SNEAK PREVIEW OF TRACKING INNOVATION:

NORTH CAROLINA INNOVATION INDEX 2015

NCEDA NETWORKING LUNCHEON ● SEPTEMBER 16, 2015

JOHN HARDIN ● SCIENCE, TECHNOLOGY & INNOVATION, N.C. COMMERCE

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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?

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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)

Why Focus on Innovation?

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• 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

What’s an Innovation Ecosystem?

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• 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 Gap Gap

Environment & Infrastructure

Broadband Access

Support for Education

Industry Mix

Cost of Living

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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

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2013Index

Dashboard Overview(2015 index is

shaping up similarly)

Red is badGreen is goodGray is neutral

Answer 1

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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

NC’s Current Population

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2014 Population Estimate

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NC’s Population Change, 2000-2014

% of Total Change

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9

11

12

13

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Answer 2

15

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Answer 3

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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?

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Thank You!