By Ted Vaden

Since I came to the NC Department of Transportation a year ago, I’ve been observing engineers.

With a few exceptions, they are the leaders here. Division engineers are the generals of small armies. They answer to the chief engineer, who answers to another engineer, who answers to the chief operating officer, who happens to be both an engineer and a general. The designation, P.E., after your name is an honorific important enough to place on the nameplate on your door. I have P.E. envy.

It makes sense that engineers are so esteemed. They get transportation done.

Transportation is about how to get from Point A to Point B in the fastest time, at the least cost. Engineers are uniquely qualified—by education but also, I would argue, by mindset—to make transportation happen. They think in straight lines, about how to get you from here to there, about how to overcome the obstacles in between (think rock slide). Transportation is about problem-solving; engineers thrive on solving puzzles. Whatever the problem is, they figure it out.

And it’s not just transportation. For the last half-century, engineers have been the drivers of our economy, our society, our culture. The great advances that define the age—the television, the computer, the cell phone, the iPod—came from engineers. Engineers rule.

Or at least, they did.

Last month’s Emerging Issues Forum in Raleigh, “Creativity, Inc.,” suggested that the era of the engineer has, if not ended, at least changed. The Forum offered the proposition that our future economic well-being depends on moving away from an engineering-based economy to one based on creativity. (Interesting it was that the forum was hosted by N.C. State University, training ground for some of the nation’s best engineers. If not basketball players.)

One of the speakers was Daniel Pink, author of the best-selling  A Whole New Mind, Why Right-Brainers will Rule the Future. Pink argues that America needs to shift from a society dominated by the left brain—the logical, sequential, analytical type of thinking characteristic of engineers and scientists—to a right-brain orientation characterized by artistic, empathic, inventive “big-picture” thinking.

Why? Because only that creative orientation will enable America to compete in a global economy in which the left brain odds are against us. Simply put, compared to India and China, we can’t produce enough engineers and scientists.

Pink said:

“There’s this notion out there that if we only train armies of scientists and engineers, we’re going to be fine. I don’t agree with that. We’re not going to be fine if we have armies of scientists and engineers who are purely technicians. We are going to get our butts kicked by India and China who are going to be able to create a lot more technicians who are going to be able to work a lot cheaper in a lot larger numbers. That’s not a game we can win.”

Pink cited a National Science Board survey that asked employers what they look for when they hire engineers:

“In addition to analytical skills, which are well provided by the current education system, companies want engineers with passion, with lifelong learning skills, systemic thinking, an ability to innovate, an ability to work in a multi-cultural environment, an ability to understand the business concepts of engineering, inter-disciplinary skills, communications skills, leadership skills and an ability to change. These are not routine engineering abilities. These are big-picture capabilities.”

Another speaker was Roger Martin, author of The Design of Business, Why Design Thinking is the Next Competitive Advantage. Martin presented research showing that creative-oriented jobs make up an increasing share of the American job market, pay better and experience virtually no unemployment. By “creative-oriented jobs,” he means work that requires decision-making and autonomy on the part of the employee. Those kinds of jobs have gone from one in ten jobs 100 years ago to three in ten today. People in creative-oriented jobs earn substantially more than workers in the rest of our service-based economy, including engineers.

Martin, business school dean at University of Toronto, worries that our higher education system focuses too much on training scientists and engineers. American colleges already produce more engineers, on a per-capita basis, than do China and India, he said:

“What worries me is that we’re headed towards a world where we are increasingly exalting analytical thinking to the exclusion of creativity. If anybody here thinks we are going to fend off the economic challenges of India and China by getting more analytical, I’ve got news for you. Good luck. It ain’t happening.”

As solutions, Pink and Martin both urge a shift to a more liberal arts curriculum in schools and more employer support for creativity-oriented work. Martin is an advocate of “design thinking”—a way of looking at the world based not so much on analytical and deduction skills, but on intuition and “the logic of what might be, a logical leap of the mind.”

Pink is a proponent of “open source” innovation—using technology to build online communities and bring the power of lots of minds to work on solving problems. NC DOT is sticking a toe into the open source world by exploring how, for instance, we might involve users of the highway system to report on traffic flow or potholes, or how DMV customers might help us shorten lines in drivers license offices.

I should say here that my experience at DOT has shown that, while we may be engineer-dominated, the most successful are those who think outside the box, encourage innovation, and while problem-solving, look for unexpected solutions.

And, don’t forget, we’re led by a secretary who was trained as an anthropologist. That’s a person who studies people.

So, are engineers an endangered species at DOT? No. They just need to embrace their creative selves. As Pink said, “We need engineers and scientists who think like artists. And we need artists who think like scientists and engineers. But if we have engineers who only think like technicians, we’re going to be in a world of hurt.”

