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Notes from Innovation Policyworks


There's a lot of energy in Maine these days around innovation and entrepreneurship. Thursday kicks off Maine Startup and Create Week, featuring over 40 events and 100+ speakers. I'm pleased to be one of those speakers, invited to participate in a panel hosted by Envision Maine on What Can Maine Do to Build an Innovative and Entrepreneurial Economy? I will be talking about ideas that are contained in my recent article in the Maine Policy Review's Innovation issue. And, MaineBiz's latest issue also contains a cover story about innovation that I was interviewed for. More to come, I hope.



LollyWollyDoodle (Really!)


What's not to like about a company called LollyWollyDoodle? Featured in the recent Inc. 500 issue, this NC company is breaking all the rules, and made $11 million last year doing it. 


Here's their business model. They sell children's clothing. Every day, they post new product ideas on their Facebook page. If you see something you like, you message them back, and they make your item. If enough people like it, they might make more. They aggregate their data, and decide that a certain design, in a certain color, is popular enough to make in larger quantities. That's it. No inventory. No advertising. Just extremely rapid cycles of product innovation and experimentation. Talk about Fail Fast Fail Cheap. 


This entrepreneur started out of her home, and she's figured out how to use Facebook as a marketing tool better than anyone else. Diversity of thinking, not being locked into "this is how we've always done it." Call me if you want to talk about how to find a new way for your organization. And read the whole story of LollyWollyDoodle HERE. 

Is Entrepreneurship Sputtering?


Just as innovation and entrepreneurship are emerging as mainstream economic development strategies, out beneath the weight of the science and technology-only mantra, new research from the Kauffman Foundation suggests that the golden age is already past. Kauffman found that the high-tech entrepreneurship rate peaked in 1982. They say that it's harder than ever to succeed and scale, especially in a way that creates lots of jobs and wealth. Terry Howerton, in a recent Forbes article, suggests that there are key actions that need to be taken to reverse this trend:

  • Align the education system to produce more entrepreneurial-linded, tech savvy kids
  • Reopen American to the brightest, most motivated immigrant minds
  • Invest in long-term, basic research, focus on growing new, small, fast-growing companies
  • Fix, don't tweak, the patent system and frivolous abuse
  • Help American companies reinvest (i.e., change US tax policy)
  • Use open data to jumpstart new markets


The Kauffman study is HERE and Howerton's commentary is HERE.

How Effective are Incubators and Accelerators?


Y Combinator is perhaps the most celebrated accelerator program in the world. Its track record includes success stories like Airbnb, Reddit and Dropbox. It has hosted around 630 startups and all but 16-17 percent have survived. Is this due to the extensive list of mentors and advisors available to the companies, to the $100,000 start-up investment in each company, or is the organization just really, really good at taking the best companies in a very narrow segment - social media?


Contrast this with Maine's Top Gun program with around fifty graduates, many doing well, whose latest class showcased their pitches last week in Portland. Or Merrimac Valley's Sandbox, a two-year old accelerator in Lowell, MA, with support from the Deshpande Foundation, which has a broad, community -based approach, including a Spanish-language curriculum. 


There's another new concept out there -- innovation districts. There are geographic areas where anchor institutions and companies connect with each other and with resources like incubators and accelerators. (Check out research on these districts HERE.)


The answer appears to be, it all depends. It all depends upon the goals of the program, the resources brought to bear, and the assets that a program has to build upon. And, it's also a matter of critical mass and scale. Does a job in Silicon Valley mean as much as one in Washington County, ME? Do wages matter, or is it wages relative to the average in a region? Is a job at a non-profit worth as much as a job in a manufacturer? In cities and town across the country, folks are weighing the answers to these questions for themselves, and creating hybrid models, tailored to their communities. 


The Importance of US Infrastructure Jobs


Anyone who drives on Maine roads in mud season when potholes abound, or who drives over one of our many rusty metal bridges is well aware of the years of deferred maintenance on our national transportation infrastructure. Add to that the need to reinforce or replace our waste water and water treatment infrastructure to deal with the increased ocean levels and other impacts of climate change, and the challenge is staggering. A new Brookings report show clearly that this is also a jobs opportunity. In 2012, 11 percent of national employment was in infrastructure jobs, almost 14.2 million people. And, these numbers are projected to increase 9.1 percent over the next decade. But, almost one-quarter of these jobs will need to be replaced due to retirements and other shifts. See the impacts for the top 100 metro areas HERE


