Entrepreneurship and innovation go hand to hand. Innovation is a creative process that renews and updates products or services by applying new features or other advantages to create new value. According to Barry Jaruzelski, Kevin Dehoff and Rakesh Bordia’s article “Smart Spenders: The Global Innovation 1000,” there are four key stages of innovation – Ideation, Project Selection, Product Development, Commercialization.
In 2011, Gov. Brian Sandoval recognized the importance of entrepreneurism within his mission to move Nevada forward in response to the high unemployment rate and lack of occupational diversity in the state. In efforts to make technology-based economic development a priority, “Catalyze Innovation in Core and Emerging Industries” became one of the six state objectives in Sandoval’s plan for a vibrant, innovative and sustainable economy.
The objective included developing a statewide innovation and commercialization structure, increasing industry collaboration with universities and Desert Research Institute (DRI) and building a support structure for entrepreneurs. The Nevada Knowledge Fund was also created to support this objective through a blueprint to spur entrepreneurship by connecting higher education research (UNLV, UNR, DRI) with business needs.
The results are impressive. According to the Governor’s Office of Economic Development (GOED) Executive Director Michael Brown, Nevada’s three research institutions received $32.5 million from the Knowledge Fund resulting in $39.8 million generated in sponsored research contracts, $35.2 million in grants and donations and $1.2 million in commercialization revenue. Additionally, 17 companies and 573 jobs have been created, 38 companies have relocated to Nevada and 67 patents have been filed. In exhibits sent to the Assembly Revenue committee, UNLV credited the Knowledge Fund for launching the Black Fire Innovation facility in Las Vegas, and UNR reported the creation of eight spin-off companies and over 490 jobs.
It is a fantastic start, yet according to Karsten Heise, director of strategic programs at GOED, “the Knowledge Fund in its current form represents the most suitable instrument to the conditions and structure of Nevada’s Innovation Economy that existed at the time of its enaction in 2011.” In 2021, Nevada is experiencing significant momentum in entrepreneurism and associated startups, innovation centers and the establishment of support organizations including incubators, accelerators and investors.
Making its rounds in the legislative session is Assembly Bill 29 (AB29), a measure created to help evolve the focus of the Knowledge Fund to be broader, including expanding innovation systems by adding scale and sustainability. Renamed the Nevada Innovation Account, the fund would target innovation capacity building, innovation transfer, innovation acceleration and innovation venture. These all are necessary to increase the effective formation of spin-off companies, create more jobs and bring more investment dollars to Nevada. Where the Knowledge Fund focused on ideation, project selection and product development, the Nevada Innovation Account will concentrate on commercialization, the essential stage of innovation.
Recently, lawmakers met to resolve budget differences and agreed to allocate to the Knowledge Fund $5 million over the next two years — half the amount the fund has received in the past. There are concerns that this cut will slow acceleration in innovation, job creation and new businesses. Equally concerning is the effect on resources and opportunities for new entrepreneurs trying to enter Nevada’s developing entrepreneur ecosystem. Remember the stages of innovation? What value are ideas if they do not go to market?
The Knowledge Fund performed as designed by creating entrepreneurs, jobs and new companies. The Innovation Account will build upon that momentum by further catalyzing innovation for a vibrant, innovative and sustainable Nevada economy. However, it won’t be easy to cultivate the next generation of entrepreneurs in the Silver State and keep the promise of innovation made a decade ago without suitable funding.
Joshua Leavitt is the chair of the Legislative Committee of the Society for Information Management, Las Vegas and the CEO and founder of IONnovate, LLC.