Universities As Anchors Of Regional Innovation

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September 23, 2014Universities as Anchorsof Regional Innovation#Engaging our universities in new ways creates newopportunities for regional innovationKey Points: Regional innovation systemsform with networks thatoperate with sufficiently highlevels of trust to innovate. Regional innovation systemsemerge from a portfolio ofnetworks focused on differentkey components. Engaged universities canspeed the development ofregional innovation systems.In the midst of all the political gridlock in Washington, it’s easy tobecome cynical about the long-term competitive prospects of ournation’s economy. But shift your focus to the nation’s regions, andyour outlook will change. There, leading edge universities havelaunched promising experiments to design and develop ecosystems— a series of overlapping, interacting, open networks — to supportboth startups and high growth companies. Ecosystems create valuethrough interactions that lead to innovation. They generate“innovating networks” that speed ideas to market.#There’s no doubt that we can intentionally design and developthese ecosystems. Nearly 20 years ago, a small team of civicentrepreneurs in Oklahoma City convened with a determination tomove the city forward after a decade of stagnation. We designed1

September 23, 2014and built new networks to speed collaborative investments infocused areas.#Nearly 15 years ago, Ernest Andrade, a young professional workingfor the city of Charleston, South Carolina, began developing theCharleston Digital Corridor. For a roadmap, Ernest listenedcarefully to the lessons we learned in Oklahoma City. Now,Oklahoma City is held out as a model for the rest of the countryand both Oklahoma City and Charleston are outperforming thenation in job growth. Both cities have moved to the top the list ofcities that support entrepreneurs.#Innovating networks collaborate to createshared value. They take time and highlevels of trust to form.Innovating networks form the core of adynamic regional innovation ecosystem.What’s the lesson? By following a few simple rules andframeworks, any city can develop the platforms needed tostimulate the formation of innovating networks. At the PurdueCenter for Regional Development, we have been designing anddeveloping the tools and frameworks needed to speed thedevelopment of clusters, innovating networks and ecosystems.#Here is what we are learning.#Thinking in New Ways: Changethe Narrative to PromoteNetwork Thinking#Our highly ideological national debates exact a toll: They slowdown innovation. To avoid these pitfalls at the regional level, westart by reframing our competitiveness challenge. We don’t presentideas in terms of public and private sectors. Instead, we look at oureconomy as a market economy embedded in a broader civiceconomy.#In the market economy, individuals and organizations makeinvestments that are both publicly valuable and privatelyprofitable. In the civic economy, individuals and organizationsmake investments that are publicly valuable but generally notprivately profitable.#While business firms dominate our market economy, our civiceconomy is far more diverse. It includes government, educationalorganizations, philanthropic foundations, and nonprofitorganizations. Seen from this perspective, our competitiveness2

September 23, 2014challenge involves aligning our civic economy with our marketeconomy. That’s what building globally competitive clusters andvibrant ecosystems is all about. The work requires developingmultiple innovating networks across both our market and civiceconomies. At this porous, flexible boundary, the real work oflong range, transformational innovation takes place.#In an innovating region, the civic economyis aligned to support investments in themarket economy.The overall productivity of both economies, working together,drives our prosperity. More important, we can see that our civiceconomy — far from being dead weight as some would have it — iscentral to our competitiveness. The flexibility and adaptability ofour civic economy lies at the core of national competitive strength.(This is not a new insight. Toqueville saw this strength of theAmerican form of democracy in the 1830’s.)#Not surprisingly, like our market economy, our civic economy isundergoing a major transformation from closed, hierarchicalorganizations to open, loosely joined networks. As Brian Arthurpointed out years ago, networks can lead to major newopportunities for value creation. Changing the prevailing narrativein a region involves moving the collective thinking from closedcommand-and-control, hierarchical mindsets to horizontal, moreflexible, open and opportunistic thinking. This idea of a vibrantecosystem is captured in the metaphor of the rainforest.#Moving in this direction represents a big shift for many regions,especially with older industrial economies. Here, due to theindustrial strength of the past, hierarchies dominated both marketand civic life. So, it is not surprising that in some of these regions,the civic life is still dominated by hierarchical, risk-averse thinking.Patterns of civic interaction, reinforced by top-down, commandand-control mindsets, are narrowed by long established (butincreasingly less relevant) organizational and political boundaries.#Changing the narrative within these regions represents animportant first step. Stories of effective collaboration enable civicleaders to cross these boundaries more easily. Collaborationbecomes more acceptable and more rewarded.#Here’s an example. In 2005, the University of Wisconsin atMilwaukee began a new narrative in Southeast Wisconsin bypointing to the region’s abundance of assets in freshwater3

