Policy and Practice Header
Notes from Innovation Policyworks
It's probably human nature to want the big hit, the single solution, the silver bullet to solve economic problems. Wishing for these types of answers is so much easier than doing the hard work of building a sustainable economy one job at a time. I suspect that this is the motivation of a new economic development initiative in a state I won't embarrass by naming, where speakers at the kickoff conference repeatedly talked only about attracting big businesses, and developing their own programs, without taking the time to look at the data, learn from the experiences of other, similar states, or thinking about the reality of their assets and opportunities. This is a state of small business that is ignoring the opportunity to grow by growing their existing and emerging businesses.
Every state, region, or municipality that I've ever worked with has stated, "We are unique." To some extent, that is true. Each has its own demographics, geography, history, and aspirations. But many are similar, and there is a wealth of information about approaches that have worked, experiments that highlighted potential challenges and programs that failed to achieve their stated objective. To ignore the lessons acquired by others is a luxury that most places cannot afford. We implore public officials and private participants in economic development planning to take the time to learn more about what's going on outside your jurisdiction before committing to a path forward.


Boosting MTI's Role 
At this writing, a bill is sitting on Governor Paul LePage's desk, awaiting his signature, which would explicitly expand the Maine Technology Institute's (MTI) role in growing the state's innovation economy. The bill, sponsored by Representative Marty Grohman, himself a successful entrepreneur, and developed with Innovation Policyworks' principal, Cathy Renault, passed through committee unanimously, and under the gavel in both houses of the Maine legislature earlier this week.
In Cathy's testimony, she said, "There are strategic investments needed in our state to full funding holes in our R&D Strategy, namely entrepreneurship support, internships and technology transfer. MTI is the logical organization to undertake these tasks, but their current statute is too vague to include these activities, with some of their funding remains on the sidelines, uninvested."
The current President of MTI, Brian Whitney, supported the bill, although he believes that the existing statute is sufficient and notes that MTI's new strategic plan will encompass the activities envisioned in the legislation. One result of the bill will be to transfer responsibility for the program that supports Maine's technology incubators over to MTI; the Office of Innovation, which is no longer staffed, previously managed the program. The Governor's original budget for the biennium had eliminated funding for the incubators; MTI has promised to fund them going forward. 

It's a Class War, Stupid!
Here's the Trump phenomenon explained in one sentence. "The white working class resents professionals but admires the rich." This is the premise of a wildly popular Harvard Business Review article that has just been released as a book, both written by Joan C. Williams. The why of this statement is simple, according to Williams. Most working class people have very little experience with rich people, but they have professionals order them around every day. Williams suggests that Hillary Clinton was the epitome of the dorky arrogance and smugness of the professional elite. Worse yet, "her mere presence rubs it in that even women from her class can treat working-class men with disrespect." Williams goes on to say that blunt talk such as emanates from the President taps into another blue-collar value : straight talk.
Another important point that Williams makes is to differentiate between working class and poor. The Democratic Party as a rule focuses on the poor. And, the working class resents the assistance for the poor. Check out JD Vance's excellent book Hillbilly Elegy for more evidence. William's message: both parties need an economic program that can deliver middle-class jobs. Read the whole article HERE.

Drones Are Not the Future; They Are Here Now
Drone technology is being commercialized at a startling rate. What was in the lab ten years ago, and an expensive toy five years ago, is now a rapidly expanding data capture technology. From capturing images for movies, measurements on construction sites, inspection of utility wires and cell towers, search and rescue, and wildlife monitoring, drones are increasingly taking over tasks that were previously expensive to perform or dangerous or both. Think of them as "smartphones with propellers" rather than "airplanes without pilots" and you will understand the potential, according to Chris Anderson, a journalist, scientists and now CEO of a drone company. Learn more HERE.
How Automation Impacts Jobs
There is currently an incredible amount of hysteria about the future of technology like robots and drones, with some observers worrying that so many jobs will be eliminated that we need to enact a baseline income for everyone. (Click HERE for an example of the doom and gloom school.) Rob Atkinson, founder of the Information Technology and Innovation Foundation (ITIF), says, not so fast. Rob's analysis of the US labor market back to 1850 yields some facts that counter the current thinking and undermines the dire predictions. First, he finds that the rate of occupational churn in recent decades is at the lowest level in US history. Second, growth in already existing occupations has historically made up for any innovation-led job losses. Rob explains, "Productivity gains allow workers and firms to produce more, yielding higher wages and lower prices which increases spending, which in turn creates more jobs in new occupations."  Third, the analysis shows that technology today is creating the lowest level of job loss of any period going back to the 1950s. Bottom line: "the pace of technical change has not accelerated over the last 200 years, and little evidence exists that this will change going forward." His advice. "Take a deep breath and calm down." Read MORE.