The Regional Challenge

Here, the Council needs to come up with “micro” oriented answers: how can innovation work in the vastly-different eco-systems the various people of our state live in? At the Williamston meeting, the Council heard how leaders in northeastern NC are thinking about the “innovation imperative.”

The region is well below the state average in per capita income and education levels, and in some ways is more oriented toward Norfolk/Virginia Beach than to North Carolina. Leaders there say they have three big assets – proximity to the huge Norfolk market, available land (including lots of coastline) and a hard working people.

Some good politicking and strategic investment have helped northeastern NC strengthen its backbone of high speed fiber and improve its road systems, so it is more connected than ever to the rest of the world. The region’s rich cultural history has enabled it to improve its “heritage” tourism offerings.

But the big employment industries that have supported the Northeast for years – apparel, agriculture, timber, food processing – are all facing huge long-term challenges, and some other cyclical industries like tourism and boat building are facing gigantic short-term challenges. It adds up to high unemployment in some places (Halifax is sitting at 13.6% unemployment; ten other counties in the region are above 10%) and a real innovation imperative.

The Northeast’s approach is to make a few “big bets” – high profile efforts that build off assets and could yield fruit that supports the region for a long time to come.  The NC Center for Automotive Research along the I-95 corridor in Northampton County takes advantage of its space to create an automotive testing track. A bio-ag initiative aims to develop the region’s ability not just to grow crops, but to extract important chemicals from those crops. An aviation and aerospace initiative aims to make the Pasquotank County area a key source of aircraft overhaul.

Even if every initiative works, it’s hard to see how they will create enough jobs to replace those in the high-employment sectors the region is losing. An innovation strategy for North Carolina needs to offer hope and tangible ideas to regions like the Northeast, but also to challenge those regions to think bigger themselves.

The Council needs to create structures or encourage thinking that permits serious innovation, the kind that comes from asking big questions and questioning fundamental assumptions. This thinking shouldn’t be wholly dependent on large transfers of funds from one part of the state to another.

For example, is there a new breed of tree that is more profitable per acre than the existing stock?

What’s the full range of niche crops that farmers might turn to to increase profits per acre?

How could the Northeast become the go-to testing ground for new ideas and companies?

What policy changes could it make to effectively blow up the state line to become an even bigger part of the exploding Norfolk market? How could northeastern innovators “play bigger” by connecting to innovative activities in that huge metro region?

What radical approaches to K-12 education can school systems there make to raise up a complete generation of innovative entrepreneurs who want to grow and plant permanent roots in a vibrant new northeast?

How can the region draw on Outer and Inner Banks visitors and retirees to extract their ideas and commitment to rethinking the region?

Which programs or research projects from which colleges or universities could be brought in to experiment with new models and ideas?

Can local government leaders come up with a new finance model that brings them the income they need to create their visions of tomorrow?

How can companies take full advantage of the even-greater connectivity offered by broadband expansion coming to the region, and the cost savings that come through greater access to “cloud” computing, to take their innovation to a new level?

No innovation council is going to be as clever at developing solutions like that as the people of a region are, but an innovation council can look at how to give regions space to dream and dare and do.

The Statewide Challenge

The other kind of answers the Council needs to develop are “macro” ones: what policy tweaks and development strategies and big ideas should the Council recommend to the state as a whole? At its meeting Thursday, the Council organized into three committees:

1)      Talent Growth, Retention and Recruitment – How do we raise up more people whose instinct it is to innovate, not immolate or enervate? Once we graduate innovative people from our schools, how do we get them to stay and innovate instate. Is it by starting new companies or developing new models, by expanding existing product lines or services, or by rejiggering existing companies? And how do we convince innovative people that this is the best place in the world to move to or move back to?

2)      Growing Innovative Companies and Organizations – What tools and conditions are necessary to increase the birth and growth rate of our most innovative companies? What financial tools or policy conditions or technical assistance strategies do we need to create a state known for its relentless innovation?

3)      Attracting Innovative Companies and Organizations – In a state accustomed to recruiting “buffaloes” – the kind of high employment branch plants of old-style, mainline industries that “fed” us in the 20^th century — can we find a way to systematically identify and recruit “gazelles” – small, fast growing, innovative companies that will feed us in the 21^st century?

The three committees will likely evolve over time and may adjust their focus, but in the meantime they need to work quickly to determine if there are any recommendations that could meaningfully help the state while we are in the middle of this economic crisis. In the meantime, the Council will continue meeting monthly across the state – balancing macro and micro solutions that can help us begin to make progress in creating an innovation culture here.

