Today, Saul heads up the Business Innovation Factory.  BIF’s name tells the story–it is a laboratory for new thinking about business innovation.  Saul’s book also tells the story of BIF’s work as well—”business model innovation is the new strategic imperative.”  If you want to transform your organization, you need to be ready, willing, and able to rethink and transform its business model(s) as well.

It’s hard to quibble with that claim–business models matter and the ability to devise a unique (and profitable) model is a key to business success.  Fortunately, the book digs deeper and provides a set of principles and tools for how to go about the process of business model innovation.  There is no “one best way” to go about the process, but it is important to be aware of key issues and potetnial roadblocks along the way. This is true for business, and non-profits (covered in part 4 of the book) as well.    If you’re on this pathway (and you should be!!),  The Business Model Innovation Factory is an excellent guidebook.

One final plug for BIF:  Their annual summit is a great event that brings together great thinkers and great ideas. BIF 8 will be held in Providence this coming September.  You can learn more here.

This week, the Project released a new Economic Mobility Visualization tool that allows users to assess economic mobility at the state level.  The data and tools track both absolute mobility (e.g. rises in income levels) and relative mobility (e.g. how people’s earning stack up against their peers). One interesting result: geographic mobility and economic mobility don’t seem to be linked–at the state level.  In other words, people who move to a new state for economic opportunity do see individual benefits. ”Movers” are more likely to rise than “stayers.”  However, at the aggregate state level, these moves don’t seem to have a larger impact on a state’s overall mobility scores.

On a regional level, states in the Northeast and New England seem to perform best in terms of support economic mobility.   Maryland, New Jersey and New York were top performers.  Meanwhile, several Southern states perform at the bottom of the table, with Louisiana, Oklahoma, and South Carolina ranking as the least economically mobile states.

Women’s Initiative for Self-Employment:  Started in San Francisco, but now expanding across the US,  the Women’s Iniitiave has an impressive track record of helping low income women start their own businesses.  They have big goals for 2012–to train 1,600 women and to help them create 10,000 new jobs across the US.

Small Business Majority:  If you listen to many lobbying groups here in Washington, you’d think that all small businesses want only 2 things:  no new taxes and no regulation.   The Small Business Majority is seeking to set the record straight.  They support research and polling of small busienss owners to assess what they really think on key issues like energy, health care, and the budget.

Senior Entrepreneurship Works:  A new organization focused on helping seniors learn about entrepreneurship as an “encore career” option.

Extreme Entrepreneurship:  This project engages college students via the Extreme Entrepreneurship Tour, a rolling series of events that celebrate entrepreneurship and get young people excited about new opportunities.  Since 2006, the tour has touched down on hundreds of college campuses around the country.

Rohit’s paper, “Supporting High Growth Entrepreneurs:  The Network-Centric Approach to Entrepreneurial Assistance,” recommends a new paradigm for supporting entrepreneurs.  He notes that today’s entrepreneur faces a world of unprecedented opportunity along with unprecedented competition.  Talent is everywhere, barriers to entry are low, and markets change at a ferocious pace.

In this environment, entrepreneurs need to think globally and have “just in time” access to market knowledge and intelligence.   However, they lack the time and capacity to amass their own global networks of expertise or connections to  needed resources. That’s where entrepreneur support organizations fit in–by connecting entrepreneurs into new global networks  The entrepreneur will not be supported by a single counselor or coach, but needs access to dozens of functional or domain experts.   These could be mentors, other firms, academic experts, etc.   Effective entrepreneur support is about growing and managing these networks.

The report contrasts this method with traditional “cluster” strategies that seek to “find all the pieces and put them together in (one place).”  Shukla argues that this approach serves to shelter entrepreneurs, leaving them less able to compete in fast-changing markets and less prepared to capitalize on non-local opportunities.   Instead of sheltering firms within a regional cluster, Shukla calls for an approach that finds and uses “people resources just in time wherever they may be, uncover(s) market opportunities across conventional boundaries, make(s) oneself visible to a range of partners and customers, and obtain(s) feedback to constantly refine and calibrate one’s offerings.”

This brief summary doesn’t do justice to the full report, but hopefully piques your interest.  This report is definitely worth a read for those looking for new thinking in regional economic development approaches.

