A comprehensive snapshot of San Diego’s innovation economy shows that 76 technology startups were formed during the three months that ended June 30, a nearly 20 percent increase over the 64 startups established during the same quarter last year.

Counting the 70 new tech companies formed during the first quarter, a total of 146 startups sprouted here during the first half of 2011, according to the latest Connect Innovation Report, which covers innovation activity in the San Diego area during the second quarter of 2011. The full report is available here.

Connect’s innovation report also highlights rising tech employment, a three-fold increase in the total value of M&A deals involving tech companies, and a historic high for patent applications. The report was prepared by Connect, the nonprofit group supporting San Diego innovation and entrepreneurship.

Taken as a whole, the indicators suggest that economic activity was improving for thousands of local life sciences, technology, and defense companies during the first half of 2011. For example, the 146 new companies founded during the first six months of 2011 marked a nearly 48 percent jump over the 99 new companies formed during the first half of 2010.

But the encouraging vital signs measured in the report were taken before this summer, when U.S. markets were unsettled by a variety of political and economic setbacks, both foreign and domestic.

Those broader economic concerns could have been a factor in a nationwide survey of CEO confidence conducted during the third quarter by Vistage International. The survey, which Connect included in its full report, found that small-business CEOs anticipate a slowdown in the pace of economic growth amid record-high economic uncertainty. Generally speaking, that means small companies are more cautious about making investments and slower to hire new workers. The September survey of 1,710 small business CEOs resulted in … Next Page »

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What was the biggest life sciences news over the past week? It might be that five San Diego companies landed financing deals, grants, and payments. Here are our highlights.

—The U.S. Food and Drug Administration outlined a new strategic initiative intended to address industry criticism that the agency has been thwarting life sciences innovation through its bureaucratic reviews and overall unpredictability. “The number of new products in the development pipeline is not where we’d like it to be,” FDA commissioner Margaret Hamburg told reporters last week in releasing a 40-page overview. “Timelines are long, costs are high, and rates of failure are distressingly high.”

—Mountain View, CA’s Complete Genomics said it has agreed to generate the whole genome sequences of 1,000 healthy senior citizens for a study underway at the Scripps Health system in San Diego. The trial dubbed as the Wellderly Study is enrolling people from 80 through 108 years old who are without long-term health complications. Scripps cardiologist Eric Topol, who is overseeing the Wellderly Study, wants to identify factors that have enabled them to live such long, healthy lives.

—It’s clear that the kind of fast and inexpensive genome sequencing to be used in Scripps Wellderly Study is provoking widespread attention. Xconomy is convening an Oct. 24 conference in San Francisco on the implication of fast and cheap genome sequencing and the role computing will play in this big story over the coming decade. In San Diego, Biocom has organized an Oct. 26 event to discuss how life sciences organizations can take advantage of advances in fast and cheap sequencing.

—Cyberonics (NASDAQ: CYBX) said it’s making an investment in ImThera Medical that could eventually total as much as $12 million if ImThera meets certain milestones. ImThera, which initially got $4 million in funding, has been developing an implantable neurostimulation device for treating obstructive sleep apnea. Cyberonics makes a neurostimulation device used to … Next Page »

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President Barack Obama today announced that six Southeast Michigan-based companies would receive grants totaling approximately $45 million from the U.S. Department of Energy (DOE) to develop technologies used to make vehicles more fuel efficient. He made the announcement during a tour of Johnson Controls‘ advanced battery manufacturing facility in Holland, MI.

The Michigan companies receiving funding are Ford ($2.7 million), General Motors ($14 million), Chrysler ($10 million), Denso ($2.6 million), Vehma International of America ($10 million), and United States Automotive Materials Partnership ($3 million).

The DOE is awarding a total of $175 million to 40 projects in 15 states, which builds on the President’s recent announcement of fuel-efficiency standards for cars and light trucks of 54.5 miles per gallon by 2025.

