Innovation Strategies

1
Innovation Strategies Issuesin Georgia

• Philip Shapira
• Professor, School of Public Policy, Georgia
  Institute of Technology, Atlanta, USA
• Midsize Cities Technology Development Initiative
  (MiTd)
• GCATT, Atlanta, June 10, 2003

2
Overview

• ? Schedule
• ? Economic development and innovation strategies
  in Georgia (100 years in 5 minutes!)
• ? Issues and Challenges

3
State of Georgia, USAContext

• Georgia, USA - basic statistics
• 7.5 million population - 3.5 million workforce -
  17 manufacturing 26 services 25 trade
• 12,000 manufacturers, 98SMEs, and growing...
• 600,000 manufacturing jobs, 66SMEs
• Not a traditional location of innovation
• Much Georgia industry is in traditional sectors
  (e.g. textiles, food processing) or in routine
  branch plants
• Poor educational performance
• Weak innovation culture
• Low industrial RD spending public RD dominated
  in past by defense procurement
• Trends towards increased innovation
• Great increase in state technology spending
• Innovative companies technology jobs growing
  (GA - a leader in tech job growth in 1990s) - but
  still a small share
• Challenge many Georgias - innovative firms
  often locate in Atlanta suburbs, not in central
  city, mid-metros or outlying areas

4
Georgia Traditional economic development
strategies

• Community preparedness and business climate
• Upgrade physical infrastructure highways,
  industrial parks
• Maintain low tax, energy, labor costs
• Industrial attraction
• Recruit branch manufacturing plants from other
  areas
• Now evolved to recruitment of services,
  logistics, in US and internationally
• Complementary vocational training services
  (QuickStart)
• Small business support
• General support for business start-ups (e.g.
  Small Business Centers)

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Georgia long-run state convergence to US mean
per capita income
Source Bureau of Economic Analysis
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Georgia State innovation strategy a new
strategy with roots

• Develop a more technologically-advanced economy
• A goal with origins in post-civil war era
• Early steps include develop of technological
  institutions (Georgia Tech), state university
  system, technical colleges
• 1960s Know-how transfer to existing companies
  through a statewide industrial extension system
• 1970s Initial efforts to strengthen science and
  research base - benchmark with North Carolinas
  Research Triangle
• 1980 - First advanced technology incubator (ATDC
  at Georgia Tech) in Atlanta
• 1980s - Development of public technology
  incubators in other locations of the state, with
  mixed success
• 1990s - Evolution into a comprehensive
  technological development strategy, aimed to make
  Georgia a premier location for advanced
  technology development
• 2010 Vision Among top five states with a
  technology-based economy

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Strategies for Innovation Technology Promotion
in GeorgiaExamples

• Development of entrepreneurial research
  universities
• Georgia Tech
• ? Creating knowledge pools for technological
  innovation
• Georgia Research Alliance
• Georgia Center for Advanced Telecommunications
  Technology
• Life sciences research centers bioengineering
  nanotechnologies
• ? Technological commercialization
• Georgia Tech Advanced Technology Development
  Center
• Other incubators
• ? Know-how transfer
• Georgia Manufacturing Extension Partnership
• Complementary actions
• Venture capital technology support associations
• Deployment of lottery funds
• HOPE Scholarships (access to higher education)
  ICAPP

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Example 1Georgia Tech Rise of an
Entrepreneurial Research University

• Strategic transition from a technical institute
  to a technological university
• Expansion of capabilities
• research, facilities, networks (GSAMs, internet)
• new teaching approaches
• Engagement with private sector
• university-industry centers, research
  partnerships
• promotion of entrepreneurship (DuPree Center)

• Engagement in state science and technology policy
  to promote economic development
• Growth of interdisciplinary programs
• e.g. Management of Technology Global
  Engineering Sustainable Development
• CIBER - International Business Center European
  Center
• Increased awareness of importance of policy
  context, content, and complexity across all
  scientific and technological fields
• Creation of new Ivan Allan College - policy,
  international affairs

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Georgia Tech Current Profile

• Leading US technological university
• 3rd in engineering research and development
  expenditures among US universities (NSF)
• Research focused in academic units, GTRI, and
  network of over 60 interdisciplinary centers that
  cut across traditional academic disciplines.

