The Innovation Frontier No Longer Ends at Silicon Valley: Forbes 500 Inc. Companies Come from all over the United States

Forbes is famous for its annual publications ranking the private sector by a variety of means- revenue, innovation, and growth among them. The lists themselves are fascinating, but even more interesting is looking into the details that explain why some companies manage to top the list and others do not make the final cut. An equally interesting question is that of where these companies come from; what is their geographic location and how does that factor into their ranking? Are the most successful companies grouped together in clusters like Silicon Valley, thriving in big cities Boston, or incorporating in business-friendly Delaware? Do the same geographic areas claim a significant portion of the list each year?

The Ewing Marion Kauffman Foundation has conducted research to answer these questions in a work entitled “The Ascent of America’s High-Growth Companies”. This study demonstrates significant geographical diversity in Forbes’ fastest-growing privately-held companies in terms of revenue between 1982 and 2010. The research “reveals that high numbers of fast-growing firms are concentrated in unexpected regions and industrial sectors”. Conclusively, this interactive data map  allows the viewer to visually compare company density by location and witness the overall the geographic diversity.

Kauffman Foundation researchers Yasuyuki Motoyama and Jared Konczal have discussed some of their surprising findings from the study. First is that of all the large metropolitan areas, Washington, D.C. has the “highest concentration of Inc. firms, both in absolute number and per capita (normalized by population)” demonstrating the growth of a strong government services cluster in the last few decades. Second, typical innovation hotspots are usurped by clusters of companies in areas such as Salt Lake City, Utah, Indianapolis, Indiana, Buffalo, New York, and Louisville, Kentucky. Lastly, the researchers found that though many variables such as patents per capita, access to venture capital investments, and ivy league-level universities significantly influence the placement of innovation centers in the United States, only one relationship matters for the largest-growing firms— having a highly-skilled labor force nearby.

The Kauffman Foundation’s research ends at 2010, but the 2012 Forbes list is out. In an ever-changing economy like the United States companies are always adapting to stay efficient and relevant for the consumer, so the geographical densities are likely different but following the same trend of the last thirty years. It appears that Americans have crossed another frontier; entrepreneurs no longer have to grow their businesses in Silicon Valley, but have the resources to create revenue from anywhere. In a world increasingly without borders, innovation and business seem to be able to grow everywhere.

Posted by: Sophia Higgins

Sources: Forbes, The Ewing Marion Kauffman Foundation, Huffington Post

Fortune Brainstorm TECH 2011 @ Fortune Live Media courtesy of Flickr user Fortune Live Media

Techonomy Conference 2012: Objectives of Technology-Driven Economic Revitalization

On Wednesday, September 12th business leaders, political figures, and technology experts came together for the annual Techonomy Conference in Detroit. Hosted by the Detroit Economic Club, the conference’s agenda focused on the role of technology as a vital component of achieving social progress and economic growth.  This single day program is especially committed to the issues of “reigniting U.S. competitiveness and economic growth, creating jobs, and revitalizing cities in a technologized age”. Featured speakers included Grady Burnett, the Vice President of Facebook’s Global Market Solutions, James Dougherty, an Adjunct Senior Fellow for Business and Foreign Policy on the Council of Foreign Relations, and Justin Fox, the Editorial Director of the Harvard Business Review. They addressed the crowd on topics ranging from challenges in the era of globalization to the democratization of finance and product development to the future of manufacturing and its impact on employment. Audience members were also greeted by the founder of Techonomy, David Kirkpatrick, and treated to speeches on individual entrepreneurial development and other related topics.

The conference took a local look at Michigan and Detroit’s economic struggles for revitalization and at the challenges faced auto-mobile industry. Described as the Silicon Valley of an “earlier era”, Detroit is said to represent the larger issues facing American cities, including adapting to changes in education, employment, and infrastructure brought on by an increasingly globalized market society. Some have questioned the conference’s location of Detroit due to current economic struggles. Techonomy’s founder sends a different message, citing Detroit’s troubles as emblematic of cities that have missed the opportunities of technology in the past but have the potential to resolve these issues. Even a recently hurting automobile industry, a defining characteristic of Detroit, stands to make substantial gains from strengthening its tech culture of efficiency and educational achievement.

