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Notes from Innovation Policyworks
I have had the great privilege of working with an entrepreneur since February as a mentor in Maine Center for Entrepreneurship's Top Gun accelerator program. We were part of the first ever aquaculture cohort, in cooperation with Focus Maine, the Gulf of Maine Research Institute, Maine Aquaculture Association, Maine Aquaculture Innovation Center and CEI. 
The entrepreneur and I worked on customer discovery during the 16-week period, and by the end, we thought we had come up with a great idea that really addressed an important problem in aquaculture. Imagine our surprise when he pitched the whole idea at one of the sessions and the feedback was, "We don't get it. What problem?"
Our first reaction was annoyance, and denial, but then we thought, "We're not telling the story well enough." We went back to the source (customers!) and redefined our problem statement. In fact, we uncovered a much bigger and more important problem, one that meshed even better with our idea. 
When the entrepreneur pitched at the regional pitch-off, the final version with this bigger and "badder" problem statement was well received, and he is continuing to have productive and impactful conversations with potential backers using the pitch deck we worked on.
Lesson learned: Keep digging. Keep asking questions, especially of potential customers. Don't fall in love with your first idea, a better one may be just around the corner.


Asking Forgiveness
Katie Fehrenbacher writes about two new scooter companies, one asking permission of the cities in which they operate, the other asking forgiveness as they forge ahead.

I can remember the first time someone told me that it was better to ask forgiveness than to ask for permission (back in the early 1990s). I was so shocked, having operated for years in the opposite mode. But I have come to embrace the spirit of this admonition, because it does encourage you to be braver and more creative. This week, however, I saw this adage framed as a Silicon Valley mantra, characterized as the "cowboy-style, grow-at-all costs mentality" and assigned to companies like Facebook and Uber. And, notes Katie Fehrenbacher in her blog, this style works for these companies, whether or not it creates huge issues. Katie was talking about new scooter companies like Scoot Networks and Bird who, like Uber before them, are shattering the norms in the cities where they operate. The question is, will Scoot, who is collaborating with (asking permission of) host cities, win over Bird who is just planning to ask forgiveness? Katie's blog is HERE.

Where are College Grads Moving?
New data show that while college grads are still moving to the "big city," millennials are now following the footsteps of previous generations to suburbs and exurbs when they marry and have kids.
There's been a surge of interest in geography and demographics as so many places are facing worker shortages due to mismatches between worker skills and employer wants, as well as the well-documented aging of the population. A Wall Street Journal article recently delved into data showing where college grads move after graduation. They found that grads, especially from the stronger schools, were "flocking" to large metro areas. A quarter of recent Ivy League grads, for instance, live in NY, DC or SFO. But, the data also show that college grads from inside a state are likely to stay there, but be drawn to the biggest metro. So, Ohio grads move to Columbus, Indiana grads to Indianapolis and Tennessee grads to Nashville, three towns that are hot right now. Enjoy checking out the DATA yourself.
Note that the most recent US Census estimates now are showing that millennials, 10-15 years older than recent college grads, are migrating away from big metro areas to small, more affordable and livable cities. The percent of the millennial age cohort living in urban cores dropper to only 19.1% from 2012-16, with 85 percent heading to the suburbs or exurbs. It turns out that millennials are following the patterns of previous generations in their housing choices, but are making the move out of the urban areas at older ages than Generation X or Boomers, as they delay marriage and parenthood. Data HERE.

When Did Supporting Higher Ed Become a Political Issue?
Should higher ed produce workers or citizens?

Wisconsin is at the forefront of a nationwide effort to reshape higher education. Policymakers there are trying to force higher ed to be more focused on job skills, and less on the traditional "liberal arts" such as humanities and social science majors such as English, history, political science and foreign languages. Everyone wants students to be well prepared for jobs that actually exist, but many differ on how to achieve this goal. Faculty members often bristle at the notion that their job is to train workers, rather than educate citizens who can think for themselves. But universities are facing the most negative public perception in decades, and some politicians are turning higher ed into a partisan issue. Read more HERE.

What Business Schools Teach Has Little to do with Entrepreneurial Success
According to Carl Schramm, business school entrepreneurship curricula miss the mark.

