Innovation Ecosystems

Commerce Department Seeks Public Input on Innovation Metrics

The Department of Commerce is seeking public input on ways to measure innovation in the economy. The public comments will support the work of the Measuring Innovation in the 21st Century Advisory Committee, established by Secretary Gutierrez to provide recommendations on how to measure innovation and its impact on the US economy. Comments from the public will inform and advance the development of proposals. "Input from innovators, entrepreneurs from businesses of all sizes, and academics is very important to the Committee as it develops ideas for innovation metrics," Gutierrez said. "Innovation is a driver of our economy and we need to help policymakers and the business community better measure innovation for the purpose of developing appropriate public policy."

The notice of public comment is available on the Committee's Web site at: www.innovationmetrics.gov Comments will be published on the Web site. The Committee anticipates the recommendations will cover the following four major categories identified by the participants during the initial meeting:

1. Improvement of the underlying architecture of the U.S. System of National Accounts to facilitate development of improved and more granular measures of innovation and productivity;
2. Identification of appropriate economy-wide and sector-specific statistical series or other indicators that could be used to quantify innovation and/or its impacts;
3. Identification of firm-specific data items that could enable comparisons and aggregation; and
4. Identification of specific "holes" in the current data collection system that limit our ability to measure innovation.

Comments in response to the Federal Register notice are due by Friday, May 11. The Federal Register notice can be accessed by the link below.
Notice and request for comments.

2007 State New Economy Index. Massachusetts Holds the Top Spot

The 2007 State New Economy Index, released by the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation (ITIF), is a state-by-state analysis of how state economies are transforming from an old industrial economic model based on "smokestack chasing" in which economic development success is measured by the number of big company relocations rather than in the creation and retention of high value-added, high-wage jobs.

The Index uses 26 indicators from a variety of sources to rank each state on the extent to which their economies are structured and operate to effectively compete regionally as well as globally. It examines the degree to which state economies are knowledge-based, globalized, entrepreneurial, information technology-driven and innovation-based. According to the Index, the most important driver is the information technology revolution that that is impacting virtually all industries and driving increased productivity.

Massachusetts has held the top spot on the State Index issued in 1999, 2002 and 2007, while New Jersey and Maryland have each made a steady climbs with each Index to close the gap and take the second and third place rankings this year. Wisconsin, Vermont, North Dakota and Rhode Island made the greatest strides on the Index from 2002 to 2007, while Missouri, Maine, Oregon, Arizona, New Mexico, Oklahoma, and Hawaii recording the biggest decline in the rankings over the last five years.

All the states at the top of the ranking show above-average levels of entrepreneurship, even those that are not growing rapidly in employment. Most are at the forefront of the information technology and Internet revolutions, with a large share of their institutions and residents embracing the digital economy. Most have a solid infrastructure that fosters and supports technological innovation and many have high levels of domestic and foreign immigration of highly mobile, highly skilled knowledge workers seeking good employment opportunities coupled with a good quality of life.

States ranking at the bottom of the Index tend to depend on natural resources or on mass production manufacturing and rely on low costs rather than innovative capacity to gain advantage.

The report also outlines an eight-point public policy framework of "best practices" that state officials can use as a guide. The key strategies discussed are:

1. Align Incentives behind Innovation Economy Fundamentals
2. Co-Invest in an Innovation Infrastructure
3. Co-Invest in the Skills of the Workforce
4. Cultivate Entrepreneurship
5. Support Industry Clusters
6. Reduce Business Costs without Reducing the Standard of Living
7. Boost Productivity
8. Reorganize Economic Development Efforts

“The 2007 State New Economy Index is an important update and advances our thinking about economic development strategies and policies that foster innovation based competitive advantage.” said Egils Milbergs of the Center for Accelerating Innovation. Click for the full 92 page report (PDF format).

Industry Leads R&D Increases While Federal Funding of R&D Slows

Battelle and R&D Magazine released a report forecasting that total funding for research and development (R&D) is expected to increase to $338 billion in 2007, an increase of 2.85 percent over the $329 billion funded in 2006. The overall increase is driven by industry funding and industrial performance, while federal support of R&D is expected to slow.

