Here's a little-known secret about the economy:  innovative companies grow faster, have higher profits, and pay higher wages. It doesn't matter whether they're big or small, high tech or no tech, in a city or in rural areas. Innovation can happen in new industries or older ones, in for-profits or not-for-profits and in multi-generational companies that are constantly re-inventing themselves, or start-ups and scale-ups working in garages, small offices or new campuses.

After all, innovation simply means a new idea or way of doing things or a new product that somebody somewhere cares enough about to buy. Most Maine companies start with a new idea; the real trick is to keep innovating.

And, innovative companies end up in places that support the creativity it takes to constantly learn and grow, place where it's alright to say: I don't know. I need to learn more. I fail a lot. This is why innovative companies can often be found in the same places where there are lot of artists, writers, and other creative people.

How can we leverage our creative and intellectual assets to accelerate economic growth? How can we create more budding entrepreneurs and help more existing businesses and emerging success stories to innovate, and to believe in themselves enough to leap to the next level? And, how can we create a community where these companies and entrepreneurs will thrive?

These are the questions I'm currently wrestling with. It seems like the opportunity to impact the economy has moved from the national level (in the 1980s) to the state level (in the 1990s and 2000s) to the community level today. 

Cathy

Education as the Great Equalizer

In the face of rising income inequality, the Washington Center for Equitable Growth studied the consequences of raising the educational achievement of children from the bottom three quarters of families to more closely match those of children born into the top quarter of families. The report concludes that just raising the educational achievement to the average level of all nations would add 1.7 percent to the US Gross Domestic Product by 2050, while raising the level to match Canadian children would increase GDP by 6.7% and matching the top US scores would raise GDP 10% by 2050. The Center concludes that public policy strategies including early childhood care and education, criminal justice reform and family-friendly workplaces would all contribute to the goal of raising achievement levels.  MORE

Entrepreneurship Recovering from Recession

US entrepreneurship levels rose to nearly 14 percent in 2014 from a recession-era low of 7.6 percent in 2010, according to the Global Entrepreneurship Monitor 2014 Global Report. Entrepreneurship rates were also found to be quite high in African nations, in contrast to European Union nations, where there are perceived to be fewer opportunities. Youth entrepreneurship is also growing internationally. In the US, 18 percent of 25-34 year olds were starting or running a new business in 2014, up from 15 percent in 2013.  MORE

A Gallup poll also reported that Baby Boomers are also flocking to entrepreneurship, being twice as likely as Millennials to be planning to start a business in he next year. The study's authors conclude, "Young, high-tech entrepreneurs may get the most attention from investors, but in the technology sector and other high-growth industries, boomers often outpace their younger counterparts in building successful businesses. The wisdom that comes from years of professional and trade experience likely translates into better business performance for boomers." MORE

Internet Speed

The latest economic development fad seems to be community and municipal broadband initiatives. While low-speed Internet is a major deterrent to economic growth because it detracts from productivity and slows access to information, markets, and capital, not all communities are in a position to take on the challenges related to capitalizing and running an Internet project.

The White House has announced a major new initiative, BroadbandUSA, to promote broadband deployment and adoption. Building on expertise gained from overseeing the $4.7 billion Broadband Technology Opportunities Program funded through the Recovery Act, BroadbandUSA will offer online and in-person technical assistance to communities; host a series of regional workshops around the country; and publish guides and tools that provide communities with proven solutions to address problems in broadband infrastructure planning, financing, construction, and operations across many types of business models. MORE

In Maine, the ConnectME Authority has also taken steps to address the issue as well. The first was to change the definition of "underserved" to include areas where simultaneous upload and download speeds are less than 10 megabytes per second. In addition, there are several bills pending in the legislature to create a bond fund for building more broadband capacity. Maine recently was ranked 50th among the states in broadband speeds.  MORE

Venture Capital in Maine - 2014

MaineBiz reports that more Maine companies received venture capital investments in 2014, but the total value was less. Twelve deals were completed in the past year, for a total of $18.87 million. A $16 million raise by Putney, a latter-stage veterinary product company, impacted the numbers. (Incidentally, Putney just announced that it received FDA approval for one of its products.)

A decade ago, in 2004, $26 million in venture capital was invested in Maine, and over $140 million in 2000, the peak of the dot.com era. In general, venture capital investments in Maine have been and continue to be very low compared to the US, and vary considerably from year to year because of the small numbers of deals.

It will be interesting to chart the impact, if any, from new Maine Crowdfunding rules that went into effect January 1. Unlike Kickstarter, Maine Crowdfunding is open only to Maine companies, limits the size of the offering to less than $1 million, and the amount that any one person can invest ($5000, except for accredited investors). There are more rules, and a company considering using this option should seek the guidance of an attorney with appropriate experience. MORE

Top 5 Sustainability Risks and Opportunities

The Global Opportunity Network recently identified their top five sustainability risks around the world, and the opportunities that could come to entrepreneurs and innovators that look for solutions. The risks were:

1. Extreme Weather is likely to be more severe and frequent. Opportunities are in early warning and forecasting systems, investments in resilience and cost-effective adaptation.
2. Lack of Fresh Water continues to threaten health, food and energy. Opportunities are in water-efficient agriculture, fresh water production and smart water regulation.
3. Unsustainable urbanization has costs in congestion, pollution and health. Opportunities are in compact, green and connected cities, rural growth initiatives and smart cities.
4. The rise of Non Communicable Diseases such as cardiovascular disease, cancers, and diabetes threaten quality of life and increase healthcare costs. Opportunities include combating these diseases with mobile technologies, new financing options and everyday health enablers.
5. Fossil Fuels continue to inhibit reductions in emissions, and slow the introduction of alternative energy sources. Opportunities exist in regulated energy transitions, energy autonomy and green consumer choices.

To read more, click HERE.

Luddite of the Year Award

I realize that you may find it amusing that I, as a non-Facebook, non-Twitter, non-Pinerest using Luddite myself, like the fact that the Information Technology and Innovation Foundation (ITIF) just came out with their Luddite of the Year announcement. This award highlights the worst anti-technology ideas and/or actions in the past year. The award goes to....the states of Arizona, Michigan, New Jersey and Texas, all of which took action last year to prevent Tesla Motors from opening stores in their states to sell electric cars directly to consumers.  To see the other nominees, click HERE.