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To grow our economy, we need to stop unicorn hunting, and reset why innovation matters. We must give “innovation” back its broader meaning.

Today, many people think of innovation only as the creation of a new commercial product suffused with advanced technology. This narrow view of innovation describes the software services created for consumers by Silicon Valley, proposals to mine the moon or efforts to create genetically modified bacteria that will trap greenhouse gasses and combat climate change. It’s a very exciting way to describe innovation, because those that succeed in it become stupendously wealthy and such innovations have a profound effect upon the economy.

But, here’s the problem. As important as advanced technology innovation is, its rewards are not distributed evenly. Not every region in the US has what it takes to be a technology innovation hub like Silicon Valley, and not every US worker currently can get a high-paying, secure technology job working at Google. But these regions and workers still have untapped capacity to be part of the innovation economy, once we open our eyes and our minds.

A limited definition of innovation obscures the broader potential of our regions and people. It prevents us from seeing clearly the positive attributes that a locality may have to support innovative behavior and the potential of the people that live there. We must celebrate and support innovation of all types.

Innovation is one of the most personally satisfying things a person can do. Innovation is the output of four drivers of human behavior: curiosity, creativity, empathy and satisfaction. As I discussed in last week’s column, all humans are curious and wired to wonder about their surroundings and place in the world. Humans use creativity to figure out how to satisfy their curiosity. They then use empathy to figure out how to encourage others to provide resources to meet shared goals. Lastly, they achieve satisfaction when curiosity, creativity, and empathy are harnessed to deliver an innovation that others care about. Simply put, successful innovative behavior makes people happy and creates new things others care about.

The tying of innovation and new business growth naturally follows. Innovation is the process of creating new things that people care about – business is the way we give it to them. Frame innovation in this way and you can see how much it contributes to the tapestry of our society and our economy.

It is essential that our discussions about innovation acknowledge that it is a fundamental behavior that drives our economy. If we broaden our view of innovation to define it as the activity of making a positive difference and creating something others will value, you will quickly find that it innovation occurs in many places. Regions other than Silicon Valley can see themselves as innovative by celebrating the particular flavor and achievements of people that live there and the businesses they grow. The. Individuals living there will gain greater satisfaction and be more likely to act as entrepreneurs if they feel that their achievements are respected.

It is good economic policy for all of us to embrace and celebrate innovation as broadly as possible This will allow us to tailor regional approaches to support innovation to the particular attributes a region has, rather than looking to emulate another location. Bring together the resources a region has to connect opportunities for local business growth. Celebrate the success of the regional businesses that grow out of those attributes.

Most importantly encourage people to think of themselves as innovators to empower them to participate in a dynamic economy. An economy that changes because of them, and not without them.

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Curiosity matters to our society. When we look to improve our lives, curiosity compels us to overcome inertia and to seek something better. But the big question is: why are we curious at all?

Last week I spoke with Mario Livio, an astrophysicist who lives in the DC region. Recently, he immersed himself in learning about curiosity and just released a book on the topic.

Why would an astrophysicist study curiosity? Livio explained that by examining his life and interests more closely, he realized that he had come a long way from being a scientist involved in the Hubble Telescope project to being someone with an eclectic range of interests, including art and music.

As he looked at his diverse interests and the happiness he got from pursuing them, he found himself asking, “Wait a second, what do we actually know about curiosity?”

Through reading on his own and by talking with scientific experts, Livio learned that there are two main types of curiosity.

The first is perceptual curiosity. Perceptual curiosity causes a person to seek to learn something to solve an immediate problem, like finding food, combating bad breath or trying to remember the name of the wonderful actor in that otherwise awful horror movie. Perceptual curiosity is primal and exists on a continuum between fear and satisfaction. Broadly speaking, the fear of a negative outcome motivates us to act. This means that the role of fear in our behavior is double edged: one level of fear motivates us to be curious, but too much fear causes us to shut down.

Perceptual curiosity is also driven by novelty. This is true regardless of our age, although the bar for finding things that are novel gets higher as we get older. 

These attributes of perceptual curiosity may explain why as people get older they tend to favor the status quo, why a boring job tends to wear people down and why we ask fewer questions when we are frightened.

The second type of curiosity is epistemic curiosity. This curiosity is much less driven by external events and emotion than is perceptual curiosity. It is based on the process of satisfying a curiosity for the pleasure that comes from mastery. Epistemic curiosity is the desire for knowledge in its own right. This is the curiosity that drives scientific discovery, philosophy and people asking big questions that shape the fabric of our society. It is a cooler, more rational curiosity, but one that is deeply rewarding and pleasurable for those who satisfy it.