What would your suggestions be for the work of these three committees? What ideas need to be on the table for them if we want to strengthen the culture of innovation in our state? And how does a region launch innovation? Send us your thoughts, comments, corrections, analysis as a comment below, or Email or twitter us.

In the crowded showroom of a restaurant supply business in Raleigh last Wednesday, Gov. Bev Perdue announced she was naming Scott Daugherty, head of UNC’s NC State-housed  Small Business and Technology Development Center (SBTDC), the first-ever “Commissioner of Small Business,” and George Millsaps, head of the NC Community College System’s Small Business Center Network (SBCN), as “Assistant Commissioner.” The move was greeted with three sentences of coverage in the local paper.

Blahblahblahyawn.  More bureaucracy, right, when what we really need is to find ways to turn innovative small businesses loose?

This one is different. For one thing, there’s no money being spent. Daugherty remains head of the SBTDC; Millsaps stays in his job as head of the Small Business Center Network. They take on these tasks in addition to their day jobs.

Second, it gives the state, for the first time, a coordination function for small business efforts in the state.  No new bureaucracy: instead it is making sure the resources we have really work together.

It’s not that we lack public and private agencies and organizations that can help.  We have folks in the SBTDC, who generally work with fast-growing or technology-driven businesses,  and the people at the 58 Small Business Centers on community college campuses, who generally work with smaller, community-based small businesses. We have the existing business employees at the state Department of Commerce, their Business ServiCenter, and the electronic portal Business Link NC (BLNC). We have the NC Rural Center-spawned Business Resource Alliance. We have the process consultants from the Industrial Extension Service, some of our business or management schools, as well as the private sector. SBCN. We have the Institute for Minority Economic Development. We have regional entrepreneurial support organizations, like the Council for Entrepreneurial Development (CED) and some of the NC Rural Center’s pilot projects, the entrepreneurial outreach efforts of the UNC system’s 11 entrepreneurship centers and other centers at private colleges like Elon University. And depending on what part of the state you are in, the local office of the Cooperative Extension Service may well be able to provide some consulting for your small business.

What we have lacked with all these agencies and organizations is coordination. And lack of coordination means inefficiency – rather than becoming great at core competencies, organizations are tempted to claim they can “do it all.” The Small Business Commissioner approach gives the state, for the first time, some folks with responsibility and permission to herd cats, to figure out what is and isn’t getting done, and to determine how to make it happen.

If Daugherty and Millsaps get it right, it’ll mean that small innovative businesses won’t waste as much time having to figure out where to go when they run into challenges. That saves time and improves service and helps businesses implement innovation quicker.

Why should non-wonks care about small-sized businesses? Because they’re not small in impact: There’s a decent chance that’s where your next job is coming from. Businesses with fewer than 100 employees make up 96% of all businesses in the state; and account for 45% of our net job growth.

As it happens some spots in North Carolina do a pretty darned good job of working with one particularly important kind of small business as well: the kind known as “gazelles.” Gazelle firms are enterprises who have at least doubled sales and employment over the past four years. According to the SBA, among all major metropolitan areas in the nation, the Triangle and Charlotte areas rank 2^nd and 5^th nationally in the percentage of their firms that are these “high growth” gazelles.

Mangled metaphor of the day: If a new Small Business Commissioner can figure out how North Carolina can help more gazelles run faster, everyone will hear the sound of that tree falling in the forest.

If you had a recommendation for policy change to the Small Business Commissioner, what would it be? What could a small business commissioner do to boost innovation in North Carolina?

If the “giga” prefix sends you to Wikipedia or your Latin-English dictionary, here’s how Google put it in their blog post announcing the effort: “We’ll deliver Internet speeds more than 100 times faster than what most Americans have access to today with 1 gigabit per second, fiber-to-the-home connections.”

Still not there? Let’s just say the speed would give you whiplash and could permit the people using it to do things with the Internet that they aren’t currently able to even imagine, and that given the permission to think at 1 gig speed, they are likely to come up with some business-changing innovations.

As I read the announcement, it was hard not to reflect on where we stood in Internet connectivity in North Carolina ten years ago, how things have changed since then – AND what hasn’t changed. Speed still kills – and saves.

Ten years ago this month it was snowing (!) in North Carolina and I was writing the final report of the North Carolina Rural Prosperity Task Force. The number one recommendation? We had to have high speed broadband across the state. In the report, we described broadband as the essential element in modern economic competitiveness: “Today’s farm-to-market road is paved with electrons…the availability and affordability of high speed information technology…will make it possible for rural North Carolina to compete with the rest of the country and the world in the next century.”

Task Force Chair Erskine Bowles put it this way: “Information technology could be the salvation of rural North Carolina; the lack of it may be the damnation of rural North Carolina.”