How P3s Can Bridge the Digital Divide
Earlier this month, a bill introduced in the Maine Legislature to ban municipalities from forming partnerships to attack the lack of broadband in their jurisdictions met a quick end. The bill was modeled on a statute promoted by the American Legislative Exchange Council (ALEC), a shadowy group that supports limited government.

The bill was in direct opposition to a big trend in telecommunications policy. Municipalities are increasingly concerned about their competitiveness when faced with low broadband speeds and service levels offered by traditional providers. Rural areas and small towns are being left behind in the rollout of fiber-based gigabit Internet services. In response, municipalities are establishing public-private partnerships (P3s) to offer ultra-high speed Internet service to their citizens. "This is the bare-bones, basic infrastructure of the 21st-century economy," says one councilman of a small Maryland town that now has gigabit fiber for its citizens. More HERE.

Inclusive Economic Growth
Inclusive growth occurs when all segments of society share in the benefits of economic growth. The rising interest in this subject no doubt springs from the increasing political and social divisions evident in the US and Europe. 

In a study of the 100 largest US metro areas, Brookings finds that all added jobs from 2010-2015; 63 added jobs at young firms and 30 were more prosperous. However, only 11 achieved inclusive growth. Only 8 achieved inclusive growth for both whites and people of color and only 4 achieved growth, prosperity, and inclusion that benefited a major of workers of all races and ethnicities: Albany, Austin, Charleston, and Denver.

The 4 cities tended to add jobs in high-skilled traded sectors like business and professional services, information and manufacturing, and lower paid jobs in those same sectors, and relied on local-serving sectors like hospitality, retail, construction and health care for less-skilled workers. 

Learn MORE

In This Issue - May 2017

Join Our Mailing List

Quote of the Month 
" You have to be willing to be misunderstood if you're going to innovate. "  

The Growth of Corporate Green Energy
Sixty-five companies representing 48 million megawatt-hours of demand for renewable energy have signed on to a buyer's pact, signaling to utilities that they want and need to purchase green energy from the grid, in addition to generating it themselves through onsite solar and energy efficiency projects. As a result, utilities are beginning to respond. There are now 13 green tariff options in ten states, a trend that has emerged in just the last few years. Utilities are stepping up because their customers are demanding it, but also because wind and solar power are now cost-competitive, and pricing is predictable. Learn more HERE.

US Supreme Court Limits Patent Infringement Lawsuits
Last week, the US Supreme Court ruled that patent lawsuits can only be filed in jurisdictions where the targeted company is incorporated. This is good news, because of the so-called "patent trolls" that sue hundreds of companies at a time, often in friendly jurisdictions. As a result of this ruling, the likelihood of being sued by ones of these predator companies has gone down substantially. MORE

Innovation Spaces: The New Design of Work
Just as Brookings redefined the Innovation District five years ago, their new report on Innovation Spaces may also redefine how we think about our office space. Brookings suggests that these innovation spaces - research institutes, incubators, accelerators, co-working spaces, etc. - "are physical manifestations of broader economic, cultural and demographic forces, elevating what matters in today's economy (their emphasis). " 

They are open, flexible places where diverse people can congregate and collaborate. It's also significant that face-to-face interactions are emphasized, given that so many people are tied up in electronic communications; these places manage to incorporate and embrace technology while increasing interpersonal interactions. Read the report HERE.

What Entrepreneurs Can Do About Where They Are
Sometimes entrepreneurs get frustrated about the ecosystem in their city or town, feeling that it's difficult to navigate or not supportive enough. This Inc. article suggests that entrepreneurs can take ownership of the problem and make a difference themselves. The first three steps: (1) Be (or find) the champion; (2) Work with what you have and (3) Fill in the blanks. These steps can create momentum. More details HERE

View our profile on LinkedIn

135 Maine Street, Suite A-183 · Brunswick, ME 04011 · 207.522.9028

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 working with 
the University of Southern Maine, and Loudoun County, VA, with more Virginia projects on the horizon.   For a list of selected projects, see www.innovationpolicyworks.com/projects.