Obama's drive to boost high-wage jobs and innovation
As readers of this column will know, I've been tracking the Obama administration's strategy for innovation and entrepreneurship in the context of the regional innovation cluster initiatives that began in earnest in 2010 (see "Catalyzing clusters"). The administration's primary cluster push for the past year and a half has been around activating emerging and established clusters in high-growth sectors such as clean energy (emerging) and robotics (established). Clusters are geographic concentrations of firms and industries that do business with each other and have common needs for talent, technology and infrastructure. Clusters are characterized by many modifiers: rural vs. urban, local vs. traded, emerging vs. mature, and vertical vs. horizontal.
Vertical clusters are so characterized for their sector specificity — i.e. the wine-growing cluster of northern California — which speaks to a common supply chain (grape growers and bottle makers in the context of the wine cluster, for example). Horizontal clusters "cut across" multiple vertical clusters and don't necessarily share the same supply chain but have common features and/or customers. Examples of horizontal clusters include the defense industry cluster (which includes diverse players such cyber security providers and armament/hardware manufacturers), the green products cluster (natural and organic food on one hand and recyclable toothbrushes on the other) and manufacturing (a wide array of producers ranging from robotics to semiconductors to biotechnology products).
As those who follow the president will note, the administration is presently talking up advanced manufacturing. In late June, Obama announced his Advanced Manufacturing Partnership, a program designed to create new jobs while invigorating American manufacturing. Led by the CEO of Dow Chemical and the president of the Massachusetts Institute of Technology, the AMP includes six universities and 11 manufacturing companies, including Ford, Procter & Gamble and Caterpillar, among others. AMP will support $500 million in robotics, national security industries and advanced materials. Some of the allocation will come from existing allocations to government agencies, though others will require congressional approval.
While the country's manufacturing base accounts for only 14% of jobs, its impact is far greater — the so-called multiplier effect — than service-based industries, in that its growth drives growth of supply chain providers. Advanced manufacturing jobs carry high wages and often represent a source of global competitiveness, another Obama theme. The administration's Winning the Future campaign is all about ensuring that the U.S. economy does not lose out to emerging educated economies like China and India, particularly in new high-growth sectors like clean energy, whether in wind turbine production or biofuels manufacturing.
Innovation in Maine
Maine's got its own base of advanced manufacturers, including large, established players such as Fairchild Semiconductor and Bath Iron Works, as well as emerging players such as the University of Maine with its "bridge in a backpack." As it happens, Coastal Enterprises Inc. of Maine has a significant stake in an emerging global leader that is at the apex of nanotechnology innovation and manufacturing. Portland-based CEI subsidiary CEI Community Ventures — the early-stage fund I've managed since 2003 — is the lead investor in Nanocomp Technologies, a New Hampshire-based company that has emerged as the top defense, nanotechnology innovation and manufacturing firm in the U.S. Funded by CCV in 2006, the company has won several local, regional and national awards for its ability to produce a new class of carbon-based advanced materials into highly functional sheets and wires that look to be as transformative an innovation in advanced materials as plastic, aluminum and carbon fiber were in their time. The company's ultra-lightweight products have properties of strength (tougher than Kevlar), electrical conductivity rivaling copper and thermal conductivity that portend thermal electric devices. In other words, the company's sheets may be able to convert waste heat to electricity the way that solar panels convert light to electricity. Best of all, Nanocomp has no meaningful competitors that can make products at its scale and with the same properties.
Obama's focus on vertical and horizontal cluster development is smart policy and practice. As I noted in "Cluster compatible" (Mainebiz, Nov. 29, 2010), cluster-centric programs have bipartisan support and are cost effective. While Obama will need to secure new funds to support his AMP program in a politically and economically challenging environment, he's right to put money into high-impact vertical and horizontal clusters.
Michael Gurau, president of Clear Innovation Partners, a Maine-based cluster development organization, can be reached at mgurau@clearinnovationpartners.com.
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