STI Sequences, Innovation Networks, and Accelerators

STI Sequences, Innovation Networks, and Accelerators

Modeling, measuring and visualizing innovation as sequences of connected activities and networks of

connected actors

C. Scott Dempwolf, PhDAssistant Research Professor& Director

July 7, 2015

UMD – Morgan State JointCenter for Economic Development

What is network analysis?

Network analysis models,

measures and visualizes

systems of human interaction in

ways that include specific

nodes (people, organizations,

places, documents, industries,

etc.) and specific ties

(relationships between nodes).York County, PA industries and occupations 2008

with sales and employment flows

Military armoredvehicle manufacturing

Motorcycle manufacturing

Snack food manufacturing

Printing

Air conditioner manufacturing

Motor vehicle parts manufacturing

Production

Innovation as a sequence of activities

Research QuestionWhat are the sequences of STI and commercialization activities involved in developing new ideas through basic research and translating them into new products or services in the marketplace?Pending NSF application with UMIACS Professor Ben Shneiderman

EventFlow Screenshot

Innovation is a process comprised of a sequence of activities leading to a new product in the marketplace

Research Publication Invention Proof-of-Concept Commercialization Product

Seeing innovation activities as networks

Each source document generates an activity network

Data Sources

Activity Type

Activity Networks

Funding Agency

Research Institution

PI / Inventor PlaceCompany

Commercialization docs

Research Publication Invention Proof-of-Concept Commercialization Product

NIHNSF

NASAStarMetrics

CitationsBibliometrics

PatentsCopyrights (future)

SBIR / STTR Phase 1

AcceleratorsWeb

SBIR / STTR Phase 2

CrunchBase

TrademarksUPC / SKUSBIR / STTR

Web

Product docCommercializatio

n docsCommercialization

DocsCommercializ

ation docsCommercializ

ation docsPOC Docs

Commercialization docs

Commercialization docs

Patent DocsCommercializ

ation docsCommercializ

ation docsPublication

DocsCommercializ

ation docsCommercializ

ation docsResearch

Grant Docs

$$

Document Ties

Seeing innovation activities as networks

Combining activity networks yields an innovation process network

Document Ties

Innovation Process Network

Activity Networks

Funding Agency

Research Institution

PI / Inventor PlaceCompany

Commercialization docs

Product docCommercializatio

n docsCommercialization

DocsCommercializ

ation docsCommercializ

ation docsPOC Docs

Commercialization docs

Commercialization docs

Patent DocsCommercializ

ation docsCommercializ

ation docsPublication

DocsCommercializ

ation docsCommercializ

ation docsResearch

Grant Docs

$$

Patent

New Product

JournalPublication

Prototype

Emerging Theory and Research

Illinois Battery Cluster 2010 - 2014

There are two main components of the innovation network…

• A Research component comprised mostly of researchers and research institutions

• An Industry component comprised mostly of investors, serial entrepreneurs, and supporting infrastructure for commercialization

… and a “Bridge” connecting them; the bridge includes accelerators, POC centers, TTO’s, etc. and their connections to brokers in each component.

The Innovation Ecosystemand the Valley of Death

Adapted from Jackson, 2011

This is a network representations of the two sides of the so-called valley of death

Accelerators as Bridge Structures

• Accelerators and specifically founders are brokers

• Their social capital is more valuable to startups than the money invested

• That social capital is limited to specific markets, technologies and investors where they have experience and relationships

• The accelerator environment is designed to create and recreate social capital in three networks: cohort, capital and market

Accelerator founder and venture capital / market network

Accelerator and startup cohort

network

Accelerators as Bridge Structures

Visualizing CrunchBase Data77 accelerators and random sample of 77 angel investors not affiliated with an accelerator, and their networks

When clustered, many accelerators emerged as central nodes while only a few unaffiliated angels were central

The accelerator subnetwork was 8.5 times larger than the unaffiliated angel network and exhibited more opportunity for brokerage

Accelerators invested 33% less per startup in angel funding ($100K vs $150K) and 50% less overall ($1.3B vs 2.6B) than unaffiliated angels. Combined their startups raised an additional $41B in subsequent funding rounds and acquisitions

Data source: https://www.crunchbase.com/

Emerging Theory and Research(working hypothesis)

Bridging structures (accelerators, TTO’s and inter-mediaries) between the two components are sparse and vary by technology and geographic region

Regions with denser, more connected bridging components will be characterized by faster innovation sequences and more innovation sequences leading to new products.

Illinois Battery Cluster 2010 - 2014

TWO MORE SLIDES WITH INTERESTING NETWORK IMAGES…

Accelerators: A Network Perspective

Visualizing Global Capital FlowsSpecific places are recognized as national and global hubs for innovation.

These places both attract more capital investment and in turn make more investments both locally and globally

Venture capital is clearly sticky in well known places – the SF Bay area, Boston / Cambridge, New York, Chicago, London, LA…

Data source: https://www.crunchbase.com/

Why networks & technology matter

• Startups need to be seeded into strong clusters

• Clusters have strong connections to markets, supply chains and talent pools

• Clusters form around technologies

• Capital flows around technologies

Policy Considerations

• Networking & social capital are central components; relationships are essential

• Networks are specific and unique to the technology field

• Current successful accelerators are built around technologies with relatively low cost entry; short prototyping timeframe; high scalability; low geographic & supply chain constraints

• Accelerators are in the business of picking (probable) winners