech startups also becoming more available, you could see more of these types of products rolling out in the next few years.

In its current form the Act permits entrepreneurs and start-ups to use online “Crowdfunding” sites to attract small tranches of investment capital from a large number of people. This opens the door for emerging companies and early stage startups to raise funds for five years without meeting the disclosure requirements of a formal IPO.

Key elements of the bill are designed to loosen up investment in start-up companies. This could be very helpful to technology based firms in fields as medical devices, biotech and nanotech. Since the 2009 funding in these sectors has been challenging specifically for companies looking to raise ‘A’ or ‘B’ rounds.

In its current House form, the JOBS bill will permit:

• Making it easier for small companies to go public by providing them a temporary reprieve from Securities and Exchange Commission regulations;
• Removing SEC restrictions preventing small businesses from using advertisements to solicit investors;
• Removing SEC restrictions on “Crowdfunding” so entrepreneurs can raise equity capital from a large pool of small investors; and,
• Raising from $5 million to $50 million the ceiling for shares a private company can sell as part of a public offering before having to register with the SEC.

The use of Crowdfunding is a critical element of the law and will open up the options for those seeking funding. The overall utility and use of Crowdfunding would allow companies and particularly start-ups to have more flexibility in three areas:

1. Raising capital from alternative sources other than banks, VCs, angels etc.;
2. Allow companies to go public easier and thus provide a more lucrative exit for those who have invested;
3. Offer companies the opportunity to postpone an IPO until the time is more opportune or strategic by having crowd funding as an alternative.

The big question is will this legislation be sufficient to fuel a resurgence of innovative startups that will bring sustainable value to the U.S. economy and help ensure its leadership in new technology development?

Some have introduced the question of potential for fraud but it would appear that these concerns are overstated and originating from the institutional quarters that fear greater competition for investment dollars.

Overall the consensus indicates that the tech sector will benefit by having substantially more access to capital.

A study by the Kaufman Foundation showed conclusively that startups are the engine that drives job growth and not large corporations. As an example, their data shows that from 1980-2005, nearly all net job creation in the United States occurred in firms fewer than five years old. This data set also shows that without startups, net job creation for the American economy would be negative in all but a handful of years.

With JOBS headed for passage, will this kick start a jobs boom in the technology sector?

Abbott Laboratories (NYSE:ABT) will donate more than $3 million to the victims of last week’s disastrous earthquake in Japan through its philanthropic foundation, the company said today.

Abbott Park, Ill.-based Abbott is one of the most active medical device companies in Japan, with more than 2,400 employees based in Tokyo, Fukui and Chiba. In 2010, Abbott reported more than $2 billion in sales in Japan, and has grown its business there by 60 percent in the past three years, according to regulatory filings.

How Japan’s 8.9-level earthquake affects the medical device industry

“Our thoughts are with everyone affected by the earthquake and tsunami in Japan,” Abbott CEO Miles White said in a prepared statement. “Abbott and the Abbott Fund are providing this support to help advance immediate relief efforts.”

In other earthquake relief news, Amgen (NSDQ:AMGN) said it would be donating $1 million to Direct Relief International and International Medical Corps to, “bring basic needs and vital health services to those affected in Japan.”

Those donations come just one day after Medtronic Inc. (NYSE:MDT) pledged $1 million in cash and medical supplies to assist in relief efforts.

On March 11, the largest temblor in Japanese recorded history struck the nation’s eastern coast. The quake, which measured 8.9 on the Richter scale, then caused a 23-foot tsunami in a cruel 1-2 punch that left millions without adequate food or fuel in sub-zero weather. Officials fear the death toll will reach 10,000. Since the quake, a series powerful aftershocks — some as powerful as a major temblor on their own — have been felt throughout the nation.

Japan, the world’s third-largest economy, is also a critical player in the global medical device market, ranking just behind the U.S. and the European Union in terms of market size at just under $25 billion. That’s about half of the total Asia-Pacific medical device market, pegged at $55 billion by Pacific Bridge Medical, a Bethesda, Md.-based regulatory consulting firm that specializes in the region.

