Much of the media commentary, political platforms,\u00a0academic\u00a0articles and “policy stuff” concerning innovation is pervasive and reads like church-speak; like the stuff you hear in most sermons.<\/p>\n
Do good and go to heaven; innovate. grow\u00a0and prosper; we all can be smart, and learn the vital skills\/knowledge\u00a0to be a knowledge-based elite; and “an\u00a0innovative entrepreneur\u00a0through education”\u00a0is\u00a0the secular Spock-like\u00a0path to economic heaven.\u00a0\u00a0In my opinion, this path to heaven\u00a0relies upon\u00a0a faith-like acceptance that each of these propositions is correct and that one proposition leads benevolently to another. To connect these propositions, assertions\u00a0(usually in the form of tables and statistics)\u00a0are made which act like glue to connect\u00a0these fragile elements–allowing us to believe in the goodness and inevitability of this path to economic heaven.<\/p>\n
The support for these assertions rely on what we think ar weak \u00a0indicators (patents, educational level), but even more damaging is the assertion-belief that education, like salvation, is available to all in relatively short order.\u00a0The proof of these concepts through imperfect statistical indications and a faith-like belief that education is our ultimate salvation\u00a0\u00a0are accepted\u00a0largely\u00a0because they have become part of the belief-system of the innovation’s herd-like true believers.\u00a0In this sense has innovation \u00a0become a secular economic development religion?<\/p>\n
Like any good religion, innovation\u00a0advocates assert a heaven-like future, that is, of course, inevitable–at least so long as one conforms to the tenets of the innovation religion. Layered on top of church-speak is jargon;\u00a0it seems to the Curmudgeon that almost\u00a0every other word is twelve to fifteen letters long and\u00a0holds a specialized meaning known only to the high priests of innovation. Reading the innovation\/knowledge-based\u00a0economic development literature is\u00a0like\u00a0reading Latin at the old-style Catholic church missal for mass. The abstractness\/futurism of innovation’s core premises, the connecting glue-like assertions, and the jargon inhibit both understanding and questioning.<\/p>\n
The astute reader should perceive that my initial take on innovation\u00a0\u00a0is that it has assumed the form of a secular, rational-based religion–a religion without a god; a bible of correlations drawn from indicators\u00a0applied to\u00a0a dubious set of\u00a0\u00a0databases. Cynically, on a bad day,\u00a0the Curmudgeon\u00a0wonders if, alongside the secular religious intelligentsia,\u00a0there also exists\u00a0a cottage media-academic-consultant-Think Tank innovation industry, sort of like the military-industrial complex, that\u00a0lives off\u00a0this “innovation” blitz? In the spirit of Easter,\u00a0around which we write this article, it is time for someone to chase the money-changers\u00a0out of the Temple?<\/p>\n Anyway,\u00a0the problem for me is that I am a true believer in innovation as a growth machine.\u00a0Despite its present day religion-like form,\u00a0innovation itself is real\u00a0and a\u00a0very powerful economic driver. Innovation is a legitimate economic development strategy–but our position\u00a0is that it is not\u00a0deserving of the\u00a0religion-like status it has evolved into. We need to be able to question \u00a0innovation\u00a0more than we do–and to challenge even its core assumptions without being dismissed as an intellectual or policy\u00a0Luddite. In this way we can understand better what innovation can do and better appreciate that innovation is a two-edged driver of economic growth and individual decline.\u00a0In the short and medium term, innovation can be quite disruptive and hurt some segments of society very, very much.<\/p>\n Grabbing ahold of this “innovation” thing is like grasping\u00a0a handful of gravity.\u00a0 \u00a0The word “innovation”\u00a0means so many different things and includes so many\u00a0potential elements\/aspects that, like a greased pig, the concept goes in and out of your hands. Our first task in talking about innovation and economic development is to isolate for discussion just a few of the many concepts and themes that can be found within its confines. Accordingly, our first interest is trying to assess how innovation has been treated as an economic development public policy over the last few decades and then capture a sense of\u00a0how it has evolved\u00a0since that time.<\/p>\n In our judgment a fine starting point for innovation and economic development is found in the early 1980’s in the form of a report by\u00a0the well-respected (sincerely)\u00a0Joint Economic Committee of the United States Congress. That report is helpful because it\u00a0combines both the academic and political world’s best thought on the issue at a time when innovation as an economic development public policy was just leaving its “starting blocks”.