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Here in Boston, we like to tout our universities, our faculty, our students. The academic community is one of the crowning strengths of the New England economy, not to mention a major driver of its global impact. But what have universities done for the local startup and business innovation community lately?

I’m not going to give a full answer here—it’s one of the broader themes I’m exploring around town—but I’ll give you a piece of the puzzle.

Harvard University’s Office of Technology Development has what it calls an “Accelerator Fund” that has been chugging along for four years now, and it has achieved some notable results. As of last month, the $10 million fund has given out $5.2 million in grants, which have supported more than 30 projects over five annual cycles. It’s still early to add up the returns on this investment, but already it has led to more than $10 million in partnership money for the university, and several startups that have received outside venture funding. (The Harvard office declined to give specifics on licensing revenues to date.)

What’s more, the model apparently has proven successful enough that the team is about to begin raising a much bigger fund, in the $20 million to $30 million range. And unlike in the past, when Harvard developed a laggardly reputation when it came to commercializing its research, universities around the country are starting to look at the school as a possible role model for technology transfer and startup development practices.

The Accelerator Fund, which Xconomy wrote about in early 2008, was created to help Harvard scientists commercialize their inventions by forming industry partnerships, licensing technology, and starting new companies, primarily in life sciences and biomedical fields. As technology development head and senior associate provost Isaac Kohlberg puts it, “The pipelines of Harvard were empty.” The school “suffered from a branding issue with stakeholders about the role of technology development,” he says.

Kohlberg and his team, which includes Curtis Keith, chief scientific officer of the Accelerator Fund, were brought in to overhaul Harvard’s tech transfer and development offices. Kohlberg joined … Next Page »

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The U.S. Department of Energy announced yesterday it awarded the University of Michigan nearly $3.5 million in research grants, aimed at developing cutting-edge nuclear energy technologies and training and educating the next generation of leaders in the U.S. nuclear industry.

The university received a total of four awards in the areas of fuel cycle research and development, advanced modeling and simulation, and transformative research.

The DOE awarded a total of $39 million to 51 projects at colleges and universities across the nation as part of its Nuclear Energy University Programs, which work to leverage the research and development capabilities of American educational institutions to enhance U.S. leadership in the global nuclear energy industry.

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A state initiative intended to facilitate technology commercialization by designating regional iHubs (or innovation hubs) has expanded San Diego’s iHub to include much of Southwest Riverside County. The California Governor’s Office of Economic Development established the San Diego iHub last year, enabling a local consortium to apply for federal economic stimulus funding in three focus areas: mobile health, biofuels, and solar energy and energy storage. Expanding San Diego’s iHub designation will expand the consortium and add the field of biomimicry as an additional focus area. San Diego and Riverside already have joined forces to collaborate on a grant application for the i6 Challenge, a $12 million federal competition intended to stimulate green technology development, new venture formation, jobs, and economic growth.

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The wireless news out of San Diego seems to have picked up in recent weeks, with Qualcomm playing a central role in most of the developments. Our briefing is ready for you now.

—The world’s largest wireless chipmaker agreed to buy San Diego-based Rapid Bridge’s LiquidCell technology, used to accelerate chip design, but Qualcomm (NASDAQ: QCOM) did not disclose the price. The Rapid Bridge asset sale is expected to close by Sept. 25, the end of Qualcomm’s fiscal year. EE Times London Editor Peter Clarke said “LiquidCell is a library consisting of a metal-programmable sea-of-transistors that can be configured into millions of usable elements supporting more than 160 functions from the 750 standard cells. The metal programmability allows designers to iterate designs, produce derivatives and meet industry-standard specifications through respins that only involve a few metal layers.”

—The success of Qualcomm’s succession is the subject of a story in The New York Times today. The Times notes that co-founder Irwin Jacobs passed the mantle of CEO to his son Paul six years ago, and that last year Qualcomm (NASDAQ: QCOM) accounted for 41 percent of the total market share in terms of smartphone chip revenue, according to one analyst’s estimates. Qualcomm also holds nearly 61 percent of the market share for application processors used in smartphones powered by Google’s Android operating system.