This is the title of a provocative article by Carl Schramm, former head of the Kauffman Foundation, writing in the current issue of the Harvard Business Review. The article is a shortened version of Schramm's new book, Burn the Business Plan. Schramm argues that a deeply flawed assumption underlies the curriculum at most business school entrepreneurship programs: that there's a logic to what makes a new venture successful and that it can be taught and followed. And, therefore, the best thing to do is write a business plan and go from there. 

Schramm points out that this is completely counter to the experiences of entrepreneurs who follow Eric Ries' Lean Startupmodel, or Steve Blank's Startup Owner's Manual, both of which insist that co-designing products with customer input is better than writing a business plan. One successful entrepreneur says, "Making a successful company requires an intimate tango with customers, not a tight grip on a business plan." Read a review of the book HERE. (You can also read the HBR article online, but it costs $18!

Seattle's New Head Tax
Taxing large businesses to pay for homeless services?

Like many other cities, Seattle has a problem with homelessness. The solution favored by the Seattle City Council? A $275 head tax will be levied on Seattle businesses with more than $20 million in revenue in order to bring in around $47 million to fund measures to get Seattle's homeless off the streets. Seattle's tech leaders are fighting back, threatening to leave for nearby locations such as Bellevue or Tacoma. Tacoma, in turn, is offering to give companies a $275 tax credit for each employee paid more than $65,000 per year.  Learn more HERE.

Is Lack of Competition Strangling the US Economy?
Large companies, even tech ones, can be bad for competition.

Over the past five years, I have studied quite a few economies and have noticed something rather weird. Places, especially rural places, that are dominated by one or two large companies, often have great statistics with regard to innovation, like patents and educational attainment, but almost no tech entrepreneurship. It's like the large companies have moats around them, and innovation moves in, but never comes out or spills over into the broader region. 
A new article by David Wessel sheds some light on this phenomenon by placing in it a larger context: most industries in the US are getting more concentrated and big firms account for higher shares of industry revenue and profit. And, research shows that many incumbent firms are using their market power to prevent new firms from starting. Waning competitive pressure makes these big companies stagnant with regard to innovation, productivity, wages paid, etc. Some innovation giants, like Google, dominate by exploiting their huge network, while others appear predatory, acquiring smaller rivals and shutting them down. Wessel argues for greater antitrust regulation, a tough way forward. Read the article HERE.

In This Issue - May 2018

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Quote of the Month 
"In all affairs, it's a healthy thing now and then to hang a question mark on the things you have long taken for granted." 
Bertrand Russell

Innovation Spark of the Month
Spyce is a newly-opened Boston-based restaurant founded by MIT graduates. The restaurant uses robots to produce healthy food at affordable prices. 

Trend-Watching asks: 

How good are you at passing on tech-driven savings to the customer? 

My brother turned me onto this book and series of essays about little known but important scientific concepts. The essay he recommended is about coalitions, "sets of individuals interpreted by their members and/or others as sharing a common abstract identity." In other words, we are descended from those who did a better job throughout the
generations of banding together for survival. We are "identity-crazed," seeing everything through the lens of Us or Them. And, author John Tooby argues, this "makes us far stupider in our groups than as individuals." When you think ab
out it, this explains a lot of what's going on these days....just saying.

Metrics for Entrepreneurship Programs
Have you been wondering how to convince your stakeholders that your program is performing well? My book on evaluating entrepreneurial programs, written for the International Business Innovation Association (iNBIA), is available on its website. The basics apply to any economic development program. Check it out HERE.

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Innovation Policyworks enables economic development officials at state, regional and local levels make better, data-driven decisions by providing expert research, analysis and recommendations. Our clients see innovation and entrepreneurship as critical elements of their economic development strategy, and are developing new programs or policies, and/or evaluating existing ones. 

Dr. Catherine S. Renault has been delivering innovation-based economic development results in rural states for more than 25 years, most recently as science advisor and Director of the Office of Innovation for the State of Maine. Cathy is currently finishing a cluster project for clean technology and starting on a strategy for Maine's Forest Products industry and an entrepreneurial assessment for Indiana's agbioscience cluster.
   For a list of selected projects, see www.innovationpolicyworks.com/projects.