Leadership Dialogue V: Spawning Technological Breakthroughs and Entrepreneurship

On this panel:

• Daniel Lyons — Technology Editor, Newsweek
• Thomas R. Baruch — Founder and Managing Director, CMEA Capital
• Dr. Ralph J. Cicerone — President, National Academy of Sciences
• Hon. John P. Holdren — Assistant to the President for Science and Technology; Director, Office of Science and Technology Policy, Executive Office of the President of the United States
• Dr. George H. Miller — Director, Lawrence Livermore National Laboratory

John Holdren: Document on the WH and OSTP website about increasing R + D. Look domain by domain at opportunities. We're creating incentives for innovation that will drive sustainability. Collect low-hanging fruit and lower the highest-hanging fruit. The president is committed to R + D and investing in science and technology.

Ralph Cicerone: Students and young business people want to work on this technology.

Question: What are the challenges for a venture capitalist in energy?

Thomas Baruch: We have incredible resources to influence the outcome in energy. We worked on the same things in the 1980s that we're working on today -- we just keep going up in magnitude. We're at a critical juncture where we can fundamentally change the game. Innovation is essential to address our problems. We have the tools to achieve fundamental change -- venture capital's role is to change and adapt so that we take a proactive role.

Question: What does the government need to do?

Thomas Baruch: If the science is important enough, we'll invest early. The government can facilitate what we do and what research labs do -- we need better communication between all moving parts. There are opportunities to transform energy applications -- government should make capital available for that.

George Miller: "Bringing star power to Earth" -- using the sun to create nuclear energy. It's not 50 years from now -- we can demonstrate this in the lab over the next 18 months. That will literally change the way people think about making this kind of carbon-free energy. There's more energy in a gallon of seawater than in a tanker of oil, if we can unlock it. We're ahead of the world right now, but we have to keep running.

Question: Do we have the national will to do this? Does shifting to new forms of energy involve sacrifice?

John Holdren: Every time there's a major transformation in doing business of any sort, society changes. Retraining, creation of new jobs, shifts. There will be a net benefit from pushing this transformation. We need to do this in any case.

Question: To make investments in alternative energy pay, these companies have to be more successful than fossil fuels. Is that feasible?

Thomas Baruch: We measure our projects against the price of oil at $40/barrel, and all of our projects have to be more competitive than that. Energy is scale-sensitive -- the ability to produce large quantities at low price is key, but often that can't happen until you have a high rate of investment. Investment patterns are changing -- we've Twittered ourselves to death.

Audience questions:

Question: How can we relate entrepreneurship to energy independence?

John Holdren: what's the most useful thing the government could do for small businesses that it's not doing? (Audience answer: put more money in R + D.)

Thomas Baruch: very few countries share our entrepreneurial spirit. We can protect intellectual property for small businesses, not large corporations, and other low-cost procedures to help guard American entrepreneurship. It's a competitive advantage we need to foster.

Question: Do entrepreneurs need the government?

Thomas Baruch: No. You can innovate without the government, but the key thing is being disciplined in backing companies and technologies. I've never seen a company with a real transformative platform and an experienced management team that couldn't get money from somewhere.

Question: What areas are you most interested in?

Thomas Baruch: Energy efficiency, future fuels, batteries. Storage technology will play a huge role in future technology. We're investing along the theme of a low-carbon economy.

Audience question: how do we get over hurdles for small and midsize businesses in meeting loan requirements?

John Holdren: We're looking at a lot of options to make this an easier environment for entrepreneurs - Sec. Chu might know more.

Audience question: taxing investors might be killing the golden goose. Would lowering the tax burden create an increased return of investment?

Thomas Baruch: That's one of the instruments we can put to work - I'm with you.

Audience question: Are we optimizing commercialization of R + D out of our federal labs?

George Miller: We haven't yet, and Sec. Chu knows this. It's fairly high on his list of things to do. Public policy issue -- if tech is developed on federal dollars, how do you give an exclusive license to someone and go develop it commercially? There's tension around the issue and it's made it hard to move tech. Open campus concept: some labs were purposefully closed during the Cold War, and so we created industrial parks around the labs. 

Audience question: We don't have a director of RPE.

John Holdren: there's a large gap between needs and opportunities, and a lot of us are frustrated because we don't have enough people in place on the government side.

Question: is it just a matter of money?

John Holdren: No.It's a combination of factors.

Ralph Cicerone: What we're demanding in the way of sophisticated solutions are just that -- demanding. It's going to take more resources than we've even been talking about to make a difference, and all of us have to get behind the people managing those resources.

Coming up: US Secretary of Energy Steven Chu makes a major funding announcement.

— Sarah Spooner

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