Innovation Ecosystems

Washington’s Economic Development Commission winds down. Remaining functions transition to Commerce Department.

It was a long and arduous legislative session in Washington state (167 days) but finally House and Senate legislators and the Governor came to an agreement on the operating budget for the next 2013-15 biennium. It is with great regret that funding for the Washington Economic Development Commission (WEDC) is eliminated. Furthermore, the STARS and Entrepreneurs in Residence program which the commission shepherded with outstanding results is also eliminated. The WEDC will no longer have an independent full time staff. The strategy, oversight and performance evaluation functions of the WEDC will be absorbed by the Department of Commerce. Modest transition funding of $75K is provided for convening a working group of former commissioners and Associate Development Organizations (ADOs) to address specified tasks.

The WEDC leadership worked hard at making the case that a non-partisan, public-private forum with an impartial view was worthy of continued state support. We emphasized the value of the private sector working jointly with the state's leading policymakers in shaping a long-term and cohesive economic growth strategy, establishing benchmarks for performance accountability and ensuring rigorous data standards for evaluating economic development programs, taxes and regulations. Many legislators appreciated the merits of an independent entity championing these values and goals—but in the end other priorities prevailed in budget deliberations.

It has been an honor to work with a fantastic group of commissioners in building a forward-looking strategy, organizing numerous innovation conferences and events, preparing research reports, managing policy development and engaging hundreds of business, education, and civic leaders in our priority-setting process. We covered every latitude and longitude of this wonderful state. Collectively we designed a potent policy framework for talent development, innovation and entrepreneurship, infrastructure, regulatory efficiency and international business. I am confident many elements of this policy framework will endure and help guide policymakers in the future.

We played a central role in designating 15 Innovation Partnership Zones across Washington State. The IPZ program garnered recognition as a best practice by the National Governors Association and in a national competition won a first place Innovation Award from the Council of State Governments. This bottom-up and essentially no-cost initiative has leveraged millions of federal, state and private sector resources for their unique innovation focused strategies.

Through our Entrepreneurs-in-Residence program dozens of new start-up companies were launched commercializing the intellectual capital of the University of Washington and Washington State University. The STARs program guided by the Innovation Advisory Committee provided the critical seed funding for recruiting world class entrepreneurial researchers and enabled the establishment of two outstanding research commercialization centers: Bio- products, Sciences and Engineering Laboratoryand the Energy Systems Innovation Center.

It was an impressive team effort facilitated greatly by the stewardship of Roger Woodworth (chair), Bruce Kendall (former chair) and Steve VanAusdle (vice-chair). I also salute my superb and productive staff—especially the amazing operational skills of Noreen Hoban who has been with me since the beginning and Spencer Cohen who set the bar for high quality analysis and rigorous standards for evaluation.

As the next steps are undertaken for the state's economic development, we should refresh our pledge to make Washington the leading birthplace of innovation and world changing ideas, business models, products and services. An enduring public-private commitment to action will be essential for this vision to be realized.

It has been a great honor and privilege to be of service to Washington State.

Warmest regards,

 

Egils Milbergs

Executive Director

Washington Economic Development Commission

Jobs Growth and Competitiveness Plan Released by the Washington Economic Development Commission

Washington State can accelerate job growth and become the leading innovation hotspot of the world. So concludes the Washington Economic Development Commission's final report, Driving Washington's Prosperity -- A Strategy for Job Creation and Competitiveness.

In accepting the commission's report, Governor Inslee observed: "This is a new era for economic development, an era where embracing innovation, inclusiveness and accountability brings out the best in us." He added, "I appreciate the Commission's efforts to set this foundation for our state's future economic opportunity, jobs and quality of life."

In short, the plan offers a roadmap for the state to differentiate itself, attract new investment and help grow family wage jobs. According to Commission chairman Roger Woodworth, "Growth is stronger when resources are leveraged for impact and aligned with a cohesive policy framework. A focus on fundamentals, coupled with leadership and a long view, will yield a more resilient economy for our state," he said.

Among the Commission's findings, the state's substantial economic development efforts have tended to be short-term, narrowly focused, and rarely coordinated across agencies. Commission Executive Director, Egils Milbergs observed that, "Rigorous evaluation of economic development programs is infrequent, limiting the evidence policy makers and taxpayers need to judge performance. We can and must do better if we're to unleash creativity, accelerate job growth, and secure our technological leadership over foreign competitors."

