The Innovation Scorecard: Grow-California has created a cost-effective, high value tool for local leaders seeking an innovation-driven economic development solution for their community: The Innovation Scorecard. The Innovation Scorecard measures a community’s readiness to support innovation-oriented entrepreneurial growth companies (whether they be start-ups, middle market companies, or well-established emerging market leaders), organizes the local and non-local assets (the value chain) to support entrepreneurial growth companies, and provides a sustainable framework to enhance your community’s innovation readiness. The premise for the Innovation Scorecard is based on a concept Grow-California has created called the Local Business Taxonomy. The Local Business Taxonomy helps illustrate that there are many different categories of businesses in any individual community, and that certain types of businesses have a much higher propensity to create jobs and wealth than others. These are the innovation-oriented businesses. To the extent a community is able to have a process to identify these companies, and then methodically bring resources from both inside and outside the community to help these businesses, it will stand a better chance of increasing prosperity and grow quality jobs.
The Innovation Scorecard establishes a baseline readiness score for a community, and a process through which a community can stage multi-year advancements using a “5-Stage Maturity Model” drawn from other disciplines and applied to economic development. Over time, a community striving to advance innovation should endeavor to obtain all of the attributes associated with Stage 5 in the Maturity Model. At this stage, the capacity to support innovation-oriented economic development is maximized, and recurring entrepreneurial success stories – including positive liquidity events – are evident. Grow-California’s Innovation Scorecard represents an “innovation” to the economic development industry, and posits that communities can, and should, take concerted strategic on a sustained basis until they achieve Stage 5 in the Maturity Model. The initial Innovation Scorecard establishes the baseline from which movement up stages of the Maturity Model can be measured annually.
Grow-California’s proprietary Scorecard algorithm encompasses 30 factors drawn from 9 key categories: See Right Column
While debate continues about how to rejuvenate the California and U.S. economies from a macroeconomic perspective, little attention has been given to the equally difficult challenge local elected officials and senior management within city and county governments face in growing their economy. They are tasked with creating jobs, tax revenues and prosperity in their communities in a period compared to the Great Depression. It is at the local grass roots level where the effects of lay-off notices are exceedingly personal and the impacts on public services most noticeable.
Many important studies conclude that innovative high-growth, entrepreneurial companies remain the U.S.A.’s one true economic advantage over other nations. These high growth companies include not only start-up ventures, but also middle-market companies, emerging market leaders, and established market leaders. What is common among these innovative businesses is that they are scalable, selling highly-differentiated products into national, and sometimes, global markets. When they achieve their business milestones, they grow and create jobs and tax revenue — and enhance prosperity — in their communities. They often start and accelerate the impact of your community’s key industry clusters. In simple terms, they increase your economic pie.
Through the Innovation Scorecard process, Grow-California identifies and then segments growth companies into 4 Primary Industry Clusters (See Right Column). It further distinguishes them from among 24 Secondary Industry Clusters (6 each per Industry Cluster). See Right Column
Every Primary Industry Cluster has its own unique Innovation Value Chain (IVC), though some participants overlap into multiple clusters. Within each cluster, to varying degrees, exist a number of contributors: See Right Column
Before implementing new economic development programs with increasingly scarce financial resources, public and private sector leaders should obtain a clear understanding of where their community currently “stacks up”. It should identify the assets it possesses (and those it lacks) to support innovative, entrepreneurial high growth companies. Despite innovation’s growing recognition as a vital economic development strategy, discussion among local officials and economic development practitioners about how to implement a sustainable, high impact initiative has mostly been relegated to the 50,000-foot-level without a well thought-out framework to build upon, and a strategic process that continually builds momentum while moving up the stages of the Maturity Model.
With our team’s 150+ collective years of leadership experience in local economic development, higher education, entrepreneurship, technology corporations, strategic planning, political advocacy, lending and venture capital investing, Grow-California is concerned that local elected officials — and other civic leaders charged with economic development responsibilities — are not fully equipped with the knowledge or tools necessary to stimulate innovation-oriented initiatives to spur economic growth.
Policymakers, indeed, can have an impact on local innovation; but they need a framework to work from, a baseline position to advance from, and an end-game to strive for. Grow-California’s Innovation Scorecard was developed for this purpose. It identifies and inventories High Growth Companies and also their corresponding Innovation Value Chain assets, enables communities to better understand both their strengths and weaknesses – most visible through noticeable gaps in the Innovation Value Chain that emerge from the process — and then systematically implement strategic actions to help them move up the 5-Stage Maturity Model for Innovation Economic Development within one or more Industry Clusters of their choice.