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Notes from Innovation Policyworks

 

The very best part about having your own firm is the opportunity to do work that matters with clients you respect, and collaborate with people you admire.

 

For instance, I want to express my appreciation for ibec creative, who just completed a major overhaul of my website - Click HERE

 

I first met Becky McKinnell when she was a USM student who won the annual business plan competition, and earned a place at the Maine Center for Entrepreneurial Development. It's been so fun to watch her grow her company, and add so many talented individuals to her team.

 

And to Alan Caron, for his collaboration on an article for the Portland Press Herald that appeared last Sunday in the Insight section.

When you first start writing with someone new, it's either really, really good, or really, really awful. I'm happy to report that this process was in the former category. We didn't always agree, but we found common ground. A lesson for all, don't you think? 

 

Cathy

Diversity Rocks!

 

Last weekend, I had the opportunity to lead an Innovation Engineering seminar at the Northeast meeting of the Society of Women Engineers in Springfield, MA. Imagine, over 300 female engineers and engineering students all in one place! For someone who didn't even know girls could be engineers when she was a high school student, it was an awesome experience!

 

For those who still need convincing about the importance of diversity in their companies, check out this new study from Stanford University. Professor Lee Fleming and his colleagues found that teams with diverse membership are more likely to develop innovations with higher value. And, Ben Jones and his colleagues at the Kellogg Business School, Northwestern University, found that interdisciplinary teams wrote the most influential papers, and that groups were more likely to foster these innovative ideas than individuals. Management should put in place diverse, interdisciplinary teams in order to generate meaningful innovation. This is just one reason why Innovation Engineering focuses on diversity in our teams - to get the best ideas and to get them to market faster and cheaper. More HERE.

 

Another new report sheds some light on why there isn't more diversity - and reports on still powerful gender bias against women in science, engineering and technology (SET) companies. Cultures hostile to women that glorify hours spent in the laboratory, for instance, or the "super-competitive fraternity of arrogant nerds" common in many technology companies. These cultures are experienced by between 20 and 30 percent of women in science, according to the study. Further, more than one-half of US women work alongside colleagues who believe men have a genetic advantage in SET fields. Most depressingly, 44% of US women interviewed feel that in order to progress, they have to behave like a man. "What does it take to be considered leadership material?" asks a former project manager at Microsoft. She concludes, "I think you have to be a man." More HERE.

A National Angel Tax Credit?

 

At last week's Angel Capital Association's annual meeting, federal legislators unveiled the concept of a federal angel capital tax credit. According to a report from Silicon Valley Bank and the Angel Resource Institute, angel investors funnel more than $1 billion into early stage companies each year. And, angel investors are spread out across more of the country that traditional venture capital. While some feel that such tax credits are just "hand outs" to the rich, others note that angel funding directly increases jobs and improves the probability that an early-stage company will thrive. Evaluations of state tax credits for angel investors have consistently found a positive return on investment for this incentive. Read MORE.    

Meanwhile, Congress is reacting to various tax credit proposals lumped together in a package that has become an annual event - the tax credit extender bill. Without progress on tax reform in general, the fate of a variety of popular tax credits gets wrapped up every year in a single bill. Credits in play include the historic rehabilitation tax credit, the production tax credit (important to renewable energy projects), the low-income housing tax credit and the New Markets Tax Credit. All are used in various development projects that spur local economic development. The President has entered the fray with his FY2015 budget that creates a new Manufacturing Communities Tax Credit. If you want all the details, read MORE

H1-B Visa Cap Reached in Five Days

 

Last week, the annual cap on H1-B visas, those set aside for skilled foreign workers, was reached in just five days, repeating a pattern that has been frustrating employers in the technology community for many years. Companies like Cisco, HP, Oracle, Facebook, and Google complain that they have a difficult time finding computer engineers and other specialized employees targeted by the program, so they want to be able to hire these workers from other countries. They have been lobbying Washington for an increase in the number of visas available, all in the context of immigration reform. Opponents say that studies have found that many employers pay workers on these visas very low wages, undercutting the American labor market. Everyone seems to agree that comprehensive immigration reform would go a long way towards keeping talented technical professionals and entrepreneurs in the US. Read more from Silicon Valley's perspective HERE.