In Whiteville, April 26, 2000 (had to miss it – something about my twins being born that day), then-President Bill Clinton said the effort would make North Carolina the national leader in closing the digital divide, because high speed Internet “…collapses time and distance. Therefore, for the first time in my lifetime, we have a chance to move more people out of poverty, unemployment and lack of access to businesses more quickly in rural America, isolated inner cities and Native American reservations than at any time in the history of this country.”

That’s why the Task Force was bold and strident: we had to get broadband to the whole state or we would get killed by the global economy.

We recommended an authority be created to head the effort. We got $30 million from MCNC to get it started. And ten years later the authority (now called e-NC) has gone way beyond what any of us thought was possible — doubling the percentage of rural folks with high speed access, moving from 36% to about 70% in a decade.  There’s still work to do, but congratulations to them.

Enough celebrating: here’s the problem. The Rural Task Force’s bold year 2000 recommendation was that we had to have 128,000 bits per second coming down the pipe – FAST STUFF at the time. Google’s announcement tells us the new “fast” is 1,000,000,000 bits per second.

Google’s announcement reminds us of four things:

1)      There is an ever-escalating minimum ante for businesses and communities to avoid being at a competitive disadvantage in the global economy. In 2000, we decided it was 128,000 bits per second to get in the game; today the new minimum may be 100,000,000 bits per second to compete. It’s going to take some ongoing commitment on the part of our state to keep developing capacity to all corners of the state, and some ongoing commitment to make sure that folks in rural areas know how to take full advantage of the high speed.

2)      Speed can’t just be available; it has to be usable. We need to continue to work on education efforts to make sure people understand the full possibilities open to them through speed.

3)     Speed can just be available and usable; it has to be affordable. In 2000 it cost more than ten times as much to get “high speed” in rural communities as it did in urban communities. No business can compete with that kind of tilt on the playing field.

4)      For businesses to get a competitive advantage, Google has just declared a new standard to shoot for – the gigabit — the new fast.

The challenge to us is whether we have the will to continue to be fastest in the urban areas that need a competitive advantage and really fast in the places that must avoid being at a competitive disadvantage. Doing  the latter is the focus of a new grant MCNC has just received – it will pay for the buildout of 480 miles of new fat fiber in the state. Doing the former is a matter of will: is there a city that will step forward to make the case for it being the right place for Google to try out its new network? (Update 3/3/10: At least two NC cities would seem to have a good case to make: Raleigh and Charlotte are ranked #1 and #16, respectively, in the latest Forbes rankings of “Most Wired Cities”)

As with innovation itself, the key mindflip we need to make is away from ever thinking that we have come up with a final solution to any business problem or social challenge that we face. Our orientation and mindset has to be that we will keep finding the next solution, and that once we find it we need to be working on the next one beyond that, and the next, and the next. That’s relentless innovation. That’s the world we live in — and if we want to keep competing, we need a gigabit of it in North Carolina.

In this interview, Anita Brown-Graham, director of the Institute for Emerging Issues, explains the importance of creativity to innovation and North Carolina. The IEI’s 25th Annual Emerging Issues Forum on Creativity was held February 8 and 9 in Raleigh. You can  join the dialogue via Twitter #IEI2010 and the IEI collaboration platform.

In desperation, I came up with this: Elements generally like to hang out together with other elements just like them. It’s their natural state.  They also naturally can’t stand some other elements and will resist any attempts to put them together.

But bring certain groups of elements into the mix and they will pair up naturally. They just fit together.  And there are still other elements, that, if you put them in just the right situation, will realize that they really have something to offer each other (an electron, a back rub) and can come together to make something brand new. You may have to add some heat or mood lighting to make it happen, but it works. My son and I talked about some examples.

Crisis averted – for now (note to self: if you want a scientist in your family, send the kids to science camp this summer).

Where did that idea come from? It has to be listening to Joe Desimone at the Governor’s Innovation Council’s first meeting. If there was one theme of that meeting, it was that innovation comes out of unnatural alliances. If there was another one, it was that we need to clone Joe Desimone.

Joe Desimone is a faculty member at UNC-Chapel Hill and NC State, an entrepreneur who has applied his brain to problems in chemistry, medicine, nanotechnology, manufacturing, advanced materials and dry cleaning (yes, dry cleaning), amassing patents (110 so far, with another 120 pending) and new company startups along the way. (Good news for one of the startups this month: Liquidia Technologies just got another $20 million in investment to do clinical trials on how to target nanoparticles at diseases.)

Yes, we need to move beyond Dolly the Sheep and clone people like that. But what we really need to clone is the way he approaches problems — his way of thinking.

There are three big lessons we can learn from Desimone, lessons we need to replicate in labs and garages, in nonprofits and even government agencies, if our state is to become “the most innovative place in the world.”