—The Department of Energy awarded funding to two San Diego companies, Genomatica and General Atomics, that is intended to advance technologies for bio-based fuels and chemicals that can be easily “dropped into” existing oil refinery and petrochemical production facilities. Energy Secretary Steven Chu said Friday that Genomatica would get as much as $5 million to enhance the commercial profitability of integrated bio-refineries used to produce 1,4-butanediol (BDO), an intermediate chemical. Genomatica has genetically engineered bacteria to make BDO. Chu said General Atomics would get up to $2 million to reduce the cost of fermentation processes needed to make algae-based biofuels.

—Analog Analytics, a San Diego-based white label provider of social coupon technology for old media newspapers and broadcasters, has been growing revenue at a monthly compounded rate of roughly 50 percent, according to co-founder and CEO Ken Kalb. I profiled the company, which counted nearly 1.9 million page views for all its sites from … Next Page »

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With the average price of gasoline reaching almost $4 a gallon nationwide, it’s safe to say a lot of people are curious about the all-electric vehicles (EV) that many automakers have been showing off lately.

Still, it’s hard to justify the $100,000-plus sticker price for a Tesla Roadster or the $33,000 price of a Nissan Leaf if the only EV charging station for hundreds of miles is in your own garage.

So Dearborn, MI-based Ford Motor, which plans to roll out its Focus EV later this year, has been studying which U.S. cities have gotten the farthest down the road, in terms of developing the infrastructure needed to support EVs. The company has listed what it calls the 25 “most electric vehicle-ready cities in the U.S.,” based on Ford’s own research and available public information.

While no metropolis is really EV ready today, the study notes the Interstate 5 corridor that runs from Seattle through Portland, San Francisco, and Los Angeles to San Diego “is probably the most advanced in terms of planning for EVs,” according to Mike Tinskey, Ford’s manager of global vehicle electrification and infrastructure. That’s not a green light for EV owners to begin planning road trips this Memorial Day weekend, but such trips might be possible in another year or two.

The corridor stands out largely because of the “EV Project,” a modern-day federal public works project made possible by the American Recovery and Reinvestment Act. The U.S. Department of Energy is providing almost $115 million to install more than 14,000 commercial and residential EV charging stations in 18 major cities—including eight along the I-5 corridor. With matching funds from utilities, automakers, and other companies, total funding for the EV Project is about $230 million, which is intended to build the charging stations and other infrastructure needed to support at least 8,300 EVs.

San Francisco-based Ecotality, which is overseeing the EV Project, said last week it had installed 1,000 of its Blink Level 2 residential charging stations so far, passing a significant milestone in the deployment of plug-in vehicle chargers. A spokeswoman says most of the charging stations installed so far have been in residential units, but the company plans to accelerate the installation of publicly available charging stations in coming weeks.

It’s also worth noting that Energy Secretary Steven Chu announced earlier this week that the Obama Administration plans to buy 101 Chevrolet Volt plug-in hybrids and 15 all-electric vehicles, the government’s first EV purchase, and to install … Next Page »

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San Francisco-based Ecotality (NASDAQ: ECTY) took the first step in creating an infrastructure for charging electric vehicles today, installing its Blink Level 2 residential charging stations at homes in Los Angeles and the San Diego area. The company says it plans to do similar installations at homes in Portland, OR, tomorrow;  in Seattle, WA, Thursday; and Arizona on Friday. The Department of Energy awarded Ecotality two grants for nearly $115 million to serve as project manager of the largest transportation electrification project in history—the installation of commercial and residential charging stations in 17 cities nationwide. The chargers are intended to support 8,300 electric vehicles.

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InfoReady, an Ann Arbor, MI-based developer of collaboration and workflow management software, announced today that it nabbed a $250,000 investment from Automation Alley, bringing its first-round funding to $1.1 million. The funding will go to sales, marketing, and new product rollouts for InfoReady, which is developing its software for clients who need to search relevant information on research grants and put together proposals to apply for the grants. The firm is also backed by Ann Arbor Spark’s Michigan Pre-Seed Capital Fund, First Step Fund, and members of the InfoReady advisory board.