Skilled Labor Matters Most

 

Area Development's 28th Annual Survey of Corporate Executives that make decisions about where to locate their companies found that the availability of skilled labor was the top factor in respondents' location decisions. Ninety-five percent of respondents said this factor was "very important" or "important." This is a change from past years when highway accessibility and labor costs were the top considerations. According to the report's authors, "An aging worker demographic, along with a lack of interest in manufacturing careers among young people, has put the issue at the top of site selectors' priorities." For those following the fights against "right-to-work" laws in several states, right-to-work was 11th among site selector priorities. State and local incentives were 8th, especially tax incentives. Energy availability and costs were 10th. More HERE.

Skills Gap-Myth or Reality?

 

How can it be that high unemployment and anemic job growth co-exist during this so-called recovery? The Skills Gap is the answer most often given, the idea being that the unemployed lack the skills that employers want and need. However common this answer, it doesn't square with the facts. A recent article from New Geography suggests that there are three things going on: insufficient pay, picky hiring practices and unwillingness to invest in training. The first suggests that if employers would pay more, they would be able to hire qualified workers. But, pay scales are now global in nature, so perhaps we really have a business model issue where we can't be profitable is we have to pay market wages. The second is a response to the increasingly computerized screening of resumes and applications. Perhaps employers are being too picky. And, third, companies are no longer willing to pay for training, rather than take an employee with the aptitude, but not the exact specifications for the job. Read MORE

Next week is the Second Annual Innovation Engineering International Conference. I'm looking forward to seeing my Black Belt friends from all over the world at Eureka Ranch in Cincinnati, OH. We're going to get training on the new Development Tools, network with each other, and probably make some pizza! 

 
In This Issue - April 2014
Diversity Rocks!
A National Angel Tax Credit?
H1-B Visa Cap Reached
Skilled Labor #1
Myth or Reality?
Silicon Valley Inequality
Merit or Geography?
Corporate Research

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Silicon Valley Not For Everyone

 

Here's another angle on the Haves and Have Not's war - in Silicon Valley. With extremely high per capita income, over $63,288, the wealthy tech denizens of Silicon Valley are openly talking about secession from California, and hoping to divorce themselves from the high poverty, unemployment rates, energy prices and water shortages that plague the rest of the state. (MORE

 

However, many other Californians are not so happy with the Silicon Valley crowd. In December, buses that take workers from San Francisco and Oakland to Google every day were attacked by a crowd upset over rising rents they believe are caused by the tech bubble. A writer was attacked in a coffee shop recently because she was wearing Google Glass, and Twitter headquarters was picketed because of the tax incentives the company has received. In San Francisco, where 23.6 percent of residents live below the poverty level, rents recently went up 10 percent in a single month. More HERE.

Should R&D Be Allocated by Merit or Geography?

 

This is the underlying question being posed by researchers from rural states, including Maine, to the National Institutes of Health. The rural states are suggesting that innovation can spring up from their universities and institutes, but that R&D dollars are disproportionately awarded by NIH to research powerhouses in Boston, New York and California. In 2013, for instance, Boston's hospitals, universities and research institutions received more than $1.77 billion in NIH grants, almost 8 percent of the total - more than any other metro area in the country.

 

Since 1980, rural states that receive less federal research funds have been part of a program called EPSCoR that awards large grants to states for the development of their research capacity. NSF, DOE, and NASA all have EPSCoR competitions. In Maine, EPSCoR funds started the Composites Center at the University of Maine, for instance, as well as the Forest Products Research Institute.

Senator Collins, (ME-R), is proposing that funding for the comparable NIH program, the Institutional Development Award, be raised to $310 million, up from $273 million. The proposal faces steep opposition, as core NIH funding is being cut. Opponents are framing the question as quality versus "something for everyone," and insinuating that other locations simply do not have good science. Read more HERE.

What's the Role of Corporations in Academic Research?

 

Is corporate sponsorship of academic research the answer to declining federal funding for R&D at universities or is it a danger to the integrity of basic research? And, do university intellectual property policies mean that corporate-sponsored research is less accessible and less useful than inventions from federally funded research? A new report on research at the University of California and its related national laboratories finds that corporate-sponsored inventions are licensed and cited more often than federally sponsored ones. Read MORE.

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Innovation Policyworks, LLC, is an innovation strategy firm focused on innovation policy and practice. Dr. Catherine S. Renault has been delivering innovation-based economic development results in rural states for over 22 years, most recently as science advisor and Director of the Office of Innovation for the State of Maine.  She is a Certified Innovation Engineering Black Belt.

Cathy is starting a new partnership of Pew and CREC to work with seven states to evaluate their business incentives.  She's been assigned to Oklahoma! What out! For a list of selected projects, see www.innovationpolicyworks.com/projects.