PCRD

Innovation Vouchers

Here's a really interesting idea. Ireland is issuing "Innovation Vouchers" to small businesses to help them better connect to the "public knowledge system (i.e., colleges and universities). Each voucher is worth €5,000 and can be redeemed for things like:

• new product / process development;
• new business model development;
• new service delivery and customer interface;
• new service development;
• tailored training in innovation management;
• innovation / technology audit

The program came out of a recommendation from a 2006 report called Small Business is Big Business. More information about the voucher program can be found here.

Ireland is not the only place to try this strategy. It has also been implemented elsewhere in the UK and in the Netherlands. Here is a study that evaluated the impact of the Dutch program. It found that the system does indeed stimulate innovation - eight out of ten vouchers issued resulted in an innovation that otherwise would not have come to fruition.

EDA Reauthorization and Regional Innovation

Recent Congressional testimony by Jonathan Sallet argues for a new focus for the Economic Development Administration. He believes the new mantra should be around regional innovation clusters and the agency should be renamed to the Economic Renewal Administration. More information here.

Senate Committee Approves 14 Year Extension for SBIR/STTR Program

Posted by Don Koverman

A U.S. Senate committee unanimously passed a bill that would extend by 14 years two federal programs that provide research funding for small businesses. The bill SBIR/STTR Reauthorization Act of 2008 (S. 3362) will now move to the full Senate after the Senate Committee on Small Business and Entrepreneurship passed it earlier yesterday.

The Small Business Innovation Research (SBIR) and the Small Business Technology Transfer Research (STTR) programs, which were created in 1982, were scheduled to “sunset” in September. Under this bill, two federal programs would be extended through 2022 and 2023 respectively.

The Senate bill would raise SBIR and STTR award sizes from their current level of $100,000 for Phase I grants and $750,000 for Phase II grants to $150,000 and $1 million, respectively. This is also a departure from the House bill (H.R. 5819) which called for $300,000 for Phase I grants and $2.5 million for Phase II awards.

In making an announcement about their decision, the U.S. Senate Committee said that approximately one out of four projects that are funded by the SBIR program result in new commercial products or processes. Senator Olympia Snowe (R - Me.), a ranking member on the committee and co-sponsor of the
bill, indicated that “by increasing the percentage of federal research and development dollars these crucial programs receive, we will pump another $1 billion into our small business economy”

The bill will now wait for review by the full Senate, and if it passes there it would be returned to the House where the changes would be considered.

INNOVATION - New Solutions for an Old Problem

It's said that it is the ability to innovate that gives regions and communities an edge in the global economy.  One way of innovating is to improve on or replace old ways of doing things.  In South Bend, IN, the city is test-driving new technologies for dealing with the old problem of combined sewer overflows (CSOs) that can contaminate groundwater, rivers, streams and lakes when storm water overflows into the regular wastewater system.  It appears that EmNet, LLC has developed "a number of tools, equipment, and infrastructure to address all the aspects of real time monitoring and real time control of CSOs. From radio enabled manhole covers with embedded sensors to advanced hydraulic and hydrologic models to test its patented distributed control system in any scenario."  South Bend is testing this system, which could be used in many different countries.  To learn more click here.

UK's Innovation Nation white paper

Every once in a while it makes sense to pick up our heads and look at what other countries are doing. We are not the only ones on the planet trying to figure out how to accelerate innovation, align our resources, and strengthen the connections among business, education, economic development and workforce development.

The UK recently released a white paper suggesting policy changes needed to accelerate innovation in that country.

The Innovation Nation white paper focuses on the linkages that are needed to accelerate innovation. You can read more about the white paper here and you can download a copy of the white paper here.

Innovation: Not Always High Tech

What is an "innovation economy." People in my business talk a lot about it but do we really know what it is? One definition of innovation has to do with the frequency with which a business introduces a new product, service, or process. According to a report (available here) from the Appalachian Center for Economic Networks only about 5-15% of all businesses in most economic regions are innovators.