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New money and new product innovations seemed to be the intertwining themes of San Diego’s life sciences news over the past week. See if you agree.

—San Diego’s Ambit Biosciences intends to raise as much as $86.3 million in an IPO, according to a regulatory filing last week. Ambit, which has been developing a drug to treat acute myeloid leukemia, hopes to ride on the coattails of 18 initial public offerings in October, the most in years.

—Bill Davenhall, ESRI‘s global marketing manager for health and human services, talked with me about his 2009 TEDMED talk about the importance of creating a medical place history. One year later, ESRI developed a way to create your own medical place history—an app that is now available for free at the Apple iStore.

—San Diego’s Arena Pharmaceuticals (NASDAQ: ARNA) said initial results from an additional test of its experimental diet pill show that the drug meets federal requirements for prescription weight-loss treatments. The study essentially showed that overweight patients who also have Type 2 diabetes reached all three goals of a clinical trial. Arena will now take this information to its next meeting with the FDA, in hopes that it can persuade regulators to approve the drug for sale. The drug’s initial application was turned down last month.

—San Diego-based Optimer Pharmaceuticals (NASDAQ: OPTR) said it halted a study of an experimental antibiotic for traveler’s diarrhea, after a higher-than-expected rate of skin rashes. Optimer said the drug candidate is in a class of antibiotics known as fluoroquinolones, which are known to sometimes cause rashes.

—The non-profit West Wireless Health Institute said it has developed its first engineering prototype-a wireless fetal and maternal monitoring device called “Sense4Baby.”

—Shareholders of San Diego’s Ligand Pharmaceuticals (NASDAQ: LGND) didn’t show much reaction after the company said its board approved a 1-for-6 reverse stock split, which is expected to take effect by the end of this month.

—Federal grants to fund therapeutic discoveries under the Affordable Care Act began arriving at nearly 3,000 biotechs across the country over the past week. Keith Darce at The San Diego Union-Tribune published a complete list of 184 biotechs in San Diego County that are getting a total of almost $67.1 million. The biggest beneficiary is Ligand Pharmaceuticals, which is getting a $1.9 million grant.

—Thoratec (NASDAQ: THOR) of Pleasanton, CA, sold its International Technidyne Corp. subsidiary for $55 million to the private equity firm Warburg Pincus, which merged it with San Diego’s Nexus Dx. The San Diego startup is focused on point of care blood diagnostic testing.

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Collaboration software for office workers isn’t new, and neither are technologies for doing refined, targeted Web searches. But Ann Arbor, MI-based InfoReady is combining those elements in a social networking-like interface to create a workflow tool that the company’s president and CEO Bhushan Kulkarni thinks will really shake things up.

“I feel that we are hitting on something that’s going to allow us to change the way that business is done in the collaboration space,” he says.

The startup spun out of Kulkarni’s Ann Arbor-based IT consulting firm GDI Infotech in March, and released its first product in June, attracting about a dozen paying customers, Kulkarni says. He thinks the market potential for his company’s product is massive, but wanted to start with a more targeted customer base and get good at that, he says. So InfoReady has selected the problem of finding government grants and other awards and putting together proposals as the first application for its software.

Between federal agencies, state agencies, and foundations, there’s about $1 trillion in grant money available every year; the problem is knowing where and what to apply for, Kulkarni says. Traditionally, those interested in grant money have had to go to individual agency and foundation websites, and by the time they gather the information on grants that are available, “there’s not enough time left to respond with a quality proposal,” Kulkarni says. So InfoReady is targeting its software to streamline the grant search and proposal process for groups such as big research universities, community colleges, public school districts, economic development agencies, and local government entities.

“It’s probably because of the environment in Michigan,” says Kulkarni of the inspiration for grants as a first market for the InfoReady software. “What became clear to us is that everybody is hungry for new sources of revenue.”

