Spreading the gospel about innovation
A couple of weeks ago I had the opportunity to attend a discussion before the final lecture in the Rochester Institute of Technology's innovation series.
We had Finger Lakes business leaders, guest lecturer Richard Lester of MIT, and Democratic assemblyman Joe Morelle around the table. After an hour of talking the conclusion was pretty stark: New York is not good at helping small business thrive.
It's the same thing we learned from the Empire Center for New York State Policy’s report yesterday.
But what surprised me about the conversation was how quickly it turned to jobs, specifically, how can business provide more of them, for poorer people.
They weren't talking exclusively about high level research jobs at universities or in corporate labs, but rather entry-level and middle-management jobs in manufacturing. They were talking jobs for the people who’ve suffered the most during the economic downturn, and it was encouraging to see the issue come up organically (not just as lip service) as a quality of life issue.
If there was a consensus about how to create those jobs, it was that regions will be better off if they pursue “clusters.” The Innovation Trail’s Daniel Robison wrote about this last week, and the discussion bore it out. Where there’s research and development, there needs to be manufacturing capacity, in order to recruit more firms, and to bring new innovations to market, from idea to store shelves.
Boston's success as a biomedical hub - in both R&D and manufacturing - is an example of this sort of clustering. University research yields what are called "downstream" jobs.
Here are some more insights from the conversation. These notes are the few moments of consensus that surfaced out of the panel, so they’re not necessarily the opinions of everyone who attended, of the Innovation Trail, or our collaborating stations:
- New York nets less than 10 percent of the nation’s venture capital. This could be in part because there’s not enough investment in proof-of-concept research. Universities are great at basic research and development, but the grants they receive often don’t provide researchers with the cash to figure out how to commercialize a breakthrough. That sort of activity doesn’t cost very much, but it’s important for demonstrating value to investors.
- There isn’t a next big thing that’s going to bail out the region economically. In order to grow, you have to leverage your existing strengths. It’s about building on core competencies and existing assets, rather than creating new industries out of whole cloth. To that end, it’s incredibly valuable for relocating businesses to have a Sherpa – a one-stop shop that can help them navigate incorporating, tax incentives and finding pools of skilled workers.
- Newish, small businesses are the most effective drivers of growth - not Fortune 500 firms. Partnerships with universities increase success rates for businesses. Partnerships in general help bring innovations to life. Companies with deep technical resources (like patents or researchers) sometimes forget to look around and see what’s being developed outside their walls, or what sort of collaborative solutions might be available.
- New York struggles with how to interact with post-early stage firms - the firms that are only a few years old and growing quickly. The state is built for the IBMs of the world, not for small firms that might create four jobs, or 4,000 (but which can't promise either).
- Manufacturing continues to drive growth, as demonstrated by the U.S., Japan, Taiwan and now China. But that’s not a consensus opinion in Washington. Government also needs to realize that we have to make bets, and commit resources in one direction or another. Many politicians still think ribbon cuttings are the key. To spread the gospel about investing innovation, small firms, and tech transfer, boosters need to organize and bring their message to Albany in a coordinated way.
What do you think? Are we diverting our resources to the wrong places? What’s missing from this conversation? Let us know on our Facebook page.