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Notes from Innovation Policyworks

 

I'm looking forward to attending the Grand Opening of the new Bigelow Laboratory for Ocean Sciences campus in East Boothbay this Friday. I was there two years ago at a very muddy groundbreaking, and can't wait to see the transformation. Bigelow is another example of what amazing things can happen in Maine when we invest public funds (in this case, the Maine Technology Asset Fund, aka the R&D bond) in research infrastructure. Bigelow raised eight times their MTAF award to complete the campus. Read the whole story HERE. 

 

Cathy

The 2012 State New Economy Index

 

Every few years, the Information Technology and Innovation Foundation (ITIF) releases its New Economy Index. The 2012 version just came out. No particular surprise, Massachusetts tops the list, with Delaware, Washington, California and Maryland rounding out the top 5. The states were ranked on five areas: Knowledge Jobs, Globalization, Economic Dynamism, the Digital Economy and Innovation Capacity.

 

Maine came in 27th this year, up slightly from 28th in 2010 and 32nd in 2007. Maine's strengths are in: immigration of knowledge workers; foreign direct investment; job churning; online agriculture; health IT; and movement toward a green economy. Weaknesses for Maine were: IT jobs; number of fast growing firms; patents; and scientists and engineers in the workforce.

 

The message of the Index is that as a whole, all the states are losing out to other nations as we fail to invest in innovation and entrepreneurship. As the authors state, "The failure of the United States to adapt to a global economy that is evermore dependent on knowledge and innovation for growth-the so-called "New Economy"-is causing traded sector firms, and manufacturers in particular, to look to other, more competitive countries when it comes to choosing locations." The prescription is, "having a workforce and jobs based on higher skills; robust global connections; dynamic firms, including strong, high-growth startups; industries and individuals embracing digital technologies; and strong capabilities in technological innovation."

 

Read the entire report or its executive summary HERE 

The Enemies of Innovation: Silence and Fear

 

Robert Half Group surveyed employees about what makes them afraid. Employees cited:

  1. Fear of making a mistake
  2. Fear of getting fired
  3. Fear of dealing with difficult customers or clients
  4. Fear of conflict with a manager
  5. Fear of speaking in front of a group
  6. Fear of disagreements with co-workers.
Given these fears, we shouldn't be surprised that innovation is so low. Trust, respect, and open communications with employees is critical to overcoming these fears and allowing folks to say: I Don't Know, I Need Help, I Fail a Lot. All of these are critical to having the open mind that is conducive to innovation and creativity. Read more HERE 

Iowa Fund of Funds in Deep Trouble

 

Regular readers of this newsletter will know that I, and many other folks in Maine's venture community, supported an effort five years ago to enact a Fund of Funds here. The vision was based largely on what were then touted as successful models in other states, notably Iowa. The idea was that the state would guarantee the downside through tax credits for venture investors who made investments in high-growth companies in the state. At the time that Maine was considering this legislation, it had been adopted in at least ten other states.

 

This week, it was revealed that the Iowa Fund of Funds, which was enacted in 2002, has resulted in a $26 million deal that has Iowa taxpayers covering the losses of two lenders who had backed the program. To be fair, the program was never funded or operated as envisioned by its original backers, and also ran straight into the Great Recession, but perhaps we dodged a bullet here in Maine.

 

The whole story, including comments by Steve Ringlee, a proponent of the concept who visited with us in Maine often, is HERE 

 The New Geography of Jobs

 

Enrico Moretti's accessible new book, The New Geography of Jobs, should be required reading for all economic developers and policymakers in this country. Moretti clearly explains the rise of "brain hubs" throughout the country and how this phenomenon is causing "unprecedented redistribution of jobs, population and wealth."

 

Moretti makes two key points. First he asserts that the US economy has moved from one centered on the production of physical goods to one centered on innovation and knowledge. "Creativity is what is in short supply," he notes. He is careful to discuss innovation not just in high technology, but also in all aspects of our society. And, he demonstrates that a single knowledge job creates another five jobs, a multiplier effect that is almost twice as high as manufacturing.

 

Moretti's second point is that the ecosystem around this human capital also matters - there needs to be a concentration of good jobs, talent and investment. His research shows that one of the most critical components of an ecosystem that supports innovation and entrepreneurship is R&D. Investments in assets (like Bigelow Labs, or the University of Maine or Jackson Labs, for instance) are critical to this ecosystem.

 

McKinsey's Report on the Future of Manufacturing

 

The McKinsey Global Institute recently released its study of the future of manufacturing. They see an era of global manufacturing, but one that will be quite different in both developing and developed countries. The authors say, "The new era of manufacturing will be marked by highly agile, networked enterprises that use information and analytics as skillfully as they employ talent and machinery to deliver products and services to diverse global markets. In advanced economies, manufacturing will continue to drive innovation, exports and productivity growth."

 

McKinsey goes on to differentiate among five types of manufacturers. Sectors such as chemicals, motor vehicles, electrical machinery and other equipment and appliances are grouped as "global innovation for local markets" and are dependent upon a steady stream of innovations and new models to compete. Also, production is close to consumers to reduce transportation costs. These seem like good targets for manufacturing in the US, compared to labor-intensive goods like textiles and furniture that will likely move to low-cost labor locations.

 

The entire report is available HERE 
In This Issue
2012 New Economy Index
Enemies of Innovation
Iowans Owe $26 million
Geography of Jobs
Manufacturing's Future
Are Likes a Measure of Success?
High School and College Grads Up
Crowdfunding Rules

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Are "Likes" a Measure of Success?

I'm a feminist from way back, so I read with great interest a recent post about likeability and women. To quote Facebook COO Sheryl Sandberg, "Success and likability are positively correlated for men and negatively correlated for women."

 

The implication is that women should spend less time trying to be liked and more time being authentic, and true to ourselves. Easier said than done.

 

Read this for yourself - and the many, many thoughtful comments afterwards. Note that this blog has received 7300 Likes! :)

Quote of the Month 

 

"Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof." 

 

John Kenneth Galbraith 

Recession Upside-More Young Adults Are Finishing High School and College

 

The Pew Research Center's review of new census data shows that, for the first time ever, one-third of 25-29 year olds in the US have completed at least a bachelor's degree. And, 90 percent of these same young adults have completed a high school education, while 63 percent has completed some college. More HERE.

 

At the same time, the US Department of Education released the first list of all states with regard to high school graduate rates using a single, uniform measure. Maine was 10th on the list with a graduation rate of 83 percent. Here's the DATA. 

Crowdfunding Rules Delayed

 

Just a note to those of you who can't wait for the SEC to issue its final rules to implement the Jumpstart Our Business Startups Act (JOBS Act) enacted last spring. The JOBS Act included a requirement that the SEC amend its rules in order to allow companies to raise capital using crowdfunding. While the SEC did issue proposed rule changes in August for public comment, and many, many comments were received, the competing interests (and leadership changes at the top of the SEC) seem to suggest that it will be some time before final rules are enacted.

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96 Maine Street, Suite 183 Brunswick, ME 04011 207.522.9028
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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.  

Cathy has recently been facilitating a number of strategic planning sessions for non-profits using Innovation Engineering tools. These tools help folks find the creativity most of us lost in first grade! 
For a list of projects, see www.innovationpolicyworks.com/projects.