By Lee Cheatham, executive director of Washington Technology Center
It’s no secret that technology and innovation are at the heart of sustainable economic growth.
An “innovation economy” affords a quality lifestyle –- abundant career options, high wage jobs, globally competitive companies, and increased wealth in the region.
This innovation economy is possible for Washington.
We have a large pool of home-grown entrepreneurs and continue to hold the number one position nationally in new company creation.
But we cannot afford to be complacent –- to simply hope we do well. We can’t expect to continue to reap the benefits of our good fortune without nurturing it. We must be aggressive in capitalizing on and investing in our strengths, especially those of innovation and technology. How do we do this? I suggest four key strategies:
One: Integrate Technology Based Economic Development into Traditional Economic Development Planning Processes.
Economic planning has always been about market development and trade; tourism and recruitment; tax policy and regulation. It also includes affordable housing, growth management and transportation. Today, innovation and technology must share as equals to these “traditional” areas. New products, business models, and education paradigms based on technology breakthroughs are critical.
Some of our state’s leaders are already taking this approach. Puget Sound’s Prosperity Partnership exemplifies this view. The more than 1000 people involved are examining new technologies along with tax policy and environmental sustainability. The Tri-Cities Community Roundtable is integrating traditional economic issues like tourism, transportation and water use with research and education through an on-going civic dialogue. Spokane is developing both recruitment and growth strategies supported by a number of organizations around technology businesses, research and health care.
Two: Encourage Early-Stage Investment
Putting innovation and technology on the agenda means making an investment. We must make Washington a preferred place to do business. At a time when it’s easy to locate business operations anywhere in the world, Washington must be among the winners for global capital investment. Early stage investment is the most critical need for companies in their growth period. Their research is finished, but the market prospects are too uncertain for venture or operating capital investment. Bridging this gap is imperative to ensure we don’t lose these high-potential businesses to failure or relocation.
Programs that channel public investment are one solution. The Investing in Innovation Program created by the Washington Legislature in 2003 is a good example. This program will allocate funds for the most promising technology commercialization ideas. Federal Small Business Innovation Research (SBIR) grants are another exceptional source of early capital. Washington’s companies have proven to be successful at SBIR, attracting more than $45 million in 2004. But over $1.4B is available annually for these awards. Encouraging more of our companies to pursue this funding is an important public service.
Three: Support Major Industry Initiatives
Washington has the advantage of both large, globally-dominant industry clusters (aerospace, software) and emerging ones (life sciences, energy, nanotechnology). This mix can lead to an economy that is strong today and strong tomorrow.
In order to ensure this long-term advantage, we must each understand the needs and opportunities these sectors offer. The Life Sciences Development Initiative, Northwest Energy Technology Collaborative, and Washington Nanotechnology Initiative all represent statewide efforts to strengthen our core industries. We must drive these initiatives to success – and continue to develop new ones. A balance of current and emerging industries is our best recipe for sustainable economic well-being.
Four: Support Community-Based Efforts to Build Technology Economies
To repurpose a well-known phrase: “All economic development is local.” While the goal in every community is the same, the strengths, needs, and interests of the people are unique. Our collective challenge is to support each of these communities in developing their plan while ensuring it has every chance of success. These plans must answer common questions. Do local companies have access to global markets? Is capital available? Does the workforce have the skills needed? Do new research and business ideas flow freely?
Washington’s communities exhibit strong potential for growth in their dominant industries. In Bellingham and Vancouver, industry clusters are forming, favorable levels of new company formation occur, active research centers exist –- their innovation economies are flourishing. Providing the means for these communities, and others across the state, to implement their plans for capitalizing on their strengths by engaging civic leaders is an integral part of achieving Washington’s overall technology-based economic development strategy.
It is not enough to want Washington to succeed. We also have to do the hard work and make the hard decisions. I refer to this a replacing “hope” with “how.” Innovation and technology must be as integral to the process as industry and business development if Washington is to realize its full economic potential.
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