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Notes from Innovation Policyworks

Last week I was in Oklahoma City for our annual SSTI meeting, a convening of my technology-based economic development peers from across the country. For twenty years, it's been an amazing opportunity to learn from my fellow practitioners, and to get caught up with friends who also think this work is essential for the future of the country's economy.  The most amazing thing I learned last week is the extent to which Americans have embraced our beliefs and hopes for the future. A new survey shows that 89% of Americans agree with the statement that science, technology, innovation and entrepreneurship are the future of our country. It's an astonishing result, given the many years when our field was considered the wicked stepchild of conventional economic development.

Now, Americans get it. They think we should keep up our lead in research, but also make sure that the research gets translated into jobs and cures. They think it's important to support entrepreneurs, to train our kids in STEM fields, and streamline regulations so that innovators can more easily bring their products to market. They see this as a way to maintain our lead in the world in both research and entrepreneurship. Perhaps we will be hearing more about this as the days go by. I remain hopeful.

Join Me at Envision Maine Summit November 20

Join me and other Maine leaders to discuss how to get to Maine's Next Economy, a daylong summit and conversation at the University of Southern Maine. We will be releasing our book, and previewing the contents in talk by all of the co-authors, including me! Hope to see you there. Here's the link to REGISTER.

University and Industry Interactions Changing: Work With Us, or Get Out of the Way

Did you know that Uber hired away 40 researchers from Carnegie Mellon earlier this year, all with specialties in autonomous vehicles? Apparently the university learned its lesson, because it has now announced a partnership with Google to create platform on campus that will enable Internet-connected sensors, gadgets and buildings to communicate with each other. The clear message - universities better learn how to work with industry, or industry will simply take what it needs. With new competitive threats coming from every quarter, industry simply must have access to domain experts in emerging fields. Universities, however, are still stuck in their long-failed experiments in technology transfer and research agreements, where adversarial thinking and extraordinary bureaucracy combine to make discussions with industry torturous at best. Read an excellent discussion of this HERE and HERE.

Where Immigrants Come From

Diving headlong into the politically hot topic of immigration, legal and otherwise, the Pew Research Center has produced a beautiful infographic depicting how immigration patterns have changed over the years. Starting with a map showing where immigrants were coming from in 1900, during the last big wave of immigration and ending with 2013, Pew shows the dramatic changes. In 1910, Germany was the top country of birth among US immigrants (19%), with Russia next (11%). Only 3 states had a majority of immigrants from Mexico, and Canadian immigration was common along our northern border.

Today, the map shows that Mexico is the birthplace of 28% of 2013 immigrants, with 6% from China. Canada is still the top country of birth for immigrants in Maine, Montana, New Hampshire, Vermont and North Dakota. Check it out HERE

Where Did All the Corporations Go?

Hidden in all the rhetoric on both sides about "corporate welfare" and "corporate tax reform," you will find the surprising fact that most business income is now earned by so-called "pass-through" entities - those partnerships and other businesses whose income is taxed at the same rate as personal income. It turns out that in 1980, only 20.7% of all business income was earned by pass-through entities; in 2011, it was 54.2%.  According to the Tax Foundation, "these sole proprietorships, S corporations, and partnerships make up the vast majority of businesses and more than 60 percent of net business income in America. In addition, pass-through businesses account for more than half of the private sector workforce and 37 percent of total private sector payroll."
The US Treasury has found that pass-through business income is very concentrated among the 1 percent richest Americans, and taxed as capital gains and dividends - at a much lower rate than C-corporations would pay. 

Angels Still Investing

It's been tough for many years to get good, accurate and detailed data on angel capital investing. Finally, the Angel Capital Association though the Angel Resource Institute is providing regular updates. Their Q2 2015 report shows that seed stage valuations continue to rise, with a 30% increase over 2014. All regions across the country have seen increases in deal size, with angel investing activity equally distributed across the country (unlike venture investing). The top three angel groups in the Northeast for the period 2010-2015 are LaunchPad Venture Group, Cherrystone Angel Group (RI) and Maine Angels. Maine Angels continues to hold its place among the top 10 most active groups across the country. 

Chief Innovation Officers in Cities

I recently met Nigel Jacobs, the co-founder of the Mayor of Boston's Office of New Urban Mechanics. That's a fancy title for what others call Chief Innovation Officers. The job-- figure out how to fix things in municipal government through innovation. Nigel, like others in similar roles, is taking a slow and steady approach. Boston's signature product, a maintenance-request app called Citizens Connect, has been downloaded more than 16,000 times and replicated in more than 20 countries since it was launched in 2009. Another CIO, Ted Smith from Louisville, KY, talks about civic innovation, and developing open data platforms so that public and private data (think air pollution, for instance) can be easily combined to benefit the public. The overall goal of these folks: change the way the city does its work. A laudable goal, indeed. Click here for more info on CIOs, Nigel, or Ted

In This Issue - November 2015

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Quote of the Month 
"If You Want To Go Fast, Go Alone. If You Want To Go Far, Go Together"
African proverb

What Should Cities Do to Attract Entrepreneurs?

Innovation districts are become yet another place-based strategy to build environments where entrepreneurs and innovators will flourish. In the face of this top-down, geography-centric approach, Kaufmann Foundation is arguing for an entrepreneur-focused, bottom-up focus. Kauffman suggests that cities stay away from traditional incubators, and instead support existing and emerging networks, education and training events, and help make connections. These two extremes demonstrate the high stakes in reinventing cities as cool places where creative and innovative people will want to live, work and play, reversing decades of urban flight. 

The answer, of course, is likely to be some combination of approaches. In Kansas City, they love the 1 Million Cups approach, a weekly program that showcases two startups per week to engage local entrepreneurs, educate them about the startups in their community and accelerate the startups and their founders through mutual collaboration. In New York, the city has invested heavily in a new innovation district on Roosevelt Island, luring Cornell and Technion University to open an engineering campus there. New York has also invested heavily in incubators and co-working spaces, given the high cost of office space in the city.
Learn more: Kauffman and  New York.

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135 Maine Street, Suite A-183 Brunswick, ME 04011 207.522.9028

Innovation Policyworks enables economic development officials at state, regional and local levels make better, data-driven decisions by providing expert research, analysis and recommendations. Our clients see innovation and entrepreneurship as critical elements of their economic development strategy, and are developing new programs or policies, and/or evaluating existing ones. 

Dr. Catherine S. Renault has been delivering innovation-based economic development results in rural states for 25 years, most recently as science advisor and Director of the Office of Innovation for the State of Maine. Cathy is starting a new project with the Newton-Needham Chamber of Commerce to develop a vision and plan for the N2 Innovation District,  in partnership with Camoin Associates. 
For a list of selected projects, see www.innovationpolicyworks.com/projects.