States step up push to lure innovators and investors
Increasingly, local prosperity depends on staying at the forefront of new industries and ideas.
from the February 26, 2007 edition
Page 2 of 3
Third, states want to play a bigger role alongside corporations and federal research programs. They aim to set policies that will welcome top talent, target industries that are a good fit for their region, and support new businesses often tied to the state's research universities.
"Nobody wants to base their state strategy on low-cost services," Dr. Audretsch says. "Every state makes massive investments [in] higher education.... There's this big potential that's sitting there. They want to get a harvest out of it."
Despite the competitive pressures, one region's success doesn't have to come at another's expense, he says. By its nature, a knowledge-based economy should spawn new industries, not simply a fight over the ones that exist now.
Some economists question whether state policy has much of a role to play in this process. After all, the federal government is likely to remain the big funder of basic research, and large corporations will continue to expand research and development spending, as well as find ways to turn this work into new products.
Still, neither CEOs nor federal agencies have the interest of a locality at heart the way that a governor does. And while mayors share the local focus, the state is the one holding the keys to the institutions driving innovation: large universities.
"You've got to have smart people. You've got to have research. They've got to be turned into a product, a business," says Mary Jo Waits, director of the Pew Center on the States, a research group in Washington that tracks state policies.
"Many of those things are really what I would call created assets," she says. "A lot of those things have to do with public policy."
A state can decide to train and hire talent, promote research, and create networks to connect the innovators with entrepreneurs and investors. This process can make the local economy more dynamic, say proponents of the model.
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