Richard Florida on Income Inequality


Richard Florida is most famous for his books on the Creative Economy. Recently, he's been writing about income inequality, particularly in different regions of the country. His research shows that since 1979, income inequality has gotten bigger across the board, and that the states with the highest levels of inequality are also the states with the more advanced, knowledge-based economies. New York, CT, DC, CA and MA top the list, joining southern states that have remained high in inequality for the past 30+ years. One common explanation is that the job market has hollowed out - the high-paying, blue collars jobs have declined, while higher paying, knowledge work, and low-pay, low skill work have both increased. However, Florida and his team suggest that the difference is really the size and density of states - there is more inequality in metro areas. Florida concludes that it will take a lot to upgrade the skills of the 60 million people in low-skill jobs. More HERE


Economic Diversity Good for an Economy, but Not a Sure Thing


The authors of a comprehensive report written by my friends at the Center for Regional Economic Competitiveness (CREC) and the University of Illinois-Urbana/Champaign and published by the Appalachian Regional Commission, states, "diverse economies tend to be more stable because they are less dependent on single industries or firms." The analysis measured industrial diversity at the county level, and found that counties in the Northeast were the most diverse, while the agricultural and rural counties in the Great Plains were the least diverse. The report, and the web tool that accompanies it, are HERE.


Patent Reform Dead


Late in May, Senator Leahy pulled the legislation designed to combat "patent trolls" from the agenda of the Senate Judiciary Committee, citing "weeks of fruitless negotiations." Although the technology community is strongly behind the bill, various companies have split on the specifics, such as whether the losing party in patent lawsuits should pay the winner's legal fees. There were some attempts at compromise, but these were stalled an major universities and other big patent holders weighed in, according to the website Politico. The House passed its patent reform bill in December. Read the whole story HERE.

In This Issue - June 2014
Is Entrepreneurship Sputtering?
How Effective are Accelerators
US Infrastructure Jobs
Income Inequality
Economic Diversity
Patent Reform Dead
Honey Baked Ham

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Aimee's Corner

State economic development and labor research professionals shared best practices from around the country at the C2ER Annual Conference last week in Pittsburgh. One session that resonated with me was, "Measuring Education Requirements of the Workforce"which featured Brenda Turner of the Oregon Employment Department and Nicole Smith of Georgetown University's Center on Education and the Workforce.


Brenda Turner introduced the concept of "competitive education"as a new education level necessary to access individual occupations. By adding the Competitive Education component, Oregon could now understand the level of education most desired by employers today. They evolved the definitions from "the least amount of training to get you into your career" to "a level of training that will help make you more competitive in the job market, and will come in especially handy when there is an economic downturn."


Georgetown University's Nicole Smith further validated the Oregon example and predicted that even fewer than the 70% of the jobs predicted by the BLS will be available by 2020 to employees with only a high school education. 


To learn more, click HERE.

Quote of the Month 


"If a window of opportunity appears, don't pull down the shade."

Tom Peters

Webinars Rescheduled: June 18 at 1 and 2 pm EST


This month, I learned about a great company, Honey Baked Hams, that is committed to Innovation Engineering. This is a company with 450 locations across the country that is famous for their spiral-cut hams. When I lived in the South, this was the place to get a ham for a special occasion or a party.


So, I was excited to learn that the company, led by CEO Craig Kurtz, is using Innovation Engineering to continually create and deliver a new product line in their stores. 


He was quoted in an article in a Cincinnati paper as saying, "Part of what we did was to make sure these products are meaningfully unique. We made a commitment to ourselves that this wouldn't be just another pre-packaged rib in a case for self-serve. We want it to be a game-changer." To learn more about the Honey Baked Ham story, click HERE.


To learn more about Innovation Engineering, you can attend one of two webinars on June 18. The webinar at 1 pm will discuss how to Stop Working So Hard, and the webinar at 2 will be called, How to Create Big Ideas Painlessly. To register, click HERE. If you need a password to register, the word is LOBSTER.

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96 Maine Street, Suite 183 Brunswick, ME 04011 207.522.9028

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.

Aimee Dobrzeniecki works with clients in Washington DC and across the country sharing her 20 years of government policy, economic development, and technology transition experience. 

She is also  Certified Black Belt in Innovation Engineering, and is following her passion by helping organizations that have a positive outlook on the future. Through her individual coaching skills, she is ready to roll up her sleeves and provide an ally to businesses seeking to enter new markets, create new products, or test new business models. Aimee not only explains why it is the time to innovate; she demonstrates the steps to innovate faster than your competition.


For a list of selected projects, see www.innovationpolicyworks.com/projects.