Four Things I Learned From Studying Innovation in 3 U.S. Cities
I’ve spent most of my career studying how key regions around the world have harnessed their indigenous research capabilities, entrepreneurial spirit, and industrial prowess to realize the economic and employment returns many innovative technologies promise.
I’m particularly intrigued by the differences that make some places engines for innovation.
If we are to be successful in assuring that all Americans share in this success, we need to understand how more locales can leverage their academic centers of basic research and other R&D enterprises to enhance regional economic growth and competitiveness. One way to accomplish this is to understand what factors can help accelerate effective approaches to knowledge transfer, technology development and commercialization, as well as new science and technology-based business startups.
I was fortunate to receive a grant from the National Science Foundation in 2008, which allowed me to do research on three interesting American cities – Philadelphia, St. Louis, and San Diego. Each of these cities has committed to building new clusters of global technology companies through a variety of innovation initiatives. Each has high levels of research activity of potential value to growing science and technology based companies. Nonetheless, each of these cities has a very different history in terms of spurring technology cluster growth.
With my research collaborators, Joshua Shapiro and Nathan Owens, we set out to explore what might lie at the base of these differences. We suspected that it had a lot to do with social and cultural dynamics that enable communication, build trust, and agility in the face of new opportunities or crises—as well as how comfortable a community is with risk taking. We gathered significant data on regional characteristics during three separate visits to each city. We surveyed 215 technology companies and 89 innovation intermediary organizations and conducted 126 in-person interviews. Our full report can be found here.
Our findings suggest that communities need to engage in a process of self-examination that allows them to
better understand the assets and gaps they have in their social dynamics and cultural values. Hard assets, such as R&D and venture capital, clearly matter. We also discovered that every community may need to address on an ongoing basis what some of the “softer” attributes of their local economy are, and what about those attributes is enabling or inhibiting change and forward movement.
To this end, we identified four critical questions that should probably be examined by every community serious about innovation and entrepreneurship. They are:
—What are our industrial legacies and how are they enabling or inhibiting us on our journey towards new, more innovative outcomes? For example, are we applying old industrial corporate models to finance and manage our innovation strategies, or are we utilizing entrepreneurial models?
—What is the culture and the priorities of our research universities and institutes, and what impact do they have on how capable we are of achieving innovation outcomes? For example, are local research institutions engaged in specific programs that support technology commercialization and regional economic growth? Or are they primarily focused on technology transfer and licensing activities to companies around the world?
—What is the character of our business culture, our management capabilities, our legal and financial institutions, our real-estate development communities? Are they poised to be enablers of high-risk new companies, will they co-invest, provide pro bono services, or do they engage in more traditional business practices that could slow down the innovation dynamic required for nimble, globally competitive companies?
—How inclusive is our community? In particular, how easy is it for newcomers, immigrants, and young people to participate in, and even provide leadership for, organizations focused on innovation and entrepreneurship? Is ours a civic culture that can rapidly integrate newcomers into our core institutions, or are we more inclined to rely on established practices and leadership? Is this helping or hindering us?
An innovation environment is one in which things are always changing, always uncertain, and typically rich in targets of opportunity. Many of the social dynamics and business practices that were suited to a traditional industrial economy may no longer be appropriate to growing innovation clusters that are globally competitive.
Nimbleness is important, adaptability is important, attracting and retaining new kinds of talent with new kinds of credentials is important. What we learned is that the significant industrial and cultural legacies that differentiate cities like Philadelphia and St. Louis from a city like San Diego may be in part responsible for their slower growth toward an innovation economy.