How Massachusetts Should Boost Innovation—A Compendium of Reader Ideas (And A Call for More)

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a result of the Yankee brain.” He added, “Start-up funding is just too important to be left to the venture capitalist who talks the seed stage talk, but really will never settle for less than B round risk at seed stage valuation.”

Polazzo suggested that “Entrepreneurs need a financial and regulatory (blue sky) bailout. Take a page out of the MA independent film industry revolution and apply it to entrepreneurs before they leave or give up. Grant every willing entrepreneur reasonable funds graduated by milestones…Only wholehearted state support will reinforce a start-up brand identity, and drive intellectual capital back to the northeast. MA odds with these many small bets will be much better that its residents’ odds in a new casino.”

Easier said than done? Weinreb challenged Polazzo: “Enrico, Gee, that would be great. Where does the money come from?” To which Polazzo responded, “Daniel – Simple. The same way that millions are spent on asphalt paving a small stretch of roadway: bonds. Where’s the justification? How much tax revenue would have been raised, how many jobs and feeder companies created, if eBay stayed around the Tufts campus in Medford where it was founded? How many VC’s here passed on eBay? There are lots of examples that MA is under-utilizing its potential by relying on private seed funding networks. You can’t expect disruptive innovation rewards without seed stage risk. Who else will fill the capital gap?”

  • Better tap experienced, successful leaders in the innovation community—Xconomist Nijhawan, a serial entrepreneur and former venture capitalist, cited his own experience teaching an MBA course on entrepreneurship at Boston University as an example of one way to help foster innovation. “Let’s get other accomplished entrepreneurs to join local colleges,” he said.

Wrote Weinreb: “Massachusetts has another great resource: experienced professionals and former entrepreneurs, who can help out the next generation of innovators. For example, many people who created and built the successful minicomputer industry are surely still around. Can we create more opportunities for them to become mentors? At the MassTLC Innovation2008 unConference, entrepreneurs were matched up with experts, who could give them advice. I found this to be successful, and I am continuing to provide tips and ideas now and then to the entrepreneurs to whom I was assigned.”

Several other promising ideas were put forth. Xconomist Michael Greeley of Flybridge Capital Partners has long worked to foster innovation in Massachusetts, not just in his day job but as chair of the New England Venture Capital Association and as a member of the state’s Information Technology Collaborative. Greeley wrote that he has recommended two immediate actions to Gov. Deval Patrick: appoint an “Entrepreneur Czar” of national stature (he dropped Jack Welch’s name), and work with the Obama Administration “to get as much of the non-dilutive funding offered up in the federal stimulus package to address the staggering ‘capital gap’ so many of our early-stage companies are struggling with.”

Since Wade’s article appear almost a month ago, I have not heard or read one word from the Patrick administration about the concrete steps it plans for strengthening the innovation ecosystem. Maybe there have been some. If so, they haven’t been communicated well—as Xconomy is one of the leading forums on innovation based in New England with over 130,000 unique visitors a month, and we haven’t heard about it. Perhaps the committees have been meeting. But with the economy in recession, and innovation a key to getting out of the economic mess we’re in, every day without action can be important.

As Alexa Scordato noted in her comment, “For all the talk that’s out there, I see very little in terms of practical tactics being executed.” Or as Genotrope founder and chief product officer Tom Summit volunteered about a study commissioned by the Information Technology Collaborative to demonstrate how the infotech sector contributes to the Massachusetts economy: “Seems like a waste of good money and a concrete example of why we have lost the edge in the first place. Things need to be done not studied.”

If you have additional encouraging words for government officials and others, or just more good ideas to put forth, we welcome your comments.

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  • Eric Dahler

    I am in agreement on the issue of seed funding. Obviously the economy makes this piece even more critical as many bright young engineers and entrepreneurs are less likely to be going into jobs out of school which would keep them here and help fund their innovations.

    I believe a public-private partnership in conjunction with more incubator facilities is possible. I have started and run a technology incubator. I know first hand that bringing people together is critical to building momentum. Now is an ideal time to put together incubator space, along with seasoned technology executives, mentors, technologists and investors to provide the infrastructure – including seed funding, required to bring these ideas and innovations to fruition.

    There is ample space available for incubator facilities in the current market. I believe a public-private alliance could be formed that would make a very significant impact on retaining top young talent and innovators by provide seed resources (space, a place to interact with advisors and other entrepreneurs, seed money, communications infrastructure, etc.).

    Many of the public incubator programs are full or overbooked currently. There is growing demand, but public programs don’t necessarily provide the exposure and intellectual capital, seasoned executives and investors to generate fast growth successful emerging growth companies. This has to be driven by the private-sector to generate significant long-term success and attract the best and brightest young entrepreneurs coming out of the top schools.

    Eric Dahler

  • Tim Rowe

    Bob–Thank you for pulling these suggestions together in one place. I look forward to hearing more productive and concrete suggestions from the community.

    One thing I would add to the dialogue here is that we need to be careful about looking primarily to government for the actions needed to bring about change.

    If we want big, lasting changes that foster a more vibrant startup community, it needs to mostly come from us. This is simply because the part of state government that interfaces with the innovation community is a hand full of people, and tax dollars are scarce.

    If the emergence of “user generated content” as a driving force on the web can offer us a lesson, it is that when we create frameworks for many individuals to directly contribute to a project, even in a small way, the impact can be surprisingly big.