American economic developers could learn a great deal from our international development colleagues who have been developing pathbreaking programs and making major investments in more rigorous research into what works in poverty alleviation.  I have found that The Aspen Network of Development Entrepreneurs is one good place to start learning about the the latest trends in these areas.  ANDE has just published an excellent literature review that assesses what current research tells us about the role of small and growing busineses in poverty alleviation.

According to ANDE, the latest research suggests that supporting the development of more microenterprises may not be the most effective antipoverty strategy.  These microenterprises do provide income for the owner and his/her family, but any other new jobs tend to be very low-paying and do little to help employees move out of poverty.  In contrast, growth-oriented small and medium-sized enteprises (SMEs) do provide better quality jobs and better employment opportunties.  These SMEs tend to employ anywhere from 50 to 200 people.

Ultimately, current research suggests that international development programs should focus on this “missing middle” as a force for poverty alleviation.  Instead of simply funding small microenterprises or investing in large scale projects, backing these dynamic SMEs–”the missing middle”– may be a better way to create more jobs, reduce poverty, and develop a more competitive local economy.   While the ANDE literature review doesn’t note this fact, a similar discussion is underway in US economic development circles.  Much like their overseas colleagues, US economic developers are placing greater emphasis on how to nurture “gazelle” companies as opposed to simply seeding the start-up of microenterprises or lifestyle businesses.   While the size and scale of the “missing middle” differs across countries, its role in improving development outcomes is remarkably similar.

Meanwhile, American Business Journals has been releasing its own regional On Numbers rankings of local small business climates.  The rankings are presented at the national level, along with regional rankings for the East, South, Midwest and West.  Regional winners  were Pittsburgh, Austin, Minneapolis-St. Paul, and Salt Lake City.  These rankings use a six part formula that includes population growth, employment growth, and small business concentration and growth.

Like most readers, I enjoy these ranking exercises, but I also recognize their limitations—especially when they are primarily designed to interest readers as opposed to driving policy.  There are many good aspects to these two examples.  For example, they both recognize—unlike many other such ranking models—that low taxes alone do not make a strong small business climate.  All else being equal, lower taxes are better.  But, if they are not accompanied by local assets and  resources, they will do little to spark small business growth.

The main shortcoming of these studies, like most such rankings, is that they provide no way to fully assess their data, their methodologies, or their ranking models.  For example, how does the Startup Compass measure work ethic or perceived competitive advantage?  And, how  does one assess this measure across diverse countries such as India,  Brazil, Poland or Canada?  The On Numbers rankings provide access to data sources, but don’t explain their purpose.  For example, why and how does population growth create a strong small business climate?

When you are reviewing these kinds of rankings in the future, keep these kinds of questions in mind.  Have a nice read, learn a little, but don’t expect the rankings to be the last word on how your region (or others) stacks up in terms of small business and entrepreneurship success.

The 2011-2012 Michigan Entrepreneurship Scorecard:  This very comprehensive report tracks Michigan’s performance on dozens of measures ranging from things like new business starts or job growth to measures such as energy security or airport performance.   This report is helpful to non-Michiganders as well as the data tracks the performance of every state in the US.

2011 Index of the Massachusetts Innovation Economy:  We might consider this study to be the “granddaddy” of innovation benchmarking.  It’s been produced every year since 1997, and it’s still one of the best such efforts now underway. The Index tracks 25 sets of measures, with a heavy focus on capital, talent, and technology.  While the report finds some problem areas, such as declines in education spending, the overall findings provide further confirmation of Massachusetts’ position as a national and global leader in technology and innovation.

The Illinois Innovation Index:  This interesting effort is a collaborative project of several groups operating in Chicago and statewide.    Instead of producing a thick annual benchmarking report, Innovation Illinois is publishing monthly updates that dig deeper into one source of data or one set of issues.  The latest March 2012 issue assesses the role of patenting activity in the Illinois economy.  Other issues have
looked at R&D spending and entrepreneurial optimism.

If you’re interested in this work, you might consider joining me and  my colleague Graham Toft, the creator of the Michigan Scorecard, at an upcoming training session on how to build your own regional innovation index.   This session will be held at the Manufacturing Extension Partnership’s annual conference in Orlando, FL on May
6, 2012.  You can learn more here.  Hope to see you there.