• Budget 550m
• Research 320m (2002)
• (250m 1990s 50m in 1981 5m in 1971!)
• Instruction approx 150m
• Service economic development technology
  transfer 27m
• Economic Development Institute 180 staff

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Example 2Creating knowledge pools...
Georgia Research Alliance (GRA)

• Collaborative state initiative with 6 research
  universities in Georgia - established 1991
• Aim use research infrastructure to generate
  business and economic development in targeted
  technologies
• advanced telecommunications
• biotechnology
• environmental technologies
• other emerging technologies

• GRA Research Universities
• Georgia Institute of Technology
• Emory University
• University of Georgia
• Georgia State University
• Medical College of Georgia
• Clark Atlanta University

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for technological innovation
Georgia Research Alliance concept Building
critical mass to create jobs
Leading-edge industry-oriented research
at universities
Skilled workforce of scientists, engineers,
and technicians
Pool of Scientific Entrepreneurs
Industry clusters with major RD facilities
Supportive environment (capital, quality of
life, business atmosphere)
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GRA strategies

• Inter-university collaboration
• Engagement with industry
• Eminent research scholars and research teams
  (supplementary endowments)
• New programs and educational initiatives in
  targeted areas (1) ICT (2) bio (3)
  environmental tech (4) existing industries (5)
  nano other emerging sectors
• Development of research facilities, including new
  technology centers
• Technology Development Investment program - funds
  university side of collaborative industry
  research programs
• Investment
• 1990s 200m by federal and state government
  by industry, including 126m invested by state

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Example 3Technological commercialization
venture creation

• Advanced Technology Development Center (ATDC)

• One of first technology incubators in US
  (established 1980)
• Entrepreneurial services, space, and support for
  early-stage new technology companies
• Faculty research commercialization program
• Corporate RD support program (including landing
  parties)
• Part of Georgia Tech Economic Development
  Institute. 9 staff associates.
• State funding about 1.5 million a year

• Original facility at Georgia Tech in Atlanta, now
  joined by facilities in mid-Georgia, GCATT, south
  Georgia, and Emory biotech collaboration

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Example 4Know-how transfer

• Georgia Manufacturing Extension Partnership

• Aim accelerate deployment of improved
  technologies and practices, to SMEs in Georgia
• 18 field offices 100 staff 1,400 firms aided
  per year
• Services quality, environment, manufacturing
  process, business systems, training, informatics,
  product development
• Partnership 7m budget (fed 2.5 m state 3m
  industry fees 1.5m)
• Linkages with faculty, SBDCs, Voc-Ed, Georgia
  Power, NASA, Federal labs, private consultants

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GeorgiaAccounting for differential income growth

• Atlanta emerged as regional, national and
  international city
• 1969 2.8 million -gt 2001 c. 4 million
• business headquarters business financial
  services logistics software and internet
  telecom media research and education services
  engineering/aero
• from white elite to (relatively) socially open
  (too busy to hate) diverse communities
• 7 Mid-sized cities 2 million (up 33 since
  1969)
• some strengths (Dalton carpet cluster Columbus
  business services)
• modern but largely dependent on routine industry
  (branch plants) weak educational resources
• Small cities/rural areas 1.5 million
• Varies but many counties based on agricultural
  industries, food processing, natural resource
  industries, government, branch plants
• High poverty rates weak educational
  infrastructure

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Regional divergence in per capita income in
Georgia
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ConclusionsGeorgia case

• Developmental state seeks to transform
  technological reality and perception of the
  region
• Not an easy task
• success may take many years, even decades (cf.
  Research Triangle)
• Have been major improvements in states
  techno-infrastructure, universities, knowledge
  pools, standing
• But challenges remain both in visible and
  invisible factors

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Issues and challenges (1)Visible factors

• Visible factors
• Extensive state investment in technology policy
• GA RD spend 182m mid-1990s (6.7 all states,
  2.7 of population)
• But private RD still relatively low
• High tech jobs are growing in Georgia venture
  cap, startups
• but still a relatively small share of all jobs
• large share of high tech jobs are in large
  companies
• Problem of the two Georgias
• new high tech firms often locate in Atlanta
  suburbs
• not in central city or outlying regions
• Educational and governance systems
• Uneven quality of public education (K-12)
  multiple government agencies

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Issues and challenges (2)Invisible factors

• Further development will require attention to
• Innovation culture
• Research spending has been dominated in past by
  defense procurement and large companies, for
  national goals
• Uneven entrepreneurial culture, access to finance
• Diffusion as well as development
• University RD and startups by themselves not
  enough
• Broad diffusion of new technologies and practices
  to existing firms
• Self-reinforcing, indigenous development
• Attracting external companies and resources needs
  to be complemented by stronger focus on
  self-reinforcing, indigenous development
• More attention to issues of general education,
  equity and allocation
• Critical mass and institutional thickness
• Soft promotion of networks
• More private RD activity and product
  development, local partnerships
• Distinctiveness and paradigm breaking
• Patience developmental v. political cycles
• Evaluation and learning (Midsize cities
  Learning Network)