1. Innovation Happens When Smart People From Different Backgrounds Come Together

What Desimone gets is that if you are going to solve problems nobody else has, you need to bring together teams of people nobody else has. For example, when he set out to solve one of the problems he worked on – how do you prevent stents from collapsing post-angioplasty — his team was not just chemists or physicians, but engineers, large animal specialists and technologists. Each person had a different part of the solution, a different way of seeing the world and a different piece of the answer.

Bringing these different sorts of people together doesn’t necessarily lead to “kumbayah” moments – sometimes they hate each other — but it does give you a better shot at “aha” moments. As Desimone notes, “the most fertile ground for innovation lies between fields.”

That’s the idea behind new spaces like Stanford’s Bio-X, an interdisciplinary center for research on bioscience and human health, where founder Jim Spudich, when asked to get rid of the center’s eating space to save money, once famously said, “Cancel the laboratories and build the restaurant.” He knew it was in the restaurant, where people from different disciplines came together, that true innovation would happen.

And that’s the idea behind Nathan Myhrvold’s new ideation company, Intellectual Ventures, which routinely locks really smart people in the same room together to develop new solutions to really big problems. It started with a pretty simple premise: as Malcolm Gladwell put it in a recent article, the idea was that  “surgeons had all kinds of problems that they didn’t realize had solutions, and physicists had all kinds of solutions to things that they didn’t realize were problems.”

John Kao, author of Innovation Nation, and a speaker at last year’s NC State’s Emerging Issues Forum, summarized it this way: “The world’s toughest problems rarely have clear-cut solutions that can be unlocked by a single discipline.”

2. Innovation Happens When Smart People Can Have Access to All Sorts of Information

Bringing together diverse teams works when it comes to innovation.  But even the biggest team in the best place is a tiny subset of the rich array of information available in the world. One of the founding notions behind the Internet was that scientists, who historically had to wait months to find out what one another were doing, needed a faster way to share ideas.

The idea, has, ahem, gone on steroids.  No longer do you have to wait for a mentor or a faculty member or a textbook to teach you; in more and more fields, more and more information is available to you online. A scientist, or widget maker, or nonprofit head or government agency leader, or an unemployed factory worker in Bear Grass, NC now have access to an array of information that is expected, by the end of this year, to double every 72 hours.

And that information enables more people in more places to be in the zip code where innovation – the ability to translate new ideas and technologies into new systems, products and services – can happen.

3. Innovation Happens When People Can See the World From More Than One Perspective

Innovation can no longer afford to be a solo enterprise. The era of the lone genius is over, if it ever really existed.  Physically or virtually, problems increasingly require teams of brains.

But to succeed in the world, especially this lightning-fast-moving, globally-connected, creative-destruction world we find ourselves living in right now, we also need to train our brains differently.

A century ago, poet/philosopher/genius Samuel Taylor Coleridge described it this way: “Great minds,” he said, between snorts of opium, “are androgynous.” Great minds have an ability to bring more than one perspective, more than one way of looking at the world, to the table.

More recently, a whole new set of research and thinking that puts some flesh on the bones of that notion.  Mihalyi Csikszentmihaly (author of Flow: The Psychology of Optimal Experience), says truly innovative people tend to be “psychologically androgynous.” In his research, he’s found that “when tests of masculinity/femininity are given to young people, over and over one finds that creative and talented girls are more dominant and tough than other girls, and creative boys are more sensitive and less aggressive than their male peers.”  One clear lesson: my daughter needs to start wailing on her brother and he needs to cry about it. But I think there’s more to it than that.

If we want North Carolina to be the most innovative place in the world, we need to produce more of what Daniel Pink – coming to the Emerging Issues Forum next week – describes in his boundary-crossing book A Whole New Mind – as “boundary crossers,” who develop “expertise in multiple spheres…speak different languages, and …find jobs in the rich variety of human experience.” These people “reject either/or choices and seek multiple options and blended solutions. They lead hyphenated lives filled with hyphenated jobs and enlivened by hyphenated identities. They help explain the growing ranks of college students with double majors – and the proliferation of academic departments that dub themselves ‘interdisciplinary.’”

It’s not theory; it works, says Nicholas Negroponte of MIT: “Many engineering deadlocks have been broken by people who are not engineers at all. This is because perspective is more important than IQ. The ability to make big leaps of thought is a common denominator among the originators of breakthrough ideas. Usually this ability resides in people with very wide backgrounds, multidisciplinary minds and a broad spectrum of experiences.”

