Recently, I led a roundtable conversation on stimulating creativity. An attendee challenged me by saying that most folks were not creative, and only a few, like himself, had the ability to innovate. I politely, but vehemently, disagreed with him.

While it's true that many of us, including myself, had creativity sucked out of us by the first grade by teachers insisting that we "color within the lines," research tells us that everyone can recapture that spirit with the right tools and the right environment. The critical pieces include a willingness to fail (i.e., make mistakes and learn from them) and an environment that supports, rather than punishes failure as learning. Another critical piece is gathering information and stimulus from a wide variety of sources, and keeping your inner critic from ignoring divergent thoughts and data that doesn't support your assumptions. Lastly, creativity is definitely a team sport - interaction with others, especially those who are different from you, will yield bigger and better ideas. MORE

Cathy

Immigration and Entrepreneurship

Robert Litan, formerly with Kauffman Foundation, and now associated with Brookings, along with his co-author Ian Hathway have been writing about the decline in American entrepreneurship (although the recent Global Entrepreneurship Initiative annual report still shows the US at #1 worldwide). They say, "How could it be that the American economy, built on the sweat and ingenuity of some of history's greatest entrepreneurs, now has more businesses closing each year than new ones opening doors?" 

The answer they found is that the declining rate of population growth in the West, Southwest and Southeast regions since the early 1980s appears to be a major factor, and they further link this to immigration. Immigration, they say, helps reverse slowing population growth. But, "we also know that immigrants generally have a higher propensity to launch new businesses, high-tech businesses in particular," say the authors. Read more HERE.

Someone seems to be listening, as shown by a little known aspect of President Obama's immigration initiative launched last week . The new directive specifically orders the Department of Homeland Security to grant parole status on a case-by-case basis to inventors, researchers and entrepreneurs who have received "substantial" US investor financing or otherwise hold the promise of innovation and job creation. This is designed to overcome the barriers to foreign entrepreneurs including the cap on H-1B visas and the lack of a clear pathway from the foreign student F-1 visa to permanent residency or green card status. Read more HERE.

Tension between Startup Communities and Ecosystems

The community that runs Startup Weekends across the country and Canada has begun to get shriller about the importance of having entrepreneur-led initiatives, rather than government-led initiatives. Their argument, as recently articulated by Ken Bautista of Startup Edmonton (Canada), is that government spends a lot of resources on innovation ecosystems and accelerator networks, while overlooking grassroots, entrepreneur-led initiatives. It's hard to say whether this is a false choice or a case of sour grapes, because I've heard this basic paradigm from many in the startup community across the country. "We don't need government," they say, right before they complain that they can't get government grants to underwrite their programs or advocate for preferred tax treatment of investments in startups. Read Ken's op-ed HERE.

It seems to me that both are needed. Entrepreneur-led initiatives are great, as they build community and support networks. But initiatives led by local, regional, state or federal governments are critical too, as they can afford to fund research and development, focus infrastructure investments to assist growing sectors, modify tax policies to support entrepreneurs, and fill in capital gaps. 

High Tech Startups Going Urban

For decades, the startup communities you heard the most about - Silicon Valley, Boston's Route 128 corridor, the Research Triangle - were primarily located in the suburbs. However, in the last few years, startup activity has exploded in urban centers, and in close-in, transit-oriented, walkable suburbs. A new report from the Martin Propserity Institute shows the shift in high tech startup activity and venture capital investment. They found that San Francisco itself now attracts more venture capital than Silicon Valley, and the Boston-New York-Washington corridor is the second major center. Metro New York is now the nation's third largest center for venture capital, with 80% invested in the city itself.

Three other findings that are relevant: (1) venture capital investment tracks the percentage of adults who are college graduates, and the creative class; (2) there is no significant statistical association between venture capital and the location of education and medical centers; and (3) investment is associated with several markers of the diversity of metro areas, including percentages of immigrants and gays.

One Answer to the Complaint About Too Many Economic Development Organizations

I hear the complaint that there are too many economic development organizations all the time, yet there are few incentives for localities, regions or states to eliminate any of their programs, or for not-for-profits to merge. However, running counter to this observation is the recent decision by Team Northeast Ohio (NEO) and NorTech to merge their operations, along with new functions such as workforce integration, retention/expansion support and strategy coordination. The merger was the result of a new regional competitiveness strategy developed by the business and philanthropy community to accelerate job growth. They plan to make larger commitments to fewer industry clusters, building on NorTech's strong record in cluster development; increase the emphasis on business retention and expansion, compared to Team NEO's prior emphasis on attraction of new businesses; continue to support startup entrepreneurs and scaleups, and address workforce issues. The downside is that many talented public servants at NorTech, including their President, Rebecca Bagley, are losing their jobs. We will see if bigger is better. Read more HERE.

Biopharma ROI Dropping

A new Deloitte study has shown that the overall rate of return on R&D investment for the 12 largest biopharmaceutical firms has dropped from 10.5 percent in 2010 to 4.8 percent in 2014, and the cost of developing a new medicine has surpassed $1.3 billion. Deloitte suggests that this is because of significant uncertainty in three areas: scientific, regulatory and insurance coverage. In addition, policies with regards to biosimilars, which have a shorter path to FDA approval create uncertainty for the time when new medicines come off patent. Read more HERE.