InfoReady’s software platform crawls the Web for information relevant to a particular customer, and delivers notifications on available grants to their inboxes, based on their customized search criteria. It’s designed so that users can take action on that particular grant right away, by putting together a proposal. “If we’re trying to find something, chances are we want to find that information because we want to do something with it,” he says. “With most software tools out there, once you find info, there’s no easy way to collaborate.”

Rather than requiring customers to go into separate programs and documents and copy and paste relevant content, the software platform enables different users to post items on an interface similar to the wall in Facebook. The software also pulls relevant content exchanged via e-mail regarding … Next Page »

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Three months ago General Electric (NYSE: GE) announced a $200 million open innovation competition, with the goal of finding and financing breakthrough ideas that will help create a smarter, cleaner, more efficient, and more economically viable grid, and help accelerate the adoption of smart grid technologies. Since the “GE Ecomagination Challenge” was introduced on July 13, businesses, entrepreneurs, innovators, and students from around the world have submitted 3,809 ideas in three categories—eco homes/buildings, grid efficiency, and renewables.

GE has already dished out its first award in the competition, $50,000 to the idea that won the most user-generated votes—the Idaho-based Solar Roadways project. Next month the judging panel—which includes GE energy services digital energy vice president Bob Gilligan, senior vice president and director of GE global research Mark Little, and Wired Magazine editor in chief Chris Anderson—will select six more winners. Five will receive $100,000 awards, and one will be given the GE Scientific Merit Award, an opportunity to work with the company’s Global Research Center.

All candidates will be considered for potential future commercial relationships with GE, including equity investments and cooperative agreements beyond the competition itself—part of GE and its partners’ capital pledge to invest $200 million into promising smart grid ideas and startups around the world.

Though the competition is truly a global one, a large number of participants hale from the Pacific Northwest. In fact, Washington state comes in No. 11 in the list of states and provinces with the most entrants. Given that there’s so much innovation coming out of the region, especially in cleantech, we thought it might be fun to give you a sneak peak at the 31 NW ideas competing in the GE ecomagination Challenge. Take a look:

Eco Houses/Buildings

—Box Playhouse Telepresence—The Future of Meetings and Entertainment, Tim Lyons, Portland, OR

—Don’t forget the farmers, Nathan Hastings, Bend, OR

—The Green Microgym, Adam Boesel, Portland, OR

—Intelligent Adaptive Traffic Light, Glenn Godden, Lynnwood, WA

—Knowledge of Power, Alexandre Cross, Bellingham, WA

—Micro Fleets for Mega Cities, Melissa Brandao, Medford, OR

—Public Watch: Powering Down Government, Mike Green, Eugene, OR

—Selfocus Solar BBQ, Ab Mobasher, Portland, OR

—Two Birds with One Stone, Caleb Tallent, Tacoma, WA

Grid Efficiency

—E-C Swap, Steven Reynolds, Portland, OR

—Grid Scale Storage—Flow Battery, Craig Wilkins, Walla Walla, WA … Next Page »

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Big companies put on dog-and-pony shows for government officials all the time, but this one actually means something. A123Systems (NASDAQ: AONE), based in the Boston area, is officially opening a 291,000-square-foot lithium ion battery manufacturing facility in Livonia, MI, today. The plant already employs more than 300 people, and is part of a Michigan expansion that the company says will create a few thousand jobs in the state over the coming years.

It’s a big deal—for Michigan’s ecosystem, for U.S. competitiveness in manufacturing, and for A123’s business. The new plant in Livonia is the largest lithium ion automotive battery plant in North America, according to the company. It will produce lithium ion battery cells and packs, to be used in electric and hybrid-electric vehicles. The Watertown, MA-based company hopes to help transform Michigan into a global hub for the expanding market of batteries and electric vehicles.