<\/p>\n “U.S. Climate for Entrepreneurship and Innovation”, 1984<\/strong><\/em><\/p>\n Joint Economic Committee Congress of the United States<\/strong><\/p>\n One of the earliest efforts of our national government to understand and set the federal government’s policy in regards to innovation occurred in 1984 \u00a0by the Joint Economic Committee of Congress (1984: ironic because Republicans controlled the\u00a0Senate and Democrats the House of Representatives). This bi-partisan decision-making committee, reaching its conclusion at a time when compromise was still allowed and at least less polarization was evident, offers hope for a more consensual image of innovation and its utility as an economic development public policy. The study, makes an excellent starting point to outline how innovation was conceptualized in these early years and some principles that, at the time, were felt to be key to structuring an economic development strategy. Further, this early policy assessment\u00a0is helpful to us because it captures the essence of innovation–without most of the moving parts\/bells and whistles that have been added by the many brilliant minds\u00a0 since 1984. It even\u00a0offers a greater blessing of being straight-forward with minimal jargon and blather.<\/p>\n We do not present the findings and recommendations of this bi-partisan report as truth from which we have subsequently departed,\u00a0or even suggest that this early federal\u00a0approach to innovation\u00a0is the way things should be today. Rather we use it\u00a0\u00a0as a benchmark to demonstrate to the reader how far federal (and state\/local) government policy has traveled or wandered, depending on one’s perspective, in the\u00a0thirty years\u00a0since it was written.<\/p>\n Key Members of the Joint Committee<\/p><\/div>\n Disarmingly,\u00a0the Report’s\u00a0initial caveat about innovation, which it associated with Route 128 and the Silicon Valley,\u00a0asserted that the “geographical location of these two centers was attributable to historical accidents” (p. VI)–that is where the maverick innovators wound up due to their own personal reasons. They argue that these innovative centers\u00a0grew out of\u00a0private sector, \u00a0industry-specific factors and were launched by entrepreneurs from these industries (who earlier worked for or developed associations with university research labs).\u00a0Because of\u00a0this geographical-entrepreneurial serendipity, the report asserts “that as a policy premise government should NOT target specific industries or areas” (p. VII). Quite importantly the report asserts that \u00a0innovation is essentially a private sector phenomenon.<\/p>\n Innovation is a process that occurs in old and new industries …. it results from the application of new ideas to organizing economic relationships and solving economic problems…. Indeed, an innovation policy is one that should emphasize a “level playing field” upon which entrepreneurs compete to achieve desirable outcome. (p. X-XI)<\/em><\/p><\/blockquote>\n The Curmudgeon notes that contemporary\u00a0innovation strategy\u00a0departs dramatically\u00a0from this position\u00a0in that it\u00a0selects for special emphasis\u00a0“growth and socially desirable” industries and sectors, and consciously targets “gazelles”,\u00a0high job-creating firms in these\u00a0growth industries for aggressive governmental and non-profit assistance and incentives.<\/p>\n Rather, the 1984 report argues that government can foster innovation best “by removing barriers” as well as providing incentives. In the Joint Committee’s\u00a0view, government’s innovation as an economic development strategy is more attune to a business climate strategy.\u00a0 In such a view the most promising economic development innovation initiative would be to lower capital gains tax rates, which\u00a0were believed to be\u00a0a critical variable in the location of the vitally important venture capital sector. The key issue at that time was securing early stage financing for\u00a0innovation entrepreneurs.\u00a0High capital gains tax rates were felt to be the worst barrier and best incentive for innovation. We might also mention that the link of innovation to job creation, indeed high rates of job creation was weak to non-existent in the Joint Committee report. The focus was on encouraging greater entrepreneurial risk-taking.<\/p>\n Thus, while not directly targeting individual firms, or selecting certain industries, government policy, by fostering a favorable environment can either serve as a barrier or incentive to economic and innovation growth”…. By contrast, it seems all but certain the Government would have failed if it had tried to plan a Silicon Valley or Route 128…. policy should instead focus on establishing favorable climate for innovation and entrepreneurship…. without the environment for innovation and entrepreneurship, the risk, even for the risk-takers, becomes almost prohibitive. \u00a0(p. VII-VIII)<\/em><\/p><\/blockquote>\n The Committee cited other critical barriers\u00a0imposed by\u00a0government which stymie innovation and entrepreneurship: high federal deficit, an under-utilization of universities and government labs as agents of technology development and transfer, excessive use of direct loans and tax incentives to attract industry by State and local governments, tax code in need of reform, antiquated antitrust law, tariffs and protective quotas, and inadequate patent and copyright protection. The reliance on these policies reflects the\u00a0report’s sense that innovation is chiefly a private sector dynamic. Route 128 and the Silicon Valley were the 1984 models of innovation policy. Government’s, especially the federal government’s role was secondary.<\/p>\n The second recommendation-observation of the Joint Committee’s report is that “the secret to success” in the process of innovation and entrepreneurship is people”. (p. VIII). “To this end, the report advocates an incentive-based approach … which permit many employees–including those at the lower and middle levels–to share in the benefits of firm success”.