As state budgets reel from the fallout of the financial crisis, the authors warn: "If states are going to meet the economic challenges of the future, they will need to make the promotion of innovation a larger part of their economic development policy framework."
Based on the report, state legislators would seem well advised to avoid deep budgets cuts affecting those areas required to support and encourage innovation - the fundamental elements of tech-based economic development.
The Index does not mean, however, that the status quo should be maintained for most state economic development strategies - particularly given the current fiscal malaise. That applies as well to current TBED approaches before we get too smug. Innovation within state economic development portfolios - in many cases seismic shifts and unconventional thinking - are also necessary, the authors point out.
"All states and most regions no longer can rely solely on old economic strategies of relentlessly driving down costs and providing large incentives to attract locationally mobile plants or branch offices...Rather regions must look for competitive advantage in earlier-stage product and service cycle activities."
"In short, regions need to be places where existing firms can become more productive and innovative, where new firms can emerge and thrive, and where locationally mobile establishments want to locate because of the innovation environment."
To accomplish this, the final chapter of the Index is dedicated to explaining briefly the four current paradigms for approaching state and regional economic development before outlining more than a dozen specific strategies for states to adopt:
Invest in Innovation
- Use targeted investments in knowledge infrastructure as an incentive
- Support statewide broadband promotion organizations
- Help Companies to Be More Innovative
Create a statewide commercialization and entrepreneurship organization
- Catalyze and empower industry clusters
- Use Web 2.0 tools to support open innovation
- Use tax policy to spur innovation
Extend sales tax parity for manufacturing purchases of computers and IT equipment
- Align state R&D tax credits with the new federal R&D tax credit
- Facilitate entrepreneurship
Provide digital tools that make it easy to start a new business
- Benchmark state procedures for starting a business
- Support angel capital networks
- Link together the array of information resources for entrepreneurs
- Expand entrepreneurship training
- Cultivate Institutional Innovation
Create different and better K-12 schools
Shift the focus of post-secondary education more toward acquiring skills
Take industry-university partnerships to new levels
"Success in the New Economy requires that a whole array of institutions--universities, school boards, firms, local governments, economic development agencies--work in new and often-uncomfortable ways. At the end of the day, this is a challenge of leadership," the Index concludes.
When I look at what our area spends in traffic abatement, I wonder how it compares to Stupidity Abatement. Florida for years has had a reputation for a poor education system. In fact, private schools down here have as competitive an admissions process as Ivy League colleges and a price tag to match. Parents are spending $10,000 per student per year starting in Kindergarten to ive their children a better education.
We are in a Knowledge Worker World. We still have an education system based around the Industrial World. Florida lacks a Fortune 1000 presence (except for call centers). This means that there is a dearth of executives to help smaller business grow. It also means that smaller businesses need to take an active part in the Education system. Public-Private Partnership is needed to produce quality employees that stay here. If you need qualified candidates to grow your business, shouldn't you be involved in helping to create them?
We don't teach selling, entrepreneurship, telecommunications, management or coaching in schools. Perhaps our Industry could get together and help change that. (We all know that once telecom is in your blood, there's no leaving :)