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Opinion by Deborah Jackson

Innovation Needs a Push

How government can help create an “ecosystem” of support.

Turning research into successful ventures isn’t a sure thing.A tenet of modern economics is the belief that innovation is the engine driving rapid economic growth. Innovation takes a variety of forms, from the introduction of new or significantly improved goods or services to organizational and marketing breakthroughs. Over the past century, the innovation economy seeded the rise of the automobile and airline industries, the digital revolution, and the onset of the information age. In every case, the advances underpinning these revolutionary technologies arose from discoveries rooted in fundamental research. Consequently, within a healthy economy, strategic investments in fundamental research are essential for innovations.

But those investments alone won’t ensure that the resulting innovations actually reach the marketplace and strengthen the economy. Hence the importance of what have come to be known as “innovation ecosystems” and – even in a period of fiscal constraint – a government role in nurturing and stabilizing them.

Moving innovations from discovery through to commercialization involves numerous actors, often including academic researchers, small businesses, the investor community, and commercial industry. At one end of the spectrum – academe – there is a heavy concentration of government investment in fundamental research. At the other, in the commercial marketplace, there is a much higher level of industry investment in direct product development. In between lies the so-called Valley of Death, where many potential innovations die for lack of resources needed to develop them to a stage where industry or investors can recognize and exploit their commercial potential.

Crossing that valley requires a complex interplay of relationships along the innovation spectrum. Common approaches include developing formal vehicles for collaboration, such as nondisclosure agreements and memoranda of understanding, or creating opportunities for actors to circulate among different entities through visiting-scientist or postdoctoral programs, sabbaticals, or consultant arrangements. Additional vehicles for promoting interaction – topical conferences, cross-disciplinary institutes, or centers of excellence – create the intangibles of the innovation ecosystem, improving the odds a venture will succeed.

Beyond the intangibles, one-time investments by the government can make the overall operation more efficient and thus help lower the threshold cost to industry of launching new ventures. These investments may include physical infrastructure, such as rapid prototyping facilities, or bundled start-up and intellectual property legal services that are accessible to most players in the ecosystem. Lowering the threshold cost results in more ventures successfully crossing the valley and entering the marketplace.

Government eventually benefits from these added one-time investments in two ways: They increase the likelihood that successful ventures will emerge, thereby making efficient use of the original government investment in fundamental research; and successful ventures generate increased tax revenues, allowing the public sector to recoup its investment.

Examples of successful innovation ecosystems include the Semiconductor Research Corp.’s investments, which have enabled industry’s continued advancement along the semiconductor road map well beyond its predicted sunset. SRC acts to stimulate and advance collaboration between university researchers – usually supported by government grants – and high-tech industries. Another is the National Science Foundation’s Engineering Research Centers

Program,which funds potentially transformative technology systems while nurturing the associated innovation ecosystem. The ERC for Structured Particulate Systems, for instance, is developing a continuous manufacturing prototype test-bed facility that could revolutionize the pharmaceutical industry’s tablet fabrication process.

Given today’s economic downturn, federal, state, and local government entities must find new ways to grow their economies by creating jobs. The higher growth rate for high-tech industries, in particular, offers a strong incentive for governments to develop and nurture innovation ecosystems that leverage fundamental technology research within academe and industry.


Deborah Jackson leads the Microelectronics, Sensors, and Information Technologies Cluster within the Engineering Research Centers program at the National Science Foundation. This article is excerpted from “What Is an Innovation Ecosystem?”




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