\u00a0 A final recommendation was that “government should not insulate companies from their own failures”. Noting that “fewer than 5% of the entrepreneurial companies founded in the Silicon Valley succeed…. it would be a terrible mistake for our government to attempt to save the 95% that fail.”<\/p>\n If so, arguably\u00a0the most observable difference between the 1984 federal perspective on innovation and today’s perspective is the centrality of government to innovation. Innovation now\u00a0is no longer the province of the private sector. Now public policy through the involvement of an activist government can nurture innovation and entrepreneurship by permitting growth and access to venture capital, deregulation, improvement in patents, technology transfer from federal government laboratories. The role of universities and innovation-sensitive non profits in identifying, fostering, guiding, if not directing the path of an innovating entrepreneur has become a cornerstone of innovative economic development.<\/p>\n Most economic developers wish they were here<\/p><\/div>\n Just imagine how Edison (Oppenheimer, or Jobs, or Gates, or Salk) would have achieved so much more in today’s environment. He (they) could have found a mentor, been\u00a0instructed in the best techniques, shared innovation with others in a non-competitive open source environment,\u00a0received input from successful entrepreneurs in putting together a business plan, and would never have lacked for funding. Instead of working in his own isolated lab-research park, he could have found free space in an university accelerator. A life and enormous potential for innovation\u00a0wasted in an unnecessarily previous harsh world–what could he have done in our present day innovation centers! (some readers might think this last sentence was sarcastic?<\/strong>)<\/p>\n It is interesting to note that at this early stage in innovation policy, the linkage of innovation to entrepreneurship is intense–the two almost seem to be flip sides of the same coin. “Risk bearing, organizational skills and foresight are the key attributes of entrepreneurs. [Accordingly] Entrepreneurship cannot be taught, but it can be nurtured …. the main focus of this study is on the process of innovation in which the entrepreneur is seen as the primary catalyst for long-term economic growth”. Innovation arises from the dynamics of change within capitalism, by capitalists who take risk, and who when they succeed disrupt established processes and business models, and create new ones as they grow. This is pure Schumpeter–although he is never cited in the report. That observation suggests that our next step will be to take a gander at what Schumpeter had to say about innovation.<\/p>\n The Schumpeterian Approach to Innovation<\/strong><\/p>\n Schumpeter saw the corporation as the source of growth–a growth characterized by disruptive but transformative change.\u00a0Schumpeter’s model of growth prepared the ground for such concepts as “innovation”, “entrepreneurship”, “strategy” (upon which Michael Porter launched his very distinguished career), as well as creative destruction. His signature concept was understanding the nature and the importance of innovation, and the subsequent \u00a0destruction of obsolete firms and jobs. that\u00a0innovation fostered, Economic growth that resulted as new firms and jobs in greater numbers and more highly paid replaced those \u00a0firms and jobs which were destroyed.\u00a0Innovation created increased wealth, prosperity and through new disruptive technology and creative destruction improved the quality of life and furthered what economists describe as “progress”.<\/p>\n Schumpeter held a bottom-up, micro-economic, individual firm based innovation. Firms in their aggregate drove the economy; individual firms are the basic unit of innovation for an industry sector. Thus the source of job growth in this perspective came from the individual-risk-taking\u00a0entrepreneurs, the firm’s business model and corporate strategy, and the innovative, market-creating,\u00a0 profit-enhancing production\u00a0processes and technologies employed by the firm.\u00a0A subset\u00a0of these firms, led by such an entrepreneur\u00a0willing to take risk,\u00a0will “innovate” and in so doing will disrupt in some way\u00a0the sector paradigm. This innovation by risk-taking firms and entrepreneurs, if successful, will yield increased profits, new markets, increased\u00a0market share\u00a0and eventually job growth as well as brand new industries and sectors.<\/p>\n These new firms will, in so many words, crush or disrupt\u00a0older, traditional-conventional firms.\u00a0Non-innovative firms will\u00a0garner\u00a0fewer\u00a0revenues and incur higher costs which\u00a0will eventually result in loss of market share and profitability which if\u00a0 unremedied will\u00a0result in job loss, and eventual bankruptcy. And so, creativity and innovation by risk-taking firms and entrepreneurs raises profitability and market share of the disruptors and destroys those firms and jobs which are disrupted. This is the now famous\u00a0“creative destruction”. Over time, more jobs often in entirely new industries will, Schumpeter asserts,\u00a0create\u00a0more jobs than\u00a0those lost, and will yield\u00a0increased economic and personal prosperity.\u00a0Creative destruction\u00a0is the engine which drives the capitalist system and\u00a0makes\u00a0capitalism\u00a0the best\u00a0economic system over all alternatives\u00a0in terms of generate growth and prosperity.