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Notes from Innovation Policyworks


Earlier this week, the Maine Legislature's Taxation Committee held a public hearing on LD 498, a bill to restore the Super Credit for Research and Development expenses that was eliminated in 2014. Maine's R&D tax credits are not used very much, being focused only on increases in R&D year over year, rather than overall levels of R&D. In addition, as credits on taxes owed, they are not particularly useful for early-stage companies that are conducting a great deal of R&D, but do not have profits that are taxable. To read more about this bill, and other ideas for using tax policy to help startups, click HERE.



Good Spirits in Allentown, PA


Eighteen months ago, I did a project for the Bridgeworks Enterprise Center, a manufacturing incubator located in an old Mack Truck factory in Allentown, PA. The project was to review the operations of this 25-year-old incubator, and make suggestions to revive the program. Recently, the Center welcomed a new tenant, County Seat Spirits, joining two other brewing companies there, and making Bridgeworks a leader in the production of alcoholic beverages. The high ceilings, loading dock, forklift and industrial utilities all make this Center well suited to this use.  Kudos to Anthony Durante for turning this Center around. Read more HERE. 


FCC Decision on Net Neutrality


In mid-February, the Federal Communications Commission (FCC) voted to approve its Net Neutrality policy, effectively deciding to regulate the Internet as a utility. This decision blocks broadband providers from offering different access speeds to different users at different prices. Supporters of this decision, including entrepreneurs, did not want large corporations such as Google, Yahoo or Netflix, to have so-called "fast lanes" that only they could afford. Detractors of the policy argued that regulating the Internet will end up quashing innovation by taking away the incentives for large Internet Service Providers (ISPs) to invest in their networks. In an interesting twist, the Wall Street Journal editorialized about the evils of this decision, calling it worse than Obamacare, while simultaneously reporting that the stock prices of the major ISPs went up after the decision, reflecting the market view that this policy will not actually harm them very much. Read the Scientific American view HERE


Start-up Capital Spreading to Flyover States


Although a handful of well-known cities continue to dominate early-stage venture capital investing, other cities are making significant strides. This is the conclusion of a new study by Ian Hathaway recently reported in the Harvard Business Review. Hathaway found that the number of first fundings (initial rounds of professional venture investment) increased 150 percent between 2009 and 2012. He also found that seven of every ten early-stage deals go to companies located in the top 5 percent of cities. The important point is that the bottom of the pyramid is broadening. Some of the new cities in the top twenty include Provo, UT, Charlottesville, VA, Lincoln, NE and Wilmington, DE. To view the data, click HERE.


Who Qualifies as an Accredited Investor?


With the rise of crowdfunding, an important question is coming up: Who qualifies as an Accredited Investor? The current definition was set by the Securities and Exchange Commission (SEC) back in the 1930s in order to protect investors after the excesses of the 1920s. The idea was that accredited investors would be sophisticated enough to make their own investment decisions. The level of financial independence now required by the SEC has remained unchanged for 30 years, allowing inflation to devalue the income and net worth thresholds. 


So, the SEC has been considering moving the thresholds up substantially. Angels and entrepreneurs have been against the change, arguing that the pool of potential investors would be significantly diminished. Instead, many are arguing for a change that would allow the substitution of education or experience for income and net worth as the appropriate threshold. The SEC Advisory Committee appears to concur that simply raising the threshold is too simplistic, and is continuing its work. Click HERE to read the SEC recommendations. 


The Real Results of Federal R&D


My esteemed colleagues at Battelle have recently published an analysis of patents based on federal R&D investments. They found that the R&D programs at the National Institutes of Health, the National Science Foundation, the Department of Energy and the National Institute for Standards and Technology are very productive when it comes to patents. But, the Department of Defense R&D programs were substantially less productive, generating to 1/5 as many patents as the other agencies.


This is a critical finding in the context of innovation because patents are critical for attracting investors, and a robust pipeline of patentable innovation is essential for job creation. The federal agencies continue to be an important source of R&D funding for universities, non-profits and companies. To read the whole report, click HERE. 



 Upcoming Learning 


Webinar: Unlock Your Innovation Capacity through 

Constructive Collaboration


In today's global economy it is important to empower the worker. Dean Schroeder, author of Ideas Are Free, joins Doug Hall to talk about the power of "bottom-up ideas" from employees who interact directly with your customers, make your products, and provide your services. They are in the best position to see where problems exist and what improvements and new offerings would have the most impact. Listen live, or register to receive access to the recording:


Monday, March 16, 2015, 1 pm EST

Passcode: IPW                                  Register HERE.


Innovation Engineering Executive Experience, 

Eureka! Ranch, Cincinnati, OH


The Executive Experience lets you see, feel and experience the Innovation System that Increases Speed to Market and Decreases Risk. You will leave with an understanding of what it takes to craft an organization that lives and breathes innovation.  


 Dates: March 19-20, 2015 and April 23-24, 2015


Contact us for more information.


In This Issue - March 2015

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Aimee's Corner


Pixar Executive Ed Catmull once wrote about the importance of the creativity and innovation process:


"People tend to think of creativity as a mysterious solo act, and they typically reduce products to a single idea: This is a movie about toys, or dinosaurs, or love, they'll say. However, in filmmaking and many other kinds of complex product development, creativity involves a large number of people from different disciplines working effectively together to solve a great many problems. The initial idea for the movie-what people in the movie business call "the high concept"-is merely one step in a long, arduous process that takes four to five years."


Or, as Edward Deming said, 85% of a worker's effectiveness is determined by the system he works within, only 15% by his own skill.


This is why we are so focused on the systems aspects of Innovation Engineering, including the amazing tools and collaboration enabled by Innovation Engineering Labs 3.0, just released. To learn more, visit http://www.innovationengineering.org.



Quote of the Month 


"Do not fear to be eccentric in opinion, for every opinion now accepted was once eccentric." 

Bertrand Russell 

Perceptions of Financial Security


In his great book, Thinking Fast and Slow, Daniel Kahneman explores our ability to fool ourselves because we don't accurately calculate the probability of future events. Here's an example. The Pew Foundation recently found that Americans are more optimistic about their finances and the economy than they have been in years. However, when queried about their own circumstances, nearly 6 in 10 say that are unprepared for a financial emergency, and 8 in 10 report having experienced a financial shock such as a drop in income, hospital visit or major car or house repair. More than half of the 7000 households surveyed reported worrying about their finances in the past year, including lack of savings, and not having enough money to retire.


New Patent Legislation Proposed


Three Senate Democrats have introduced new patent reform legislation that would target patent abusers but also strengthen patents and American innovation.The STRONG, or Support Technology and Research for Our Nation's Growth, Patents Act was introduced by U.S. Sens. Chris Coons (D-DE), Dick Durbin (D-IL) and Mazie Hirono (D-HI).According to the Senators, the legislation takes "focused, thoughtful" steps to make the patent system work for individual inventors and research-intensive companies from every sector of the economy. In particular, the bill would make it harder for firms to be targeted with frivolous patent lawsuits, levels the playing field between small inventors and large companies, and ensures the U.S. Patent and Trademark Office has the resources it needs to ensure patent quality. The full text of the legislation is HERE. 

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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. Cathy is currently in the middle of a project with Camoin Associates working with the Town of Falmouth, ME on an economic development project.
Cathy is just starting an Innovation Engineering project with E2Tech to address a Very Important Problem facing one of its members. Matching dollars are available from MTI for more E2Tech members.

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.