he data charted above was courteously provided by VentureOne.com and Ernst & Young. It represents the latest statistics on venture-capital investment in America, showing activity up to and including the second quarter of 2003. It shows an uptick this year in venture-capital investment — apparently news of the Bush Boom has finally wafted up to the penthouse office space and underneath the oaken doors of America’s most well-heeled private investment companies.
Here’s the breakdown of these statistics: The yellow line represents the information-technology industry’s total, which includes communications and networking, electronics and computer hardware, information services, semiconductors, software, and other IT. As you see, venture investing in this category has been dropping slowly but steadily since the beginning of 2002. Not surprisingly, the sub-category that is bringing down the average is communications and networking, which is down 33 percent since the beginning of 2002. The blue line represents the products-and-services industry, which includes consumer and business products, consumer and business services, and retailers. This category has been almost perfectly flat since the beginning of 2002 and the drop this year is too small to recognize on the chart. To go into more detail, consumer and business products are down very slightly and consumer and business services are up very slightly, probably due to the miniaturization of technology products, such as PDAs. This development is consistent with the growth of small micro-entrepreneurial ventures and home-based businesses which are the back bone of the Bush Boom The data illustrated by the maroon line is the grand total of amount invested in U.S. venture-backed companies; industries included are information technology, healthcare, and products and services. T0his area has been steadily dropping since the beginning of 2002, with the exception of the latest quarter in 2003, which is illustrating a turn-around. This latest jump is largely because of the health-care industry, which is up roughly 160 percent since the beginning of 2003. The pink line represents the health-care industry, which includes biopharmaceuticals, health-care services, medical devices, and medical-information systems. This category has been somewhat flat, excluding some volatility towards the beginning of 2002 and a slight jump during the latest quarter of 2003. The sub-category that contributed to this jump is biopharmaceuticals, which has nearly doubled in the past quarter (195 percent). This seems to be the hot sector in venture capital right now.
— Jerry Bowyer is a radio and television talk show host and the author of the up-coming book, The Bush Boom: What the Data Says About Our Mis-Underestimated Economy. He can be reached through www.BowyerMedia.com.