Innovation as a Regional Imperative

04/11/2023 Sheridan, Travis A.

COMMITMENT TO REGIONAL INNOVATION

Building the Ecosystem

04/11/2023 Sheridan, Travis A. 2

OverviewOver the past several years, St. Louis has made great strides in the development of the region. The following document outlines an aligned and concentrated focus on innovation and entrepreneurship across seven key sectors (referred to as the Seven Innovation Pillars). It should be noted that innovation does not simply imply entrepreneurship or information technology. Innovation is a mindset.

There are currently only a handful of municipalities in the United States making a focus on regional innovation a key component to their regional fabric. San Francisco, Philadelphia and the state of Maryland have established municipal offices of innovation. While traditional innovation efforts have been internally focused and fixated on improvements to core business functions, this document suggests that St. Louis can assume a national leadership role with an innovation commitment based on the identification of new business platforms which can be tested and proven within the region and then exported to solve similar problems around the country. Imagine positioning St Louis as the nation’s test market. There is national fight for regions to be considered entrepreneurial; however, there is a void in the area of being a community of early-adopters. This is evidenced by entrepreneurs building in one community and flocking to another community to follow capital or customers. “Innovation challenges existing processes and

systems, resulting in the injection, rapid execution and validation of new ideas into the ecosystem.”

Bryan Sivak, Chief Innovation Officer for the State of Maryland

The presentation includes:1) Overview of Innovation

Ecosystem2) Areas to Measure3) Alignment with current

Efforts4) Positioning/Campaigns 5) Seven Innovation Pillars


Why Now?

Innovation Focus

Econ Dev Partnership

Current Rebranding

Efforts

Industry Evolution

Political Alignment

Status Quo Less

Effective

Market Readiness


Innovation Ecosystem

Regional Innovation Czar

ValueRisk

Ideas and Research

Conceive It

Workforce

Scale It

Entrepreneurs

Build It

Customers

Prove It

Capital AccessThe current ecosystem falls short in connecting entrepreneurs and innovations to actual customers (there is no “prove it” function currently available). Subsequently, the capital resources available earlier in the process represent significantly greater risk and cost the founders a larger stake in the venture. In an effort to attract less expensive capital, the ecosystem needs to include customers who are early adopters and potential proof of concept partners.

Creating a culture of innovation requires a commitment to support the testing (prove it) phase of innovation. Capital secured following proof of concept or secured to fulfill a customer’s order represents lower risk and is less dilutive to the founders.


Key Components

• Innovative Platforms become Ventures• Real Companies | Real Jobs | Real Revenue• Become the Nation’s Test Market• Work with Clients to secure Customer #1• Create a Community of Early Adopters (#TryLocal)• Innovate in Seven Key Areas

– Municipal Services, Manufacturing & Logistics, Education, Healthcare, Renewable Energy, Agriculture, and Retail/Consumables

• Unlock Funding for Growth and Scale• Make Innovation part of the Regional Fabric


Measuring Innovation • New Ventures (created or attracted)– Can be segmented by Pillars

• Jobs Created/Retained• Capital Raised (sources & type)• Revenue (new contracts secured)• Patents Filed• Market Growth/Expansion• Early Adopters (#TryLocal)• Increase Revenue/Decreased Costs• Industry Engagement


Align & Maximize Current Physical Resources

• Incubators, Accelerators & Co-work spaces become the hubs for innovation

• Connect clients/members to Customer #1• Provide mentors & programming to build customer readiness

(customer readiness includes revenue readiness)• Maximize connections & relationships to go beyond Customer

#1• Manage Innovation Pipeline for targeted industries


St. Louis as the home for Fastest Growing Companies.

This is a byproduct of the shift in focus from St. Louis as a desirable market to St. Louis as a dynamic platform. Innovation fuels fast-growing companies to meet needs beyond demographic and geographic boundaries of the St. Louis region. The region serves as a testing ground; however, as innovation is exported, revenue is imported. As revenue is imported, jobs are created.

Imagine being known as the region with the most ventures on the annual Inc. list of Fastest Growing Companies.


Market vs. Platform

St. Louis as a Market

• Draws from internal economy• Subject to saturation • Requires repeatedly selling to

local market• Limits St. Louis as a source of

revenue• We buy products

St. Louis as a Platform

• Draws from external economy• Opportunity for expansion• Export solutions to similar

markets• Positions St. Louis as a source

of growth• We build ventures

The region’s aggressive commitment to shift from problems to a perspective of innovation platforms will attract higher-quality options and more community goodwill. As an economic driver, the solutions tested and successfully proven in the St. Louis region can be exported to communities facing similar situations.


Positioning – Gateway to the Best

• Use the Seven Pillars to launch successful innovations in specific industries that have appeal beyond the region

• Create a look-toward-St. Louis mindset as it relates to innovation in critical areas

• Export solutions while importing revenue and without exporting jobs

• Use innovation-based competitions to solve industry-identified problems connected to actual customers• The prize can be a contract to

fulfill instead of cash to spend


Positioning – The Nation’s Test Market

• Build off of the “Show Me” motto and foster a “Test it in St. Louis. If it works, we will buy it.” environment

• Create pilot opportunities for locally-developed or locally-based innovations

• Maximize the region’s diversity (in several areas) to attract innovators who wish to engage a cross-section of the US demographic

Ideas and Research

Conceive It

Workforce

Scale It

Entrepreneurs

Build It

Customers

Prove It

The Nation’s Test Market


Positioning – TryLocal

• Community members can opt in to become beta testers of new products, innovations, businesses

• Companies must be vetted and approved before seeking users – Must be actual businesses and not just technologists with a new

application– Must offer FREE trial or product for testing; the goal is generating

buzz, testing assumptions, securing first batch of users

While many communities promote Buy Local campaigns, a willingness to try something is a necessary psychological and behavioral precursor to purchase. St. Louis can take an innovative approach to remove barriers to trial and increase community engagement.