That same report states that an "innovation economy" emerges when 50% or more of the businesses in a region become innovators and that to do that a region must create networks that strategically link less innovative firms to innovation leaders (innovative firms, innovation-focused universities, etc.) This is how an economy becomes increasingly prosperous and resilient with more and more businesses moving into the traded or export economy.

The report also points out that not all innovation comes only from the high tech sectors but that a true innovation economy emerges when there are breakthrough businesses in many sectors. Here are some examples:

• A BBQ restaurant moves into the traded economy by manufacturing and selling their BBQ sauce
• A dry cleaning business develops a new "green process" for cleaning and then liscenses that technology to dry clearners around the country
• A beauty parlor develops a new way to train stylists and spins of that training program to train employees at other shops.

This kind of innovation can occur anywhere - rural communities, urban neighborhoods, even those regions with few biotech or information ‎technology firms. When a couple of University of Seattle professors started a shop that sold Italian cappuccino machines, nobody would have thought of that as "high tech." Howard Shultz came along as a partner and told them they should actually start making coffee to sell in the shop - again not real high tech. Of course we now know that company as Starbucks. They had $7.8 billion in sales in 2006 and they've created over 145,000 jobs. If that can happen in Seattle it can happen anywhere.

Innovation Measurement

The U. S. Department of Commerce just issued an important report on how to improve the measurement of innovation in the economy. The committee that put the report together defines innovation as, "The design, invention, development and/or implementation of new or altered products, services, processes, systems, organizational structures, or business models for the purpose of creating new value for customers and financial returns for the firm." For more information about this report go here.

New PCRD Project

PCRD will soon launch a new project, funded by the U.S. Department of Commerce Economic Development Administration. This project will develop data and analytic tools to help economic development practitioners explore the role of rural communities in America’s knowledge-based innovation economy. The study will include:

• the development of a framework to measure and assess innovation capacity in rural regions,
• the creation of a framework to identify and map occupational and industry clusters, and
• a model for prioritizing public investments based on regional competitive advantages.

U.S. Department of Labor's View of the University

Last week (April 10, 2007) Assistant Secretary for Employment and Training of the U.S. Department of Labor Emily DeRocco was on campus to speak to students and faculty of the Purdue University College of Technology. She had some insightful things to say about the economy, the role of the university in workforce and economic development, and the importance of regional strategies. For example - "Universities are unique in that they are not only educators and purveyors of ‎knowledge, they are actually knowledge creators. This was a field traditionally ‎dominated by big business, think AT&T’s Bell Labs or Lockheed’s Skunk Works, ‎but is now shared with higher education. The research and development ‎facilities located at nearly every major university, particularly those focused on ‎engineering, provide a tremendous asset to the regions in which they are located, ‎provided that that knowledge can be turned into intelligence and application."

Her remarks are available here.

Commercializing Unused Patents

As part of our WIRED grant, we are working with the Council on Competitiveness to explore ways to commercialize unused patents.

The Situation: The North Central Indiana region has a relatively high concentration of patent production per employee. Many of these patents are unused. Industrial companies hold many of these patents. Do these patents provide an economic development opportunity for the region? If so, what new type of intermediary should we put in place to exploit these assets? The Center for Advanced Technology and Innovation (CATI) in Wisconsin provides a model for exploiting unused patents. See this article.

Issues to Be Explored: Here are the questions we are currently exploring.

1. Is CATI the only model we should be investigating or are there others?
2. How does the CATI model work to evaluate the commercial value of patents, prioritize the best patents, and then market them? Are they operating, at this stage, similar to a university licensing office?
3. Delaware recently adopted a similar model to CATI. What are the major differences between the Delaware and CATI approach? What did Delaware receive for its $212,000 fee to CATI?
4. What does an effective regional policy for exploiting unused patents look like? How can we build the base of Inventrek with this strategy?