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Notes from Innovation Policyworks
Academic discourse can be very genteel and civilized. Not so the current disagreement between two Harvard Business School professors taking place in the pages of various distinguished publications.
The no-holds-barred fight was started by Jill Lepore in the June 23 edition of The New Yorker. There, Dr. Lepore took issued with Disruptive Innovation, a concept championed by Clayton Christensen in his popular book, The Innovator's Dilemma. Christensen has long argued that real innovation is completely disruptive, while Lepore takes issue with many of his case examples. Christensen has fired back in the latest Harvard Magazine and many followers have supported his "side" by writing letters to The New Yorker. Whew!
My question is, does it matter? I think it takes both disruptive and incremental innovation to move forward. What do you think?
Cathy
PS. Thanks to Stephen Jenks for turning me on to this fight!
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The US Govt Isn't Friendly Enough to Big Business
This is the provocative title of an article in Forbes by my colleague Rob Atkinson, another Chapel Hill Public Policy grad. Rob argues that the US' "size-based" industrial policy favors small business at the expense of the economy as a whole. He says that small businesses generally serve local markets only and will neither prosper or suffer from economic policies, but could benefit from the successes of large companies and high-growth, entrepreneurial firms. He argues that it is the age of companies and their target customers (export from their region, versus local serving) that matters. He says that we should be tilting our policies towards innovation and entrepreneurship, rather than just size. Read the whole piece HERE.
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Changes to Federal R&D Tax Credit
We have argued for years about the importance of the R&D tax credit, encouraging businesses to innovate. However, in practice, many of the federal and state R&D tax credits are too complicated, and for many companies, it isn't worth the paperwork, accounting time or aggravation to file for the credit. Recently, however, the IRS changed the regulations for the Research and Development Alternative Simplified Credit (ASC) This change means that companies can take the credit on an amended return. So, if you start a R&D Project in one year and go into subsequent years, you can go back and claim the credit on the first year. Don't trust me, ask your accountant! MORE
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Immigration and Economic Growth
Immigration seems to be a touchstone issue again this election year, with some in this country dead set against "illegal" immigration, advocating policies that deny immigrants and their children general assistance, educational opportunities and due process. These folks ignore that fact that almost all of us (except Native Americans) ultimately came from somewhere else, and that foreign-born immigrants are contributing in a big way to our economic growth. Take the example of Silicon Valley. Not only did the region attract almost 14,000 newcomers to the area in 2013, Asian-Americans make up the majority of the tech workforce. One third of the start-ups in the Valley are founded by Indian Americans. Sixty-four percent of the Valley's foreign-born talent has a BA or higher in science and engineering, compared with 26 percent of foreign-born workers in the country as a whole. MORE
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Documenting the New Economy
Every year, the State New Economy Index is published, following a set of indicators that show the progress of the states on a variety of measures from innovative capacity to workforce to broadband. The top five states have remained the same for quite a few years: Massachusetts, Delaware, California, Washington State, Maryland.
The bottom five are: Mississippi, West Virginia, Oklahoma, Arkansas and Louisiana.
The top five share economies driven by innovation, high concentrations of knowledge workers, R&D and patents. The bottom five have economies dependent upon natural resources, tourism or on mass-production manufacturing, and have relied on low-cost rather than innovation for competitive advantage. My Maine friends will want to know that we rank 28th, approximately the same as the past five years. Review the numbers HERE.
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Deciphering Net Neutrality
The Federal Communications Commission issued proposed new rules on Network Neutrality in May. This seemingly arcane subject focuses on whether or not broadband Internet service providers can discriminate among the content that runs over their lines. If allowed, Internet providers could offer "fast lanes" to certain subscribers, allowing some Internet users to be "more equal" than others.
It turns out that the crux of the legal discussion comes from decades old law that differentiates between "telecommunications" and "information." In short, you can't discriminate in telecommunications, but you can with information. Of course, the law was written in the very early years of the Internet, so who knew? And, several attempts to clean this up in Congress have failed over the years, so basically, only the lawyers are getting rich, as everyone else is wrangling. And, it doesn't get any less complicated when you have cable providers buying Internet content companies (e.g. the current battle over Netflix).
The FCC had to extend its comment period on the proposed rules because over 780,000 comments have been received, many asking that the Internet be treated like a telecom utility (and therefore must provide equal access.)
More gory details HERE and HERE.
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Patent Decision Implications
In late June, the Supreme Court ruled in Alice Corporation v. CLS Bank International that basic business methods may not be patented, even if computers are used to apply them. Justice Clarence Thomas wrote, "Merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention." In other words, just because you put something on a computer or smart phone, doesn't mean it's now patentable. This is a relatively narrow interpretation of patent law, and doesn't seem to have as broad implications for software patents as many were anticipating. This is the opposite reaction to biotechnology industry concerns over last year's Court rulings on Mayo and Myriad. The Biotechnology Organization (BIO) recently released a report claiming that those decisions have "shaken the life sciences industry to its roots." In all of these cases, the Court has tried to find a balance between encouraging innovation, and protecting the intellectual property rights of inventors. Read more HERE.
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| Aimee's Corner |
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Young Innovators
The process of discovery and failure, testing and redefining is one that is very healthy for an innovative economy. And while we want to encourage more experimentation and even more ideas to percolate, there are proven ways to increase our odds for success. One of these ways, design thinking, is being shared with high school students in Maryland in a new approach to teach entrepreneurial concepts. I-Corps For Young Innovators is a two-week summer program for high school students who will be seniors next fall. The students are attending the summer program from a number of local schools and will learn how to turn their ideas into a successful business during a new summer program offered at Bullis School in Potomac, Maryland. You can read more about the Young Innovators summer session HERE.
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"I have not failed. I've just found 10,000 ways that won't work."
Thomas A. Edison
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Making Time for Innovation
CEOs of rapidly growing companies have recently said to me, "I don't have time for Innovation Engineering. We're too busy!" I can totally understanding how they feel. As an entrepreneur, it always feels like there is too much to do, and not enough time to do it in. And, there's always the feeling that your customers, your funders, and your team want more and more of you than there is to give.
The key question is, are you spending your time doing the most important things? How do you know? This is a major advantage of the Innovation Engineering system - it provides a framework for evaluating the products/services you are developing, the projects you are working on, indeed even your daily or hourly activities. MORE
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135 Maine Street, Suite A-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.
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