Summaries of Innovation Reports

Committee Staff reviewed over 35 reports on innovation and economic development in preparation of the 2012 hearing.  Below is the list of the top five reports with their summaries below.

1. California’s Role in the Global Economy: New Context-New Opportunity

2. Innovation America: Investing in Innovation

3. The Culture of Innovation: What Makes San Francisco Bay Area Companies Different?

4. Entrepreneurship and Urban Success: Toward a Policy Consensus

5. Investing in California’s Infrastructure: How to Ensure Value for Money and Protect California’s Competitive Position in the National and Global Economy

Creating and maintaining an innovation-supportive environment requires government to rethink and to be open to the reassessment of government supported programs and services.  That said, there are many examples of key actions that have been or could be taken by local, regional, and state government entities.  Much research has been undertaken in the past decade to assess some of the best-practices for government action.  In addition, there are key innovation-related reports that focus on single issues including "Workforce Development," "Access to Capital," "Company Strategies," and multifaceted solutions that examine public and private sectors solutions together. 

Summaries of the First Five Report

California's Role in the Global Economy:  New Context-New Opportunity (Doug Henton, John Melville, Tracey Grose, Tiffany Furrell; Collaborative Economics, Inc., 2008)

This report provides a diagnosis of California’s current economic situation and its unique place in an emerging global innovation network. It also has implications on what can be done to help our state and regions in these challenging times. Findings, among other issues, include: 

  • The Innovation Economy has four key elements: expertise as in new discoveries, knowledge and insights; interaction in the form of exchange of ideas and surfacing of synergy that creates new business models, marketing plans, or products; diversity to enable the mixing of perspectives to create newer, more robust ideas; and the application of these ideas to proof their values in commercialization.
  • Individuals and businesses suffer but new opportunities also emerge when economic conditions shift. California, a global center of innovation, attracts companies from all over the world as a profitable location for their R&D operations with the devaluation of the U.S. dollar.
  • New concerns about pollution and climate change will create new opportunities for California’s green technology producers and service providers.

Recommendations include:

  • California should take advantage of its position at an important nexus of the global innovation network and as a broker in the global economy.
  • Key questions include, but are not limited to, the following:
  1. How can California strengthen its innovation assets?
  2. What efforts can be pursued to ensure the State’s educational system (K-12 and universities) is globally competitive?
  3. How can we create and support regional innovation brokers?


Innovation America:  Investing in Innovation (National Governors Association, Pew Center on the States, 2006-2007)

This report identifies a wide range of strategies on states’ direct involvement in R&D, which can spur innovation that serve specific economic and social needs within their own borders. Moreover, it provides clear guidance on how to design R & D investments that work. Findings include, but are not limited to:

  • States are building expertise by building strong research capabilities and attracting world-class talent.
  • States are orchestrating interaction by cultivating strong networks, well-designed research facilities and compact geographical areas.
  • States put people from diverse knowledge fields and cultures together.
  • States are making the application or commercialization of research by requiring university-industry partnerships and peer review prior to making investments.

Recommendations include, but not limited to:

  • States must strategically choose areas most likely to pay off in new or expanding businesses, a well-educated workforce and high paying jobs. It is not enough to find opportunities for marginal gains. The goal is to be ahead of the competition by being the pioneer or the only player.
  • A key to industry’s heart is to persuade business leaders that there is something of value for them in the effort by involving them in the earliest stages.
  • Not only should states look to areas of strength, but also relevance to their particular needs. For example, California is tackling pollution. 


The Culture of Innovation:  What Makes San Francisco Bay Area Companies Different? (Bay Area Council Economic Institute and Booz & Company Joint Report, 2012)

This report identifies the strategic, cultural, and organizational attributes that have led to the sustained success of the San Francisco Bay Area. Findings include, but are not limited to:

  • Innovation lies at the heart of the Bay Area’s economy, and the region is considered to be the world’s leading center for innovative activity, particularly in technology. In addition, the ongoing creation of new business paradigms also contributed to this distinction.
  • The Bay Area’s formula for success can be attributed to three critical factors: infrastructure (both hard and soft), finance, and culture.
  • The Bay Area hosts possibly the world’s greatest assembly of scientific research capacity. This includes five national laboratories (Lawrence Livermore, Lawrence Berkeley, Sandia, NASA Ames and the Stanford Linear Accelerator) and five leading research universities (Stanford, UC Berkeley, UC Santa Cruz, UC Davis, and UC San Francisco).
  • Another distinctive element of the Bay Area’s success is venture capital, an industry created there.

Recommendations include, but are not limited to:

  • Every company needs a clear, specific strategy—one informed by and aligned with customer needs.
  • The technical community needs to be fully aligned with top management, and technical leaders should report directly to the highest levels of the company.
  • The ability to innovate is a competitive advantage not just for companies but for entire nations.


Entrepreneurship and Urban Success:  Towards a Policy Consensus (Ewing Marion Kauffman Foundation, 2008)

This report provides a guide to policymakers and citizens to what is known about the effects of various local and state policies aimed at fostering entrepreneurially driven growth.  Findings include, but are not limited to:

  • Policymakers at local and state levels increasingly recognize that entrepreneurship is the key to building and sustaining their economies’ growth.
  • Historically, state and local policymakers have put their energies into trying to attract existing firms from somewhere else, either to relocate to a particular area or to build new facilities there.
  • Local, state, and regional economic development centered on entrepreneurship, however, it is a fundamentally different phenomenon. The formation and growth of new firms, especially those built around new products or ways of doing things, is clearly a positive sum game, not just for the locality, but the nation as a whole.
  • Industry clusters are important to the growth of local, regional, and national economies. Universities often, but not always, are at the heart of this process, birthing new ideas and training the workforce needed to implement them.
  • State and local governments affect higher education in the direct funding of research, subsidies of student costs, and regulatory oversight.

Recommendations include:

  • The strongest consensus about the appropriate policy course occurs in the regulatory arena where there are significant gains from adopting speedy and simplified regulatory approval processes.
  • The interventions that appear to be important, but that need cost-benefit analysis, include local entrepreneurship encouragement and mentoring programs, and improvements to schools, local amenities including public safety, and transportation infrastructure.  State policies that target spending either on research programs or on particular industries or particular firms are the least attractive option.


Investing in California's Infrastructure:  How to ensure Value for Money and Protect California's Competitive Position in the National and Global Economy? (Bay Area Economic Forum, 2006)

The purpose of this report is to identify the basic building blocks of infrastructure investment in California, and to develop a framework for evaluating effective public policy related to infrastructure investment.

The report produces recommendations by comparing today’s public policy environment to 50 years ago, which has revealed a much more improved balance between the economy and the crosscutting goals of smart growth and environmental protection. The state has been lagging in updating its fiscal policy framework to encourage productivity in infrastructure investment.

The report recommends the state to develop a well-thought-out, multi-year infrastructure investment plan capable of convincing investors that the plan makes financial sense, provides value for money in infrastructure investment and eventually pays dividends that benefit the California economy in addition to creating more robust fiscal-policy tools.


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