·         The federal government is expected to spend $98.3 billion funding R&D efforts, a minor 1.8 percent increase over the $96.6 billion spent in 2006. Government-funded R&D continues to be influenced by the global war on terror. Significant thrusts are being directed to detection of instruments or compounds that represent major terror threats, The Department of Defense will receive a record R&D budget of $76.8 billion in 2007-which is up 4.8 percent over 2006 levels. The Department of Homeland Security-for the first time since its inception-will see a 21 percent decline in its R&D budget from the $1.281 billion it received in 2006. Energy issues related to supply and impact on security will get greater attention and support. Past efforts to reduce dependence on foreign energy supplies have been less than successful. However, current pressures from cost increases and the general trends toward green practices appear to be having a greater effect on the funding of R&D directed toward alternate energy issues. There will be a continued emphasis on the entire range of information gathering, analysis, and communication technologies that create and support reliable infrastructure.

·         Industrial investments on R&D are expected to reach $219 billion in 2007, a healthy increase of 3.4 percent over 2006 levels of $212 billion. Growth fields for industry are electronics, biotechnology, pharmaceuticals, software development, and process modeling. Aerospace: Getting a healthy boost from commercial airliner sales, communication systems and imaging satellite sales escalate. Semiconductor market appears poised for dramatic growth as various elements within it support the emergence and development of new technology, low cost, high-efficiency photovoltaic systems that are approaching the cost efficiencies of petroleum-based energy supplies. Industries that show promise for improvements in R&D investments are energy, nanotechnology-based materials science, and any industry or sub-industry involved in sustainability areas. Changes in industrial funding have been influenced by major moves toward establishing or pursuing research programs in financially and intellectually attractive offshore locales. China and India, are making aggressive moves toward becoming formidable participants in the global R&D and technology arena, with resultant strengthening economic presences.

·         Academia and other non-profits make up the remaining expenditures on R&D with $20.8 billion for 2007. Academia is set to increase by 1 percent to $11.4 billion and non-profits are expected to increase by 3.6 percent to $9.4 billion. Non-profit R&D is growing, but academia is suffering. The near-zero growth in academic-based research can largely be attributed to a lack of industrial support, but federal and state government support has also dwindled. Non-profit R&D funding comes mainly from the federal government-in particular the Department of Defense and the Department of Homeland Security-which has kept funding levels in a growth mode.

LINK for the full report: 2007 R&D Funding Forecast (2.69 mb PDF)

Business More Trusted Than Media and Government

Business is more trusted than either government or media in every region of the globe, according to the eighth annual Edelman Trust Barometer, a survey of 3,100 opinion leaders that measures trust in institutions, companies, and sources of information in 18 countries.   Released ahead of this week's World Economic Forum, in Davos, Switzerland, the study highlights a growing mistrust by intellectual and financial elites of elected representatives in favor of alternative entities such as non-governmental organizations and companies.

Business was more trusted than governments in every continent, according to the respondents. NGOs beat business to the top position in North America and Europe, with most respondents ranking them as the most trusted institution, while government was regarded as the least trusted in both America and Europe. The trust in NGOs is mirrored in the public's belief that socially responsible activities are more important for a company than customer service or a strong financial performance, added the survey.

In the US, 53% of respondents report trusting business, which marks an all-time high for the survey. This is a recovery from a low of 44% in 2002, which came in the wake of the Enron and WorldCom debacles.

Egils Milbergs, president of the Center for Accelerating Innovation commented: “This shift in trust away from the governmental sector reflects a public hope that business and independent non-profits will assume a larger leadership role in addressing issues such as energy, environment, health, public safety, innovation and raising global living standards.”

