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Commentary: Time to turn rest of US into innovation factory

Cincinnati making a push to become hub for supply chain innovation

Cincinnati shimmers at night. (Photo: Flickr/jblaha)

The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.

As the nation begins to turn its attention toward recovering from the COVID-19 pandemic, now is the perfect time for concerted action to transform the United States’ dominance of information technology into a durable leadership position in the innovations that will characterize supply chains in the physical economy during the remainder of this century.

To do this, businesses, government agencies, universities, investors, and nongovernmental and nonprofit organizations will need to create a shared vision and work collaboratively and deliberately to fashion that vision into a tangible reality.

To focus the discussion, let’s use the Midwest as a case study of what this might mean.

In A Vital Midwest: The Path to a New Prosperity, John Austin and Alexander Hitch of the Chicago Council on Global Affairs observe that the Midwest:

● Boasts nearly 150 Fortune 500 companies.

● Accounts for 20 of the top 200 research universities in the world.

● Is home to six of the top 25 STEM universities in the U.S.

● Has a network of universities that conduct $10.6 billion of fundamental science and technology research each year — nearly equaling the research output of the Ivy League and the University of California system combined. 

Furthermore, the Midwest holds its own in winning:

● A significant share of new patents issued by the USPTO each year.

● Annual business expenditures for conducting commercial R&D.

● Annual educational expenditure for academic R&D.

● Highly competitive National Institutes of Health research funding grants, which are key to creating new drugs and medical technologies before such innovations start showing commercial promise.

There’s another reason for state governments in the Midwest to pursue the creation of innovation ecosystems more aggressively than they have in the past — the challenges the world continues to grapple with outlined in the 16 United Nations’ Sustainable Development Goals (SDGs). Goal 2, focused on ending world hunger by promoting innovation in agriculture and food storage, preservation and distribution, plays to the Midwest’s strength in agricultural production and food processing. Goal 3, which promotes health and well-being for all, ties to the Midwest’s strength in health care innovation and medical technologies. Goal 7, which focuses on the creation of affordable access to sustainable clean energy, plays to the Midwest’s strength in energy production and distribution. Goal 9, aimed at building resilient infrastructure, promoting inclusive industrialization and fostering innovation, plays particularly well to the Midwest’s historical strength in manufacturing.

Each of the U.N.’s SDGs represents a global market worth several trillion dollars, with a potential for new startups and mature companies that develop innovations to solve these problems while earning billions of dollars in revenues and creating hundreds, if not thousands, of direct and indirect jobs in the process.

With its share of the nation’s STEM graduates AND nearly 30% of the Fortune 500 list, the Midwest has a strong foundation on which to build an economy driven by technology-enabled innovation in traditional industries — the kind of innovations the rest of the world desperately needs as the focus on climate change and environmental sustainability increases.

I am not suggesting that the Midwest compete head-to-head with Silicon Valley, Boston and New York. Rather I am proposing that states in the region play to their unique strengths, individually and collectively, and augment that with efforts to nurture sources of private and public innovation capital to invest in technology startups and more mature companies that have either been founded by entrepreneurs from the region or that have relocated to the region.

This requires thinking nontraditionally about how any region goes from 0 to 1 as it tries to create and nurture an environment that encourages, nurtures and celebrates entrepreneurial risk-taking.

Cincinnati is making a push to become a hub for supply chain innovation. Cintrifuse, an innovation community in the Greater Cincinnati region, recently launched a Supply Chain Task Force as part of a wider post-Covid “Restart” initiative. The task force includes top supply chain executives from P&G, Cintas, DHL, 80acres and others, and will explore innovation and sustainability goals for the region.

In Tulsa, Oklahoma, Atento Capital is collaborating with other organizations to explore how the oil and gas industry might adapt as the world grapples with climate change and transitions toward other sources of energy. An important question is what this will mean for jobs and the regional economy.

Ecosystem and community organizations like Blue North in northern Kentucky and Epicenter in Memphis, Tennessee, are building networks that support local entrepreneurs and the technology startups and small businesses they are building. In Miami, Mayor Francis Suarez has engaged in an aggressive and highly public push to attract technology talent and venture capital to his city.

To be clear, success is not a foregone conclusion.

One invisible challenge that causes such initiatives to fail is that of pervasive risk-avoiding cultural attitudes toward entrepreneurship and innovation. This is usually exacerbated by the difficulty of coordinating top-down and bottom-up, grassroots-driven activities that such initiatives require if they are to yield the desired outcomes.

Success requires realizing and accepting that such economic transformation initiatives take time, require patience and commitment, and demand a focus on long-term positive-sum, rather than short-term zero-sum, outcomes. Success depends on social, economic and physical infrastructure that supports and propels entrepreneurship over the long term.

Success also requires a willingness to invite and welcome participation from outside parties with aligned interests.

As we start to look forward with optimism to the world after COVID-19, it’s time people in positions of leadership at every level of society start to think about the unique opportunities that the pandemic has created for the communities they lead. It is time to build on the United States’ Silicon Valley-driven dominance in information technology to turn the rest of the country into a prolific innovation factory for the physical economy and to sell those innovations to the rest of the world.


If you are a team working on innovations that you believe have the potential to significantly refashion global supply chains, we’d love to tell your story in FreightWaves. I am easy to reach on LinkedIn and Twitter. Alternatively, you can reach out to any member of the editorial team at FreightWaves at [email protected].

Brian Aoaeh

Brian Laung Aoaeh writes about the reinvention of global supply chains, from the perspective of an early-stage technology venture capitalist. He is the co-founder of REFASHIOND Ventures, an early stage venture capital fund that is being built to invest in startups creating innovations to refashion global supply chain networks. He is also the co-founder of The Worldwide Supply Chain Federation (The New York Supply Chain Meetup). His background covers the gamut from scientific research, data and statistical analysis, corporate development and investing for a single-family office, and then building an early stage venture fund from scratch - immediately prior to REFASHIOND. Brian holds an MBA in General Management, with a specialization in Financial Instruments and Markets, from NYU’s Stern School of Business. He also holds a Bachelor’s Degree in Mathematics & Physics from Connecticut College. Brian is a charter holding member of the CFA Institute. He is also an adjunct professor of operations management in the Department of Technology Management and Innovation at the New York University School of Engineering.