\u00a0Because of creative destruction, capitalism,\u00a0however, is a very fragile system; innovation, being disruptive, hurts firms and people. In the short term the disadvantaged seek relief and political\u00a0and economic system change is a constant threat.<\/p>\n Schumpeter<\/p><\/div>\n The Schumpeterian framework served as the launching pad for the sub-discipline of \u00a0innovation economics. Between 1950-1990 scholars such as Solow, Lucas, Romer, and Krugman contributed thought and research from which innovation and knowledge-based economic development strategies followed. More or less, the 1984 Senate report not only\u00a0mirrored the Schumpeterian conception of innovation, but introduced these strategies into real life economic development. Subsequent Twenty-first century innovation economic development strategies, while citing Schumpeter and celebrating creative destruction, have seemingly evolved on their own dynamic leaving Schumpeter’s\u00a0model of capitalist growth on the margins.<\/p>\n Today’s Versions of Innovation<\/strong><\/p>\n Today, most current innovation economic development strategies\u00a0 downplay risk-taking firms as less critical to innovation by materially mitigating risks usually through various non-profit\/governmental programs. With risk reduced, the number of\u00a0potential “innovative” entrepreneurs can be significantly augmented, taught a body of knowledge, specialized techniques, and better networked so that\u00a0their creative idea and entrepreneurial business plan can succeed and therefore result in increased job creation, greater prosperity, as well as individual success.\u00a0 Accordingly, entrepreneurialism itself has become a job creation strategy.<\/p>\n In this approach to innovation\u00a0 government and non profits (universities and economic development agencies, for example) reduce risk to the entrepreneur\u00a0through facilitation services, inexpensive real estate,\u00a0provision or access to key\u00a0expertise and direct financial support. Also, since innovation can\u00a0be a strategy for individual empowerment through innovative entrepreneurship,\u00a0failure, a commonplace feature of Schumpeterian innovation,\u00a0is\u00a0not a satisfactory option in conventional economic development–especially if failure negatively\u00a0affects a socially-targeted segment of society.<\/p>\n Is this the innovation ecosystem?<\/p><\/div>\n Accordingly, if we are more or less correct, the last three decades have witnessed a radical departure from Schumpeterian notions\u00a0of risk-taking, the primacy of the private sector and the individual disruptive firm\u00a0in innovation , and the weak, almost dependent position of politics and government in the acceleration of capitalist prosperity, progress and employment.\u00a0 Present day innovation policies instead do not merely encourage and facilitate innovation, but insert government and non-profit institutions into an active innovation creation process. Government becomes a (the) major player in driving the capitalist engine of transformative change. It is government’s ability, if not responsibility to create an “innovation ecosystem” within which entrepreneurs flourish, jobs flow, and prosperity ensues. Firms and entrepreneurs reverse positions and emerge as the dependent variable in driving innovation through government’s ability to enhance the knowledge of its everyday citizens and residents.<\/p>\n Consider as a example of how the current\u00a0perspective regarding\u00a0 innovation and entrepreneurism gets translated into an economic development innovation\/entrepreneurial program.\u00a0\u00a0In this example workshops\u00a0combined with\u00a0a business program\u00a0aimed at young entrepreneurs was recently conducted by Microsoft’s New England Research Development Center (on Boston’s Charles River). Selected young entrepreneurs who have won a business plan competition funded by the National Collegiate Inventors and Innovator’s Alliance (a non profit that encourages entrepreneurship)\u00a0 are assembled in the Center’s “Venture Lab” to undergo a five day boot camp. Members in each of the twenty-one teams comprising this group-class have already set up and are employed\u00a0in an existing early stage business that has been awarded “technological innovation funding” and have outlined a potential market for their good idea. The workshop’s purpose\u00a0was to turn this idea into a “better commercial proposition”. (see Ian Sanders, Financial Times, Sept. 6, 2012). To further ensure success the workshop supporters have brought in larger relevant firms to either serve as a mentors or in some way to pave the path for attainment of the “better commercial proposition”.<\/p>\n There is very little Schumpeter in this approach to innovation.<\/p>\n Innovation as Creativity<\/strong><\/p>\n In the middle-late 1990’s innovation got somewhat redirected towards an enlarged version of knowledge-based innovation disruption. Risk-taking, intentionally or not, was bypassed\/substituted by another concept: creativity\/talent. Creativity injected by education, pleasurable lifestyle seeking, free-booting generational cohorts\u00a0became a key driver\u00a0of innovation and disruptive change. Creativity\/talent breed disruptive ideas from which innovation flourishes. Creativity in this perspective, however, is much less economic, less profit-seeking, certainly less risk-taking, almost anti-organizational–it is transformed into a vehicle for individual empowerment, Maslowian self-actualization, if not\u00a0pure human happiness. We turn to Richard Florida for a description of creativity\/talent innovation. For Florida, “people love to do creative work”–the “opportunity to engage their creative faculties”. “The best part of this equation is that the kind of work that people love is also the work that leads to prosperity” (p. 27, The Flight of the Creative Class<\/strong>, 2005)).