September 23, 2014technology. Out of that shifting narrative, a new cluster emerged:The Water Council.#Now, the Water Council — which includes leading actors from theregion’s market and civic economies — stands as a global leader inthe development of freshwater technologies. Instead of beingconstrained by organizational and political boundaries within theirregion, the leaders of Milwaukee’s water cluster began linking andleveraging their assets across these boundaries.#Behaving in New Ways: CreateCivic Spaces and Plant NewSeeds#Shifting the regional narrative, while an important first step, is notenough to develop an ecosystem. (Otherwise, every region with“Silicon” in its name would be an innovation hot spot. They’re not.)A region that embraces innovation must also establish regularplaces for networks to form and people to interact. #Civic forums help people practice the habitof moving toward their opportunities. Akey insight: people move in the directionof their conversations.Oddly though, many regions still do not have the “civic spaces”— regular forums, meet-ups, and gatherings — where actors in themarket and civic economies interact regularly. Creating theseplatforms creates opportunities for connection. They constitute anew type of civic infrastructure that is essential for ecosystems toflourish. Developing these platforms is simple, but not easy. Theytake time and persistence.#If you glance across our regional landscape, most places are stillstuck in the top-down mindset of the annual meetings, leadershipsummits, and “sage on the stage” panel discussions. These eventspay scant attention to stimulating interaction among participants.They do little to promote the behavior needed for innovation inopen, loosely joined networks.#Indeed, some places must start at a more basic level. Their civicdiscourse has become corrupted by patterns of bad civic behavior.To begin building an innovation ecosystem, they need first toestablish clear standards of civility before any large-scaleinnovation in the civic economy can happen. #4

September 23, 2014In the open networks that characterize our civic economy and ourdemocracy, civility plays a central role. Without it, we cannot dothe complex thinking needed to innovate or dress the continuousflow of challenges we face.#To make this point, we often refer to John Madison’s notes of ourConstitutional Convention. In May 1787, before any businesstranspired at the convention, the delegates passed rules of civility.These guidelines enabled them to conduct heated exchangeswithin these bounds. They provided the safe space for thedelegates to design our new form of government.#Once a region establishes civic spaces, civic leaders andentrepreneurs can plant the seeds from which new networks form.These seeds take the form of engaging conversations that stimulatenew collaborations. #To develop this ecosystem around the the Penn State College ofMedicine, they have launched a monthly Innovation Cafe. Duringthe design phase, civic leaders agreed that no single organizationwould “own” the initiative. Instead, they wanted to create acommons, shared by all. Each month, leaders of the Cafe plantseeds, consisting of both educational content and investmentopportunities that draw participants into the monthly forum.#In a similar way at the Charleston Digital Corridor, ErnestAndrade plants seeds at regular Fridays at the Corridor events.These sessions attract new participants and strengthen ties withinthe Charleston ecosystem.#Strategy in open networks involvesanswering two simple, but not easy,questions. Strategic Doing is designed toanswer these two questions quickly andmake revisions based on learning bydoing.Do Strategy in New Ways: Linkand Leverage#When it comes to building a strategy for an ecosystem, ourtraditional linear approaches — strategic planning — just won’t do.This approach is simply too slow and costly. Instead, we can buildour networks intentionally by teaching people how to collaboratequickly, move their collaborations toward measurable outcomes,and make adjustments along the way. These new strategy practices— which at Purdue we call “Strategic Doing” — accelerate networkdevelopment in an intentional and disciplined way.#5

