Where we stand: A profound shift gains momentum
Where we are heading: Innovating regions
Building prosperity with open innovation: The theory of change
How regions move toward open innovation: The four horizons
WHERE WE STAND: A PROFOUND SHIFT GAINS MOMENTUM -------------------------------------------------------------The Nation is undergoing a profound economic shift in
which
hierarchical,
command
and
control
organizations are being forced to adapt to open networks, powered by the Internet. In the Industrial Era
(“our
Grandfather’s
Economy”),
businesses
generated wealth by dominating relatively stable markets. Vertical integration gave corporations the control they needed to minimize costs and maximize profitability.
Now open networks are creating new pathways to wealth. Embedding knowledge into products and services in fast moving markets requires agility and collaboration. No one organization has the expertise required to innovate successfully. “Open innovation” in
which
knowledge
crosses
organizational
boundaries through collaborative networks points the new pathways to what’s next: our Grandchildren’s Economy.
In the face of this profound shift, regional economies are either in the process of: 1.
Releasing assets from traditional industrial
organizations by learning to collaborate across political and organizational boundaries, or 2.
Accelerating their move up the new S Curve
of open networks with advanced strategies to accelerate open innovation.
In either situation, regional leaders are confronting unprecedented
complexity.
To
manage
this
complexity, they need a simple, rigorous process for guiding the transformation of their economy toward open
networks.
process called
REGIONERATE
is facilitating
this
“strategic doing”— a low cost,
repeatable way to define and implement strategy in open networks — and new strategy frameworks embedded in the concept of an innovating region.
leaders to chart a new course toward economic
HERE WE ARE HEADING: INNOVATING REGIONS
transformation.
-----------------------------------------------------------------------------Innovative regions create a stable platform for collaboration to strengthen regional competitiveness. They bring together representatives from the four sectors
that
invest
heavily
in
competitiveness:
business, government, education and nonprofits. (the “quad helix”). Through guided, focused interactions,
4.
Our policy and practice has not kept up
with these changes. We are attempting to meet the complex competitive challenges of the 21st century with policies and practices invented in the 20th century.
each region designs and delivers new strategies, policies
and
practices
to
improve
regional
The new
Flint
region will create new, focused
collaborations that “link and leverage” the core
competitiveness.
strengths across the quad helix. These collaborations point the way to the next generation of policies,
The region operates on the following assumptions: 1.
Our national economy is undergoing a
profound transformation toward open networks. We
are
moving
knowledge-based
rapidly
toward
economy
in
a
collaborate
and
which
innovate
and
research
to
transform
regional
economies and accelerate regional innovation.
more our
competitiveness will be determined by how well we
practices
across
The values of our region: Civility and collaboration •
Defined guidelines of civic behavior to
enable complex thinking.
organizational and political boundaries;
Without civility, complex thinking is impossible. In 2.
As this new economy emerges, regions will
drive
national
competitiveness.
Competitive
regions will foster a dynamic interaction among members of the quad helix. Regions with thicker collaborative networks will be more competitive. You will learn faster. They will spot opportunities
some regions, civility has broken down. It must be re-established before a region can move toward open innovation. •
Emerging, open networks of collaboration to
translate ideas into action. Most often, the move toward open innovation begins with a relatively small number of people
faster. They will act faster.
willing 3.
Higher education institutions anchor the
regional networks that are key to our national competitiveness. higher
education contribute brainpower and
entrepreneurs.
hotspots
for
these
Their new
campuses and
become
expanding
companies. Campuses also become the beacon for young people and adults as they explore new career
cross organizational
and
political
boundaries to experiment. This core group guides the initial stages of the transformation.
Fully engaged institutions of
other resources to support innovative companies and
to
options.
Finally,
leaders
in
higher
education play a vital role in convening regional
Engaged networks and anchor institutions •
Engaged leadership across the four sectors
that drive regional competitiveness: business, education, government, and the nonprofit sector. Open innovation requires contributions across the “quad helix”, since each sector has resources to contribute. Although all four sectors do not have
to be represented for transformation to begin, the
Leaders of innovative regions are willing to share
absence of one slows down the transformation.
what they have learned with other regions.
•
Leaders in innovating regions know that building
At
least
one anchor
higher
education
institution that actively participates in guiding
economic
prosperity
in
our
Grandchildren’s
regional strategy.
Economy is not a zero-sum game of winners and
Without an engaged higher education institution,
losers. Instead, they recognize that regions with
regional transformation is not possible. The reason
more connections -- thicker networks -- will be
is simple. A regional transformation is powered by
more competitive. They will learn faster, spot
brainpower.
opportunities faster, assemble resources faster and act faster. Connecting with new regions
Advanced strategy and analytics •
A flexible, low cost and repeatable process
to define, implement and adapt strategies. Traditional approaches to strategy -- strategic planning -- are too slow and costly to work in fast moving,
open
networks.