For North Carolina to become dramatically, relentlessly, more innovative, we need all three elements: 1) more interdisciplinary places where great minds can take on great big problems together – two prime spots are in universities and private companies; 2) better access to more information for more people – we can help that by continuing to improve high speed access for everyone; and 3) more people with boundary-crossing minds that can make connections, synthesize some of that glut of information, see synergies that nobody else sees – we can grow them by emphasizing problem-solving approaches to education and rehabilitating liberal arts studies.

But back to chemistry. We won’t get any of that just by hanging out with elements who look and think like us. We need some encouragement to get out of our comfort zones and let ideas collide until they create new innovations. If we get it right, the next generation is going to have a brand new set of answers to the question: “How does chemistry work?”

How do we create spaces where ideas can collide? How do we grow people who can sort through the information morass and find answers? What needs to change about education for us to raise up more boundary crossers?

With more than 90% of our jobs coming from small businesses and startups, we know that the solution to our short and long-term problems lies in the hands of the people who can create and grow those businesses. And we know that the companies most likely to grow fastest are those that are truly innovative, that offer a new idea, a new widget, a new service that people want and need and will pay money for. The answer to our needs in the mid- and long-term must be a new innovation-driven economy.

But what does that look like and what can we do in the short term to make that happen?

A starter set of ideas comes from this Sunday’s column by uber-columnist Thomas Friedman in the New York Times. Friedman calls on President Obama to “launch his own moon shot…to make 2010…the year of innovation…the year of ‘Start-Up America,’” and not just for geeks or geniuses, but for millions of kids.

Why? “Without inventing more new products and services that make people more productive, healthier or entertained – that we can sell around the world – we’ll never be able to afford the health care our people need, let alone pay off our debts,” says Friedman.

How might this grassroots movement toward innovation get started? Friedman connects three dots, one focusing on fostering inventiveness and the other two looking at how to turn innovative ideas into innovative companies: 1) National Lab Day, an effort calling for practicing scientists and classroom teachers to work together on exciting science projects the first week of May to inspire K-12 students in science; 2) the Network for Teaching Entrepreneurship, which advocates for teaching of entrepreneurship in middle and high school classrooms, with a special emphasis on low-income areas; and 3) a film called “Ten9Eight” profiling students participating in the NFTE annual entrepreneurship competition  (see trailer here).

There’s no question the Obama administration is upping the emphasis on innovation (see Paper 04). There have been dramatic new investments in the past year in science and technology research that could defibrilate a good bit of our inno-sclerosis over time. And I joined a small group of people meeting with a US Department of Commerce official who’ll be leading the USDOC’s first-ever office of Innovation and Entrepreneurship to hear about what plans for that office are starting to sound like and how we in NC can connect to them.

But the truth is we in North Carolina can’t afford to wait for trickle down innovation. So why don’t we start to work right now on a couple of Friedman’s ideas?

1. Let’s all commit to call our nearest school principal and ask what their plans are for National Lab Day. If they don’t have any, ask why. And if they don’t know how to get started, call your nearest university (you can start with the folks at these numbers on the UNC Economic Transformation Council) and ask how you could connect their scientists to your schools.
2. Let’s organize a movement to order copies of the DVD of the new film “Ten9Eight” to be shown in middle school classrooms across the state, or ask our students to tune in to the broadcast showing of the film on Super Bowl Sunday, February 7 at noon on BET, and then work to create the best participation ever in our annual “Hop on the Bus” high school entrepreneurship competition (this year’s competition is already down to finalists, to be announced this spring)

The combination of the two ideas – a lot more young people interested in scientific discovery and a lot more young people thinking about how to turn innovative ideas into companies – doesn’t address the entire spectrum of “innovation.” But wouldn’t it be a great kick start to our own “moon launch” of innovation?

On the one hand, there was a good chunk of energy in the room as a mix of big and small businessmen and women, elected officials, government types, higher ed folks, venture capitalists, nonprofit leaders and others shared stories and ideas.

There was a challenge from Gov. Bev Perdue to come up with really good ideas, a request that we “work a little miracle” and “make something good happen here,” and a promise that she would listen and take recommendations seriously.

There was great analysis of the world and national climate for innovation from Rob Atkinson, president of the Information Technology and Innovation Foundation, who gave a sobering assessment of where North Carolina is currently and its possibilities (the Triangle is strong, we have an above average concentration of scientists and engineers and a good business climate; according to his criteria, we have a weak “entrepreneurial climate,” a lack of easily-objectively-measurable innovation results in our rural areas and not nearly enough people with education beyond high school).

Entrepreneur Joe Desimone of UNC-CH and NCSU, discussed how he has been able to work in the space between disciplines to found three companies and secure 110 patents that promise to improve health and create wealth in North Carolina, and laid out an agenda NC might follow to increase innovation in the state.

Younger entrepreneur Judd Bowman, who started Motricity in his dorm room at the NC School of Science and Math and is currently working on his second startup, Pocketgear, talked about why he liked NC and how it could work better to attract more innovators.

