1. S NEAK P REVIEW OF T RACKING I NNOVATION : N ORTH C AROLINA I NNOVATION I NDEX 2015 NCEDA NETWORKING LUNCHEON ● SEPTEMBER 16, 2015 JOHN HARDIN ● SCIENCE, TECHNOLOGY & INNOVATION, N.C. COMMERCE

2. Pop Quiz! 1.Among the 50 U.S. states, where does NC rank in terms of the strength of its innovation economy? 2.On average, how many time higher (e.g., 2x, 3x, 4x) are wages in high-tech industries compared to all industries? 3.What percentage of NC’s total employment is considered high-tech? 2

3. Why Focus on Innovation? Between one‐third to one-half of economic growth in U.S. is attributed to innovation (Source: U.S. Department of Commerce 2012) Innovation is the creation & adoption of new products, services, and business models to yield value Innovation comes primarily from science (systematic knowledge) & technology (practical/creative application of knowledge) 3

4. Why Focus on Innovation? 4 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 SAS adds a Data Scientist job in Cary → more jobs for waiters, landscapers, store clerks, painters, etc., but not vice-versa Most important impact of SAS on local labor market is outside high-tech Best way to create jobs for all is to grow & attract high- tech/innovative companies that hire highly educated/skilled workers Source: Moretti 2013

5. What’s an Innovation Ecosystem? 5 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 Gap Environment & Infrastructure Broadband Access Support for Education Industry Mix Cost of Living

6. What’s an Innovation Index? Comprehensive measurement of an innovation ecosystem’s performance 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 6

7. 7 2013 Index Dashboard Overview (2015 index is shaping up similarly) Red is bad Green is good Gray is neutral Answer 1

8. 8 Which underlying factors have the largest impact on three target economic well-being variables: Per capita GDP Per capita personal income Average annual pay Based on analysis using SAS Visual Statistics, we found three variables statistically significant for predicting changes in target variables: Proportion of workers in high-tech industries Proportion of workers in science and engineering occupations Post-secondary educational attainment

9. NC’s Current Population 9 3 10 2014 Population Estimate

10. 10 NC’s Population Change, 2000-2014 % of Total Change 2 9

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22. Two Current Innovation Initiatives Innovation-to-Jobs (I2J) Initiative Policies & programs, developed by Governor McCrory’s I2J Working Group, to commercialize more innovations, particularly from universities InnovateNC Initiative Multi-organization partnership, led by Institute for Emerging Issues, to help five North Carolina communities—Asheville, Greensboro, Pembroke, Wilmington/Carolina Coast, & Wilson— build and sustain their local innovation ecosystems What else can/should be done? 22

23. 23 Thank You!