The Commission's report advances a strategy to overcome this fragmented approach to economic development, identifying five key drivers for ensuring job creation and competitiveness:

• Make talent a top priority
• Invest in entrepreneurship
• Connect through reliable infrastructure
• Regulate in the smartest ways
• Expand international business

The report includes an analysis of the State's competitive strengths (such as in research and development, patent production, technology jobs growth, venture capital investment, manufacturing and exports) and weaknesses (such as in the rate of jobs recovery particularly in rural regions, in-state production of scientists and engineers, workforce skills, household income, investment in transportation infrastructure and foreign direct investment).

The Commission prepares the legislatively authorized report every other year. This year's plan is the result of multi-stakeholder dialogue among leaders in business, education, labor, economic development, and government. More than 650 stakeholders participated at 15 regional strategy forums.

Below are links to the strategy report and the series of evaluation reports to inform the plan and economic development mission of the State.

Driving Washington's Prosperity: A Strategy for Job Creation and Competitiveness

http://www.wedc.wa.gov/Download%20files/2013StrategicPlan.pdf

Economic Development Programs and Investments: Review of Evaluation Practices in Washington State http://www.wedc.wa.gov/Download%20files/Evaluation_Practices.pdf

Vital Signs for Economic Development http://www.wedc.wa.gov/Download%20files/Vital_Signs_for_Economic_Development.pdf

Innovation Sources, Practices, and Economic Development Programs Serving the Needs of Businesses: A Survey of Businesses and Recommendations

http://www.wedc.wa.gov/Download%20files/WEDC_SURVEY_OF_BUSINESSES.pdf

The Washington Economic Development Commission (WEDC) is an independent, non‐partisan commission established to assist the governor and legislature by providing leadership, direction, and guidance on a long‐term and systematic approach to economic development that will result in enduring global competitiveness, prosperity and economic opportunity for all the state's citizens. For more information on the state's economic development strategy, policy reports, meeting schedules and status of recommendations visit Washington Economic Development Commission at www.WEDC.wa.gov.

Milbergs previews state innovation strategy before advanced manufacturing group

Egils Milbergs, executive director, Washington Economic Development Commission (WEDC)  previewed the state economic development strategy before manufacturing executives at a July 26th Center for Advanced Manufacturing Puget Sound (CAMPS) meeting in Kent, WA. The draft final strategy report was approved for public review. A road tour and series of community economic development forums are planned for August and September. The final report is expected to be completed before the end of the year. DOWNLOADS:

Download Milbergs CAMPS 1.1 KENT 7 26 2012

Download Innovation Pillars Schema 4 51

Download 2012StrategicPlanDraft.4.52 pdf

Priorities for Kick-starting Job Creation in Washington State

We cannot wait for national recovery. The state needs a job growth strategy. However, the task of kick-starting job creation is daunting when the state budget faces such huge fiscal constraints.  Policymakers must make difficult budget trade-offs in ways that do not undermine the future prosperity we seek. Generating more private sector investment and job creation requires that business have confidence in the state’s long term policies for economic development and innovation.

Offered below and in the attached statement are priorities in the context of advancing four key pillars of the innovation economy: talent, investment, infrastructure and exports. These are the pillars the Washington Development Commission adopted in its plan to make the state the most attractive, creative and fertile environment for innovation in the world. Focusing legislative activity on these longer term priorities and related actions will contribute to business confidence, economic recovery and job creation. Download Job Creation Priorities of the Economic Development Commission  

As a matter of priorities the state should focus efforts on the following:

 
1. Talent. Emphasize investments in career transition rather than in temporary income maintenance and reorient training and education priorities to meet employment demand.

 2. Investment and Entrepreneurship. Affirm commitment to policies that create an “innovation ecosystem” that fosters entrepreneurship, business investment and on-shore manufacturing.

 3. Infrastructure and Regulations. Design a 21^st century infrastructure and regulatory environment that enhances business investment and job creation and aligns with regional job creation objectives.