For a PowerPoint presentation on the 2007 survey click here:  Download edelman_trust_barometer_january_2007.ppt

US Must Do More to Spur Green Technologies

A poll by Zogby International and TechNet's Green Tech Task Force released today points out that only one in four American voters today believe the nation is doing enough to promote and utilize alternative or "green" technologies. Major findings:

 n      77% of American voters say that the nation is not doing enough to 

      promote and   utilize green  technologies in order to reduce our reliance on 

      foreign fuel sources, 17% say     that   the nation is doing enough     

 n      75% of the voting population said that their purchasing decisions in   

     the past year have been influenced by a desire to save energy and 

      improve the environment.

 n      When asked their preferred alternative to oil and coal as energy 

       sources, respondents chose: solar    power (28%), biofuels (24%), wind (16%) 

        nuclear energy (14%) and   fuel cells (4%).  77% of the voting  age population 

         has improved the energy efficiency of their homes.

 n      56% have saved energy by purchasing good and services over the

        internet, and half (50%) have  used telecommuting or email to reduce travel.

 n      One in eight (12%) has already purchased alternative fuel vehicles.

The nationwide telephone survey of 1,043 likely voters was conducted by Zogby 

International from January 5-10, 2007. The poll has a margin of error of +/- 3.1 percentage points. 

For complete polling results, go to: http://www.463.com/clients/technet/WF-TN.pdf  

For cross-tabs, go to: http://www.463.com/clients/technet/X-TN.pdf

Indian Entrepreneurs Lead in US Technology Start-ups

Indian-Americans are the top entrepreneurs among immigrant groups in the United States, in setting up the largest number of engineering and technology companies, over the past decade. Indian Americans account for 26 per cent of tech firms founded by immigrants as a whole. A study led by Vivek Wadhwa, executive in residence at Duke University reports that during the period 1995-2005, Indian immigrants founded more engineering and technology firms across the US than their counterparts from the UK, China, Taiwan and Japan put together. Wadhwa said the country should make the most of its ability to "get the best and brightest from around the world."

Foreign-born entrepreneurs were behind one in four U.S.technology start-ups over the past decade. Immigrant entrepreneurs' companies employed 450,000 workers and generated $52 billion in sales in 2005, according to the survey.

Indians have outpaced the Chinese in founding engineering and technology companies in Silicon Valley accounting for 15.5 per cent of the start-ups in the Californian hub during this decade. Immigrants from China and Taiwan accounted for 12.8 per cent of the start-ups. In the preceding years, Chinese had an upper hand.

The study states: "This research shows that immigrants have become a significant driving force in the creation of new businesses and intellectual property in the US-- and that their contributions have increased over the past decade. The key to maintaining US competitiveness in a global economy is to understand America's strengths and to effectively leverage these. Skilled immigrants are one of America's greatest advantages."

The biggest concentration of Indian entrepreneurs is in California, Texas and New Jersey. The share of Indian start-ups is as high as 47 per cent in New Jersey, followed by Texas (25 per cent), California (20 per cent), Florida (18 per cent), New York (14 per cent) and Massachusetts (10 per cent). Almost 80 per cent of immigrant-founded companies in the US were within just two industry fields: software (33 per cent) and innovation/manufacturing-related services (46 per cent).

LINK:

"America's New Immigrant Entrepreneurs" is available online

Insights from Accelerating Innovation Conference 2006

Were you unable to make it to the Accelerating Innovation 2006 Conference on September 26, 2006 at the National Academies? Find photos, the agenda, and speaker presentations at www.innovationconf.org As we embark into the 21st century with innovation moving at a record pace, the way we live and work is constantly changing. It is no longer the notion of a single scientist, organization, or nation that provokes such innovation. Superior results derive from connections and networks spanning the globe. Our century’s knowledge economy is empowering regions, communities, and even individuals to innovate and generate resources as never before. Some of the greatest growth opportunities are occurring on these local scales across the globe, bringing many new opportunities along with greatly increased competition. Succeeding in this economic climate will require new tools, policies, and collaborative relationships between all levels of the business, academic, and governmental sectors.