What were the goals and expectations of Techonomy? The event sought to utilize the revitalization of industry through technological advances, entrepreneurship, and innovation as major strategies for economic recovery. A focus on the increasing globalization of business and industry practices seemed also to be an objective of the conference. Intent on keeping America pushing the technological envelope, speakers discussed the future of expanding innovation and inspiring competitive growth. Complementarily, lecturers represented a diverse background of national industry and intellectual leadership, to address the concern of declining US competitiveness in detail and tackle the issue from unique viewpoints.

What can the public expect to come from this meeting of multi-disciplinary minds? Perhaps policy-makers will be influenced by the incredible support from the business community for this technology initiative as a means of creating jobs and stimulating urban development. Another possible outcome is a renewed emphasis on education for current and future generations to establish a more highly-skilled workforce with improved techno-literacy. Finally, perhaps Americans will see more pressure for regulatory reform easing start-up business restrictions. Ultimately, conference publicity should push technology to the forefront of economic recovery initiatives as a tool for improving US competitiveness and improving urgent urban issues to speed along city development.

Forbes highlights examples of innovative entrepreneurs in the Detroit area who exemplify these aims and serve as best-practice models for aspiring start-up companies. With the help of the Techonomy and its conference speakers, the American public may be able to look forward to more success stories like these.

Posted by: Sophia Higgins

Sources: Techonomy, Forbes, CNBC

Photo Credit: 2010_08_05_techonomy_105 @ Techonomy courtesy of Flickr user dserals

 

US Manufacturing Decline

The month of August showed further signs of a struggling US economy with a decrease in manufacturing.  This was the third month in a row that overall manufacturing in the US has been in decline. A total of 15,000 manufacturing jobs were lost during the month of August with a loss of 8,000 jobs in vehicle parts manufacturing. The US has lost 3.5 million manufacturing jobs since 2002, and as of August, the total number of jobs in manufacturing stands at 11,967,000. With the August jobs report released by the Bureau of Labor Statistics showing an increase of only 96,000 jobs, many questions about the state of the US economy linger on.

The weak performance of the US manufacturing sector mirrors manufacturing developments around the world. With the global economy still in a recession, other countries are experiencing similar economic woes. Chinese manufacturing in the last month was at a nine month low, and its GDP growth of 7.6% in the second quarter of this year compared to a year before was its lowest increase in three years. The Chinese purchasing managers index (PMI), an indicator of financial activity, fell to 49.2, while the American index for August stood at 51.5. A PMI of 50 indicates no change.  The Eurozone showed even greater signs of decline as its composite PMI for all 17 states stood at 46.3 in August.

What does the continual struggle of the US economy tell us about American competitiveness? It is far from clear that it is an indicator of America’s decline relative to other countries. As the numbers above show, the other two major economies in the world, China and the Eurozone, went through similar contractions in the manufacturing sector. What the evidence points to, however, is that we are still in a worldwide economic recession. It should not come as a surprise to anyone that the US economy is still stagnant. With the global economy so integrated, hopes of a stronger US manufacturing sector depends on other countries as well.  With stagnant growth rates affecting a majority of countries in the developed world, these latest numbers on American manufacturing shouldn’t be interpreted as evidence that America is falling behind. The problem with manufacturing jobs will not be alleviated until the global recession comes to an end.  As of right now, there are few signs that an end to the recession is in sight.

Posted by: Samuel Benka

Sources: ReutersThe Wall Street Journal, The Huffington Post

 Photo Credit:  Polar-Polar Tank Trailer ManufacturingCourtesy of Flickr user TruckPR

You are invited to: The New Advanced Manufacturing Partnership Report

 You are invited to: 

The Program on America and the Global Economy (PAGE) presents:

The New Advanced Manufacturing Partnership Report

Thursday, September 20, 2012

1:00 p.m. – 2:30 p.m.

5th floor Conference Room, Woodrow Wilson Center


Martin A. Schmidt, Co-Technical Lead, Advanced Manufacturing Partnership Report; Associate Provost; Professor of Electrical Engineering at MIT

 

Theresa Kotanchek, Co-Technical Lead, Advanced Manufacturing Partnership Report,

Vice President, Sustainable Technologies and Innovation Sourcing, Dow Chemical Company

 

Introduction:

Thomas Kurfess, Prof., Georgia Tech, Assistant Director for Advanced Manufacturing, Office of Science and Technology


The recently released Advanced Manufacturing Partnership report, Capturing Domestic Competitive Advantage in Advanced Manufacturing, details the unique role that manufacturing plays in the broader U.S. economy-as a direct source of jobs, as a spur to additional job growth across the economy, and as an important force for addressing the nation’s trade deficit.  Most importantly, the report reveals that the nation’s continued strength in innovation depends on sustaining a close, two-way connection between the innovation and manufacturing processes.  “Proximity to the manufacturing process creates innovation spillovers across firms and industries leading to the ideas and capabilities that support the next generation of products and processes,” the report notes.  “In this way, a vibrant manufacturing sector is inextricably linked to our capacity as a nation to innovate.”  At this forum the two technical co-leads for the AMP report will discuss its findings.


