A Quick Comparison of Different Models of Innovation to Spur Economic Growth
Last month, the Brookings Institution published a report written by Scott Andes titled How Firms Learn. In the report, Andes examined how companies innovate and what cities can do to foster greater innovation. He analyzed the manufacturing sector and the software industry, which accounts for a large portion of the technology-based economy. The report provided some interesting data. For example, did you know that over two-thirds of America’s R&D companies are focused on manufacturing and software?
The report identifies three models of industry innovation:
1. Classic – The traditional, “classic” model is dependent on scientific breakthroughs and scientific expertise for advancement. Companies are reliant on large institutions such as national laboratories, universities, military, and private investors for research and development. In this model, scientific advancement on the higher-level creates opportunities for commercialization of the technology.
2. Unconventional – In the more atypical “unconventional” model, companies are both consumers and producers, and work collaboratively. Innovation occurs through cooperation among suppliers, manufacturers, and customers for technology breakthroughs. Although innovation happens independent of scientific breakthroughs, in the unconventional model, the innovations are “less linear and sequential” and are “more incremental and adaptive.”
3. Mixed – This model combines both classic and unconventional innovation to advance innovation.
Fremont is home to a variety of industries, including advanced manufacturing, life sciences, and cleantech. Many of the companies in Fremont are in the classic and mixed innovation models. For example, Lycean and Applied Spectra are companies that have spun out of the federal labs and universities. In the mixed innovation model, contract manufacturers such as AsteelFlash are actively using a design build process to actualize new R&D concepts. Additionally, the proximity of software companies to manufacturers allows for organic, active cross-fertilization of ideas, resulting in novel hardware products. For these reasons, Fremont represents the software and hardware convergence in Silicon Valley.
How can the City nurture further collaboration? In addition to the city’s rich network of suppliers, customers, and investors to support advanced manufacturers, Fremont is working with regional partners such as the Manufacturing Roundtable, Silicon Valley Manufacturing Engineers (SME98)and the Silicon Valley Chamber (REDI) to provide a social network for innovation. Additionally, the city promotes StartupGrind, a monthly networking group for entrepreneurs, to connect and learn from each other.
Finally, innovation does not happen in isolation. Clustering of innovative companies is essential for long-term growth. Fremont’s Warm Springs Community plan ensures that the Innovation District is set up to succeed.
Future models may continue to evolve, so Fremont is committed to an innovation agenda that will help it to change and grow at the pace of business.
A mixed innovation model.