John Hardin, head of the NC Board of Science and Technology, reviewed the recommendations of the board’s report, “Advancing Innovation in North Carolina,” and challenged the Council to consider some of those recommendations.

Jay Chaudhuri, Senior Policy Advisor to State Treasurer Janet Cowell, updated Council members on the status of the proposed $250 million Innovation Fund, which will attempt to invest a small percentage of state pension funds in potentially high return innovative NC companies.

And I talked about the efforts the UNC system is taking to become more innovative and some of the good ideas that are coming from commenters on changepapers.org.

But after all the talking, it was time for the Council to go to work, and the comments revealed the Council has a ways to go before it can identify and implement meaningful change.

As we’ve discussed in previous posts, one of the big challenges for blue-ribbon panels is the difficulty of focus. Since they are non-legislative bodies peopled with volunteers that have day jobs, in order to be successful, councils like this HAVE to concentrate on just a few high-leverage recommendations.

At this initial meeting, the ideas were almost universally interesting and useful, and given enough time or power or energy, if implemented, could meaningfully change North Carolina’s climate for innovation.

We heard ideas about the importance of beginning to teach innovation and entrepreneurship at all, creating a variety of new tax credits and funding streams to support innovation, of changing the culture for innovation in universities, of holding on to out of state and out of country highly educated Ph.D. or recruiting back innovators who have left the state. We heard about the importance of getting rid of the paperwork that can snarl innovation, of getting rid of the barriers that make it hard for universities and private companies to work together, and were reminded that many of these ideas have been tried other places and we need to benefit from the lessons others have learned.

So what are the FEW things that are HIGHEST leverage? What could the Council rally behind and get changed that will really make a difference? UNC President Erskine Bowles says “if you’re about everything, you’re about nothing.” The challenge to us will be to explore, yes, but then to narrow and get serious about the few things we can be about that can get change going.

What do you think the “few things” are? And how do you suggest an Innovation Council get some momentum behind efforts to change those things? Let us know with your comments!

The Council, co-chaired by Steve Nelson of the Wakefield Group and Al Delia, the Governor’s Senior Policy Advisor, looks to have 30 members.  I’m on it. There are reps from the small business and entrepreneurship communities, some government folks, some university types, some nonprofit leaders, and elected and appointed officials, including state Treasurer Janet Cowell.

On Thursday, the Council will get a commissioning charge from Gov. Bev Perdue, then will hear from Rob Atkinson, president of the Information and Technology and Innovation Foundation in DC, along with John Hardin, executive director of the NC Board of Science and Technology and Joe Desimone of UNC-CH. I’ll be talking about UNC’s system-wide effort to increase innovation and knowledge transfer.

And I’ll be talking about this blog, you and your comments — what you are saying about innovation in this state.

We’d like to hear from you with your #1 idea for the Council. If the Council could change one big thing, start one initiative, make one thing different, what would it be? Or what frustrates you most about innovation in NC these days?

Post your comment now!

GIFTS                                                                                     RECIPIENTS

1. Bully pulpit                                                         a.  University faculty and innovators
2. Wii Fit tightrope program                                 b. NC Gov. Bev Perdue
3. Three-legged stool                                             c. NC Chamber
4. Fishbowl                                                            d. NC General Assembly
5. Chips ‘n dip                                                        e. NC Treasurer Janet Cowell
6. SBIR grant                                                        f. Frustrated company workers
7. Legos                                                                 g. North Carolina universities
8. Student loan, spouse, child                               h. NC Rural Center
9. Carbonated beverage                                        i. Entrepreneurs
10. Weakened immune systems                           j. NC Department of Commerce

1. A bully pulpit for Governor Bev. Perdue – The idea of the “bully pulpit” was birthed 100 years ago not by guilt-inducing evangelists trying to beat some morality into us, but by Teddy Roosevelt, who felt the power of the presidency gave him a “bully good” perch to push his favorite programs. Let’s hope Gov. Perdue uses her gubernatorial pulpit to push innovation to the forefront this year.  She could start by using the 20 pound state seal that sits in her office to declare 2010 “The Year of Innovation.”

2. Wii fit tightrope for State Treasurer Janet Cowell — The Treasurer’s proposed $250 million program to invest a small amount of state retirement assets in high-growth, primarily North Carolina-based companies will require some careful stepping to balance the need of NC pensioners for good return on investment and the needs of NC innovative fast-growing companies for critical growth funds. Wii Fit has an excellent game to practice walking the tightrope. She’ll need it.

