NGA Power Point Template

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Policies to Grow State Economies
Erin Sparks CSG-WEST Annual Meeting July 31, 2013
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U.S. Not Getting Back Many of the Jobs Lost
During the Recession
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Recent Trends Suggest U.S. Economy Has Turned
Soft on Risks

• Companies add jobs more slowly
• Investors put less money in new ventures
• Americans start fewer businesses and are less
  inclined to change jobs or move for new
  opportunities
• All three reverse prior trends

Source Risk-Adverse Culture Infects U.S.
Workers, Entrepreneurs, WSJ, 6-3-13
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Economic Development in the State of the States
The top 100 words governors used when discussing
economic development in their 2013 state of the
state addresses.
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Economic Development in the State of the States

• Governors are still talking about business
  attraction, but theyre talking about startup
  companies, entrepreneurship, and growing
  businesses in the state just as much.
• Governors are focused on supporting on innovation
  and entrepreneurship.
• With the new focus on growing from within,
  governors are launching partnerships and tools to
  help existing businesses grow and stay
  competitive.
• Most governors are talking about lowering taxes
  to create better business conditions, but some
  governors did discuss raising taxes.

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• Where Does Growth Come From?
• Role of EDUCATION, WORKFORCE ECONOMIC
  DEVELOPMENT Policy

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An Action Plan for Growth 12 Actions
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Distinguish among different entrepreneurs and
companies target resources accordingly.
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State of the States Excerpts Growing From Within

• Wisconsin Most new jobs are going to come from
  new businesses created here or from small
  businesses growing in our state. We need to help
  them tap into the capital they need to make
  investments that will lead to more jobs.
• Colorado We hope to partner with the Secretary
  of State and fund a comprehensive suite of
  business services that will give entrepreneurs
  additional resources to grow their businesses.
• Illinois We're partnering with the University of
  Illinois and the National Center for
  Supercomputing Applications to create an advanced
  manufacturing hub where companies - big and small
  - come to learn and use the world's most
  sophisticated tools and software. The Illinois
  Manufacturing Lab will make our manufacturers
  more competitive.

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Cast a wide net.
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• Not all entrepreneurs are twenty-something
  techies reach out to baby boomers
  (reinventuers), women, immigrants.

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Provide entrepreneurship training for veterans
and the unemployed.
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Find the high-growth companies help them grow.
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Success Stories

• Innovation Works (Pennsylvania)
• Has invested more than 50 million in over 150
  companies that have created thousands of new jobs
  and attracted over 1.2 billion in follow-on
  capital.
• Pipeline Fellowship Program (Kansas)
• Since 2007, companies led by Pipeline fellows
  have grown at an average rate of 82 percent.

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Recent Initiatives

• Michigans Pure Business Connect
• 8 billion, multiyear initiative to help
  Michigan-based companies grow.
• Helps companies find new ways to raise capital,
  get access to various business services, and
  connect with each other for business-to-business
  procurement opportunities.
• Michigan is also investing 12 million in
  entrepreneurship support services.
• Hawaii Growth Initiative
• Set of policies aimed at developing an ecosystem
  to support high-growth entrepreneurial companies
  in the state.
• funded with 6 million, will focus on three main
  areas mentoring, collaborating, and funding
  opportunities for entrepreneurs to establish and
  grow their businesses leading partnerships
  between public and private organizations to build
  research and commercialization activities and
  networking Hawaiis businesses into broader U.S.
  and international sources of investment.

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Reward strong ties among universities, companies,
and entrepreneurs.
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Offer RD Funding in New Ways

• Utah Science Technology and Research Initiative
  (USTAR)
• Utah has invested a total of 977 million in
  research teams and infrastructure, which has
  generated 4.9 billion in new research funds and
  4.9 in new state revenues.
• The University of Utah generated more startups in
  2011 than any other U.S. university.

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Utahs Results
Source Jack Brittain, Presentation to NGA, April
25, 2012.
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Helping Create Good Paying Jobs in the State
Utah
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Utah
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Invest in Mega Partnerships

• Virginias Commonwealth for Advanced
  Manufacturing
• State played key role in developing a mega
  partnership of that provided tailored RD and
  workforce to attract a Rolls Royce production
  facility to the state.
• Partnership includes worldwide manufacturers, 3
  universities, and the state.
• CCAMs eight industry members, including Newport
  News Shipbuilding, Rolls Royce, and Siemans, make
  sizable contributions to the partnership, drive
  university research to be production ready, and
  provide direction on workforce strategy.

