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Tracking Innovation in NC

Patterns and Implications for NC's Eastern Region

John Hardin, Executive Director NC Board of Science & Technology

www.nccommerce.com/scitechMay 21, 2014

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Importance of Innovation• Innovation is the creation & adoption of new products, services,

and business models to yield value

• Between one third to one-half of ‐ economic growth in U.S. can be attributed to innovation (Source: U.S. Department of Commerce 2012)

• A large source of innovation comes from science (systematic knowledge) & technology (practical application of knowledge)

• STEM (science, technology, engineering and math) drives technological innovation

3Source: Moretti 2013

Innovation is Economic Engine

• US labor force = 66% local services, 10% innovation, 24% other

• But jobs in local services are more the effect, than the cause, of growth in other sectors

• Innovation has big (5x) multiplier effect (across sectors & skill levels) • e.g., If RTI adds a biologic mfg. job in Greenville → more jobs for waiters,

landscapers, store clerks, painters, etc., but not vice-versa

• Most important impact of RTI on local labor market is outside high-tech

• Best way to create jobs for all is to grow & attract high-tech companies that hire highly educated workers, particularly STEM

4Source: Georgetown Center on Education and the Workforce

STEM Jobs Pay More (on average)

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STEM Jobs are Increasing

Source: Georgetown Center on Education and the Workforce

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Economic & Innovation

Patterns in NC

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Summarized Today:

A small sample (1/4)

of key indicators. . .

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• Funding• Policies• Facilities & Equipment• Industry-University Nexus• Culture & Goals of

Commercialization Organizations

Commercialization

• Funding• Policies• K-16 Education System • Industry Training • Culture & Goals of

Education/Training Organizations

Education & Workforce

• Funding• Policies• Facilities & Equipment• Researchers• Culture & Goals of

Research & Development Organizations

Research & Development

* *Economic

Well-Being & Quality of Life

Innovative Organizations (New & Enhanced)

*Innovative

Ideas/Discoveries

Innovative Products & Practices

Ultimate Goal

Innovation Ecosystem

Gap Gap Gap

Environment & Infrastructure

Broadband Access

Support for Education

Industry Mix

Cost of Living

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Innovation Index• Comprehensive measurement of ecosystem’s health

• Several purposes:

• Identify strengths & weaknesses

• Inform decisions & policy making

• Establish benchmarks & measure effectiveness

• A comprehensive & effective index should:

• Focus on multiple components of innovation ecosystem

• Include multiple indicators for each component

• Compare on multiple dimensions – spatially & temporally

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Index Dashboard Overview

Red is bad

Green is good

Gray is neutral

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Summary Observations• NC’s innovation ecosystem is moderately healthy (ranks 24th

overall) & not improving much

• On 27 of 38 measures, NC’s “Percent of U.S. Average Value” is below average, meaning NC underperforms nation overall

• Performance across indicators varies widely

• Innovation assets & activities are concentrated geographically (place matters)

• Need to understand state as a whole and differences across state

• Strong potential for increased innovation & commercialization

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23Source: Dow Jones Venture Source

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Implications

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Recommended Actions1. Education

a. Provide public information/exhortation/consultationb. Raise core educational attainment of all citizens at all levelsc. Emphasize STEM skills in education

2. Commercea. Strategically recruit high-tech/STEM companiesb. Strategically start and grow new high-tech/STEM companiesc. Strategically assist existing high-tech/STEM companies

3. Infrastructurea. Expand broadband deployment and adoptionb. Enhance cultural amenitiesc. Link rural regions to close and/or affinity urban regions