Bummer. It�s over � my

by francine Hardaway on September 7, 2005

Bummer. It�s over � my summer in Silicon Valley. This is the third year I�ve gone up there to help bring the word from the desert to the Valley, and vice versa.

However, this year there�s not as much news to bring back. The desert knows as much as Silicon Valley does, especially since the hurricane season has devastated half the country and created unforeseen opportunity for the other half. Disaster recovery, environmental cleanup, construction, communications infrastructure, engineering, concrete and asphalt, building materials � things Arizona is at least as good at as California. The government money is all going to be directed to finance the rebuilding of the Gulf Coast. The opportunities will be huge. For the next few months, indeed years, it will be all about reconstruction.

(Social work and psychology will also flourish as �industries,� because you can be certain all this relocation and loss have caused an outbreak of post-traumatic stress disorder. Dr. Phil is already on the scene. )

But why just reconstruct? Why not take this opportunity to reinvent? Although the venture funds are out there making investments, there isn�t anything exciting for them to invest in right now. They are all trying to learn about biotech, and the industries that support it. But the time horizons are long for those investments, and the IPO window for them is narrow, the stock market having also bounced around on the winds of Hurricane Katrina.

In the interim, they�re also giving small amounts of follow-on capital to companies in the RFID, network security, and distributed application space.

So I have a suggestion: as long as there is all of this money looking for something to do, why not use the innovation skills of Silicon Valley to find better ways to do things that have suddenly revealed themselves as desperately needed and are accomplishable in the short term?

Let�s start with remaking America�s aging physical infrastructure: the way water is purified, carried, or conserved. The way electricity is produced and transmitted. The way cities are planned and built.

I�ve never been able to attract venture capital to, let�s say, construction methods that cut the cost or the time to build a house, such as prefabricated wall panels, or insulation materials. Nor have I seen much attention given to non-toxic paints, or new pipeline materials, innovative ways to place utilities underground so they won�t be interrupted by hurricanes, or ways to remove contaminants from water. The only company even remotely connected to construction that we saw funded was a new way to apply termite protection � and that one was funded by an SBIR grant, not a private fund.

But these are the kinds of innovations we need immediately, and because we have ignored them in favor of more �sexy� investments, we have situations like the one in New Orleans, which is as much a manmade disaster as a natural disaster. There�s common agreement that only 20% of the damage to New Orleans was caused by the hurricane, while the other 80% has been caused by the consequences of the levees� failure. And for the evacuees, who have been asked to leave their homes (if they still have them) for thirty to eighty days, the damage is incalculable. We�re going to need to generate jobs in Memphis, Houston, San Francisco, Phoenix � every place the Red Cross is sending evacuees.

I�m not asking venture capitalists to donate their funds to the Red Cross. I�m asking them to consider opportunities they don�t ordinarily consider, such as alternative energy sources and construction techniques, conservation technologies or water purification –, and band together to fund those.

I will bet their return on investment will be just as high � after all, Arizonans have grown rich building infrastructure and housing for the past fifty years. While these industry segments are often scorned by economic developers who look past them to more exciting technologies, at times like these they are the industries with the biggest markets. You can bet all the homebuilders will find their way to New Orleans in the very near future, along with the Home Depots or the world.

But why go back to the old stuff? Wouldn�t it be cool to use this time to try new and perhaps improved technologies and techniques? I bet there are entrepreneurs out there with solutions to most of New Orleans� problems, if they could just find some funding to help them get their products to market. It�s time for all of us to begin thinking outside the box.

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