American medical device and diagnostic companies employ more than 13,000 workers in Japan, according to the Advanced Medical Technology Assn.

For the overall US economy to continue improving, sustained economic prosperity depends in no small measure on continual innovation. However, with burdens placed on device companies in the form of new taxation, unpredictable and protracted regulatory processes, in addition to growing international competition, the need for reinvention of medical device firms, could be more needed than ever.

From a strategic viewpoint it may not be enough for early-stage device development companies or even larger public medical device firms to be centered on strictly product development and commercialization of alone.

As hospitals and health-care delivery organizations are forced to reevaluate where their dollars are being spent, the pressure will be on those companies who provide therapeutic and diagnostic products to continually justify their value.

In a post reform and environment. It may be increasingly difficult for early-stage firms to validate their worth to VCs and private equity firms if they cannot make a compelling case for improving patient results and reducing delivery costs over and above what is currently on the market. Efficacy and cost will be the yardstick that health-care institutions will measure the adoption of new technologies into their system in the face of mounting pressure to bring cost of care down.

Product Centric or Solutions Centric

Many firms and the medical device space have taken a somewhat product centric orientation. That is, they have placed the emphasis on developing new and novel technologies. Indeed the U.S. has been at the forefront of producing the most effective and least invasive means to health care delivery. This product centric orientation may become obsolete or at least less workable in the face of a changing health care environment.

The future for device manufacturers may be to consider reaching beyond just product and technology development. Firms may need to become increasingly involved in the full delivery chain, i.e., product and services. For example, a company that produces a line of diagnostic products may need to strategically consider ownership in other organizations that furnish the actual delivery at the clinical level. In other words, having control over all of the points that a patient encounters their product from the diagnostic execution, test validation, physician referral, all the way to the delivery of therapy. In other words a systems level approach considering at all of the points before and after a patient would encounter their diagnostic technology looking at the delivery chain and becoming an integrated solution provider, not just a product provider.

This type of reinvention from being product provider to a systems integrator would have the net result of gaining more control over the cost structure and patient results thus being more competitive.

The Executive Skills of Reinvention

Redefinition of a company requires systemic change of perspective at the C-level and throughout the organization. The implementation by a CEO of a strategic company redefinition would likely require the addition of key personnel. Human resources would likely work hand in glove with management to determine what skills are needed and to oversee the recruitment of the appropriate executive skills to be able to affect such a change. It would be probable that a candidate would come from outside the organization and from a company that has successfully implemented a fundamental shift from being product oriented to systems solutions oriented.

Those firms who have succeeded in this have done so through the aid of a chief marketing officer or CMO. The CEO, Board of Directors, and investors need to be clear on their target goals and purposes. The data required to effectively evaluate markets would likely be the job of the CMO. Such experience and skills can lend valuable insights on market potential cost structures pricing structures and competitive analysis in addition to evaluation of potential acquisition targets. The CEO, CFO and CMO would often be the team to work with investors to marshal the support for the necessary funding to execute

A New World of Health Care

As the U.S. population continues to age the demand for quality health care will only go up. The question becomes will medical device innovation slow down due to cost containment pressures and the growing cost of introducing new products into market. Perhaps the only way to compete in the new health care environment of the future will be to reinvent and redefine what development firms consider moving beyond the definition of a pure-play product company to reinventing themselves as a strategic solutions provider.

As companies globally recover from the effects of the economic downturn and seek to rebuild around core competencies, a surprising number of top executives and HR leaders believe they lack the executive talent and management bench strength to establish, maintain or regain a competitive edge as the marketplace recovers according to recent polling.

Efficiency, focus and effectiveness are crucial across the organization and none more so than in the area of executive recruitment. The ability attract and “romance” top-tier talent can be a cost effective and useful skill. Though not obvious, it is surprising that few clients really get it right. With a few tweaks, one’s hiring batting average can be improved markedly.

