Government leaders in Europe and North America are seeking to formulate enlightened, effective policies to create the necessary ecosystems and help their corporations respond to threats of loss of markets at home and abroad. The need to better commercialize public and private investments in R & D is well understood, but does not always happen as hoped for and mandated in well-intentioned protocols.

Hope is not a strategy.

At the inaugural meeting of the National Advisory Council on Innovation and Entrepreneurship yesterday, U.S. Commerce Secretary Gary Locke said the U.S. Innovation Engine is not working as well as it should, and that is not acceptable…particularly since governments around the world are putting more of their muscle behind their drive for innovation.

Innovation = Invention + Commercialization

One reason that hopeful protocols fail to deliver the needed results is that Innovation is difficult, and requires teamwork. The inventors of breakthrough ideas are rarely well equipped to lead their inventions from the cool comfort of the laboratory to the cruel crucible of the marketplace. Inventors need to team up with gritty, market savvy, workaholic entrepreneurs to reduce their ideas to practice, quantify the value proposition, earn beachhead customers, become an accepted standard, and finally, to achieve total global domination of their chosen market niche.

The Lisbon Strategy in its various forms envisions top-notch inventors achieving innovation by commercializing their ideas. How will they be more easily connected to passionate entrepreneurs, and where will the entrepreneurs come from?

The challenge is palpable for both global and local corporations, as well as government-funded laboratories. The pace of change and the need for rapid innovation has never been greater. Today the CEOs of the top companies in the so-called mature Western economies have few tools (and little time) to help them re-engineer their organizations to be more innovative. They lie awake at night worrying that faster, more innovative, lower-cost competitors are springing up every day, eager to take big bites from their cash cows and star performers.

Indeed, according to an annual study by the Boston Consulting Group, the top 100 companies outside Europe and North America are truly globally ambitious. They have many advantages:

—flexible, talented, hard working, non-union work forces

—flexible labor policies

—modern industrial plants and equipment

—equally modern and flexible supply chains

—access to global capital

—access to international markets, while their home markets may be hard for competitors to enter

In the face of increasing global competition, more and more major companies are coming to understand the value of corporate venturing, which generally aims to give large mature organizations some of the agility of their smaller competitors. Such venturing works both to improve a corporation’s standing in its existing markets and to break into new markets.

Today’s major corporations pursue different organizational strategies to achieve incremental and radical innovation. Incremental innovation is usually managed inside the Business Units, using their knowledge of evolving customer needs, manufacturing flexibility, and short-term budgets. Radical innovation is best done by a team of trusted corporate veterans, protected from “NIH” and reporting directly to the CEO. Buying products from startups is one way to achieve innovation and shorten time to market.

Large Western corporations have many advantages when competing, IF they have the will and clockspeed to use them.

Charles Darwin’s conclusions about evolution also hold for business: “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” Innovation programs such as corporate venturing can help companies evolve in the face of a rapidly changing world, and not just survive, but thrive. The role of governments is to provide a level playing field with policies that support, rather than penalize, success in the highly competitive global markets.

Special thanks to my colleagues, and friends, Dave Weber and Carter Williams, for their help and advice on this article.

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While traveling the world over the past dozen years on behalf of the MIT Entrepreneurship Center, I have spoken with hundreds of entrepreneurs in virtually all major business centers of the world, both developed and developing. I would like to see more of our regional entrepreneurs take a big leap by establishing early international relationships and recruiting operations with foreign companies.

While the lack of VC funding and investment capital in general is on every entrepreneur’s mind, being globally competitive with effective sales and sales management is “mission critical.” The importance of sales — one of the most important life lessons — usually comes late in the career of most entrepreneurs.

I’ve seen the benefits of going global. I was a founding member of 3Com Corporation, actually employee No. 8. As the first head of sales, marketing, and planning, I helped 3Com raise its initial venture funding and bring its first three products to market. After a successful launch, I returned to the Boston area where I co-founded several MIT-related startups. These opportunities came after my five years in Beijing under the aegis of Chase Manhattan Bank. I formed a trading advisory company there to assist IBM, General Motors, Gillette, Hughes Aircraft and other pioneering companies enter the China market.

While these large companies knew they needed to grow globally, they also realized they needed outside assistance to build new markets in foreign countries. Many start-up companies may see international markets in their future, but they don’t always hire their initial management team with international sales in mind. Instead, they hire at levels below their growth objectives and then get frustrated when they cannot succeed. Start-ups that aren’t thinking internationally need to think again.

San Diego startups may be at a disadvantage when it comes to having the necessary passion and tenacity for executing a successful global sales strategy. That’s because today’s bright young entrepreneurs may not have been raised to think about the importance of global sales. Have they ever been forced to compete for funding? Where did their sales mentors come from? Most importantly, how does entrepreneurial training in San Diego differ from that offered by our most successful global competitors?

In a startup’s strategic planning phase, it is critical to think globally about the “go to market” strategy, and to identify exactly which markets to enter. If there is an international market for a startup’s product or service, it makes sense to plan an early entry—not only to differentiate their revenue streams, but also to capture market share before their competitors do.

Improving the effectiveness of the sales force in globally ambitious companies, large and small, is consistently cited by business experts as one of the highest priorities. In the current economic climate, every purchase by any prospective customer must be triple-justified at all levels of management. Thus, having the best ROI-based sales approach is essential to shortening the sales cycle across borders and, therefore, to the survival of San Diego’s young companies.

So what are global tech entrepreneurs saying?

—In today’s tough environment, high tech companies must be excellent at sales and customer acquisition or else they will not survive.

—Sincere commitment to solving customer problems is key. If the CEO is not passionately committed to delivering significant value to customers, then either he/she should leave the company, or the employees should find another place to work, because the company will not succeed.

—Loyal long-term customer relationships can provide a key, dependable source of sustainable competitive advantage for growing companies.

Good selling is not an art; it is a science. Effective sales and customer relationship management can be both learned and promulgated throughout the organization. San Diego’s successful regional companies can realize the benefits of global funding, sales, and economic significance by going global. The best way to learn how to do it is from the teachers who have been entrepreneurs themselves. Programs such as the MIT Entrepreneurship Center and Connect’s Springboard program are international and regional assets that excel at teaching sales skills and how to turn concepts related to innovation into profitable business realities.

Editors Note: Ken Morse is scheduled to speak today at the San Diego MIT Enterprise Forum. Details are here.

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…is coming soon.

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