Accelerating Innovation Conference 2006 in Washington DC

The Accelerating Innovation Conference will be held Tuesday, September 26, 2006 at the The National Academies, Washington, D.C. Keynote speakers include Congressman Don Manzullo, chairman of House Small Business Committee; James Woolsey, vice-president for Global Strategic Security, Booz-Allen Hamilton and former CIA director; John Backus, managing partner, Draper Atlantic; Congressman Bob Goodlatte, co-chair of the Congressional Internet Caucus, and chairman of the House Republican High Technology Working Group. There will be four outstanding panels of speakers addressing International Models of Innovation, New Paradigms in Education and Workforce Development, The Global Innovation Economy and Implications for Corporate Strategy and Intergovernmental Dimensions of Innovation Policy. For more agenda details and registration information go to: www.innovationconf.org

Civic Leaders Begin Mapping a Global Innovation Hotspot

The civic leadership of Rockford, Illinois is prototyping a new dynamic economic development model. The goal is to transform the Rock River Valley Region into a regional innovation ecosystem that adapts quickly to global markets and technological opportunities. Rockford is the third largest city in Illinois approximately 90 miles northwest of Chicago and home to more than 150,000 people. By maximizing linkages and relationships among local stakeholders with customers, suppliers and sources of creativity on a global basis the result will be faster commercialization of new products and services and the foundation for driving the next generation of economic growth, business start-ups and jobs.

Rockford's 20th Century industry revolved around machine tools, heavy machinery, automotive, aerospace, fastener and cabinet hardware products, and packaging devices and concepts. During the 1980s the Rockford area went in to a severe economic decline as foreign competition and demand shifts in the manufacturing sector severely impacted the economy and employment structure. In a typical American story of resilience, Rockford is re-inventing itself and is now in transition as the business, political and civic leadership look to new markets, entrepreneurship and technology based businesses to drive the future economy.

As an initial step in this process Rockford held an Innovation Forum August 17, 2006 at the EIGERlab facilities. The Forum was not the typical "talking head" conference consisting of keynote speeches and attendees in a classroom setting. The Forum was designed as a highly interactive “innovation café” to open minds and build trust, reciprocity, inspiration and critically important relationship capital to unlock the insights and pathways to a stronger innovation economy. The Forum was kicked-off by presentations by Larry Morrissey, Mayor of Rockford; Tom McDunn, vice president, EIGERlab; Egils Milbergs, president, Center for Accelerating Innovation; and Dr. James Kadtke, executive director, Accelerating Innovation Foundation.

Forum participants then assembled into tables of six to intensely interact about the innovation assets, opportunities, barriers and action alternatives. Participants rotated among the tables after each round of conversation and results were posted to the web on a real time basis. The entire day was also graphically visualized by Brandy Agerbeck. The Forum clearly demonstrated that innovation is a cross- organizational activity and is enabled by a “mindset” of collaboration wherein the assets, creativity and innovations of one stakeholder can be linked, shared and leveraged with others. You can see the methodology and results of the forum at www.eigerlab.org and by clicking on the link for RocoPedia which was launched by EIGERlab as an innovation”wiki” and portal for the Rock River Valley Region.

The Rockford Innovation Initiative is a collaboration between Rockford Area Ventures, EIGERlab, City of Rockford, Rockford Area Economic Development Council and the Center for Accelerating Innovation.

PARTNER LINKS:

EIGERlab: www.eigerlab.org

City of Rockford: www.ci.rockford.il.us

Rockford Area Ventures: www.rockfordareaventures.com

Rockford Area Economic Development Council:  www.rockfordil.com

Center for Accelerating Innovation: www.innovationecosystems.com

Rockford Innovation Forum presentation: Download egils_milbergs_rockford_in_the_global_innovation_age.pdf

Growing American Manufacturing through Global Innovation

Access to highly skilled individuals and their ideas is a critical component of American economic growth and competitiveness for thousands of manufacturing companies. CRDF held a forum July 27 hosted by the Congressional Manufacturing Caucus to highlight its successes helping domestic businesses to access technical expertise from nearly 20 countries.

Entitled, American Manufacturing: Growth through Global Innovation, the panel was moderated by CRDF President and CEO Cathy Campbell and featured Ohio Lt. Governor Bruce Johnson, Imalux President Jerry Cirino and Jim Ohneck of Oculatek. "To thrive, American manufacturers must embrace and implement new technology and new ideas," remarked Ohio Congressman and Manufacturing Caucus Chair Tim Ryan.

Read a full summary of the event

Download:

Manufacturing Fact Sheet (75K) [download]
EIIF Fact Sheet (161K) [download]