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Recent Initiatives

• Maryland Innovation Initiative
• Partnership between the state and five academic
  research institutions.
• Created the role of site miners to make
  connections between partners.
• In order to access funding that will assist with
  the costs of commercialization, university
  faculty and other entrepreneurs are required to
  meet with a site miner, who will make sure their
  application is business-oriented and champion the
  application during the review process.
• Washington W Fund
• A combination of state, university, and
  philanthropic funding.
• Provides early-stage venture funds to promising
  companies that are started at the states
  research institutions.

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Build ecosystems, not programs.
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The Elements of the Innovation Ecosystem

• Institutions that attract and support the people
  with the talent and foresight to create new
  ideas
• Industry networks that encourage interaction,
  stimulate further innovation, help develop
  specialized services to support area companies,
  and encourage cross-industry partnerships
• Facilitation of entrepreneurship to commercialize
  concepts so that ideas, and businesses based on
  them, grow in the area and
• Cultural and social amenities constituting
  quality of life that motivate knowledge workers
  and the innovation-based companies that rely on
  them to stay in the area.

Source Rosabeth Moss Kanter, 1995, Harvard
Business School
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Who Coordinates Key Elements of an Innovation
Ecosystem?
Source Mary Walshok, 2010
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Institutes for Collaboration

• Innovation is built in from the beginning as a
  core mission. Their job is to build, nurture and
  link the elements of an innovative place a
  local ecosystem of people, institutions, and
  companies that all support the innovation
  process.
• They are building an innovation ecosystem for a
  particular industry cluster. Connected to a
  particular industry from inception, they know how
  to create consistency from research ideas forward
  through the commercialization process to feed the
  industrial base within the state.
• The institutes are not part of one university.
  They sit at the nexus of multiple universities
  and aim for a catalytic effect that will
  produce results.
• They depart from traditional university
  technology transfer efforts by focusing on what
  is required upstream to bring new products out
  downstream. The goal is not to focus on just
  ideas or just markets, but to stimulate the
  entire innovation process in such a profound way
  that the states entire innovation pipeline is
  transformed.
•  

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These Organizations Require

• Leaders who proactively find and nurture
  connections across the boundaries and know who to
  connect with whom. Companies and entrepreneurs
  need one point of contact that will connect them
  with all the diverse resources they need.
• Speed and Flexibility in working with industry.
  For this reason, non-profit organizations that
  operate outside of the university/government
  orbit may be needed, but they must excel at
  bringing together the resources of several
  universities.
• Industry Focus that allows innovation to be
  strategically targeted at sectors that are
  promising to the state or region. At the same
  time, however, there is a balancing act between
  being sector-focused (built up around innovation
  process and network for one sector) and bringing
  together research and companies from different
  disciplines and industries.
• Space That Crosses Traditional Academic
  Boundaries so that innovation results from
  different disciplines working together. Shared
  research facilities push researchers,
  entrepreneurs and industries beyond their
  specializations and allow for discoveries at the
  boundaries of disciplines.

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Evolving from.
Source Regis Kelly, QB3
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To this..and
Source Regis Kelly, QB3
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.To this Institutes of Collaboration
Source Regis Kelly, QB3
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Institute of Collaboration
Source Regis Kelly, QB3
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Recent Initiatives

• Connecticut Innovation Ecosystem
• Funded with 4.8 million in its first year for
  four innovations hubs to help scalable young
  companies start and grow in Connecticut.
• Launched innovation vouchers program to help most
  promising early stage companies develop their
  ideas and get products to market faster.
• StartupNY
• Creates tax free zones near universities across
  the state in an effort to create, keep and
  attract high-tech and other startups and venture
  capital.
• Aligns with Regional Councils.

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Overarching Lessons Learned

• Companies within the state are most likely to
  create new jobs and entrepreneurs leading the
  fastest growing companies should be a focus of
  economic development efforts.
• States are emphasizing policies and programs that
  have strong industry buy-in and participation.
• States are applying lessons learned from cluster
  strategies to innovation hub strategies, which
  combines a cluster strategy with a place-based
  strategy for entrepreneurship and revitalization.
  Each strategy depends on getting public and
  private leaders to work together to develop an
  ecosystem of statewide proficiencies.