Wanted: Innovation Broker

First published in UT San Diego, December 11, 2012

By Barbara Bry and Neil Senturia

Wanted:  Innovation Broker

Primary duties and responsibilities: Bring together technology, talent and financial resources to transform existing companies and to create new ones. Force competitive collaboration.

Requirements: Demonstrated skills to work across boundaries and to identify the unique strengths of a region. Ability to convince silo-minded, strong-willed entrepreneurs that Robert Metcalfe is right — the power of the network is proportional to the number of users squared.

Compensation: Enormous satisfaction, some cash.

Local innovation brokers are the key to creating an ecosystem that allows companies to compete globally, said Doug Henton, chairman and CEO of Collaborative Economics, who spoke at last week’s Global CONNECT Summit held at the San Diego Marriott Del Mar. Henton has more than 30 years of experience assisting more than 35 U.S. states and 10 foreign countries in crafting and implementing economic development strategies, so he knows whereof he speaks.

Started in 1985, San Diego’s CONNECT is viewed as one of the early innovation brokers. Its model has been copied around the world, and now the Global CONNECT community meets annually to share best practices and to build partnerships that will create a bigger pie for everyone. I was the associate director of CONNECT in the early days, and it is amazing to see how much the innovation community here and around the world has evolved. CONNECT’s mission then and now is to link San Diego inventors and entrepreneurs with the resources they need for success.

Unlike the industrial revolution or the manufacturing boom of the first half of 20th century, today the source of wealth is ideas. Look at San Diego back in the 1980s when you could count the number of life science companies on two hands. Today there are hundreds that have created thousands of good jobs. These companies are based on ideas that were developed initially through federal research funding and then commercialized with private capital (mostly from outside San Diego).

The old economic development model was cost- driven and was viewed as a zero sum game, according to Henton. Companies sought the least-expensive raw materials and labor for a mass production system. Today, he says, customization is more important, so you need to move quickly and to be close to your customer. This has resulted in a resurgence of advanced manufacturing jobs in Silicon Valley, where Google, for example, is making its Nexus Q entertainment device.

“We have to collaborate to compete globally,” Henton said.

His argument: Ideas aren’t limited. The barriers are speed to prototype and speed to market. So we need to figure out how to move ideas into production more quickly with new modeling and simulation technologies as well as 3D printing. Ironically, we are in the middle of a manufacturing revolution. The result is that not everything is “cheaper in China.” America can be competitive, even in “high cost” regions because of new technologies along with the requirement to customize the solutions.

Henton said he’s often asked: How can my region be like Silicon Valley?

His answer: Each region has to figure out its unique value proposition that builds on its strengths. For example, Alabama has a Mercedes-Benz manufacturing facility in Tuscaloosa and advanced aerospace research in Huntsville. His approach was to apply modeling technology out of Huntsville to the auto industry to speed up prototyping.

At the evening event, Neil challenged him on the age-old question of “not enough capital in San Diego.” Henton pushed back hard, saying that there actually is lots of capital, but it is not traditional venture financing. Rather, it is corporate and strategic. Neil pressed with how difficult it is to get the “valley venture funds” to come to town. Maybe, but in the end, they came to detente, agreeing that there is always more capital than good ideas.

The one incontrovertible fact is this. Global CONNECT is addressing the reality that the innovation ecosystem must be global. You compete with the company across the street and across the ocean. That leads to the proposition about collaborating to compete.

Rule #118: If you can’t beat ’em, join ’em.


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