#TryLocal


Seven Pillars of InnovationM

unic

ipal

Ser

vice

s

Man

ufac

turin

g &

Log

istic

s

Educ

ation

Hea

lthca

re

Rene

wab

le E

nerg

y

Agric

ultu

re

Reta

il &

Con

sum

able

s


Seven Pillars of Innovation - Rationale

• Historically many of these areas lack innovation• The seven areas represent opportunities beyond the region• Future-proofing job creation in existing (known) fields• These seven areas will position St. Louis as a national leader

in innovation • Pillars are grounded in industries that impact the community

Leaders from each area would chair an Innovation Cluster from their particular arena. Furthermore, these leaders, along with representatives from the areas of technology and capital, will serve as an advisory committee for the overall effort.


Pillar-based Innovation Clusters

• Each Innovation Cluster is a microcosm of the Innovation and Entrepreneurship Ecosystem– Lead by Industry Leadership

• Identifies and sets Innovation Agenda

• Builds an Innovation Pipeline– Facilitates RFP-type Innovation Process

• Provides Pilot-Project Opportunities• Clarifies ongoing workforce needs

Innovation Cluster

ValueRisk

Ideas and Research

Conceive It

Workforce

Scale It

Entrepreneurs

Build It

Customers

Prove It This model works at the macro level as well as the micro level.


Municipal Services

There is an opportunity to lead by example. The City and County can identify opportunities for innovation that exist within each system. Furthermore, both the City and County will benefit from a shared focus on innovation. Government is often viewed as a late adopter and stagnated by bureaucratic red tape. A focus and commitment to innovation communicates to the region and nation that business-as-usual is not the regional mindset. This allows for the problems within the region to be viewed as potential platforms for innovation.

Objective: Infuse innovation into the municipal services arena. Identify areas where innovators can pilot various products/solutions. Promote innovation challenges within the pillar.


Manufacturing & Logistics

Given the region’s history and centralized location, this sector is positioned perfectly for innovation. Manufacturing and logistics also represent opportunities for significant job creation. Identifying innovative solutions that increases revenue and/or decreases operating costs in this sector can result in more sustainable ventures.

Objective: Increase the level of advanced manufacturing solutions being employed by the industry. Build solutions that decrease costs and improve margins for the sector. Redefine manufacturing and logistics to meet 21st century reality.


Education

If any sector was in need of innovation, it’s education. Education is a volatile sector and provides a significant opportunity for the adoption of innovative solutions. The nature of education in the St. Louis region, while imperfect, is a microcosm of the challenges facing education on a national level. St. Louis can pioneer new innovative solutions that can have a national impact.

Objective: Employ innovations that directly impact student outcomes and performance. Position regional education as a place that is welcoming for innovative educators and administrators.


Healthcare

St. Louis is a leader in the healthcare arena and there is already a lot of innovation occurring in this sector. This sector should continue to be an area of focus. The innovation from this sector can be exported on a broader scale while being tested and proven locally.

Objective: Build off of the current healthcare and life-science focus. Identify targeted solutions that can be exported to medical center beyond the region. Develop innovations that improve community health.


Renewable Energy

The St. Louis region, like many others around the nation, has an interest in clean/renewable energy innovation. Given the urban, suburban and rural landscape within the region, there are opportunities to launch innovative energy solutions that meet a variety of needs.

Objective: Maximize the region’s diverse energy needs in a way that exports solutions to other markets. Develop innovations that reduce overall energy consumptions and costs.


Agriculture

Much like the healthcare sector, agriculture represents significant opportunities for platform-based innovation. Solutions in this sector have international opportunities and the region provides significant testing and chances for early adoption.

Objective: Create ventures that directly increase revenue and/or decrease costs associated with agriculture. Develop innovations that can be adopted by current and future agriculture leader.


Retail & Consumables

In a region with significant economic disparity, the opportunity exists to innovate in the retail sector. Solutions that reduce the costs of goods sold or increase the buying power within the region can serve as models on a national level.

Objective: Identify innovation that will help local retailers reach new customers and reduce the cost of good sold.


Innovation Inputs

Talent | Technology | Capital

Mun

icip

al

Serv

ices

Man

ufac

turin

g &

Lo

gisti

cs

Educ

ation

Hea

lthca

re

Rene

wab

le

Ener

gy

Agric

ultu

re

Reta

il &

Co

nsum

able

s

All to often, innovation is seen as synonymous with technology. In reality, St. Louis can foster and embrace technology and talent development with a focus on targeted application. The Seven Pillars represent areas in which talent, technology and capital can be leveraged for the strongest result.

04/11/2023 Sheridan, Travis A.

@[email protected]

Connected & Engage