Livio believes that these two types of curiosity are essential to our ability to have happy and productive lives. We need both, he adds, because “love of knowledge does create a reward for its own sake, but you want to feel results.”

His conclusion? “Curiosity is a human condition. Something that we cannot avoid.”

Implicit in all of this is an important thread: to satisfy curiosity you must have agency. Curiosity is thwarted without a way to apply it. Whether we are talking about a homeless person wondering where to find a meal, a futurist looking for a great science fiction novel in a book store, or a scientist pondering the origin of the universe, people are driven forward by the belief that their curiosity will be rewarded . Without a framework that rewords and encourages curiosity, we will lose the very trait that is essential to our future.

As I ended my conversation with Livio, I asked him if he had a final thought on the matter. He answered: “Curiosity is one of the purest forms of freedom.”

I couldn’t agree more.

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It is impossible not to be concerned about cyber attacks if you are following the news. The question is what to do about it.

Last week Richard Levick, CEO of Levick, Andres Franzetti, chief strategy officer of Risk Cooperative, and Bryan Finch, a partner at Pillsbury Winthrop Shaw Pittman, joined me on What’s Working in Washington to discuss cyber attacks and their effect on business owners and society. This conversation reinforced in me something I had already suspected: cyber attacks have become commonplace.

Brian Finch pointed out that the bar to launch a cyber attack had become very low indeed. There was no longer a need to write code or be a systems expert. You just needed to find existing tools for sale on the “dark web” and cut the developer in for some of the upside in your hacking scheme.
Andres Franzetti agreed with Finch’s categorization of the widespread availability of tools to do cyber harm. “A lot of folks just don’t get it.” It’s an arms race. And it’s a race where it’s a lot cheaper to attack than defend.

The result of this rapid expansion of cyber attack techniques and software? Easy availability means that every American business and government entity should assume it will eventually be cyber attacked, if it has not been already. As Richard Levick put it: “One hundred percent of companies are going to have to deal with this.”

If we are in a place where cyber attacks are commonplace, then what are we to do about it?
Clearly, businesses must prepare for the inevitable by taking a hard look at their technology and being ready to manage the public relations challenges and business interruptions that are likely to occur.
But I have significant concern that our government has to rapidly fill a policy void, if we are to address the larger societal challenges that the ubiquity of cyber threats creates.

For our national security, we must have clearly stated principles for how the United States government will respond to cyber attacks. You can’t deter aggression unless you can communicate the likely consequences. It’s one thing to talk about cyber war conceptually, but another to define the difference between using military force to influence another nation state’s behavior and using cyber attacks to achieve similar ends.

Turning to commerce, there is an immediate need for the management and owners of companies to have rules to allow them to allocate legal liability when the inevitable cyber attack occurs. For instance, it is broadly acknowledged that many boards of directors of public companies are now keenly aware that directors might face personal liability if their company is the subject of a cyber hacking. But have we really stopped to ask whether, as a matter of policy, it should be their responsibility? And, if the answer is yes, under what circumstances should insurance cover their risk, if there should be insurance available at all?

What about the responsibility and liability of individual employees? We know that in many instances, cyber attacks succeed because a single computer user in a network didn’t keep his computer software up to date or used a password that was easy to guess. If people don’t practice good computer “hygiene,” should the responsible individuals be penalized for their lack of care if their employer’s system is hacked? Does it matter if it’s a shared computer, or one that is used exclusively by the employee?

And, finally, what should our reasonable expectations for privacy be? Is it still fair to expect our personal information to be protected when it is shared on line? Or if we don’t practice good computer hygiene on our home computers? Under what circumstances should we be entitled to hold others accountable for our loss of privacy or property because of a successful cyber attack?

I don’t have the answers to these questions today, and that is my point. The time for argument about whether cyber security is an issue has passed. The time for action by our government has arrived.

The threat to our way of life is not fake. It’s real.

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Economic growth doesn’t just happen; it results from successful strategy and execution. A growing number of people in Greater Washington believe that future economic growth will come from overseas – if the right choices are made.

From 1980 until now, economic growth in our region has been tightly tied to increases in federal spending, especially in federal government procurement. DC really has been a company town.