The Livonia plant has been in the works for years, but is now a reality thanks to a $249 million grant from the U.S. Department of Energy (DOE) last year, and $125 million in refundable tax credits from Michigan’s 21st Century Jobs Fund. A123 also has a DOE loan application pending for $233 million.

For the opening ceremony, U.S. Secretary of Energy Steven Chu will be on hand, as will Michigan Governor Jennifer Granholm, Senator Carl Levin, Senator Debbie Stabenow, and other politicians. A123’s CEO, David Vieau, will be joined by most of the company’s top brass, including co-founders Yet-Ming Chiang and Bart Riley, and chairman Desh Deshpande. Big customers like China’s SAIC Motor Corp., BAE Systems, Navistar, and GM will be present too. The emcee and host will be Jason Forcier, vice president of A123’s automotive group, who is based in Michigan and is overseeing the new facility. (Forcier is known within the company as the “wheels guy.”)

Attendees will see a working factory, and see how a lithium ion battery is made, Forcier says. Unlike some of A123’s competitors in the state (like LG Chem), he adds, “This is not a groundbreaking, this is a grand opening…We’ll show the world we’re making batteries right here in the state.”

That has special significance to Forcier. While many people around the country may have learned of the economic woes of Flint, MI, through Michael Moore’s 1989 documentary, “Roger & Me,” Forcier and his family—some of them GM employees—lived through it. Forcier himself has built … Next Page »

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TPI Composites, an Arizona-based maker of wind turbine blades, plans to open a new facility in Fall River, MA, as soon as January, according to a report in the Boston Globe. The plant will be a development hub for TPI’s facilities in Rhode Island, Iowa, Mexico, and China, the report says. The Massachusetts Clean Energy Center has confirmed it will provide a $250,000 grant to TPI, contingent on the jobs expected to be created at the new plant (about 30 when it opens).

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The Northwest Open Access Network (NoaNet) has received an additional $54.5 million in Recovery Act funds to expand high-speed broadband Internet to underserved areas across Washington state. U.S. Secretary of Commerce and former Washington state Gov. Gary Locke announced the funding, alongside U.S. Reps. Jay Inslee and Brian Baird, at the Seattle Central Library yesterday. All three touted the project as a way to bridge the technological divide, boost economic growth, create jobs, improve educational resources and access to healthcare, and connect the rural regions of the state to the digital economy.

“This critical investment will lay the groundwork for sustainable economic growth by connecting difficult terrain both east and west of the Cascades that has been without the full economic, educational and social benefits of high-speed Internet,” Locke said.

This is the second federal grant Tacoma, WA-based NoaNet has been awarded in the last year for the State of Washington Broadband Consortium, a $185 million project to bring Internet access to 170 communities, and 2,000 schools, libraries, universities, hospitals, and emergency response agencies that lack adequate service. The first grant, for $84 million, was awarded in March.

Altogether, the $185 million will finance the construction of more than 1,300 miles of new fiber, bringing affordable broadband Internet service to 55 Washington communities labeled by NoaNet as “economically depressed.” The project will directly affect 538,559 households and 103,230 businesses throughout 25 of the state’s 39 counties. The plan will also enhance connectivity to six Native American tribal communities in Washington, including the Tulalip Tribes of Washington, the Kalispel Tribe of Indians, the Yakama Nation, the Lower Elwha Kallam Tribe of Indians, the Suquamish Tribe, and the Port Gamble S’Kallam Tribe of Indians.

“This broadband initiative will create immediate jobs, attract economic investment to rural areas, and provide reliable, high-speed Internet,” NoaNet CEO Greg Marney said in a statement released yesterday. “Imagine a rural doctor being able to instantaneously share a patient’s test results and consult with an expert at any major medical center in the world. It’s a big deal for rural Washington.”

The NoaNet project focuses on remote areas, because they are those that most often have rudimentary capabilities. And according to Marney, greater broadband connectivity will bring  an overall enhancement to the quality of life in the areas served. Not only will these communities now have attractive economic appeal that could pull in outside businesses, but those living in even the most remote parts of the state will be able to quickly access and share critical information among fire, police, hospitals, and first responders.