What is your URP?

In spite of the business slowdown the talent-gap continues to grow especially in the high technology fields as medical device recruitment, biotechnology , nanotechnology and others. Typically at the final stage of the executive interview process, top candidates are the buyers in the job transaction, “shopping for” their next, new opportunity.

After an interviewer has successfully short-listed the candidates, what is either entirely absent from the interview process or poorly practiced is a stage at which the interviewer makes the necessary shift from “buyer”, asking the rigorous questions that elicit deep knowledge of the candidate, to “seller”. This role of “seller” is most often completely overlooked. So, the question the interviewer as “seller” needs to address is: “What do I have to sell that makes my opportunity compelling?”

The Unique Recruitment Proposition

When it comes to the executive interview, the candidate is almost always more prepared than the interviewer. This is especially critical in the final stage of the interview process when the candidate is also in decision-making mode.

To prepare effectively for the final interview, the interviewer as “seller” needs to carefully and thoughtfully articulate the organization’s unique recruitment proposition (URP). This URP serves to seal the deal when (and this is nearly inevitable with opportunities in technology 0 the top candidate before you has multiple positions he or she is considering alongside of yours.

So, what is a unique recruitment proposition and how do you develop one for your company?

First, adopt the candidate’s viewpoint, with a “what’s-in-it-for-me” attitude, putting yourself in the candidate’s shoes. Sounds simple, I know. But Reader Beware: get it right and your success rate soars; get it wrong and you’re mired in the middle of “the one that got away”. The following case study illustrates the risk/reward here.

Case Study: A Matter of Viewpoint

A leading technology manufacturer, known for consistently making the list of America’s top companies to work for, has an opening and interviews a small group of carefully screened candidates. Out of this process, one clearly emerges as their front runner, an individual with the requisite depth of experience, hands-on capabilities, yet a visionary in the field. Negotiation is successful. The offer goes out.

A case made in “recruitment heaven”? Hardly. The candidate walks. Takes a job with a competing company.

Money issues? Not in the least. Re-location troubles? It was virtually in her back yard.

Debriefing with the candidate revealed the competing company had a similar opportunity, with the same title and at the same level in the organization. Compensation and benefits packages, all similar, even slightly less advantageous to the candidate in certain facets. So, what made the difference? What makes a candidate turn away from a company that appears to be a “slam-dunk” fit?

Simply put, the competing company “showed her the love”. They made a place in the interview process for it to be about her, the candidate, put her front and center into their company’s picture, ensured that she felt their enthusiasm for her in joining their team. The competing company got it right. They put candidate viewpoints into play in the final interview; they tapped into the conversation in the candidate’s head.

Crafting Your Unique Recruitment Proposition

To make the viewpoint shift and enter into that conversation in your top candidate’s head, proceed as follows. Clearly define for yourself what sets your opportunity apart from other career or executive opportunities. Now, answer the questions below. (Remember, you are the candidate.)

• Why should I be interested in working here?
• What are the defining characteristics that describe this opportunity?
• How does this opportunity advance my career, my professional goals?
• What makes this opportunity unique among all that I have looked at?

Once you have answered these, focus on the key, jump-off-the-page aspects of your company, your department, your position. Keep whittling until you come away with a tight package of ideas, easily delivered to your candidate, worth their weight in …

ROI

The ROI for the time and care spent in the development of the unique recruitment proposition is well worth the effort.

The first and most important benefit is achieving a significantly higher rate in completing the hiring process by signing on your top candidate. Executives who understand how to develop and communicate the URP and have buy-in from every member of the interview team find that they have better success in closing the deal with candidates to whom they extend offers.

Next, developing and using the URP pays off in actual dollars. It is axiomatic that candidates, who are highly interested in a career opportunity, realizing how the position will serve their interests and enhance their professional growth, will be less demanding when the chips are on the table.

