Obama's Business Innovation Hubs: Down, But Not Out

The Obama Administration's promise to launch innovation hubs to catalyze business innovation in economically hard-hit areas of the country has been cash-strapped and slow to materialize -- but don't count the program out just yet, says Marc Berejka, a former Microsoft lobbyist and now a top policy advisor in President Obama's U.S. Commerce Department. I caught up with Berejka at the Supernova 2010 conference Friday at The Wharton School in Philadelphia. What follows is an edited transcript of our conversation:

MS: You said during one of the Supernova panels today that President Obama still wants to see what the government can do to help kick-start business innovation clusters in areas of the country that have been hit hard by the economic downturn. What's the status of this initiative?

MB: There's been a pretty common understanding in the commercial and policy space that there are parts of the country that have thrived on new innovations and new technologies. Silicon Valley, of course, is one such area, where a lot of tech geeks and business people have been combining their ideas, resulting in phenomenal successes. And those clusters exist elsewhere -- along Route 128 near Boston, in Triangle Park in North Carolina, and in Seattle, around Microsoft and Boeing. And so the question is, if these clusters arise organically and create all sorts of new jobs and opportunities, is there something in that which can be emulated elsewhere around the country? How can policy levers be used to foster that type of economic clustering elsewhere, where job prospects might not be as good as they are in these innovation hotbeds?

MS: Past administrations in Washington chose simply to boost existing hubs rather than to try seeding new ones. What might this government -- any government -- actually do to seed recovery in less vibrant areas of the country?

MB: And that's the question we're asking and think we need to starting asking as a nation. Sure, people would be hard-pressed to say, of course, that Silicon Valley had a policy framework that led to the formation of innovation there. In fact, there was no policy in Seattle. The fact of the matter is that Paul Allen and Bill Gates grew up there and the innovation cluster grew up around them. We don't want as a government to get in the way of any clusters naturally emerging and sustaining themselves. But we do want to consider whether there is something policy makers can do to stir the pot in areas not as economically thriving. Take Detroit, for example. It's suffering badly due to the downturn in the U.S auto industry. Is there anything policymakers, working with entrepreneurs, can do there to get the local economy to spin a little faster? In tough times like these, every little bit helps. The government should not be picking winners or losers geographically. But if local or federal policy can help a region that is suffering and help to convene teams of entrepreneurs in these areas, we should be exploring these policy paths.

MS: So what is the status of your thinking on this? Should we expect to see movement out of the Administration on these seed hubs any time soon?

MB: We have a team at Commerce, a small team, and it's focusing on what policy levers can be identified and pulled. It's in the early stages and one of the challenges is that we are in Fiscal Year 2010, and this is the first full fiscal year of the Obama Administration. Up until this point, there was not a lot of money for regional innovation clusters, to be honest, and we've had to scrape money together to support this team. But the news is that there is a team and we're very focused on this going forward. The Department of Energy also has latched onto this notion of economic clusters, for the development of alternative energy. The Energy Department has money from the Recovery Act and it is looking at creating hubs for developing energy efficient technologies. We are approaching this more generally at Commerce.

Okay, readers. It's your turn. What do you think? Should there be more or less support for government efforts to seed innovation clusters across the United States -- and under what conditions? Let us hear from you.

(Illustration by Gary Cook for istock.com)