Welcome to the latest edition of EntreWorks Insights, a new quarterly newsletter that will report on business trends, policy developments, and other issues impacting the business of economic development. You’re receiving this note because you’ve asked to subscribe or because you have some previous interest in the work of EntreWorks or the National Commission on Entrepreneurship, where I used to serve as Policy Director. If you wish to subscribe or be removed from this list, please send an email to info(at)entreworks.net. If you’re interested in the newsletter, please read on. Please feel free to share with friends, family, colleagues, and other loved ones. Comments and constructive criticism (and praise) are also welcome. Thanks for your interest.
Erik R. Pages
President
EntreWorks Consulting
www.entreworks.net
HIGHLIGHTS
Regional Innovation Benchmarking 101, Part 2
This issue of EntreWorks Insights is the second installment of our review of how regions can set up a system to benchmark their innovation performance in relation to other similar communities. The first part of this series, which appeared in October, introduced the concept of regional innovation benchmarking. It can be accessed here. In Part 2, we offer some guidance on how to do it right. This work is based on ongoing research and consulting engagements in partnership with Growth Economics, Inc., and its President, Graham Toft.
You’ve decided to embark on an effort to benchmark your community’s economic performance and the strength of your local innovation ecosystem. Maybe you read our last newsletter or maybe you just know that you need to do the right thing. Regardless of your motives, here are few things to keep in mind.
Getting Started
Getting started is often the hardest part as many economic developers (rightly) fear having to dive through reams of data and economic statistics.
While benchmarking can be a complicated process, there is some good news. In most cases, economic developers don’t need to create their own Innovation Index from scratch. Each year, states, communities, media organizations, and think tanks create hundreds of “report cards” and benchmarking reports. These report cards cover nearly every topic under the sun. For instance, you can find listings of the best places to own pets, to be a father, to work in the Federal government, to reinvent your life, to launch your career, and to retire.
As you begin the benchmarking process, you should review other similar reports and indexes. These reports will help provide lots of ideas on what to do and what not to do in terms of measures to use and in terms of how to do the analytics, qualitative investigations and communicate your results.
Assessing Other Products
As you review various lists, a couple of general rules of thumb can help to separate serious benchmarking reports from more frivolous “best of” lists designed to sell magazines or newspapers. First, an effective report is transparent. It provides citations for all of its measures, and also explains how it calculates various scores or rankings.
Second, an effective report explains how and why each of its specific metrics matters. For example, if a region tracks patenting activity as part of an innovation index, it should also explain why patents are an important innovation indicator. Understanding this underlying “theory of change” becomes especially important when working with indexes produced by national organizations or think tanks. Most of these reports promote a particular perspective or approach to economic development, and may thus contain explicit or implicit biases.
Finally, an effective report reflects the unique innovation environment of a given state, region, or locality. You should measure what matters to you, and what is relevant to your own community’s economic development vision. This may require specific measures tied to a leading industrial sector or cluster, or unique local quality of life assets or challenges.
Communicating the Results
When it comes to producing a Regional Innovation Index and publicizing its results, good data is not enough. Remember, benchmarking is a process. You need to follow-on with examination of what the best in class are doing well, to engage leaders in creative adaptation of best practices to the local context and to tell a “good story.” Effective communication of your findings requires that you also develop a comprehensive communications strategy to accompany report and action plan release.
A particular challenge relates to the question of “why should they care?” An effective communications strategy engages local residents. It clearly explains why key measures matter to the average citizen. It makes the case that regional innovation is not just about high technology industries: it is about building more a prosperous region on a wide variety of fronts.
Integrating the Results
Beyond the basics of effective communications, world-class development organizations also bring another unique perspective to the benchmarking process. They view benchmarking as a core activity that becomes embedded in the organization. They do not view a Regional Innovation Index as a one-time exercise to produce a glossy report. For them, benchmarking is a tool to foster continuous improvement, identify new trends, and address growing challenges.
Innovation is a cross-cutting theme that overlaps with a number of leading approaches to economic development. Nearly every aspect of local, regional, or state economic growth is now affected by the innovation climate and innovation strategies. Consequently, innovation benchmarking is moving up the priority list for competitive economic development organizations. The task of innovation benchmarking can begin simply, perhaps by tracking metrics already published in scorecards from state or national think tanks. More sophisticated efforts can follow. But, in the end, the important point is to get started, and begin a process that tracks progress not just once but on an ongoing basis.
Other Resources
While there are hundreds of economic development benchmarking reports produced each year, here are a few national efforts that may be especially helpful.
- Beacon Hill Institute for Public Policy Research, Metro Area Competitiveness Report 2007. Available at www.beaconhill.org.
- Corporation for Enterprise Development, Development Report Card of the States. Available at www.cfed.org.
- Information Technology and Innovation Foundation and the Kauffman Foundation, State New Economy Index 2008. Available at www.itif.org.
- Milken Institute, State Technology and Science Index 2008. Available at www.milkeninstitute.org.
What’s New at EntreWorks Consulting?
New Articles:
New reports in the EntreWorks Library are listed below.
Erik R. Pages reviewed A Future of Good Jobs: America’s Challenge in the Global Economy in the October 2008 issue of Applied Research in Economic Development. You can access the review here.
The Aspen Institute’s Youth Entrepreneurship Strategy Group recently released the report, Youth Entrepreneurship Education in America: A Policymaker’s Action Guide. EntreWorks Consulting supported the development of this report, and it can be accessed here.