Creating Enterprise: Igniting innovation Saturday, April 24, 2004 For the past day and a half, I have been participating in our Creating Enterprise seminar at Case. The sessions have explored the latest thinking in how to ignite innovation through government-business-university partnerships. You can see more of the schedule here. Here are a sample of the points that I found interesting: Irwin Feller: Throughout American history, federal and state involvement in economic development has tended to be directed at perceived economic oppportunities. As we have moved to the knowledge economy, federal and state polices have shifted to research, technology development and technology transfer. This shift started around 1980. That's the good news: government tends to be flexible. Here's the bad news: government tends to ignore objective evaluations. The Manufacturing Extension Partnership (MEP) has generated positive evaluations, but the Bush Administration has drastically curtailed the program. Entrepreneurship is the next wave of economic development thinking. John Butler: Immigrants to Austin played a critical role in building the region's wealth. "Austin's wealth was created by immigrants and minorities who didn't belong to the yacht club in Boston". For example, George Kozmetsky played a key role in shaping the early direction of the region. Bob Litan: The Kauffman Foundation identifies Seattle Community Capital Development as a good model for growing minority businesses. The key to the success of this approach is the assurance that participants will receive financing if they successfully complete training. This approach overcomes the fragmentation that is common in most settings. Mike Lugar: We need new approaches to cluster development. Mike presented a very useful paper exploring how to integrate and extend cluster analysis. David Morganthaler: Venture capital is not a constraint to building innovation. Venture capital will follow good deals. (Once established, however, firms tend to invest in local firms over distant firms.) Older industrial regions like Ohio have not been able to develop new foundations of wealth. The older industries have extended their "S" curves into the mature phase. VC-backed firms represent a very small fraction of growth companies. Only about 1% of the total companies formed in a year receive venture funding. Too often the probelm is not a lack of venture capital, but rather a lack of quality business plans. Scott Shane explored the dynamics of university spin-offs. Most university licenses go to established firms, not spin-offs. There are a number of steps that policy makers can take to increase the rate of spin-offs. These steps include increasing the level or research, strengthening early stage financing, expanding flexibillity for faculty to move back and forth between the university and commercial ventures, and providing company support, such as incubators. Marcus Stanley summarized research on manufacturing that he is conducting with Sue Helper. Their research is leading us to form the contours fo a regional manufactuirng strategy for Northeast Ohio. Eric Bettinger has been exploring the details of brain drain and the impact of state tuition and financial aide policies on holding talented people. he has developed a useful four stage model to help us develop policies that can hold on to smart people. An interesting insight: one big opportunity may be in "roundtrippers": young professionals who leave the state, but could return. Mike Fogarty's paper pointed us in the direction of viewing regional commercialization as a system with four major components. He explored this issue in the context of MEMS development in Ohio. Commenting on Fogarty's paper, Bill Seelbach pointed to the importance of defining the appropriate scale for competitive success in new technology development. His comments led us to a discussion of how to define appropriate scale. Bo Carlsson compared research on European and U.S. innovation systems. In Europe the thinking about regional innovation systems is more advanced than in the U.S. Former Kentucky governor Martha Layne Collins provided some valuable insights into how to forge consensus around difficult policy innovations. It's clear that we need to develop a new type of leadership skills to translate collaborative policy ideas into action. These skills are closely aligned with concepts of servant leadership developed by Robert Greenleaf I thank George Nemeth who provided an on-going summary of our conference on his blog. posted by Ed Morrison |		This work is licensed under a Creative Commons License. links Some Background on EDPro Weblog The purpose of this weblog is to help economic development professionals -- EDPros -- keep up with the changes sweeping our profession. Strap on your goggles. It's a whole new game. There are no experts any more. The only place to learn about economic development is from other EDPros who are doing it. One other point: the prevaling approach (paradigm, if you like) in economic development is shifting from competition to collaboration. There are a lot of reaasons underlying this shift, but here's the important insight: You, your community, and your region will do better by collaborating and sharing information. So, spread the word...Share the knowledge. Tell a friend about EDPro Weblog. If you are using a news reader, here is the link to syndicate this site: Here's the link if you are a bloglines subscriber: Speaking and workshops on Open Source Economic Development As the idea of Open Source Economic Development starts spreading, more people are asking about it. Visit the I-Open web site to learn more. My colleagues and I are happy to explain the basic concepts in a talk or a workshop. E-mail Susan Alshuler if you'd like to learn more about workshops and speaking. Background on Ed Morrison Download some background information on me here.

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