Notes from Innovation Policyworks


Innovation is Essential for Corporate Growth, Earnings and Employment


The World Bank has recently released a study that shows that employment growth is greater for firms that innovate compared to firms that do not. This finding is robust even when other characteristics of firms are taken into account, including their industrial sector or country. The benefits of innovation accrue to all innovating companies, not just those in high-tech or advanced economies. Indeed, the authors find that job creation is even more powerful in innovation-driven companies with larger proportions of unskilled jobs. This debunks the myth that innovation or knowledge-based growth does little for poorer segments of society. 


Similarly, Arthur D Little studied top innovators globally and found that the most innovative global companies have as much as twice the revenue and double the earnings (EBIT) as the average company. The benchmarking study found that companies felt that innovation was critical, but did not take the steps necessary to implement a system to ensure success. 


One system for innovation is the Innovation Engineering Management System (IEMS) developed by Doug Hall and the folks at Eureka Ranch, and being taught and implemented with firms by the Manufacturing Extension Partnership (MEP) nationally, and with the University of Maine. IEMS reduces the risk associated with innovation, and increases the speed of commercialization.  I have a contract with MEP and believe that this system is extremely effective. If you want to learn more, send me an email or give me a call.




Is Unemployment a Problem of Unskilled Workers or Unskilled Companies?

The conventional wisdom these days is that a large part of the unemployment problem comes from the mismatch between the skills that employers want and the skills that the unemployed have. This is supported by several studies of want ads and comparisons with the skills available among the unemployed.


Some economists are arguing that companies need to take on some of the blame. For instance, Peter Cappelli recently wrote an article in the Wall Street Journal saying that employers want too much-they want workers who can fill jobs right away without any training. He says that companies need to drop the ideal of finding perfect candidates and look for people who could do the job with a bit of training and practice. He suggests that companies (1) work with education providers; (2) bring back apprenticeships; (3) promote from within. 

Crowdfunding Bill Passes House


The Entrepreneur Access to Capital Act (H.R. 2930) creates a crowdfunding exemption from SEC regulations for firms raising up to $5 million, with individual investments limited to $10,000 or 10 percent of an investor's annual income, whichever is lesser. It also preempts Blue Sky Laws and eliminates the application of the ban on general solicitation for issuers relying on the crowdfunding exemption.


Finally, it excludes crowdfunding investors from counting as shareholders for the purposes of calculating the 499-shareholder cap under 12(g) of the Securities Exchange Act. This Bill has passed the House and is being supported by the Obama Administration.


An example of crowdfunding is Kickstarter, a website where entrepreneurs can showcase their products. Mainer Charles Friedman had posted his design project, a iPad sleeve made from recycled sails, and has already recruited 83 backers and raised over $6000, which was his goal. In this case, backers are pre-paying for a product. View this here.

SBIR Reauthorization Status

The reauthorization of SBIR/STTR has been included in the Senate version of the National Defense Authorization Act for FY2012, but not the House version. The conference committee is meeting this week, and pressure is being applied by certain House members to delete the SBIR language. Our own Senator Snowe has been an awesome backer of this effort. This is undoubtedly a good time for a short email or call to Representatives Michaud and Pingree to let them know that we care about this issue - given the dearth of early stage capital in Maine, SBIR and STTR are the best tools we have!


In This Issue
Unemployment Mismatch?


To UMaine and the Gulf of Maine Research Institute who will share a recent $1.77 million award from the National Oceanic and Atmospheric Administration (NOAA) to keep the

Northeastern Regional Association of Coastal Ocean Observing Systems (NERACOOS) operating. This system includes the Gulf of Maine system, GoMOOS, that has seven buoys operating from Cape Ann to the southwestern tip of Nova Scotia.


To Cate Street Capital for their acquisition of technology for a wood-derived fuel called biocoal. The company plans to manufacture the product, also called torrefied wood, at the former Katahdin Paper Co mill in Millinocket.


To Susan Corbett of Axiom Technologies, the Machias-base internet provider, who was recently named the AT&T Innovator of the Year by Women Impacting Public Policy.


To the UMaine Forest Bioproducts Research Institute who is being funded by the US Forest Service to build a pilot-scale plant to manufacture cellulose nanofibrils, a material that could replace plastics.


To the Bigelow Laboratory for Ocean Sciences that is starting to move into its new facility in East Boothbay (with partial funding from MTAF), and recently broke ground on the third building at the campus. 

Merry Christmas and a Happy New Year!

Catherine Renault
Innovation Policyworks 

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96 Maine Street, Suite 183 Brunswick, ME 04011 207.522.9028
Innovation Policyworks, LLC, is an innovation strategy and evaluation firm focused on the development and measurement of effective state and regional technology-based policies and programs. Dr. Catherine S. Renault has been delivering innovation-based economic development results in rural states for over 20 years. She has been a technology-based economic development practitioner in two states and consulted with eight more, most recently as science advisor and Director of the Office of Innovation for the State of Maine.  
For the past two months, I have been working in Charlottesville doing a Technology Asset Inventory for a regional targeting project. It has been great to catch up with friends at the University of Virginia, and learn about the exciting new directions being taken in technology transfer and entrepreneurship under the leadership of the (relatively) new President.