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Notes from Innovation Policyworks
The best part about the election being over is that the robo-calls have stopped! Somehow Pete and I are still on the voting lists for Durham NC (we moved 6 years ago) and so we got the calls for both Maine and NC!. Enough!
Now it's time to get back to talking about what's really going to get the US going again -- innovation! My blog this month is about how important colleges and universities are to this enterprise. So, despite our frustration with American education, we can't just say, "Cut everything to the bone." We need a more nuanced policy. Read more here.
Cathy
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The Benefit of Bringing Clarity to Innovation's Fuzzy Front End
Booz & Company just released its annual study of R&D spending, The Global Innovation 1000. The top companies on this list will not surprise you: Toyota, Novartis, Roche, Pfizer, Microsoft and Samsung. Booz found that there is no long-term correlation between the amount of money a company spends on innovation and its financial performance; what matters is how the money is used and the decisions made.
So Booz decided to study the upfront innovation process. Only 43 percent of the companies said they were effective at generating new ideas and even fewer, 36 percent felt good about their ability to convert ideas to project development projects. Only 25 percent of these top firms felt they were good at both!
The 25 percent who said their company was highly effective at both ideation and conversion also reported outperforming their industry peers on revenue growth, market capitalization growth and earnings as a percentage of revenue.
According to the survey, "the most successful innovators in all industries have developed a variety of consistent, manageable ideation practices that are well aligned with their innovation strategies. Any, when moving ideas into the development stage, they tend to depend on an equally consistent set of principles and processes."
And, by the way, the companies surveyed named their 10 most innovative companies: Apple, Google, 3M, Samsung, GE,, Microsoft, Toyota, P&G, IBM and Amazon.
The entire report is available here. |
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Uncomfortable Truths
Brooking has published a very strong opinion piece about the source of problems in job creation. This piece argues that the economic downturn merely exacerbated longer-term challenges in the labor market. The authors point out that the wages of American male workers are actually worse than the data show because most analyses fail to take into account the larger numbers of men without jobs (e.g., more incarcerated, more on disability, and more simply struggling to find work). When considering all working-age men, real earnings have actually declined 19 percent since 1970. Men with less education face an even worse picture - earnings of the median man with only a high school diploma fell by 41 percent from 1970 to 2010.
Brookings goes on to point out that education reduces unemployment and increases earnings. But our educational attainment has not kept pace - the share of men 25-34 with a college degree has barely increased over the last 30 years. So, Brooking concludes, strengthening our K-12 education system and increasing college completion rates is imperative. Read the entire editorial and see their charts here.
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Angels Actually Do Make Money
The conventional wisdom is that angel investors make risky investments in early-stage ventures that likely to fail. And, if one of these investments looks promising, professional venture capitalists will cram down the angels, and take the real upside returns.
Researcher Robert Wiltbank has just completed a 10 year study looking at angel investments in Silicon Valley and nationally. He concludes, "The best estimate of overall angel investor returns in 2.5 their investment, though in any one investment, the offs of a positive return are less than 50 percent. This is absolutely competitive with venture capital returns."
The detailed paper is available here. |
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Is Skills Gap in Manufacturing as Bad as Everyone Says?
The Boston Consulting Group released research in October that documented a skill shortage of 80,000-100,000 workers, less than 1 percent of the US manufacturing workers, and, only seven states show significant or severe skills gaps. BCG found that the shortages are local, not nationwide. Using wage growth as an indicator of shortages, BCG identified Baton Rouge, Charlotte, Miami, San Antonio and Wichita as having significant or severe skills gaps. Occupations in shortest supply are welders, machinists and industrial-machinery mechanics.
However, BCG does point out that the skills gap could become more severe as aging workers retire at the same time as manufacturing ramps back up because of "reshoring" and increased exports.
Read more here. |
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Congrats
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To Joshua Hayward, newly named President with Zeomatrix, an Orono-based Clean Tech company.
To all the great guys and gals who got elected on Tuesday to help lead Maine forward, regardless of party. Our future is in your hands. Don't screw it up! And good bye for now to dear friends who have served with great distinction, but didn't win this time. We appreciate everything you accomplished. But, there is life after Augusta. I promise. |
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"Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid."
Albert Einstein (maybe, but still a great saying!) |
3-D Printing Competition in New York City
Before he got sidetracked by Hurricane Sandy, New York City Mayor Mike Blumberg announced the launch of a competition to promote 3-D printing and innovation. The announcement was made at a new facility in Queens that is going to house between 30 and 50 industrial sized 3-D printers, with the potential to print 3-5 million unique products each year. Read more about 3-D printing here.
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How Public Job Cuts are Slowing the Economic Recovery
Did you know that there are 4.7 jobs in the private sector in the US for every government job? And, did you know that private industries have added more than 3.9 million jobs from 2010-2012, a 4 percent increase? During the same timeframe, the public sector has contracted by nearly 500,000 jobs, a 2% decrease.
Yeah, I can hear some of you saying. Let's get rid of public sector jobs. But wait, those job losses have been the highest in elementary and secondary schools, state and local government. The US Postal Service has also taken quite a hit. For more of the actual numbers, read more here.
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96 Maine Street, Suite 183 � Brunswick, ME 04011 � 207.522.9028 I
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 many more, most recently as science advisor and Director of the Office of Innovation for the State of Maine.
Jim Damicis of Camoin Associates recently completed the Rhode Island Innovation Index for 2012 with Cathy. This is the second edition of this report on the innovation economy of the state.
For a list of projects, see www.innovationpolicyworks.com/projects.
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