In executive hiring, there is an inverse relationship between the amount of interest the candidate has in the position and the demands he or she will make before accepting an offer: the higher the interest in the content of the position itself, the lower the demands in terms of salary, bonuses, etc.; the lower the interest, the higher the demands.

When you have a clear and compelling unique recruitment proposition, developed and refined, which is communicated consistently to the candidate from all members of the interview team and understood by the candidate, you have the winning ticket. You will avoid being on the wrong side of “the one that got away”.

Recently is has been reported that employee turnover has been rising with the perception that the economy is improving. This rise is due in part by the fact that a some executives have remained in positions that were not the best use of their skills but were forced to remain in the role due to limited or non-existent alternatives. Now that the economic climate has shown improvement, turnover which has been pent up and backlogged for the past couple of years is now showing signs of increase.

When Turnover Occurs

For executives that need to hire for their organization, conducting interviews for executive positions in a climate of rising turnover, registers near the top of the challenge chart even for successful management teams. It is easily the most nerve-wracking experience a team will go through together.

Money Pit of the Corporate World

The mis-hire can be very costly. Few want to confront the depth and breadth of negative consequences resulting from choosing the wrong candidate. Recently, 52 companies surveyed estimated the dollar cost of mis-hiring 6-figure executives to be 1.5 million dollars and 150 wasted hours. Business blogs estimate the price tag attached to a bad hire at the executive level to be as much as 30 times the new hire’s salary. Taking into account the waste, inefficiency, lowered morale, and opportunity loss, the exact price tag of the mis-hire may be difficult to calculate and makes the mis-hire the money pit of the corporate world.

How Did We Wind Up Here?

Executives who find themselves with the mis-hire in their corporate midst may wonder how they got to that point. This circumstance stems from two, all-too-common circumstances.

The first is the mis-hire that occurs after the interview process has identified the most qualified candidate, who turns down the offer in favor of a different opportunity. The candidate selected in the aftermath of this turn down is a second-tier choice. Let’s call this scenario “the one that got away“.

In this case after your #1 candidate gets away especially after you have been “left at the altar” and following a long negotiation process, often the natural tendency is to reactively drop to your #2 backup candidate out of expediency. This is not always the best long term solution especially if your well of candidates was not particularly deep. It may be advisable to hit the reset button and continue to look. If in-house resources have run out of alternatives it may be wise to enlist a retained executive search firm provided they have the tool set to drill deeper and bring the next level of candidates to you. On lower level positions, contract recruitment /outsourcing may be a way to dedicate resources to the situation so that a hiring decision can be arrived at with the knowledge that the best possible array of candidates has been considered.

A word of caution, thoroughness can be brought to an extreme. For example one company we observed brought 50+ candidates in for interviews from all corners of the United States for a senior technology position. That role went unfilled for greater than 24 months. So proper judgment must be exercised so as to confuse being too overzealous with being complete.

The second is the mis-hire that moves through the interview process, which simply does not reveal that the individual is not a fit; a mis-match occurs, despite the best intentions and time investment of all involved throughout the interview process. This is commonly brought about by emphasis being placed on the wrong qualities in the interview whereby qualified candidates were eliminated on arbitrary factors before there was sufficient discussion to reveal meaningful experience accomplishments and skills that would positively effect on the organization. Instead, because the order of importances were not aligned properly a candidate with lesser skills or flatly the wrong abilities gets the job. Wrong skills, wrong position, wrong company; this is the “mis-match” scenario.

These circumstances are not unusual. According to Michigan State University, 90% of all hiring decisions are made through interviews. This may seem like a statement of the obvious. It is disheartening to learn from the same research that interview processes as practiced are only 14% accurate. As a result, more fortune 500 companies than ever before report that they are using assessments by third-party screening services, executive search firms and other service providers to find the right candidates.

Nevertheless, at the decision point when making executive hires, the key still lies in the interview.