Stephen Fuller, University Professor of Public Policy at the Schar School of Policy and Government at George Mason University, has followed this interdependence for years. Since federal spending in our region peaked in 2010, the region’s annual growth rate has been less than 1%. Fuller is concerned that even this growth rate may be difficult to achieve in the future, as he expects government spending in our region to continue to decline – from 40% of our region’s economy in 2010 to 30% by 2022. To him, the strategic choice is simple: “we need to diversify away from our historic federal dependence.”

Fuller suggests one place to look for economic growth is outside the United States. He points to Greater Washington’s concentration of international organizations and consulates as the catalyst for a professional sector that is comfortable doing business overseas. Looking for clients and sales abroad is a natural fit for these individuals, Fuller points out, since they “use the same skill sets and professional services developed in the federal market place.”

It is not just professional services that can leverage international opportunities. Our region creates many sought-after products. For example, many of our region’s leading cybersecurity companies sell their products abroad, and our local life science industry has a heavy international component. Virginia wines are finding their way onto many tables overseas, and numerous local small businesses are achieving international sales.

Nevertheless, to date Greater Washington has not taken full advantage of international trade. According to the Global Cities Initiative, a comprehensive analysis of international trade and economic development, our region ranks 95th out of the 100 largest metropolitan areas in the United States in export performance.

Is this something we should address? Chuck Bean, Executive Director of the Metropolitan Washington Council of Governments, thinks so. He points to studies that show that for every $1 billion in international exports, 5700 jobs are created. Exports will grow our economy.

However, there are significant barriers. As someone who has done business overseas, I know that achieving international business growth requires an appreciation of different cultures and an understanding of significantly different legal requirements. And building awareness of product or service in a new market is a challenge that can’t be dismissed. But all of these barriers can be overcome with time, experience, determination and money. It can be hard for a single business to go it alone.

Fortunately, there is no need to go it alone because there is a high level of commonality in these challenges across businesses. This is an opportunity for regional cooperation and knowledge sharing to make a huge difference. If businesses do not have to reinvent the wheel when they decide to look for growth overseas, the expense and time required for international success can be significantly decreased.

Bob Sweeney, the Managing Director of the Global Cities Initiative at the Metropolitan Washington Council of Governments, believes that the region needs one thing if it is to have greater international trade success: it needs “a place where businesses can go to learn about the complex world of international trade” and learn of the opportunities and pitfalls from those that have been there, and have succeeded.

For a region that needs to identify and implement a strategy for achieving future growth, helping local business owners look overseas for customers and opportunities is both desirable and achievable.
That is a strategy we can all get behind.

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When a company’s ownership is dominated by a small number of stockholders related by blood, it is often hard to distinguish between what is good for the business and what is good for the family.

This blurring can be a positive thing. As someone who grew up in two family businesses, I saw both the positive and negative: the satisfaction my parents gained from having autonomy and getting a new order from a customer but also the long hours and unpredictability of entrepreneurship.

When dinner conversation at home is as likely to be about whether the family business will be able to make payroll as what the children did at school that day, it does leave an impression.

One of the biggest determinants of whether someone will be an entrepreneur is if they were exposed to it as a child. For those who grew up around it, starting a business is much more natural and therefore likely. For good or for ill, children surrounded by a family business know what they are getting into by choosing entrepreneurship in adulthood.

However, there is also a potential down side to a family business. To understand this better, I reached out to David Pellegrini, a psychologist who specializes in family business matters. He pointed out that unlike a “normal” company, the CEO in a family-run business is usually both the generational and professional leader. This can be challenging because, as he puts it, “being the boss of one’s own children tends to lead to an expectation of fealty, loyalty and appreciation from the children.”When this happens, the offspring who are not in charge tend to be deferential.

In my consulting business, I have often seen this pattern of behavior to be very damaging. The head of a family-owned company who does not exercise care can become convinced that there is no need for outside viewpoints, particularly if things are profitable.

Pellegrini notes that this stifles the leaders’ personal growth, because “they have less need to develop skills of persuasion, consensus-building, or true engagement.” It also puts the business at risk if unexpected challenges arise, since it will not have the benefit of a broader experience base to draw from, or lessons to be learned.

Another downside is that viewpoints of non-family members are often treated with suspicion, if not contempt. The entity becomes a self-referential echo chamber, with the business leader in the middle of a sycophantic group offering only news he or she wants to hear. This issue cannot be solved through marriage; often, those who marry into a family are still treated as second-class citizens, since they are not blood relatives.

So, what can break this toxic dynamic? In my experience, the only remedy is for the family head to consciously separate family dynamics from the business, involve professional management and entertain contrary views.

Without making these changes, a family business leader may succeed for a time, but long-term success is highly unlikely.

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