As I've noted in previous articles, the Obama administration has been focused on bipartisan-informed regional innovation cluster initiatives since 2009. I've described the various initiatives led by federal agencies and, more recently, the multi-agency competitions designed to speed development of both sector- and region-based innovation and economic development strategies. The latest announcement in this vein is the president's Memorandum on Accelerating Technology Transfer and Commercialization of Federal Research in Support of High Growth Businesses.
The memorandum highlights three actions: establish goals and measure progress; streamline the federal government's technology transfer and commercialization process; and facilitate commercialization through local and regional partnerships. Goals and measurements are based on the acknowledgement that it's hard to assess an action without setting objectives and gauging progress. The administration will monitor — from 2013-2017 — the number and pace of effective transfers from federal agencies to the private sector, and other federal and nonprofit research partners. Streamlining licensing procedures from federal labs and improving the Small Business Innovation Research and Small Business Technology Transfer are highlighted. Specific attention is being paid to competitions that spur transfer technology and to federal tie-ins with regional innovation cluster initiatives.
To streamline transfer and communication processes, key agencies like the Department of Commerce and the president's advisers, such as his chief technology officer, are focusing on reducing regulations and administrative burdens. Finally, the memorandum points to the importance of collaboration with universities, industry consortia, economic development entities, and state and local governments — key players in cluster development. Obama's memo also links this effort to the administration's Startup American Partnership, the public-private partnership designed to shine a light on entrepreneurship as a key to job and innovation growth.
The presidential memorandum has no budget and might be dismissed as political posturing. Certainly, it's not realistic to think the president could do more than this in the current political, economic and budget environment. Use of the bully pulpit, however, is an important tool as shown by the positive poll results stemming from the president's national tour on his jobs initiative. While Obama's push benefits his 2012 re-election efforts, it demonstrates that an agenda may be moved forward by policy-informed response to the current environment.
While the president is doing capable work in driving his innovation and entrepreneurship agenda despite significant structural and political obstacles, clusters and tech transfers are not sufficient to translate innovation into new businesses and good-paying jobs. New ventures spun out of labs are limited without seed and early-stage capital, as well as mentorships. Startups have very high failure rates, even in good economies. The capital and specialized support associated with providers of this critical resource are available but tend to be concentrated in metropolitan centers, challenging rural economies like those in northern New England. Despite the emerging success shown by innovation accelerators like Techstars in Boston and Jumpstart in Ohio, capital markets are still in contraction mode with a bias for established, rather than nascent, technology businesses. The economy needs new private market players willing to engage in university and lab spinouts.
As I noted in my last column, Maine has a unique regional asset in Maine Technology Institute, which has had its resources and profile leveraged with the Blackstone Accelerates Growth commitment, the Clean Energy Foundation's i6 Green win, which included MTI as a collaborator, and recognition of MTI Executive Director Betsy Biemann and its Maine Technology Asset Fund for the 2010 Excellence in Technology Based Economic Development award. While Maine will have a leg up on many states, this early grant capital (via MTI) and mentorship/entrepreneurship support (via Blackstone) will not realize its potential for job creation without a vibrant early-stage equity community. Small Enterprise Growth Fund and CEI Ventures both have dedicated VC funds that support early-stage ventures, but the absolute dollars — less than $10 million under management for each — is inadequate to carry companies from startup to job-creator. For Maine or any other state to exploit the opportunities — whether from federal labs, universities or garages of great inventors — the region needs capital players who can provide multi-million dollar investments to carry these inventions to their game-changing and job-creating potential. To the Obama administration's credit, the Small Business Administration introduced a new private capital matching initiative through its existing SBIC Debenture program. Now, if the market can only come up with some private capital…