Strategies abound for how to recognize and capitalize on the discovery of exceptional talent. In the subsequent posts on this topic, you will see strategies to assist you in preventing the mis-match scenario.

Identity theft, hacked credit card data bases, national security breaches and the now-infamous WikiLeaks illustrate the vulnerability of our data.

Data Defined Issues

For financial institutions, including banks and credit card companies, customer data and transaction information are among obvious assets needing protection. Health care institutions and service providers enforce strict policy for data access and permissioning. In response to data asset issues, some sectors of the economy are being held accountable through new laws and regulations. For example, companies in the information and transaction processing space are required to disclose leaks or breaches of information security.

Companies developing cutting edge technology in life sciences, medical devices, nanotech and other technology fields, bear substantial risk. A high priority for these firms is the protection of any data related to patentable product information, from intellectual property, to test data, clinical data and other information that would be catastrophic if lost, stolen or corrupted. Security policy, therefore would not be considered complete if it did not also cover these assets.

The threat of intellectual property theft should not be underestimated. Ponemon Institute independently conducted a national study entitled, Data Loss Risks During Downsizing, to understand what employees are doing with the data on employer-provided laptops. According to their findings, 59% of employees who leave or are asked to leave are stealing company data.

Emergence of the Chief Privacy Officer

In an information economy the loss of that most valuable commodity, information, is of major concern for business leaders in all fields. Larger firms affected by data theft have established the role of Chief Privacy Officer or CPO to coordinate all of the functions within the organization to stay ahead of the threat, safe guarding information and intellectual assets.

For emerging and mid-sized companies, this may seem an unnecessary operating cost. However, as we move forward toward increased dependence on the internet for information exchange and messaging, transmission of vital and confidential product and test data, in addition to customer and transactional information, security of all forms of proprietary information becomes vital.

Not Just an I.T. Issue

A complete job description of a Chief Privacy Officer encompasses a range of skills that go beyond purely technical aspects. Legal, financial, regulatory, process change management, even board and investor relations skills come into play, in addition to subject matter expertise in the evolving domain of data security.

The issues move beyond what happens in-house. For companies that outsource, the CPO must be able to extend the privacy and security policies of the company to all outside vendors in order to make it comprehensive and truly effective.

In the area of offshore manufacturing, loss of valuable intellectual property has been estimated in the multi-billions per year. A Ford motor company spokesman is on record stating that over $1 billion per year is lost in counterfeit auto parts produced in China alone. The decision to manufacture offshore carries with it the potential liabilities. The CPO role is best suited to oversee the integration of policy and risk/reward assessment, coordinating all areas, from IT security to the tradeoffs connected to offshoring services.

Privacy Protection as a Strategic Advantage

Forward thinking firms view the CPO role not only as a defensive move, but as a strategic asset to enhance their customer profile and build investor confidence, ultimately adding to the bottom line. Organizationally, many consider it to be a peer to the CIO, not a subordinate role because it encompasses more than I.T. issues. Consequently, the CPO should have board reporting responsibilities as its domain covers overall risk metrics that influence executive, operational, and human resource decision making.

Once there is a decision to hire a Chief Privacy Officer has been arrived at, the crafting of a position profile follows. Human Resources executives are best served by a CPO profile that accounts for all facets of the company’s business processes, customers, IP, etc. The position profile also provides metrics to demonstrate actual deliverables, and justify the creation, recruitment and addition of this executive level role.

From an executive search perspective, there are challenges connected with filling the role of Chief Privacy Officer. First, as companies recognize the need for a CPO, it becomes clear that they are not likely to pull such a skill set from their internal ranks. Second, since this is a relatively new role, locating highly-qualified candidates presents difficulties and requires specialized research. Working with a retained search firm is an effective, efficient alternative to access talent of this caliber. This is especially true if the company is a small- to mid-sized firm with limited resources to conduct this type of search.

Your Story

The next time you slip your jump drive into your computer or zip up your laptop, consider what would happen if it fell into the wrong hands. What would the implications be? How would you recover?