As Printed in the Rockford Register Star 1/14/07
Over the past several years increased attention has been given to the underlying factors that contribute to the economic growth in the United States and regions within the country. The role of innovation in maintaining the competitiveness of a country or region has emerged as a key ingredient for economic growth. Innovation can take several forms and should not be confused with inventions. Innovation can be a change in the production process of a manufacturing company, a change in the line of clothing a retailer carries in its store, a change in the way a service provider markets their services, as well as the implementation of an invention. Thus, all segments of society can be innovative.
The Rock River Valley has historically been an innovative region. Transformation from being reliant on furniture manufacturing to machine manufacturing is an example of the innovative spirit that has historically existed in the region. The recent emphasis on attracting logistic companies to the region indicated the region in willing to change to reflect changes in economic forces.
As part of the most recent Rock River Valley Economic Index survey of regional businesses a set of questions was asked that related to innovation. The questions were designed to parallel research done by the National Federation of Independent Business (NFIB) so a comparison of innovation activity by regional firms could be compared to national figures. While it was not possible to conduct the project in a manner that assured the distribution of respondents by industry and size of firms was the same for both surveys, the results still provide a relevant comparison.
In general, the RRV compares very favorably with the nation on basic innovation questions. When asked: Did your business introduce at least one new, or significantly improved, product, service, or process into the market last year? 57.5 percent responded yes compared with 42.2 percent in the NFIB survey. Retailers had the highest positive response, 72.2 percent, and service business the lowest, 46.7 percent. Even more impressive is the response from companies that did not introduce an innovation during 2006, of those only 13.5 percent indicated they had never introduced a significantly improved product, service, design, or process. This compares to 59.2 percent of the national sample.
Firms in the RRV are also more likely to innovate for the purpose of selling or licensing the innovation. When asked: Does your business purposely innovate or invent things with the intention of selling or licensing those innovations or inventions? 26.4 percent said yes compared to 11.8 percent of the national sample.
Regional businesses reward employees for innovative ideas. Of the survey respondents, 79.3 encourage employees to suggest new ideas, 2.3% provide a bonus for innovation ideas, 32.3 % provide recognition, and 36.8% provide both a bonus and recognition. This compares with 74.6, 14.2%, 5.1% and 32.2% of the national sample.
The results of the innovation survey are very encouraging. Businesses in the Rock River Valley are using innovation as a means of competing in the global market place. Not only has innovation been the key to adapting to changes in the overall economic climate in the past, it will be a key to the region being successful in competing in the new global market.
John L. Lewis
Director, Regional Development Institute
Associate Vice President, Administration and Outreach
Northern Illinois University