<\/p>\n Creativity heading for Florida<\/p><\/div>\n In Florida’s world, innovation’s core trigger, the real engine of\u00a0economic change\u00a0is something called “creativity”, which is often linked to generational change or to something called “talent”. Consider Florida’s assertion that<\/p>\n the majority of U.S. political leaders, academics, and business analysts fail to grasp the true reason behind America’s remarkable success in innovation, economic growth, and prosperity. It’s not simply a generous endowment of natural resources, the size of our market, or some indigenous Yankee ingenuity that has powered our global competitiveness for more than a century: America’s growth miracle turns on one key factor: its openness to new ideas, which has allowed it to dominate the global competition for talent… (p. 4; The Flight of the Creative Class<\/strong>, 2005).<\/em><\/p><\/blockquote>\n Innovation doesn’t come magically from an invisible hand. As … Paul Romer has long argued, great advances have always sprung from ideas. Ideas don’t fall from the sky; they come from people. People write the software. People design the products. People start the new businesses. People create the music and images that come streaming at us out of devices that other people create. Every new thing that gives us convenience, or pleasure, or productivity [is the result of] a tremendous unleashing of human creativity…. Perhaps the most incredible thing about the creative age is that it holds the possibility not only for economic growth and prosperity, but also for a much fuller development of human potential (p.26).<\/em><\/p><\/blockquote>\n These newer individual-focused\u00a0notions of innovation, linking as they do ideas with creativity and\u00a0talent to achieve personal fulfillment, depart radically\u00a0from the private-sector-firm-based\u00a0path of creative destruction\u00a0paved by Schumpeter. The destruction part of creative destruction seems to have fallen off a\u00a0cliff into oblivion.\u00a0Economic development policy-programs and strategy following this conception of innovation, adopt initiatives which allow geographies to attract “creative\u00a0individuals” and “talent” into their communities. Prosperity and job creation follow.<\/p>\n Knowledge Breeds Innovation and Innovation Breeds Innovation<\/strong><\/p>\n Arguably,\u00a0for many proponents\u00a0of innovation\u00a0there is a widespread\u00a0belief \u00a0that innovation flows from education and knowledge. If one gets into this literature nary a trace of risk-taking can be found. In this world, knowledge creates innovation, innovation attracts knowledgeable talent, and further innovation occurs. Innovation begets innovation. This is\u00a0a world sustained by\u00a0research findings derived from the number and location\u00a0of patent filings and per cent of population with college degree. A good example of this approach to innovation is Enrico Moretti’s “The New Geography of Jobs”. <\/a><\/em><\/strong><\/span><\/p>\n Moretti,\u00a0as he\u00a0relates in a September 18th, 2013 NYT article “Where the Good Jobs Are–And Why” <\/strong><\/em>observes that only two groups of American cities are doing well since the Great Recession: (1) the first group includes cities endowed with a large number of highly educated workers and innovative employees (San Jose, San Francisco, Seattle, Austin, Raleigh, Washington D.C. and Minneapolis), and (2) a second group in areas endowed with oil and gas which are thriving due to technological innovations such\u00a0as “fracking”, horizontal drilling and computer-based seismic imaging.<\/span> To Moretti, both of these types of rising cities owe their growth through innovation, but they constitute two distinct types of innovation growth. The first group, with the best economic multiplier are America’s “brain hub” and have been growing for three decades. The second group of cities will decline whenever the price of oil declines. Why will the brain hub win out over a\u00a0 potential transformative energy revolution.\u00a0Because, Moretti asserts …<\/p>\n Since 1980 data show that the economic success of a city has been increasingly defined by its number of highly educated\u00a0 workers. cities with many college-educated workers and innovative employers started attracting more of the same, and cities with a less educated workforce and less innovative employers–such as traditional manufacturing–started losing groups…. Once a city spawns some innovative companies, its ecosystem changes in ways that make it even more attractive to others…. Using data on nine million workers in 320 metropolitan areas, (Moretti) found that for each new innovation-job in a city, five additional jobs are created… Most industries have a multiplier effect. but none has a bigger one than the innovation sector…. Clearly the best way for a city or state to generate jobs for everyone is to attract innovative companies that hire highly educated workers.<\/em><\/p><\/blockquote>\n So there you have it: the best economic development strategy for a city is to attract innovative firms that hire higher educated workers. In this model, innovation itself creates further\u00a0innovation–to such an extent that convergence between unequal geographic regions (and groups of people)\u00a0may be, at best,\u00a0exceedingly difficult.