The Valley’s most promising cash crop: Innovation
Essential to a strong economy, local innovation is on the rise — but is it
healthy enough to keep the Valley competitive?
Innovative communities are not built overnight. In fact, it’s taken nearly a
decade for communities to discard the principles of the “old economy” (such as
striving to attract businesses), and replace them with such “new-economy” ideas
as attracting knowledge and creative workers.
The Central Valley is taking steps to make the transition to an innovative
community. Since the launch of the Collaborative Regional Initiative (CRI) in
2001, much of the groundwork for the transition has taken place, including the
emergence of the Regional Jobs Initiative (RJI), Creative Fresno, the Mayor’s
Creative Economy Council and a host of other efforts.
In addition to a report from the Mayor’s Creative Economy Council providing a
vision for change, the RJI Innovation Task Force will release its Innovation
Index to spotlight the region’s strengths and weaknesses during the past
decade. The Innovation Index tracks three channels of innovative activity that
are critical for a vibrant economy: entrepreneurship, capital formation and
knowledge productivity. Add to this the growth and development of professional
support services, and the “four pillars” of an innovative economy are in place.
Pillar 1: Entrepreneurship
In recent years, significant improvement has taken place in the area of
entrepreneurship. Fresno State’s ranking as the eighth-best program in the
nation (out of more than 500 such programs) demonstrates the progress made in
the Valley’s capacity for producing young entrepreneurs. Additionally, the
Central Valley Business Incubator (CVBI) now provides services for high-end
startups and assists in the growth of existing businesses. However, the Valley
is still in need of more technology-based businesses that require the services
of knowledge and creative workers.
The RJI is helping lay the foundation for an industry cluster around clean
technology. The CVBI is working with the International Center for Water
Technology to align their services with new ventures to commercialize water
technology. And the entrepreneurship program at Fresno State has developed
courses that combine engineering and biotech with business, while adding
graduate courses that emphasize the commercialization of technology.
Pillar 2: Capital formation
Progress has also taken place in the area of capital formation. The Central
Valley has been plagued with a lack of investment capital essential for the
launch and expansion of entrepreneurial firms. This has generated a knowledge
deficiency, resulting in entrepreneurs with little understanding of such
concepts as the difference between investment capital and lending capital.
Investment capital is given in exchange for ownership in the business, while
lending capital is given in exchange for repayment with interest.
In 2005, the Central Valley Fund was launched, making nearly $100 million in
capital available for investment in Valley businesses. The fund’s focus is on
investing in companies that are looking to expand, merge or pursue an
acquisition.
Additionally, preliminary steps are under way to create an Angel Fund — a formal
seed fund that will assist entrepreneurs in the startup of their new ventures.
Pillar 3: Knowledge productivity
Increasing knowledge productivity (i.e. research and development) is essential
to an innovative community and several local resources are serving to
accomplish that. Among them is the region’s new University of California campus
that will attract many quality researchers and graduate students.
The Lyles Center for Innovation and Entrepreneurship is working with the
National Network for Technology Development and Commercialization as well as
the National Institute for Strategic Technology Acquisition and
Commercialization to assist in the commercialization of intellectual property —
ideas and inventions that can be legally protected, such as patents,
trademarks, copyrights and trade secrets. The ability to protect such ideas
keeps competitors from infringing on the idea and is essential to successful
innovation.
Pillar 4: Professional support services
The development of professional support services is vital to launching new
ventures. Key professional service providers include lawyers, accountants,
financial analysts, information technologists, human resource managers, and
other individuals and businesses that can assist entrepreneurs.
Currently, the Central Valley has few professional support services that cater
to the needs of entrepreneurs, venture capitalists and knowledge workers. More
efforts are needed to prepare this important group for increased
entrepreneurial activity. To that end, the Lyles Center has partnered with San
Joaquin College of Law and the Walter Law Group to host seminars that increase
awareness among attorneys in helping emerging businesses.
A bright future is dawning
If the past two years are any measure, the Central Valley holds great promise
for successfully transitioning into an innovative community. All four pillars
are present and as long as they continue to grow and develop, the Valley will
possess the promising infrastructure of a region known worldwide as a leader in
innovation.
For more information, please visit:
www.lylescenter.com
www.cvbi.org
www.centralvalleyfund.com
|