3. Three-legged stool for the NC Department of Commerce – 2010 could be the year the North Carolina Department of Commerce finally balances the “three-legged stool” of economic development policy (recruitment, existing business, startups) from one that heavily tilts toward recruitment to one that pays equal amounts of attention to encouraging existing companies to innovate and finding ways to get new, innovative companies started.  There’s nothing wrong with recruitment, but with 98% of the state’s businesses less than 500 employees (officially “small”), we need to see more emphasis on Commerce programs like BLNC and BizBoost that help ensure young innovative companies make it through the “valley of death.”

4. Fishbowl for NC Universities – This idea from Mark Rostick (through the changepapers “comments” section) gets at a key communications gap — between companies and investors (that are looking for increasingly looking to buy innovation rather than develop it internally), and universities (that are better at developing innovative ideas than bringing them to market). Mark’s suggestion — create a better “fishbowl” for outside people to “look in” on ideas being developed.  In 2010 the UNC system will be rolling out an improved version of a look-in function; it will be up to businesses and investors to determine if it works.

5. Chips ‘n dip for the NC Chamber — the entire responsibility for marketing innovation can’t fall on the shoulders of NC universities. As corporate R&D investments increasingly move out of company and out-of-country, NC’s historic success in attracting corporate R&D (the state ranks #1 nationally, with 13.6% of total university R&D sponsored by industry) is a strength to be developed further. If groups like the NC Chamber could sponsor forums for companies and investors to “look in” at university-conducted research, they might well find new ideas they could bring to market (if they serve chips ‘n dip, maybe there will be more energy!). The energy to find and bring to market innovation needs to be going in both directions.

6. SBIR grant for faculty members or entrepreneurs ready to take innovations to the next level — NC’s One NC Small Business Program provides matching funds for the Small Business Innovative Research (SBIR) that help innovators figure out whether their ideas have any commercial merit. State funds match federal grants of up to $100,000 for ideas selected as worth further exploration, making it easier to figure out if they can “turn new ideas into new services or products of value” (our definition of innovation).  Those sorts of programs, especially if coupled with an organized commercialization fund (as we described in the “Priming the Pump” section of Paper 14), really increase our chances of turning dreams into realities.

7. Legos for frustrated company workers – Everyday tens of thousands of us gripe and grouse about how our workplaces could save money, improve efficiency, make smarter stuff. But most of us are more comfortable talking about what’s wrong than what could be different. We need to fundamentally flip our perspective. As George Bernard Shaw once said, “some men see things as they are and ask ‘why?’: I dream things that never were and ask ‘why not?’” What about if every one of us working for someone else started putting energy into fixing the old broken widget or process instead of complaining about how they don’t work? Into creating the next new thing rather than complaining that nobody else is? Into making new lego creations instead of tearing other people’s lego’s down? Chances are a lot more of our companies would become a lot more innovative. And if we make a good faith effort to try innovation within and it fails, we always have the option to out-ovate!

8. Student loan, spouse, child for entrepreneurs -- If we want to become the most innovative place in the world, we don’t just need new innovators, who come from anywhere. We also need entrepreneurs who can translate those innovations from idea to market. And while those entrepreneurs  can come from anywhere, statistically speaking the people most likely to start high-growth companies are college educated, married with children. Research by Vivek Wadhwa at Duke for the Kauffman Foundation finds in a survey of 549 high growth businesses that 95% of founders held a bachelor’s degree or higher, that 69.9% were married and that 59.7% of them had at least one child. Of course we can’t force anyone into marriage or parenthood, but we can help more people complete degrees — right now there are 38 million people in the US that started college and didn’t finish — we need to reach out to those people and help them finish, and support those currently in school to help them finish. Even if they don’t start an innovative company, they will be more helpful to their companies, and on average they will earn more too.

9.  Carbonated beverage for the Rural Center – If the idea of a “free innovation zone” (see Paper 05) a place that has adopted a series of policies and made a serious commitment to  gets adopted in NC it will likely come easiest in an urban area that already has many of the assets that make innovation easier — a university, venture capital funds, a critical mass of industries. But finding a place with the energy and assets to make innovation FIZ in a non-metro setting is the kind of work the NC Rural Center is uniquely qualified to do.

10. Weakened immune systems for the North Carolina General Assembly — Without the support of the NC General Assembly, any innovation effort won’t get very far. The Governor and Treasurer may support it, businesses may get behind it, universities may back it, but it can’t truly go viral until it infects the General Assembly.  Here’s hoping for an NC1 I1 (NC #1 in Innovation) outbreak in the state in 2010.

What are your top resolutions this New Year to make your company more innovative? Your agency? Your school? What’s it going to take to get you there? Or what innovation resolution would you like to make for someone ELSE in this New Year? Send us your thoughts, comments, corrections, analysis as a comment below, or Email or twitter us.