“This is a game-changer for many communities,” Marney said. “It just like when electricity was finally extended to rural communities in the 1930s and 1940s. Broadband will help save lives, reduce government costs, help educate young people, and create business opportunities.”

The news came on the same day that Vice President Joe Biden announced an approximately $1.8-billion investment in new projects to create jobs and stimulate economic opportunities in 37 states across the country.

“Investment in Broadband will be a fuel for the engine of our economic recovery,” Inslee said. “NoaNet’s State of Washington Broadband Consortium is one more link in our economic chain that … Next Page »

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There’s a new cleantech player in town. As we and other media outlets reported last week, Watertown, MA-based A123Systems (NASDAQ: AONE) has spun out a new company called 24M Technologies, which is developing a new kind of energy storage system that combines aspects of lithium-ion and flow battery technologies. The company announced today it has raised $10 million in Series A venture capital from Charles River Ventures and North Bridge Venture Partners. It also said it is collaborating with MIT and Rutgers University on a project supported by a $6 million grant from ARPA-E, the relatively new research agency within the U.S. Department of Energy.

The announcement is a strong PR push for Cambridge, MA-based 24M as a separate entity, but the company isn’t giving many details about its technology or business strategy just yet. A123 and North Bridge Venture Partners did not respond to requests for comment last week. (It’s not totally clear to me why A123 would spin this company out instead of keeping it in-house, where it would seem to have enough resources.)

Here’s what we know so far. 24M’s technology originated at A123, the lithium ion battery maker, and was further developed at MIT. It combines aspects of rechargeable batteries, fuel cells, and flow batteries. A flow battery pumps liquid electrolyte (often stored in external tanks) through an electrochemical cell to produce electricity. 24M says it is targeting energy-storage applications such as transportation—presumably hybrid and electric vehicles—and the power grid.

The latter is certainly a long-term problem in renewable energy; solar power and wind farms won’t go very far without more efficient ways to store the electricity generated. It sounds like 24M, like many other companies, is looking to develop technology that will store more energy in a given amount of space, for less cost than existing batteries.

A123 has an unspecified equity stake in 24M, which is led by president and co-founder Throop Wilder, who is a veteran of the IT world. Wilder was previously involved with Crossbeam Systems and American Internet Corp, among other tech companies. His fellow 24M co-founders are MIT scientists Yet-Ming Chiang (co-founder of A123) and W. Craig Carter.

“We believe that 24M’s technology has the potential to reduce energy storage costs for transportation and grid applications, and we look forward to helping the company as it leverages our research innovations for the development of commercially viable systems,” said A123’s CEO, David Vieau, in a statement.

Some other interesting details about 24M have been reported elsewhere. For those interested in the technical aspects, Martin LaMonica of CNET pointed to a patent for a “redox flow device” filed by Chiang, Carter, and others on behalf of A123 and MIT. This may or may not be related to the technology that 24M is working on. And 24M’s Wilder told Scott Kirsner of the Boston Globe that he originally met Chiang through North Bridge (which invested in A123), while Wilder was an entrepreneur-in-residence at Charles River. Wilder also said that 24M will be expanding to 10 to 20 employees within the next six months.

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Wilmington, MA-based Advanced Electron Beams is developing energy-efficient technology in a sector that typically doesn’t attract the same attention as hybrid cars or green buildings: industrial manufacturing.

The company makes a device that CEO Mitch Tyson describes as a stainless-steel light bulb, which emits a cloud of high-speed electrons to produce a blue glow, replacing industrial processes that typically require vast amounts of heat, water, or chemicals. This includes sterilizing in food packaging and pharmaceutical environments, and curing coatings for metal, wood, and plastics in manufacturing. “Anything that goes into the glow is transformed,” says Tyson, explaining how the electron beam technology incites a chemical reaction in the materials it touches.