RSVP here or to receive further information, send an email to PAGE@wilsoncenter.org

Directions to the Wilson Center: www.wilsoncenter.org/directions

You Are Invited: Leading the Second Century of Flight

You are invited to:

DIRECTOR’S FORUM

Leading the Second Century of Flight

 

Jim Albaugh

Executive Vice President, The Boeing Company

 With an introduction by

The Honorable Jane Harman

Director, President and CEO

Woodrow Wilson International Center for Scholars

 

Since the Wright brothers’ first flight, America’s leadership in aerospace has helped build our economy and ensured our security. Today our leadership is threatened by budget constraints at home and heavy investment by other nations abroad. In this National Aerospace Week address, Jim Albaugh will highlight what’s at stake and what steps the U.S. must take to lead the second century of flight.

Jim Albaugh is an executive vice president of The Boeing Company. A 37-year Boeing veteran, Albaugh has led the company’s commercial, defense, space and security businesses.

——————————————

Tuesday, September 18, 2012

10:00 to 11:00 a.m.

Woodrow Wilson Center

6th Floor, Joseph H. and Claire Flom Auditorium

RSVP here or to receive further information, send an email to RSVP@wilsoncenter.org. Please provide your name and professional affiliation.


Please allow time on arrival at the building for routine security procedures. A photo ID is required.

Directions at www.WilsonCenter.org/directions

Individuals attending Woodrow Wilson Center events may be audiotaped, videotaped, or photographed during the course of a meeting, and by attending grant permission for their likenesses and the content of their comments, if any, to be broadcast, webcast, published, or otherwise reported or recorded.

The national debt hits $16 trillion: where is the debt coming from and who is it affecting?

On Tuesday, September 4th, the Department of the Treasury reported that the national debt has topped the $16 trillion mark. After a series of debt auctions near the close of business on Friday, August 31st, the gross debt rose from $15.991 trillion to $16.016 trillion. What does this number, once imaginably enormous and now alarmingly tangible, mean for American citizens and the economy?

Taking a closer look at where exactly our debt had been auctioned off to is an important first step

to answering this question. A breakdown of our current debt reveals that about 70% of the $16

trillion (about $11.273 trillion) belongs to both foreign and domestic investors and the Federal Reserve, representing an increase of almost $60 billion in a single day. The remaining 30% is inter-governmental transfers. Specifically, a little less than $5 trillion is owed to the trust fund for Social Security and federal pension systems.

Of the over $11 trillion owed to foreign investors, China owns $1.16 trillion but is closely followed by Japan with $1.12 million. In fact, though China has been vilified as the largest foreign holder of US debt, their holdings have decreased from $1.31 trillion in June of 2011. Other world powers including Russia, the United Kingdom, and Brazil together hold significant portions of the national debt as well.

Now that the debt has been categorized, we can see possible implications for American citizens. So much of the debt is held by American institutions and American citizens who require the services of those federal funds. Borrowing $5 trillion from Social Security’s trust fund may have a significant effect on the future functioning and stability of the pension system, and therefore a powerful impact on care for coming generations. Pension funds could see cuts if borrowing options are restricted in the future,impacted by the downgrading of US credit. In the presidential debate and current political arena, obtaining the financing for enacting policies like the Healthcare Reform through deficit-spending remains a major controversy and fault-line between the Democratic and Republican parties.

Another potential effect of this is the strong possibility of a changing, for better or for worse, our relationship with our foreign investors. How much influence on America does the Republic of China have as it reigns as the largest holder of US debt? Will our policy decisions in the future favor not necessarily who our friendly relationships are with, but with which nations hold the biggest shares of our deficit?

These questions and many more remain to be answered. Perhaps we will find the answers before meet the next trillion dollar marker.

Posted by Sophia Higgins

Sources: US Department of the Treasury,Washington Times ,CNN

Photo Credit courtesy of Flickr user Photo Gallery