By Scott Meacham
It is time to lean into the opportunities that are already in front of us to build our own Oklahoma version of the economy of the future.
Will Rogers, Oklahoma’s Cherokee cowboy philosopher, delivered a quote that aptly sums up our state’s challenge with innovation and the “new” economy. As Will put it, “You can’t have a picnic unless the party carrying the basket comes.”
When it comes to building an innovation economy, it also matters one heck of a lot what that “basket” contains. The first thing on Oklahoma’s menu is economic diversification.
Back in the ‘80s, when Oklahoma founded the Oklahoma Center for Advancement of Science & Technology, the specific goal was to invest to diversify the state through advanced technology grown and commercialized here.
At the time, one in every 11 Oklahomans worked in the oil and gas industry. The OCAST plan succeeded. By 2018, this had fallen to one in 27.
Abundant natural resources can be a drag on diversification. It takes a strong-willed state to take the far-sighted path. In that regard, Oklahoma has done phenomenally well — look at how we weathered the latest downturn in oil prices compared to previously recessions.
What types of companies created the new jobs that diversified our economy? A snapshot of the 730 high-growth companies that i2E has worked with and invested in since inception tells the tale.
More than half of those new businesses are in software and IT, healthcare services and devices, and biotech and pharma. The companies have created more than 3,693 new jobs with average annual salary of $75,000 which is 15 percent higher than the average salary in this state.
The policy question for Oklahoma going forward is, how can we continue to diversify our economy while leveraging the diversification that we have developed to amplify our version of the “new” economy?
The Milken Institute State Technology and Science Index (STSI) indexes each state’s capacity for achieving job and wealth growth limited to scientific discovery and technological innovation. The index helps show why some states are more effective in job and wealth creation from certain advanced technology businesses. Success comes from leveraging concentrations — in research and development, risk capital and entrepreneurial infrastructure, human capital, and technology concentration.
In the Milken ranking, Oklahoma is a fifth tier state. But that really doesn’t tell the story.
Leaning In to Opportunity
Given the structure of our economy the Milken rating isn’t surprising or, really, even problematic. With significant sectors of our economy devoted to energy production, agriculture, aerospace repair and maintenance, and banking and finance — we do not see significant private investment in applied research like states with high concentrations of pharmaceutical and medical technology companies. We do not have the nexus of research institutions of other states to drive basic research as well as access to federal R&D dollars. Oklahoma historically has underinvested in education, and, as a result, we are 50 out of 50 on the human capital sub-index.
However, there are specific areas where we can lean in and continue to diversify and grow our “new economy” jobs. The state needs to invest to provide broadband internet access to every school and student in every part of this state. We can also strive to leverage related companies and expertise that currently exist in Oklahoma — cybersecurity, aerospace maintenance, agriculture technology, weather technology, and alternative energy and battery technology — into high-value economic clusters.
Building an innovation economy is no picnic, and we are limited by the size of our basket and our physical location. However, we have proven before numerous times that we are overachievers and can change the course of our river with diversification. Maybe it is time to lean into the opportunities that are already in front of us to build our own Oklahoma version of the economy of the future.
Scott Meacham CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state support from the Oklahoma Center for the Advancement of Science and Technology and is an integral part of Oklahoma’s Innovation Model. Contact Meacham at [email protected]