 4. Export. Intensify efforts to grow the national and global presence of Washington’s businesses.

Four Pillars for Economic Growth and Job Creation

Despite the official end of the recession, the economy recovery remains excruciatingly slow and Washington state is still more than 100,000 jobs in the hole. The overarching imperative is clear. We must urgently learn more, create more, make more and export more. Innovation will be the key driver in accelerating economic recovery. Four pillars underpin a 21^st century innovation economy: talent, investment and entrepreneurship, infrastructure and exports. Getting the economy back on a sustainable path will take extraordinary leadership from the private sector and every level of government—federal, state, local and tribal. Our new commissioners are in the process of updating the state’s economic development strategy and, in parallel, conducting an in-depth outcome evaluation of over 124 agency economic development programs.

To create jobs Washington must set itself apart and make our state the most attractive environment for innovation in the world. We invite your thoughts as we move forward. LINK: www.wedc.wa.gov

Powerpoint charts on Washington state's innovation plan.

Download Four Pillars for Economic Growth and Job Creation by Egils Milbergs

Washington Economic Development Commission meets December 8 at Sea-Tac. Economic recovery and innovation priorities to be discussed.

The Washington Economic Development Commission (www.wedc.wa.gov)meets Tuesday, December 8 at Sea-Tac Airport Conference Center. The major agenda item is consideration of WEDC issue priorities for the upcoming legislative session and longer term.  Rogers Weed will report on Commerce department reorganization (www.commerce.wa.gov ). Mark Emmert, president of University of Washington and Don Brunell president of Association of Washington Business will also be presenting perspectives on the innovation economy.

 

$27million federal stimulus to support low-income adults and dislocated workers in Washington State

Gov. Chris Gregoire and Employment Security Commissioner Karen Lee announced today that $27 million in federal stimulus grants are being distributed throughout the state to provide training opportunities, financial assistance and employment services to low-income adults and dislocated workers.

 

“By improving the skills of our work force, Washingtonians will be better able to fill jobs that are currently in demand in our state.  Equally imperative is that our communities will be in a better position to attract new jobs and emerge from the recession faster,” Gregoire said.

 

The American Recovery and Reinvestment Act (ARRA) authorized additional funding for local training and employment-assistance programs sponsored through the federal Workforce Investment Act.  The goal is to substantially increase the number of adults who have the skills to fill jobs that are in demand in their communities. Training services for low-income adults range from basic education to a wide variety of training programs, including on-the-job training, classroom education, occupational skills training, private-sector training programs, entrepreneurship training, job-readiness training, a combination of workplace training and classroom instruction, and customized training. 

 

Eligible participants include people receiving public assistance, low-income veterans and their spouses, low-income foster families, homeless individuals and other families who meet the income criteria. Dislocated workers qualify for skill assessments and a broad array of personalized employment and training services.  A dislocated worker is someone who is unemployed or has received a layoff notice and is unlikely to return to his previous occupation or industry. 

 

“The more skills you have, the more likely you are to get and keep a good job,” Lee said.  “And just as importantly, these funds will help ensure that there’s a healthy supply of skilled workers for employers who have jobs to fill.”

 

The Employment Security Department will distribute the money among the state’s 12 workforce development councils based on a federal formula linked to local poverty and unemployment rates.  The training and employment services are made available through local WorkSource centers. Locations are printed the blue pages of telephone books or online at www.Go2WorkSource.com. These grants are in addition to the approximately $20 million awarded to the workforce development councils last week for summer-employment programs for youths and young adults.

Innovation: Washington State’s Pathway to a Long-Term Economic Recovery

Olympia, Washington. The Washington Economic Development Commission (WEDC) has released its strategy report:  “Building the Washington Innovation Economy: New Economic Strategy for Prosperity.”  WEDC Chairman Bruce Kendall and Vice-chairman Steve van Ausdle explained that innovation will be the way to forward to a sustainable long term economic recovery.  The ten year vision is to make Washington the most attractive, creative and fertile investment environment for innovation in the world.

 

Governor Chris Gregoire participated in the roll-out event in the State Legislative Building and praised the commission’s report: “This report confirms that Washington is on the right track to build a more sustainable economy. I applaud the commission for its tireless work to review our programs and ensure that Washington will continue to support and strengthen our local businesses.”  Key legislators expressed their bi-partisan support of the strategy including Senator Jim Kastama and Senator Joe Zarelli and Representative Phyllis Kenney and Representative Barbara Bailey. 