<\/span><\/p>\n Innovation as easy as switching on a light<\/strong><\/p>\n Flip this switch and create jobs<\/p><\/div>\n Maybe the Curmudgeon is wrong–not for the first time to be sure. But innovation like baptism immediately<\/span> washes away the sins and the need for punishment. In an earlier article, “Innovation: A Dirty, Sloppy, Time-Consuming and Unfair Process”<\/a>, the Curmudgeon pushed back against innovation as an effective short and\u00a0intermediate term state and sub-state economic development strategy. It wasn’t that innovation was unimportant, but rather that the historical “playing out” of innovation stretched over longer periods of time than much current innovation policy literature suggests. It seemed in the past\u00a0that a lot of great innovations waited around for additional innovations in other fields to occur before either the innovation was complete,\u00a0commercialization could go forward, or demand (and price)\u00a0for a product using the innovation materialized. Innovation took its own sweet time, and many an innovator died in poverty.<\/p>\n After all, Steve Jobs would not have prospered if he used the 1940 or 1950 versions of computers. In fact, there had to be a series of innovations before the computer and the personal computer industries could become platform technologies. Say it another way, innovation in the short term does not necessarily lead to a product or to job creation. Innovation can hang around for awhile without doing much of anything (like teen age\/twenty-something age children). Nevertheless, since the Great Recession we see many state and local economic development programs stress innovation as a relatively immediate jobs-producing strategy capable of dealing with current unemployment, reversing chronic regional decline, creating a plethora of\u00a0high-wage jobs amid\u00a0a job-less national\u00a0recovery. The Curmudgeon has no problem with innovation causing a long-term growth in jobs and prosperity–but as a short-term baptism-like salvation, innovation is not likely to deliver the heaven on earth that it promises.<\/p>\n Also, are we wrong to suspect that the correlations uncovered by weak statistical indicators which support and underlie\u00a0this baptism-like salvation have been pushed way, way too far by innovation proponents?\u00a0\u00a0Much of current innovation literature ties\u00a0innovation to\u00a0patent-filing and the educational level of a community’s residents. Patents are the single best (available)\u00a0indicator\/evidence of innovation, it is suggested.\u00a0The geography or place where the patent is filed is viewed as more creative, more educated, more entrepreneurial–and innovative. The place where the patent is filed is described as an innovative community\u00a0reaping the benefits of future job growth and prosperity. Patents and patent-filing are to me a mere indicator of where innovation “might” occur. Today’s research seems to have elevated the importance to patents and patent-filing as the location where innovation occurs and benefits are received. Indeed, for Moretti the benefits are an educated workforce which\u00a0ensures-predisposes- a community to a\u00a0perpetual innovation\u00a0advantage.\u00a0The location of where patents are filed, coupled with technology-based employment,\u00a0demarcates an innovation center. The quality, nature\u00a0and the purpose behind the patent (and the subsequent innovation and\u00a0employment, income, prosperity growth), however, is a religious article of faith for which doubters are burned at the innovation stake.<\/p>\n Patents seem to me to\u00a0be a\u00a0less than adequate\u00a0indicator for supporting this heavy duty innovation or creativity heaven. All patents are not equal and the sheer number of patents has more to do with how companies control their technology and try to protect their markets and insulate themselves from pilferage and reverse engineering. It is, therefore,\u00a0little surprise that patents\u00a0are filed\u00a0near where big successful patent-prone companies\/educational\/research institutions are located. in states whose patent laws are supportive. Places where patents are filed in large numbers, however,\u00a0become the role model for other communities to emulate. They become the “innovation center”. This is a closed loop, self-fulfilling vicious little circle.<\/p>\n The Politicization of Innovation<\/strong><\/p>\n We conclude our review with a discussion on why innovation has become so pervasive throughout the nation. In\u00a0state after\u00a0state, it seems\u00a0that some variant of innovation\/knowledge-base economics has become the cornerstone reference paradigm for state-level economic development policy. Why? Why\u00a0is governor after governor\u00a0moving their administration’s economic development platform around a single approach-justification? For a big piece of the answer let’s finish up with\u00a0\u00a0the 2009, the National Governor\u2019s Association \u201cInnovation America: A Final Report\u201d<\/strong><\/em>. We wonder if this report (and others that followed) has launched a state-level momentum behind innovation-knowledge-based economic development?