Strategic doing,
a
discipline of simple rules, builds new habits of collaboration,
clarity,
measurement
and
commitment to action. •
Analytic tools that support data driven
strategies. Strategies in open networks represent continuous experimentation to find “what works”. Successful pilot initiatives transform a regional economy, if they can be replicated, scaled and sustained. Quick access to data creates the insights needed to guide the process.
Open innovation and thought leadership •
Continuous interaction across boundaries to
generate innovation. Open innovation thrives in an environment of continuous overlapping
knowledge networks.
exchange
Within
an
within
innovating
region, these exchanges take place in a variety of different ways: entrepreneurship forums, angel capital networks, and formal cluster organizations, to name a few. •
Help for other regions learning the lessons of
open innovation.
presents opportunities. --------------------------------------------------------------
BUILDING PROSPERITY WITH OPEN INNOVATION: THE THEORY OF CHANGE -------------------------------------------------------------Innovation drives improvements in productivity, and higher levels of productivity lead to higher levels of prosperity. But how does innovation take place? In the
Industrial
Economy
of
our
Grandfathers,
innovation emerged from largely closed systems. Companies
carefully
guarded
their
intellectual
property.
They had little incentive to share ideas beyond their corporate boundaries. Corporations invested in large internal R&D operations and expected thee labs to keep generating new flows of promising ideas.
In the last decades of the 21st century, the explosion of the Internet -- our first interactive mass medium -eroded this system of closed innovation. Information now
flows
more
freely
across
organizational
boundaries. Innovative activity is far more dispersed.
Ideas bubble up in all types of organizations, large and small. Maintaining closed innovation simply cuts people off from the flow of new ideas. In addition, as knowledge workers become more mobile, it is increasingly difficult for companies to control the intellectual property these workers generate. Finally, the growth of venture capital has enabled smaller firms to capitalize on their innovations. Companies can commercialize their ideas outside the orbit of large scale corporations and their R&D labs.
-----------------------------------------------------------------------------shape internal innovation decisions. With open innovation the generation and commercialization of
An alternative model, open innovation, is now
new ideas takes place in networks, as corporate
reshaping how
boundaries become more porous.
companies guide new
ideas to
market. In open innovation, companies make use of ideas from wherever they find them. Open innovation
Regional prosperity emerges from the formation of
inherently leads to more flexible, networked business
these networks and the flow of productive investment
models.
Companies
partner
with
outsiders
to
leverage their expertise. At the same time, outsiders -suppliers, competitors, universities, customers -- help
through
them.
Innovating
regions
master
the
techniques and tools to build prosperity through open innovation.
HOW
REGIONS
MOVE
TOWARD
OPEN
critical to regional transformation: is the initiative
INNOVATION: THE FOUR HORIZONS
replicable? Is the initiative scalable? Finally, is the
-------------------------------------------------------------Developing innovative regions is an organic process
initiative sustainable?
of growth and development, in which a region
Horizon One.-- During the initial phase, regions learn the importance of developing and managing a new narrative that points the region toward assets,
collaboration.
and
transformation
through
Regions learn about the importance
of creating intentional “civic spaces� in which they can engage in continuous complex thinking. Regions also learn about the strategic value of civility.
Horizon Two.-- In the next horizon, regions learn about the value of networks and how thinking in networks is different
from
organizations.
thinking
within
hierarchical
At this stage, regions learn to map
their assets strategically in a way that enables them to define new opportunities by connecting these assets. Regions also learn about new tools that enable
them
to
understand
their
networks by
exploring both business and occupational clusters.
Horizon Three.-- In this horizon, regions learn about how to guide networks strategically using the new discipline and simple rules of strategic doing. At this stage, regions also learn how to guide their strategy using new strategy maps and metrics. at this stage, regions typically develop their first strategic action plan
and
encounter
the challenge of regional
governance.
Horizon Four.-- During this phase, regions use open networks and
new
perfect their ability to use metrics in order to learn what works and to keep their initiatives on track.
passes through a series of clear horizons.
opportunities
At this stage, regions also
habits of strategy to bring
successful pilot initiatives to scale across a region. Regions move to build new initiatives within a handful of strategic focus areas. They learn how to evaluate each initiative by answering three questions that are
To build the power of open innovation within their region, regional leaders need to move through each of these horizons. Moving through the horizons involves a series of guided workshop exercises and continuous practice in new habits of collaboration, analysis and strategy. ------------------------------------------------------------------------------
Contacts REGIONERATE
Primary Intermediary Linda Fowler / CEO
Web and Electronic Communications: www.REGIONERATE.com lindmariefowler@gmail.com