1. 1 Tracking Innovation in NC Patterns and Implications for NC's Eastern Region John Hardin, Executive Director NC Board of Science & Technology www.nccommerce.com/scitech May 21, 2014

2. 2 Importance of Innovation Innovation is the creation & adoption of new products, services, and business models to yield value Between one‐third to one-half of economic growth in U.S. can be attributed to innovation (Source: U.S. Department of Commerce 2012) A large source of innovation comes from science (systematic knowledge) & technology (practical application of knowledge) STEM (science, technology, engineering and math) drives technological innovation

3. 3 Source: Moretti 2013 Innovation is Economic Engine US labor force = 66% local services, 10% innovation, 24% other But jobs in local services are more the effect, than the cause, of growth in other sectors Innovation has big (5x) multiplier effect (across sectors & skill levels) e.g., If RTI adds a biologic mfg. job in Greenville → more jobs for waiters, landscapers, store clerks, painters, etc., but not vice-versa Most important impact of RTI on local labor market is outside high-tech Best way to create jobs for all is to grow & attract high-tech companies that hire highly educated workers, particularly STEM

4. 4 Source: Georgetown Center on Education and the Workforce STEM Jobs Pay More (on average)

5. 5 STEM Jobs are Increasing Source: Georgetown Center on Education and the Workforce

6. 6 Economic & Innovation Patterns in NC

7. 7 Summarized Today: A small sample (1/4) of key indicators...

8. 8 Funding Policies Facilities & Equipment Industry-University Nexus Culture & Goals of Commercialization Organizations Commercialization Funding Policies K-16 Education System Industry Training Culture & Goals of Education/Training Organizations Education & Workforce Funding Policies Facilities & Equipment Researchers Culture & Goals of Research & Development Organizations Research & Development * * Economic Well-Being & Quality of Life Innovative Organizations ( New & Enhanced) * Innovative Ideas/ Discoveries Innovative Products & Practices Ultimate Goal Innovation Ecosystem Gap Environment & Infrastructure Broadband Access Support for Education Industry Mix Cost of Living

9. 9 Innovation Index Comprehensive measurement of ecosystem’s health Several purposes: Identify strengths & weaknesses Inform decisions & policy making Establish benchmarks & measure effectiveness A comprehensive & effective index should: Focus on multiple components of innovation ecosystem Include multiple indicators for each component Compare on multiple dimensions – spatially & temporally

10. 10 Index Dashboard Overview Red is bad Green is good Gray is neutral

11. 11 Summary Observations NC’s innovation ecosystem is moderately healthy (ranks 24 th overall) & not improving much On 27 of 38 measures, NC’s “Percent of U.S. Average Value” is below average, meaning NC underperforms nation overall Performance across indicators varies widely Innovation assets & activities are concentrated geographically (place matters) Need to understand state as a whole and differences across state Strong potential for increased innovation & commercialization

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23. 23 Source: Dow Jones Venture Source

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33. 33 Implications

34. 34 Recommended Actions 1.Education a.Provide public information/exhortation/consultation b.Raise core educational attainment of all citizens at all levels c.Emphasize STEM skills in education 2.Commerce a.Strategically recruit high-tech/STEM companies b.Strategically start and grow new high-tech/STEM companies c.Strategically assist existing high-tech/STEM companies 3.Infrastructure a.Expand broadband deployment and adoption b.Enhance cultural amenities c.Link rural regions to close and/or affinity urban regions