<\/p>\n This 2009 NGA report,\u00a0meant to be\u00a0signature initiative of the Association,\u00a0developed the rationale for the gubernatorial adoption of “Innovation America” as a strategy for states to achieve meaningful growth on their own (governor’s) initiative and leadership:<\/p>\n Innovation America defines innovation \u201cas a process by which new ideas enter the economy and change what is produced, how it is produced, and the way production itself is organized\u201d. (P.1) Indeed, \u201cinnovation is a hallmark of a successful economy, and it drives economic growth and the creation of new jobs\u201d. (P. 1).<\/i><\/p><\/blockquote>\n \u2026strengthen our nation\u2019s competitive position in the global economy by improving our capacity to innovate. The goal was to give governors the tools they need to improve math and science education, better align post secondary education systems with state economies, and develop regional innovation strategies. (P. i) <\/i><\/p><\/blockquote>\n Because, the\u00a0Governor’s\u00a0report asserts,\u00a0governors deal with these and other policy realities daily, they are uniquely suited to create a unified vision for innovation in education and the economy. They can use the bully pulpit to advocate for a comprehensive innovation agenda \u2026. And as chief executives, governors can take executive action to implement the state’ innovation agenda\u2026. As leading advocates, governors are agents of change and the driving force for innovation in their states and in the national arena. (P. 4). Given that innovation\/knowledge-based economic development is now a public sector initiative and responsibility, it might as well be the state that leads it rather than the federal government.<\/p>\n The 2009\u00a0report demarcates core strategies and individual programmatic initiatives, providing both\u00a0a menu and a manual so that\u00a0states (and governors) can\u00a0lead \u201cthe country as it responds to fast-moving changes in the global economy\u2026”<\/p>\n To achieve the growth through innovation,\u00a0states should refocus education and\u00a0occupational skills around innovative and growing sectors and firms, target\u00a0key innovations\u00a0and innovative processes, and identify firms and industries which possess significant capacity to impact future growth (such as information technology, green and sustainable, life sciences, and advanced manufacturing). Through state-led innovative leadership, America can transform our post industrial economy by refocusing on new skills, ideas, and processes, creating a knowledge-based economy, which will produce high paying, and competitive jobs and competitive firms. This state governor-led strategy \u201coffer(s) a means-perhaps the only means- by which a high-skill, high-wage economy can successfully compete with high-skill, lower-wage economies without reducing its standard of living\u201d. (P. 1).<\/em><\/p><\/blockquote>\n In this 2009 report, states, as a change-agent, are tasked to lead American private enterprise and individual workers in a quest to win the battle against global competitiveness. Government, in this case at the states and regional levels, will initiate, fund and inject change and innovation into our private businesses through revitalized public institutions such as K-12 and higher education, community colleges, public private partnerships (often public university based or at least\u00a0state funded) and subsidized interventions into private business decisions and activities (such as skills, exporting, entrepreneurship, marketing and process\/production efficiency).\u00a0 Oh where, oh where has poor Schumpeter gone?<\/p>\n How the heck did innovation and knowledge economics become their magic bullet for American competitiveness and the reassertion of the state\u2019s (and governor’s) role in American federalism? The answer in part is contained in the report itself. The NGA hired a consultant, Dr. Frank Luntz, to assess Americans’ innovation attitudes and to help the governors “talk innovation”. His research which resulted from several “response dial sessions\u201d (whatever that might be?) and a nationwide public opinion survey, Luntz concluded:<\/p>\n \u2026 that even in these days of political polarization [this is 2007 \u2013 what would he say today?], innovation is applauded and embraced by just about everyone. A stunning 88 percent of Americans polled said they support a nationwide innovation effort. The desirability of innovation is expressed by people of all political persuasions and across all demographic, geographic, and attitudinal subgroups. (P.5)<\/i><\/p><\/blockquote>\n And who is best positioned to seize upon this theme and use it to not only advance the innovation agenda, but also presumably their own political position: the governor. “After all, who is better at communicating in a bipartisan way, the value of innovation than the elected chief executive\u2013the person who has been to all corners of the state, met with all the key constituencies, and articulated a vision for governing?” (P.5) The message behind “Innovation America” is traditional American optimism and hope personified (the audacity of thinking that we as Americans can be the very best). “Innovation” is what America has always done. We are a nation of entrepreneurs, a nation of change and social\/economic mobility-often through education. Isn\u2019t it natural that in an era where the nation seems to be in decline and our economy is in tattered shreds, with many cities and regions in deep and sustained decline, that innovation and education is a call to return to our core and original roots-a reassertion of American exceptionalism to the entire planet? Say this in a more cynical fashion, innovation is one hell of a gubernatorial elective and governance platform.