Tuesday, September 27, 2005

Very Interesting Report - The Innovation-Entrepreneurship NEXUS

OK. I know. Not everyone is a junkie like I am for a research report from the SBA Office of Advocacy entitled, "The Innovation-Entrepreneurship NEXUS: A National Assessment of Entrepreneurship and Regional Economic Growth and Development."

But every now and then you come across something like this that resonates because it precisely matches up with your experience. Here's the Cliff Notes version:

1) "When compared to local-serving industries, traded industries are generally larger, grow faster, and pay higher wages... In regions with higher levels of entrepreneurship activity the percent of all industries that are traded is significantly higher than in those regions with lower levels of entrepreneurship."

Note: SC is #1 in the continental US in foreign direct investment.

2) "The most entrepreneurial regions in the United States also possess the greatest innovation capacity." The author's Regional Innovation Capacity Index is made up of total R&D expenditures, the number of patents issued, and regional technology orientation.

Note: We can leverage our historical successes in industrial recruitment, the deep base of international companies with a presence here, to increase our innovation capacity. We don't have to convince BMW and other global companies to do research. We only have to convince them to do research here.

3) "The Regional Entrepreneurship Index was computed as the average of the relative rankings (equally weighted) of three core metrics: 1) the number of new firm births per 1,000 labor force, 2) growth in the number of new firm births and 3) the proportion of young firms that are growing." The author's Regional Entrepreneurship Index is a measure the capability of converting innovation capacity into entrepreneurial activity.

Note: We need a lot of work in this area. FastTrac in the Lowcountry, in the Midlands, Upstate, is a start.

4) "Innovation and entrepreneurship are both positive and statistically significant factors in regional employment change... entrepreneurship appears to mediate between innovation and regional employment."

Note: Thus the reason InnoVenture has major companies, universities, and emerging companies in the same room. Major companies and universities drive innovation, and the emerging, high-impact companies will spin out. That is the Austin model George Kozmetsky gave me in 2001.

This should be the foundation of the economic development strategy in our region.

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