 

The commission report addresses three key drivers of an innovation economy—talent, investment and entrepreneurship, and infrastructure—and proposes 22 action items to address those drivers. The 17 member commission’s innovation economy strategy was formulated by business, education, research and government leaders from across the state.

 

“An innovation economy requires doing new and different things very well,” said Egils Milbergs, executive director of the WEDC. “No single institution alone will lead the way.  Countless organizations and individuals across the state, interacting and acting in a larger innovation ecosystem will evolve the Next Washington.  Collaborative innovation will be the essential ingredient for the state’s future growth and prosperity.

 

Download the Strategy Report at www.wedc.wa.gov

 

Egils Milbergs remarks at the event.

This is an unprecedented time of economic uncertainty. Uncertainly leads to fear. We cannot be afraid to lead.  We need a strategy. The challenges the commission identifies in talent, investment and infrastructure are worthy of our attention right now. 

 

A time of crisis is the best time to examine the fundamentals, set new directions, make necessary changes, and transform our fortunes.  At the root of our growing unemployment problem and budget deficit is a growth deficit. To grow our economy again we need to do some new and different things very well.  To thrive our economic development system must be nimble, adaptive and more resilient to a rapidly changing world and disruptive technologies.

 

 

In the 1960s and 70s the nation’s competitive advantage relied on cost and economies of scale.  In the 1980s our competitive advantage depended on quality to meet the Japanese challenge. Today our competitive advantage rests on our capacity to innovative. Other nations can imitate, but for us we have to innovate. New boots—big steps.  The next wave of growth, job creation and prosperity will be based on our capacity to nurture new to the world products and services. Growing the top line, not just the bottom line. This requires implementing a new way of doing business which is more collaborative. A model that relies more on multi-disciplinary solutions, openness  to ideas outside organization boundaries, drawing on  capabilities all across the state and empathy with customer and social needs.

 

Our strategic intent is to create a new dynamic in relationships—we call it an innovation ecosystem—that sees all the capabilities of the state as a toolbox for growth.   The purpose of these relationships: knowledge creation, smarter workers and transformational systems, products and services.  

 

No single institution will lead the way.  We cannot command creativity or innovation. The industrial revolution was not the product of a single business or government program. The same can be said for the information revolution.  Countless businesses, entrepreneurs, educators, researchers, non-profit organizations, communities and individuals across our state will be actors in the innovation revolution that we foresee. To realize this vision we will need a mindset of discovery, innovation, continuous learning, entrepreneurship and stronger, deeper and more productive collaboration.

 

Our work does not end with this report. In this first step we strategize, the next step we organize and the third step we operationalize.  The report is a draft. It is not the last word.  It is a set of ideas. We hope it will lead to thoughtful and imaginative discourse and constructive debate.  We are starting a new narrative and an exciting journey.

In the weeks and months ahead we will advise the Governor and legislature on the status of our recommendations.  We will work with agencies to align policies and the portfolio of economic development programs to ensure their relevance to the innovation economy.  We will take the innovation framework to the communities that helped shape this report. Ask them to weigh in, fill in their unique innovation contribution.  We will inform our congressional delegation of how this strategy relates to various components of the stimulus package. The state has the opportunity to garner and compete for a significant share of these funds

 

The long term view matters.  In fact it is an imperative to make decisions for the present.  We cannot neglect developing the next generation of talent, broadening the R&D base so more industry sectors can innovate, financing entrepreneurs, nurturing nascent industry clusters and transforming the state’s infrastructure to be smart, clean and green.  We should lead the nation in transitioning from oil dependency. A full and lasting recovery must be investment driven by both the public and private sector. 

 

We have a fortunate history of entrepreneurship. We have demonstrated strengths and assets to build on.   This is not a prescriptive top down approach. Rather bottom up with key reliance on local initiative and self organizing behavior.  We must leave behind the notion that regions are competing for a fixed pie and a zero sum game.   If our regions collaborate it becomes a value creation game and win-win. We can pioneer a powerful new model for innovation from the bottom up and come out stronger. I am confident our political, business and civic leadership will take on the mission.