Regions Do to Compete? Director Center for Regional Competitiveness 3

CONNECTING INNOVATION & Four Key Questions REGIONAL DEVELOPMENT Four Key Questions

The Critical Role of Universities 1. Why is regional competitiveness the new framework for economic development? Mark Drabenstott 2. What must regions do to compete? Director Center for Regional Competitiveness 3. How to connect innovation with regional development? University of Missouri-Columbia 4. What policy initiatives are needed? [email protected]

FourFour KeyKey QuestionsQuestions Globalization makes regions the athletes in the global economic race.

1. Why is regional competitiveness the new framework for economic development? The impact of globalization is greater 2. What must regions do to compete? for regions than for nations. 3. How to connect innovation with regional development?

4. What policy initiatives are needed? The impact of globalization is The impact of globalization is greater for regions than for nations. greater for regions than for nations.

17 % range

6.2% range

Globalization has changed Innovation is now a powerful economic driver. the field of play in this race. National Entrepreneurship Index and GDP Growth Average GDP Growth (2004 to 2006) 12 China Venezuela 10 India Innovation now matters more than 8 Russia simply being a low-cost place. Hong Kong 6

2 U.S. Japan European countries 0 0 5 10 15 20 25 30 35

Total Entrepreneurship Activity Index (2003)

Source: Global Entrepreneurship Monitor, 2003 and International Monetary Fund

Source: Drabenstott & Henderson, 2006 FourFour KeyKey QuestionsQuestions To prosper, rural regions must:

1. Why is regional competitiveness the new 1. Craft a regional strategy. framework for economic development? 2. Build robust regional governance. 2. What must regions do to compete? 3. Deliberately pursue innovation. 3. How to connect innovation with regional development? 4. Grow a lot of entrepreneurs.

4. What policy initiatives are needed?

A New System for Regional Development FourFour KeyKey QuestionsQuestions

1. Why is regional competitiveness the new Strategy Governance framework for economic development?

Regional 2. What must regions do to compete? Prosperity 3. How to connect innovation with regional Entrepreneurship Innovation development? 4. What policy initiatives are needed? Universities Regions •Competitive advantage poorly understood. •Innovation scattered across separate research centers. •Do not know which innovations can help.

•Economic benefits flow to unknown locations.

•Competitive needs of regions not understood.

The Problem The Current Approach

Interdisciplinary Universities Regions Research Centers Universities Regions

• Innovation scattered • Competitive • Competitive across separate advantages poorly • Innovation centers • Innovation centers advantages poorly research centers understood pooled to create pooled to create Research Parks understood synergies • Economic benefits • Do not know which • Do not know which flow to unknown innovations might • Competitive needs • Competitive needs innovations would locations help of regions still not of regions still not help understood • Competitive needs of regions not Intellectual Property understood & • Economic benefits Technology transfer flow to hometown Universities need regions… Regions need Universities…

st But there is no 21 Century bridge connecting the two. Hometown Innovation Bridge Four Key Questions

1. Why is regional competitiveness the new framework for economic development? Universities Regions New Institutional • Better understand • Engaged in helping 2. What must regions do to compete? competitive regions diagnose Mechanisms advantages competitive advantage • Gain access to 3. How to connect innovation with regional innovations that • Research informed leverage by competitive development? competitive needs of regions advantages 4. What policy initiatives are needed?

Innovation & Regional Development Innovation & Regional Development Policy Issues for the Future Policy Issues for the Future

1. It is not enough to have a “research 2. These “bridges” represent a frontier in engine.” We must build “bridges” that all OECD countries. connect innovation with regions, the new athletes in the global economic race. Innovation & Regional Development Innovation & Regional Development Policy Issues for the Future Policy Issues for the Future

3. Policy must focus on creating an 4. Building this “market” will take three effective “incentives” for new steps: institutional mechanisms at universities. Increasing the capacity of regions to define competitiveness strategy— ”the ask.”

Cataloging & filtering innovation in a “development friendly” way— ”the bid.”

Providing incentives for researchers and regions to come together— ”the market maker.”