BILL FULTON: The recent trend toward “open innovation” in corporate America is changing the way communities approach economic development policy. In fact, it’s making public policy on economic development more important than ever because prosperity emerges from the interaction.
Open innovation — a term coined by Harvard professor Henry William Chesbrough — requires a more public and collaborative approach as a way of developing new products, especially in the technology sector. By placing research labs close to college campuses and sharing knowledge more openly, the idea goes, we are more likely to see successful spinoff companies, and the flow of profitable new products will accelerate.
A more revolutionary change in corporate products research is hard to imagine — especially in my family. Seventy-five years ago, at the dawn of the Great Depression, the owners of the Columbian Rope Co. in upstate New York hired a young chemistry professor from Cornell named Edgar Johnson to create a “New Products Research Laboratory” adjacent to the rope company’s large factory.
It was a classic example of private industry luring a significant talent out of academia. It also changed the trajectory of my family. Edgar Johnson was my grandfather, and in 1930 he left left the cozy intellectual sophistication of Ithaca and moved his family - including my concert-pianist grandmother and my mother, then 10 years old - forty miles north to the factory town of Auburn.
The gamble paid off. By the late 1930s, Columbian was producing innovative breakthroughs in rope strength that helped the company dominate the field. During World War II, the research lab tackled “rope rot,” experimenting with the first chemical treatments designed to slow down the decay caused by fungi, mold and other organisms.
Columbian’s research lab was, of course, a classic corporate R&D operation - a proprietary lab operating in secret, located across the street from the factory and far away from the academic world of chemistry. Today the story would be different. Edgar Johnson might be lured away from teaching, but he would probably not be lured far from the Cornell campus - perhaps to a research lab set up by Cornell and funded partly by Columbian.
In those days, public policy didn’t play much of a role in basic corporate research, other than ensuring that my grandmother had a symphony to perform with every now and then. (Richard Florida, take note!) Today, of course, we find Florida subsidizing Scripps Research Institute, Arizona subsidizing the Translational Genomic Research Institute, and California voters plowing $3 billion into stem-cell research as a result of Proposition 72.
It’s interesting to wonder how much stronger rope would be today if open innovation had been in vogue decades ago. Maybe I would have grown up in Ithaca instead of Auburn.
For more on this subject see this months’ Governing magazine and/or the California Planning & Development Report