How open innovation is turning regions into magnets for new business, and fostering economic growth


By Nick Kacsandi

Today’s cities, counties and states are facing challenges in everything from safety and mobility to attracting and retaining companies and talent. With the pressure to out-innovate the competition, companies are looking for ways to tap into new capabilities, solutions and partners both regionally and nationally. Local and state governments, associations and non-profits are quickly recognizing that they can become part of the solution by helping companies to access these valuable external resources – while also raising awareness for their own innovation efforts.

Governments and economic development organizations are turning to Open Innovation (OI) to help companies reach beyond their existing networks to a worldwide community of scientific and technical experts. This strategy helps organizations to find not only novel solutions, but also novel applications for pre-existing technologies or processes that they can use to create groundbreaking products or services. When companies use OI, they are able to speed product development by as much as 50 percent, bring innovations to market faster, and accelerate revenue and job growth.

Whether it’s a state creating an OI program to help companies externally source their innovation needs, or a city working to position itself as a hub for innovation to draw new businesses in, OI can be leveraged in the public sector in several ways.   

Fostering local economic development
Traditionally, economic development offices use marketing approaches and financial incentives to bring new companies to a region and retain existing businesses. For local and state governments, there are ways to show tangible economic growth and bring new technologies to existing companies to make them more competitive and financially successful.

The Ohio government had this in mind when they created the Third Frontier Open Innovation Incentive (OII) to empower middle market companies in the region to use OI for the first time. The state subsidized half the cost of their OI searches. The goal was to help these companies take their research and development (R+D) to the next level, while also spurring economic development across the state. The initiative had widespread impact. By 2015, the OI projects completed projected an increase of more than $1.2 billion in Ohio-based revenue, with $32 million in capital investments, and 503 jobs to be added within five years.

Boosting capacity for innovation

Other cities and states have also focused on helping local companies to increase their level of innovation. Columbus, Ohio has made similar strides to tap outside resources and transform themselves into an innovation hub. Recently, officials in Columbus successfully applied for the U.S. Department of Transportation’s “Smart City” crown, which provides resources to develop a high-tech hub for transportation advancements. It’s a win that will eventually result in driverless vehicles roaming the streets and a smart transportation infrastructurethat will draw new business to the city. 

A bright future for innovation
These are just a few stories of how collaborative innovation is a solution that can spark positive change in a community, but they represent an upward trend emerging around the nation. By tapping OI, cities, counties and states – together with their resident businesses–can build a competitive advantage on the national and global levels.


Nick Kacsandi is the business development manager for global innovation company NineSigma, specializing in regional innovation and economic development programs. He can be reached at

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