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Bridging the innovation gap - A role for local and state governments.

February 22, 2018

Gartner estimates that for every dollar invested in innovation, it will require 7 times that amount to incorporate such innovation into operations. This investment is one of the key issues that startups face, as they must find ways of crossing “the valley of death”[1] for innovation.

States and local governments can play an important part in bridging the gap, while creating an ecosystem that will foster new organizations, ideas and jobs for their economy.

Many states have been focused on the development of start up ecosystem, following the incubators & accelerator models that currently exist, but fail to understand and leverage their strengths and opportunities that would make the programs impactful; by leveraging their vast operations to create a bridge for local innovators to validate their solutions.

The following posting describes an alternative.

One of the most difficult issues facing any start-up is the validation of their innovation within the commercial markets. Part of the problem is the operational focus of enterprises, which does not encourage for innovation and disruptions to be introduced and tested.

This lack of a path to introduce innovation within enterprises is part of the challenge of the “valley of death” for the innovation and start-ups. Without early validation neither customers, nor investors will want to support additional efforts.

States could address this by creating an Innovation Office, whose sole role would be to become the bridge between local startups and its operations - bridging the gap between the startup requirement and the customer need.

The office would de-risk the innovation process to the agencies and customers by:

·    Becoming the project leader within the customer to manage the project/pilot - identifying the key performance indicator (KPI) for measuring success, and manage the project timeline and outcomes.

·     Understanding the operational requirements and risk that such innovation will bring into the organization and analyzing its impact before the start of any project.

·     By becoming the functional office to move the innovation into the organization, it allows the current staff to continue to focus on operations, while the innovation team is working on the integration, compliance, and operation work. This approach – protects the current objectives, while introducing innovation to reach new ones.

·     The teams should be small and agile[2] – as the objective is to be a focused team that drops in, evaluates needs, integrates innovation, asses its impact and creates a plan to turn it over to operations.

The agencies could become the funding source for the project - to pay the startup for the project - based on the KPI and objectives of the customer, or the startup based on access to validation may find ways of funding the project externally.

Their limitations would be that they must use local created innovation only - if they can not find a solution to a problem within their ecosystem - they would pass on the project, and if they can not find a project for a start up, they would be provide the feedback for the startup to make a product and market fit determination; which could result on a pivoting based on feedback, preserving resources for an alternative approach.

The innovation office could start with some seed funding from the state economic development groups, the state agencies (or corporations that want to be part of this program) - and then as the model is proven, it could then change to a subscription model for companies to become part of the ecosystem (while remaining free to the local based startups) 

As states are grappling with the innovation paradigm and how to bring their citizenship into this new economy, they must find new ways of addressing job creation and entrepreneurship.

They can either become leaders by developing new models that encourage innovation within their state, utilizing all of the tools at their disposal, or they can see their entrepreneurship talent migrate to greener fields in neighborhood states, becoming innovation exporters instead of creator and adopters.

 

 

 

 

 

 

[1] http://www.csl.sri.com/papers/ieee-sp-tt-2013/ieee-sp-tt-2013.pdf

[2] http://www.thestartupway.com/em

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