    Please indulge an analogy to drive this point home: if we asked the government to create an encyclopedia, and they did an exceptional job, they might come up with something that looks like the Encyclopedia Britannica. And this would come at a significant cost to the taxpayer. But if the community instead took this project on, we would get something that looks like wikipedia. A better solution that costs the tax-payer nothing.

    A real-life example of how government’s reach is inherently limited is Pell grants. The idea is to impact the high cost of higher ed. The government spends billions on it (get the figure). But it only reduces the average recipient’s college bill by $500 (confirm). A relative drop in the bucket.

    So what can we do?

    Well, once again, Flybridge’s stay-in-ma program is a model. They didn’t wait for somebody to tell them it was OK to do it, or for the state to fund it, they just launched their program. What if every venture fund in the state came up with their best idea and went ahead and implemented it? What if every innovative company with means did this too?

  • Create the GlobalCommonwealth…

    We have examined hundreds of examples worldwide – initiatives to position companies, regions and countries in the Knowledge Economy []. Further, we have analyzed new performance measures and comparative ranking systems from around the globe.

    ‘Knowledge Innovation’ is the new concept – not technological; and Knowledge Innovation Zones (KIZ) is the concept-in-practice…Dubai Knowledge Village, Desert Knowledge Australia, Manchester Knowledge Capital, Øresund Region (connecting two cities across a sea), Medicon Valley, to mention a few. Beijing is celebrating 10 years of their Knowledge Innovation Program; and India seeks to become “the crucible of global innovations”. Hardly a company or country is not innovating itself into the future.

    Massachusetts continues to rank in the lead within the United States; but other countries have adopted progressive ways to measure and manage – what has become known as Intellectual Capital (IC) or intangible wealth. One might even suggest that amidst this global economic meltdown, we are ready for the Bretton Woods of the Knowledge Economy. More important, what is the innovation strategy for our State and under whose (collective) aegis is it cultivated?

    1st: Connect the dots within the Commonwealth: Massachusetts was one of the first to produce the Innovation Index and define the Innovation Economy. Associations, research institutes, degree programs and company positioning has capitalized upon this branding. Reality, though, is that we are not known as being very collaborative. In difficult times, there is more imperative to carefully leverage resources, the most important of which is human. The Massachusetts Miracle – however successful others may consider – was an umbrella strategy which coalesced – at least for a period of time – the leadership. We now need a shared vision, common language and innovation strategy to position us globally.

    2nd: Maintain US innovation prominence: Although Massachusetts enjoys premier ranking on numerous counts, other States are not standing still. The stimulus program in Pennsylvania is called Keystone Innovation Zones. Newark has a Chief Innovation Zone Officer. Rhode Island has their Business Innovation Factory. Maine has an Executive Office of Innovation. Research Triangle Park in NC is hosting the International Assembly of Science & Technology Parks. The National Governor’s Association has an Innovation Task Force. Last fall, an Advisory Group delivered a report to the US Department of Commerce on Innovation Measures. [Note: It is being used by the government-funded Intellectual Assets Centre in Glasgow.] The Chief Economist of BusinessWeek calls it Innovation Economics. Other articles call for a cabinet position of Secretary of Innovation – complete with an action plan. Why not ensure that Massachusetts remains the hub of US innovation by hosting the meeting to bring together leaders from these various state-wide and national ‘zone’ initiatives?

    3rd: Become the window for global innovation: Start planning now for the worldwide congress on Knowledge Innovation. Invite 40 heads-of-State to Boston to provide the State-of-Innovation in their respective countries. As someone who has now traveled to 35 of these nations, I know that innovation is high on the priority list for industrialized, developing and transition al economies. Abu Dhabi has its Festival of Thinkers. Davos has the World Economic Forum. South Africa hosted the IASP last year. The 2nd Knowledge Cities Summit is scheduled for Shenzhen, China, in November. The European IC Conference is slated for The Netherlands next month. We know that the old financial rules of a global economy are not working. The answers lie in new performance measures. But innovation is how knowledge is created, exchanged and applied to generate wealth. Why not host the international trade mission of the decade?

    There are ways to catalyze the dialogue across sector, industry and geographic boundaries locally, nationally and abroad. This is not rocket science; but it does take a new mindset for what we might do to innovate our future…together. Your blog is a GREAT beginning.

  • Entrepreneur

    There is a TechCrunch home page article right now on this subject comparing Silicon Valley (once again) to Route 128. I get the sense that in the Valley there is an “we’re all in this together”atmosphere, whereas in Boston we have a “every man (or woman) for himself” mentality. While this is not Davos, getting practical about improving start-up funding processes in 2010 may benefit from government leaders reaching outside the US for capital (Dubai?) to fill the seed capital gap that local firms do not. Out of box ideas in the community are great for discussion, but discussion gets you only so far. There has to be a locus for action. When key enabling processes are counterproductive in any business, management seeks to re-invent them. Aren’t the parties ultimately responsible for ensuring the best eco-system exists in MA to create next generation ICE jobs on Beacon Hill? They’ve helped quite a bit in film and bio-tech already, they may just need a little “prodding” to take on this cluster, filter good ideas, and make a public commitment to a sector known for its explosive scalability. Thanks Robert.

  • Enrico Polazzo

    From, March 22, 2011 :

    “US Geithner: Small Businesses Need Greater Access To Capital

    …”we can’t promote innovation and investment in the United States unless we help innovative companies get the funding they need to succeed…
    Geithner said solutions could range from tax incentives and direct lending to “the innovative and alternative, such as creating a way to efficiently pool investments in small companies.”