A good friend recently asked me, “Why don’t you take the lead and have a statewide conversation about innovation?” I had no particular answer, except, “Been there, done that.” Afterall, in most states, the policy prescriptions for increasing the culture of innovation or building the innovation ecosystem or growing science and technology-based companies or whatever you want to call them, are well known. What’s missing is the political will to put them in place…..MORE
New research confirms that conclusion that innovation is a long-term process, one where constant attention to filling the idea pipeline, prioritizing new ideas for development, and executing on implementation is required. And, the pre-requisite for doing all of this well? Leadership, committed, visionary, stick-to-it, leadership. This is true whether you are building a single organization, a sector or a culture of innovation in a state, region or locality. Karl Ronn, Scott Anthony, David Duncan, Clayton Christensen and others have completed research which support this basic point. Innovation is not a point solution. It’s a system through which an organization can gain strategic advantage.
Now, more than ever in the thirty-plus years that people have been advocating for policies that encourage the growth of innovative companies, there is wide agreement that these companies offer well-paying jobs and contribute to fast-growing economies. The stories of Silicon Valley, Boston, Research Triangle and Austin, TX, among others are well documented and well known. Communities and states across the country and around the world are working towards these goals.
There are still places where the possibilities are not as well appreciated, especially in rural areas where lower educational attainment and aspirations make the innovation economy feel like something that happens somewhere else. Too bad many do not remember that only 50 years ago, the Research Triangle Park was a tobacco field in a rural state with great income disparities. To be fair, NC is home to three amazing, world-class universities, but two of them are state-funded, and so far-sighted leaders in the political and business communities made the Triangle happen with investment in those universities and in the Park.
Today, political leaders are spending their time thinking about what to cut and where to pull back, rather than thinking about investing in innovation processes in order to grow the pie. I do understand and agree that federal, state and local services seem to grow almost of their own accord, but the real problem is that the recession caused less revenue, and caused the safety net to get bigger. So, if we can get back to a virtuous cycle of investment (both by government and by industry), then we can get out of this situation.
One policy prescription that could be adopted that would spur investment and could be revenue neutral would be to trade some tax incentives that don’t work well for tax incentives that help build an innovation ecosystem. One example would be to pull back on film tax credits that have been widely shown to not increase local jobs (most impacts are short-term and temporary) and to cost more than the benefits to local communities and states. Replace the film tax credits with investment tax credits, especially for early stage seed capital, investment in new plant and equipment and/or R&D. All of these investments will support the innovative new products and services that create jobs and build companies in our local communities for the long run.
Another policy prescription that is relatively inexpensive (compared to the gains) is support for entrepreneurship…whether through incubators/accelerators/mentor programs/innovation hubs …pick your favorite.
The biggest takeaway is that any investments in innovation have to be long-term, sustained, predictable and at scale. This requires leadership.