September 23, 2014Traditional strategic planning operates from the premise that wecan discover most of what we need to know through detailedanalysis. The fallacy, of course, is that complex systems areunknowable in this way. No amount of analysis is complete. Inaddition, strategic plans generated with long periods of datagathering and analysis are very difficult to implement. Theyexhaust our energy and fail to inspire participation.#Strategic Doing forms a managed networkwith a core team, outcomes (with successmetrics), and projects (with metrics andmilestones.Strategic Doing is different. It is designed to form collaborationsquickly by “linking and leveraging” our existing assets across thenetwork. As we do, we also align them. Because we are dealing withcomplex systems that are continuously changing, Strategic Doingpresumes that the only way forward is to learn by doing.#With clear, simple rules to guide this process, participants inemerging networks learn the new skills of deep collaboration. Byteaching these skills across a region, more networks form faster.We scale ecosystem development. In the end, regions with moreinnovating networks will be more competitive. They will learnfaster. They will spot opportunities faster. And they will align andact faster.#With Strategic Doing, we form hypotheses quickly and test ourassumptions with “pathfinder projects”. Moving into action hasanother significant benefit: we form bonds of trust more widelyand quickly. We are scaling the development of trust. Byalternating periods of thinking and doing in short “time buckets”— usually 30 days — we make continuous adjustments in ourstrategy as we move forward.#Strategic Doing is designed on agileprinciples. There is no such thing as a finalstrategy. Continuous reviews lead tocontinuous revisions.Equally important, developing strategy in networks must relyheavily on visualizations. Because we are dealing with complexsystems that we cannot see, visualizations help us align our mentalmodels. Visualization, a key tool of design thinking, reducesconfusion. Text — in the form of endless Power Points, or long,unread strategic plans — opens the door to widely varyinginterpretations. In contrast, pictures engage a different part of ourbrain. The more vivid our imagery, the more we are likely tobecome emotionally engaged in our collaborative work. Seeing andgaining new insights becomes a shared experience. #To capture the complex collaborations that characterize a vibrantinnovation ecosystem, we have created a simple visualization, a6

September 23, 2014Strategic Doing Portfolio that outlines the type of networks thatmake an ecosystem or regional innovation cluster vibrant. Thetheory of transformation underlying the portfolio isstraightforward. It says simply:# A vibrant ecosystem needs brainpower to power it.# It needs support networks for innovation and entrepreneurshipto convert brainpower into wealth.# The ecosystem also needs networks to develop quality,connected places, because both talent and growing companiesare mobile; they will only locate in quality, connected placeswhere people can comfortably connect.#Ecosystems require a portfolio ofcollaborative investments. By mappingexisting assets on this portfolio, regionalleaders can begin to see how to strengthentheir existing networks. A vibrant ecosystem relies on new, intentionally developednarratives to both guide participants to new opportunities and toattract new resources to the ecosystem.# Finally, an ecosystem cannot develop without a deep pool ofpeople with the sophisticated collaboration skills to guide anddevelop these new networks.#Most of the results we want from an ecosystem — cool places,creative people, hot companies, innovative clusters — are“emergent”. They emerge from a balanced set of underlyinginvestments. An effective regional strategy focuses on generatingmeasurable returns from these underlying investments.#Power the Engaged Universitywith Strategic Doing#We do not need to leave the development of these ecosystems tochance. We have natural anchors for these ecosystems in everyregion of the country. For a host of reasons, colleges anduniversities can be leading their development:# Colleges and universities are the major source of talent neededto power these ecosystems;# With students, faculty, staff and alumni, they can assemble thenetworks needed to support startups and high growthcompanies;#7