<\/p>\n If the reader thinks this is a bit much, please take a gander at the 2013 and 2014 state of the states by our various governors. It seems that many took Luntz’s advice and innovation has become, arguably, the cornerstone state economic development paradigm.<\/p>\n A final section of Luntz’s Chapter 2, entitled “Use Optimistic, Specific, and Action-Oriented Language” (P. 6) provides the instruction manual to governors desirous of leading through innovation. In this section, the author advises the governors to avoid negativism. “Innovation, he argues, is best described not in dire language\u2026 but in hopeful terms that encourage citizens to visualize the future \u2026 “(P. 6).<\/p>\n Governors do well when they don’t talk about job losses, but do talk about economic development through career improvement, when they don’t talk about competition but do talk about universal opportunity; and when they don’t talk about other countries, but they do talk about preparing Americans for the future. (P. 6)<\/i><\/p><\/blockquote>\n Innovation America is a bi-partisan political platform, not tied to economic theory, but to a memory of a past heritage.\u00a0In this report innovation and knowledge economics is a politically attractive “back to the future” call to action and its essential substance and specific proposals are based ultimately on hope, and history, not economic theory.<\/p>\n As is my style, I “Googled” and came up with the following 2013\/2014 Governor Innovation Programs: Arizona’s Governor’s Office of Education and Innovation, Pennsylvania’s Governor’s Office of Innovation, Utah’s Governor’s Technology Commercialization and Innovation Program, Colorado’s Governor’s\u00a0Office of Innovation Technology, Georgia’s Governor’s Office of Student Achievement Innovation Fund, California’s Governor’s Innovation Hub Initiative, North Carolina’s Governor’s Innovation Center, the Massachusetts Governor’s Office which creates jobs through education, innovation and infrastructure–followed by the Governor’s “innovation mission to Panama and Mexico to grow the Massachusetts global economy, Governor Terry McAuliffe’s proposed “biotech commercial program to fund entrepreneurs, inventors,\u00a0 or scientists hoping to prepare an idea to attract private capital”, Ohio’s Third Frontier (governor’s program initiative) to build strong commercialization and innovation capabilities and capacities”, Governor Cuomo’s\u00a0New York\u00a0City Innovation Lab, Illinois Governor’s Office of Health Innovation and Transformation, and\u00a0my personal favorite, Indiana Governor’s Innovative, Crowd-Funding Campaign for Women Entrepreneurs–and the list goes on for several pages more… get the point? What are we left with if innovation has become little more than a political platform? The NGA report\u00a0asserts that a\u00a0bipartisanship can characterize the pursuit of state-led innovation policy,\u00a0but competition between political ideologies and simple partisan politics\u00a0are likely to be intense. It is hard to visualize that innovation as an economic development public policy\u00a0will prove invulnerable to these forces. The heavy reliance on government, the\u00a0injection of government into key areas of public policy to develop an innovation economy\u00a0rushes headlong into the vortex of our polarization. For instance, nowhere in the presidential platform of Governor Tim Pawlenty (the Co-Chair of Innovation America-Janet Napolitano is the other) did one discover any support for Innovation America’s specific proposals. Indeed nowhere in Innovation America is he directly quoted. Napolitano is quoted several times. Is there a Red and a Blue Innovation America? If ultimately Innovation America becomes a Blue State economic development strategy then political polarization may inevitably reach deep into its implementation and destroy\u00a0any success it may achieve. Will the red states revert to an older form of innovation policy more closely related to the 1984 Joint Committee report?<\/p>\n Another fear is that the laundry list of programs cited by Innovation America are small, individually interesting, but absolutely uncoordinated programs, each highly dependent upon a state’s budget process and its often fractured politics.\u00a0The Curmudgeon labels such initiatives as \u00a0\u201cRhetorical Programs\u201d. Rhetorical programs are initiatives whose ultimate real purpose\u00a0is to allow elected officials to talk and to differentiate themselves from their competition. Rhetorical programs come with ambitious goals, inspiring hope, and appealing to core constituencies and affluent campaign contributors. The individual initiatives are usually billed as the first steps toward serious change and a commitment for further substantial change, but which are funded at levels sufficient only to draw reporters and media to write articles, headlines, blogs or TV commentaries. And the rhetoric, after a quick underfunded approval, soon\u00a0disappears–only to reappear, resuscitated by\u00a0a new Administration in another form in future years.<\/p>\n It appears that innovation as an economic development policy has become either a religion for a selected few true believers who mostly work in academia or think tanks–or– a device to win elections, yet another vehicle in the red state-blue state divide.<\/p>\n![\"800px-St_Maria_Sehnde_Gottesdienst\"](\"https:\/\/journal.c2er.org\/wp-content\/uploads\/2012\/04\/800px-St_Maria_Sehnde_Gottesdienst.jpg\")
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