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Week of November 26 - December 3, 2007 |
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Human Capital and Local Innovation Capacity Yet another new study is highlighting the critical importance of human capital as a driver of local innovative activity. New research from the Federal Reserve Bank of Philadelphia assesses the role of various local economic characteristics in driving innovation, as measured by patents. The researchers find that an abundance of local human capital is the primary factor explaining differences in local patenting activity. These effects are particularly strong in the chemical and pharmaceutical sectors where R&D investments by universities help drive innovation. Other important factors include the presence of a competitive local market structure. Regions with a smaller average size of establishments tend to have higher levels of patenting activity. They also find that industrial specialization in manufacturing may impede local patenting. In contrast, specialization in service sectors tends to promote more local inventions. Download the 2007 Federal Reserve Bank of Philadelphia Working Paper (No. 07-28), “Innovation Across U.S. Industries: The Effects of Local Economic Characteristics,” by Gerald Carlino and Robert Hunt. |
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The Center for Digital Government has announced the winners of its 2007 Digital Cities Survey. The annual survey assesses local governments for their capacity to use “technology to create a seamless environment between local government and constituents.” The winners are based on population categories, and this year’s top performers are as follows:
Learn more about the Center for Digital Government’s 2007 Digital Cities Survey. |
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The Role of Innovation Networks We all recognize that the process of innovation is changing. Firms and institutions can no longer rely solely on in-house resources—such as a corporate R&D lab—as a means to develop pioneering products, technologies and services. New ideas and concepts come from everywhere—from users, from partners, and from competitors. But, how can firms “manage” innovation in this decentralized environment? A new Knowledge@Wharton article examines these issues via an interview with Larry Huston, who helped develop Proctor & Gamble’s open innovation processes. Huston foresees the growing importance of innovation networks, i.e., individuals and companies who exist outside of a corporation but who help it identify new ideas and solve pressing problems. Harnessing innovation networks is easier said than done. Huston recommends creating “an architecture of participation,” a set of transparent and open processes where outsiders can help solve clearly articulated problems and challenges. To be effective, companies must clearly define the specific problem areas, and also help divide these issues into manageable pieces. At the same time, firms must build their “absorptive capacity” for outside input. If they seek out new ideas and solutions, they need to build systems that will allow them to respond to and act upon outside feedback. Access the November 14, 2007 Knowledge@Wharton article, “Innovation Networks: Looking for Ideas Outside the Company.” |
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Business Location Decisions in California For years, business owners and other observers have criticized California’s high business costs and have argued that they were forcing companies to leave the state. Researchers at the Public Policy Institute of California have been trying to verify whether these claims are true. In earlier research, they found that few firms are exiting the state, and that these business relocation decisions have a minimal impact on the state economy. In a new study released this month, they find that business relocations within California show a great deal of regional variation. High cost areas—especially the San Francisco Bay region---did see some big job losses in the period between 1992 and 2004. However, most of the business relocations seem to be occurring over smaller distances. This pattern suggests that firms are moving because of high real estate costs, not because of business regulation or business climate concerns. In general, the new report supports earlier findings. The economic impact of business relocations is very limited. Local prosperity is much more heavily influenced by local patterns of new firm birth, growth, contraction, and decline. Download the November 2007 Public Policy Institute of California study, Business Location Decisions and Employment Dynamics in California, by Jed Kolko and David Neumark. |
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The Impact of Rural Broadband Access Rural communities are being transformed thanks to smart investments in broadband technology, according to a new study from Alliance for Public Technology (APT). The APT report is fairly critical of the US’ lagging efforts to provide public broadband access. At present, the US ranks 16th among industrialized economies in terms of per capital broadband use. As Federal investments have lagged, state and local initiatives have bloomed across the US. The study highlights a number of these efforts. For example, ConnectKentucky (www.connectkentucky.org) has succeeded in wiring most of the Bluegrass State so that 90% of Kentucky residents and businesses now have access to broadband. Broadband programs of this type have helped create local jobs and stimulate local economic development. The report recommends that Washington establish clear national goals for broadband deployment and also offer tax incentives and other subsidies to help spur these efforts. Download the November 2007 Alliance for Public Technology report, Broadband Initiatives: Enhancing Lives and Transforming Communities. |
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The National Dialogue on Entrepreneurship is an initiative of the Public Forum Institute made possible by a grant from the Kauffman Foundation of Kansas City. Through NDE-news, we bring you short summaries and analyses of various trends driving entrepreneurship around the world. Subscribe now to receive your weekly copy. Archived issues are available online. |
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stories © 2007 The Public Forum Institute
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