September 23, 2014 Their campuses, especially when they are connected to thesurrounding community, provide high quality physicaldevelopment to make their region “sticky” to both talent andhigh growth companies;# They provide a rich source of stories — the new narratives —that can align resources and speed the development of thesenetworks; and# They have the convening power to bring together the differentactors within the ecosystem and teach the skills of deepcollaboration.#Strategic Doing: The Game provides asimulation for developing sophisticatedstrategies quickly. Players begin tounderstand that strategy in open, looselyconnected networks requires a newapproach.That’s the path we are following. We start by teaching StrategicDoing. With our university partners — including colleagues atMichigan State University, the University of Alaska, NorthernIllinois University, Kansas State University, the University ofWisconsin-Milwaukee, the University of Wisconsin-Parkside, theUniversity of Missouri, and The University of Akron – we arebuilding a network of university centers that understand and canapply agile strategy. Our immediate goal is to teach a StrategicDoing certification on five campuses next year. We are targetingtwenty to thirty universities in three years.#In our work with Michigan State, we have developed StrategicDoing: The Game. The game introduces the deep skills ofcollaboration quickly. By producing remarkably detailed strategiesin a few hours and charting a simple path forward, Strategic Doing:The Game resets our shared notions of strategy. It’s no longer adeadening, endless exercise. Strategy becomes fun, fast andengaging. #In the years ahead, fully engaged universities will guide thedevelopment of regional innovation systems. New approaches tostrategy provide the framework for developing sophisticatedcollaborations quickly and moving them toward clear, measurableoutcomes. #Engaged universities — through faculty, students, alumni and staff— will power the formation of these regional innovation systems.We have reached an exciting inflection point. #!8

September 23, 2014Ed MorrisonEd Morrison is the regional economic development advisor at thePurdue Center for Regional Development, joining the staff in2006. For over 20 years, he has conducted strategy projects witheconomic and workforce developers in the U.S. He guided theprivate sector team, based in the Oklahoma City Chamber ofCommerce, that partnered with the City to transform OklahomaCity. He also guided the early development of the CharlestonDigital Corridor. #His work emphasizes the strategic value of focused regionalcollaborations and open innovation, network-based models intoday's global economy. Ed developed a new discipline calledStrategic Doing to accelerate these collaborations that is nowwidely used across the U.S. and is now gaining attentioninternationally. His work won the first Arthur D. Little Award forexcellence in economic development presented by the AmericanEconomic Development Council.#Prior to starting his economic development work, Ed worked forTelesis, a corporate strategy consulting firm. In this position, heserved on consulting teams for clients such as Ford MotorCompany, Volvo and General Electric. He conductedmanufacturing cost studies in the U.S., Japan, Mexico, Canada,Italy, Sweden and France.#Ed started his professional career in Washington, D.C., serving as alegislative assistant to an Ohio Congressman, staff attorney in theFederal Trade Commission and staff counsel in the U.S. Senate. Heholds a B.A. degree cum laude from Yale University and M.B.A.and J.D. degrees from the University of Virginia. #Purdue Center for Regional DevelopmentFormed in 2005, the Purdue Center for Regional Development(PCRD) answered the call for our nation’s research universities tobecome more engaged in promoting regional prosperity. And forgood cause. Our nation’s competitiveness is tied to our regionaleconomies where sophisticated clusters of innovative businessesform and grow. Our research universities help accelerate thisinnovation with innovative approaches to regional engagementthat are agile, adaptive and responsive.#9

September 23, 2014Pioneering these new approaches comes naturally to Purdue, andthis purpose—defining the contours of regional engagement forthe 21st century research university—defines the work of PCRD.The energy to pursue this purpose is rooted in our values. We buildsophisticated collaborations quickly by relentlessly looking formutual benefits and behaving in ways that build trust and mutualrespect.#We anticipate dramatic changes to the academic and marketlandscapes for our nation’s research universities in the comingyears. Our proactive response is to continue to explore new waysto co-create value with those willing to invest in their futureprosperity. In defining the tools, frameworks and strategydisciplines to guide these sophisticated collaborations, PCRDstands at the forefront of this important work.#Strategic DoingStrategic Doing teaches people how to form collaborations quickly,move them toward measurable outcomes and make adjustmentsalong the way. In today’s world, collaboration is essential to meetthe complex challenges we face. Strategic Doing enables leaders todesign and guide new networks that generate innovative solutions.It is a new strategy discipline that is lean, agile and fast—just whatorganizations, communities and regions need to survive and thrive.You can learn more about Strategic Doing on the PCRD website.You can download background here; watch an introductory videohere; and keep up with Strategic Doing on ou

Regional innovation systems form with networks that operate with sufficiently high levels of trust to innovate. Regional innovation systems emerge from a portfolio of networks focused on different key components. Engaged universities can speed the development of regional innovation systems. Universities as Anchors of Regional .