For example, companies that make food and beverage packaging need to sterilize sheets of plastic to convert them into storage containers, he says. That process requires manufacturers to run the material through a hot, chemical-laden solution. Afterwards, they’ll also have to rinse the material to ensure none of the chemicals remain on the food packaging.

Instead, AEB‘s device, which is rolled into other industrial equipment, can shoot an electron beam onto the plastic surface to sterilize the material, eliminating the need for the chemicals, heat, and rinse water. The technology can also replace the ovens typically needed to dry ink in the commercial printing process, and also has applications in pharmaceuticals and medical devices production, materials engineering, and industrial coating. General Electric (NYSE: GE) is both an investor in the company and a consumer of its technology.

Using electron beam technology to induce chemical processes is not new, but previous methods were expensive, bulky, and difficult to install, operate, and maintain, says AEB, which raised a $14.2 million Series C round a year ago from investors including Flagship Ventures, Agman Partners, Atlas Venture, GE, General Catalyst Partners, and RockPort Capital Partners. Its intellectual property focuses on converting the process into simple, compact beam emitters that can be mass-produced.

“We’re taking an older technology that’s really large, complex, and difficult to use and bringing it to a form that could really revolutionize the manufacturing process,” says Tyson. He compared the original electron beam methods to old mainframe computers, and likened AEB’s approach to laptops.

Now, the company is out to tackle the air pollution that factories emit in sites ranging from printing houses to auto body shops. To that end, it attracted a $250,000 grant from the Department of Energy’s Industrial Energy Efficiency Grand Challenge. The federal program has pledged a total of $13 million to support innovative ideas aimed at reducing the energy footprint of companies in the industrial manufacturing realm, which … Next Page »

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The economic indicators in San Diego’s innovation economy are flashing mixed signals for the first quarter of 2010, based on data released by Connect, the nonprofit group for technology and entrepreneurship. The Connect Innovation Report can be found online here, and my roundup of the latest data follows:

—Flashing Red: New company formation fell by 21 percent during the first three months of 2010, with just 51 startups established, compared with 66 startups that formed during the same period in 2009, according to the Connect report on San Diego’s innovation economy. New company formation also declined about 31 percent from the fourth quarter of 2009, when 74 companies started in the San Diego area. “This is most likely a seasonal variation due in part to potentially higher tax liabilities incurred in establishing a new business in the first quarter,” says Economist Kelly Cunningham, a senior fellow at the National University System Institute for Policy Research, in the Connect report. One ominous note: The formation of technology startups throughout California was down by 37 percent.

—Flashing Green: There were 46 M&A deals in the San Diego area that totaled over $845 million during the first quarter, a 9 percent increase over the same quarter in 2009 and a nearly 59 percent gain over the fourth quarter of 2009. Over 30 percent of all M&A deals that closed during the quarter in Southern California involved San Diego companies.

—Flashing Yellow: Venture Capital investments in San Diego companies declined by 27 percent, to $222 million in 29 deals from $305 million in 31 deals during the previous quarter (Fourth quarter of 2009), according to data from the MoneyTree Report prepared by PricewaterhouseCoopers and the National Venture Capital Association. That’s less than half the $576 million that VCs invested during the first quarter of 2007, but still represents a 242 percent increase from the same quarter in 2009, when a paltry $92 million was invested in just 16 companies in the San Diego area. As we previously reported, about 64 percent of the first-quarter VC funding was invested in … Next Page »

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Seattle-based Cray, the supercomputer company, announced today it has been awarded a multi-year, $20 million contract with the Foundation for Space Technology, Applications and Science in Brazil. Under the terms of the contract, the company will deliver a Cray XT6 supercomputer to Brazil’s National Institute for Space Research, to perform weather forecasts and climate studies; the computer will go into production later this year. Cray (NASDAQ: CRAY) has won a series of large government contracts, both foreign and domestic, in the past year. Last July, Cray CEO Peter Ungaro gave me a detailed overview of the company’s strategy, shortly before it posted a surprise profit for the second quarter of 2009.

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