Innovation

Shaping the innovation economy

Our region, defined by the GO Virginia initiative as Region 2, includes the cities of Covington, Lynchburg, Radford, Roanoke, and Salem and the counties of Alleghany, Amherst, Appomattox, Bedford, Botetourt, Campbell, Craig, Floyd, Franklin, Giles, Montgomery, Pulaski, and Roanoke, continues to emerge as a technology hub and engine for innovation-based economic development. Over the next year, this column will explore why innovation and entrepreneurial activity is so critical for long-term economic success.

The concept of innovation economics was first advanced by the economist Joseph Schumpeter in his 1942 book, Capitalism, Socialism and Democracy. Schumpeter is credited with introducing the idea of an innovation economy. He argues that innovation and entrepreneurship are at the heart of economic growth. But it is only in recent years that an “innovation economy,” grounded in Schumpeter’s ideas, has become a mainstream concept.

Innovation economists advocate that what primarily drives economic growth in today’s knowledge-based economy is innovative capacity. The presence of creative knowledge workers, policies that encourage and support innovation and entrepreneurship, advanced industry clusters, research enterprises, collaborative firms, and support mechanisms such as accelerator programs, mentorship support, and access to new venture financing sources are all key ingredients for a vibrant innovation economy.

The good news for our region is that many of these key elements are present here: • Virginia Tech is a leading R1 classified research university • The Fralin Biomedical Research Institute is a growing biomedical research enterprise • Liberty University’s Center for Engineering Research &

Education provides labs for researching chemical and materials, electromagnetic compatibility, 3D prototyping, calibration testing, and non-destructive testing • RAMP provides acceleration and mentorship services to technology startups • The VTC Innovation and Seed Funds, along with Common-

Wealth Angels provide capital access in Region 2 for startups • Regional industry clusters include advanced manufacturing, health and life science, IT and software development and autonomous systems.

Schumpeter’s views seem prophetic today. Tech-based companies dominate the list of the ten largest companies in the world as ranked by market capitalization. They include Apple (#1), Microsoft (#3), Amazon (#4), Alphabet (#5), Facebook (#6), Tencent (#7), Tesla (#8) and Alibaba (#9). As recently as 2008, only Microsoft made this list.

With the right vision, leadership, and support for innovation and entrepreneurship, Region 2 could be the home of the next Tesla or Amazon. We have most of the right ecosystem elements to make this happen with proper focus and commitment.

INNOVATION

By Greg Feldmann

Executive Summary:

A new occasional column focused around one word – innovation.

Zack Jackson is co-founder of The JPG Agency small business creative firm. Reach him at zack@thejpgagency.com.