TRE Networks:

A Uniquely American
Solution to Regional
Innovation
A whitepaper produced by the Office of Public Partnerships and Engagement
at Penn State University

by Penn State Office of Public Partnerships and Engagement:

Timothy Franklin
Liz Nilsen
Meredith Aronson
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TRE represents a uniquely American answer to regional innovation activities

going on around the world. Instead of top down policy, it is bottom up and
regional; it plays to the strengths of regional economies; it lifts efforts beyond
regional boundaries; it is built upon public-private partnerships; and it spans
the rural-urban continuum. (Ed Paisley, Center for American Progress, 2010)

What Happened To The American Economy? - Needs and Directions

The United States is, itself, an innovation – the world’s first representative democracy, viewed as
an experiment at its founding but now emulated worldwide. Innovation and creativity is in our
national DNA – an advantage reflected not just in our political history, but in our economic
story as well. Despite recent challenges, the United States’ economy remains the wealthiest in
the world largely because of its capacity to invent and brand new and competitive products.
(Nelson, 1993; Lopez-Claros, 2010; CIA Factbook).

The global economy in 2010 finds numerous ―first world‖ economies (China, India, European
Union countries, Brazil, and others) whose relative wealth is growing in part because of
ambitious policies directed at strengthening their capacity to innovate. The advantage we have
long held is being challenged by unprecedented worldwide competition; in the most recent IMD
World Competitiveness Yearbook, Singapore and Hong Kong passed the US in their annual
rankings of national competitiveness factors (IMD, 2010).

The demands of an increasingly vibrant global economy are being felt not just at the level of the
national economy. In small industrial cities and rural regions, and in specific industries (such as
manufacturing), Americans are falling behind. While individual stories of decline may differ in
certain respects, one common thread is that innovative ecosystems at the regional and industrial
level are underdeveloped or have competitive gaps.

The route to a turnaround is both breathtakingly simple and astonishingly complex: the US
needs both policy and practice that change the equation at the national level by strengthening
regions’ and industries’ ability to innovate.

The National Picture: Sowing Public Policy Seeds to Accelerate Private

Economies through Regional Innovation Clusters

The past two years have seen the Obama administration laboring to enhance and/or reprioritize
federal investments to jumpstart an economic revival. How can these public investments to
seed a private economy be made in the most effective and efficient manner? There are four key
considerations for policymakers:
Networks are the locus of increasing innovation. Maximizing the interactions between
knowledge suppliers (individuals or organizations that ―do‖ innovation) and knowledge
consumers (those who ―need‖ the innovations) is the key to quickening the pace by
which the innovation process takes place as well as the volume of the knowledge created
and deployed. (Hagedoorn, 2002)
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Place-based prosperity is related to a regionally-focused transformation strategy. The

reasons for distress within a particular community lie within the specific challenges of
the region; likewise, transformation efforts must build on the assets (geographic, social,
or industrial) of the region rather than relying on one-size-fits-all national solutions.
(Partridge & Rickman, 2006)
Current innovation capacity is concentrated in large metropolitan areas (Brookings
Institution, 2008). This creates an issue of equity as smaller cities and rural areas find
themselves struggling to strengthen their local economies. Because metropolitan areas
now represent two-thirds of the nation’s population and, by extension, its voting citizens,
the distribution of innovation capacity also creates a political challenge for policymakers
as they make decisions about funding allocations.
Investment dollars can be maximized by creating a national network that will leverage
available funding. This network’s efforts can best be directed toward helping regions
create the needed hard and soft innovation infrastructure, as well as seeding replicable
efforts that can be deployed in multiple regions.

Creating a System: Characteristics of a National Framework that is Regionally

Driven, Customized to Area Strengths and Focused on Results

There is clearly much that can be accomplished on the national level to better use federal
investments to drive innovation, particularly in a fashion that encourages the formation and
growth of regional economic clusters. But as the last policy consideration suggests, spending is
not enough. Resources need to be deployed within the region in ways that will create actual
transformation. Simply writing checks to regions in hopes that they will know how to grow an
innovation ecosystem doesn’t guarantee that it will happen.

A national framework that can assist regions would function as an intermediary layer between
funders and regions, helping regions best use investments based on proven strategies and
detailed knowledge of how to make innovation happen. What would that intermediary role look
like?

Focusing funding and leadership energy so as to avoid the ineffectiveness of

fragmentation;
Offering effectiveness across the rural-urban continuum so to be politically attractive;
Providing a national scope for developing and vetting high quality, locally customized
solutions with high regional relevance so as to ensure the national strategy results in
globally competitive quality;
Increasing interactions between universities and private sector so as to accelerate the
critical input to an innovation economy: knowledge transfer;
Repositioning existing assets and infrastructure in a region by linking them with national
university and innovation capabilities so as to be cost-effective;
Customizing a theory of regional change to the specific needs of individual regional
economies across the United States so as to implement effective and efficient policy;
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Increasing national programmatic capacity for creating additional regional innovation

clusters so as to compound success and reduce the cost of participation;
Developing regional infrastructure and strengthening anchor institutions so as to
create regional governance and program capacity capable of sustaining long-term
progress.

The nation’s universities are uniquely positioned to be at the center of development efforts,
playing the critical intermediary role that is so needed.

Why Universities?

Despite what is sometimes viewed as an ivory tower culture of impracticality, in fact universities
are still the epicenter of learning and research in the US. In 2006, they contributed more than
70 percent of the top 100 innovations (Litan, 2010; Power & Malmberg, 2008). Land-grant
institutions, in particular, have more than a century’s worth of outreach to communities
throughout their home states, and a shared understanding of their responsibility to ―extend‖
knowledge to local settings.

The role of universities in development can and should be multi-faceted:

At the most basic level, universities provide talent, through access to degree, certificate and
professional development programs to build or enhance a region’s workforce, and often offer
enrichment programs to children, youth and adults.

Talent development serves as a base for three other important roles in development:
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Technology development: universities are involved in commercialization, technology

transfer, and industrial research, and create entrepreneurs as students graduate with
valuable knowledge and skills
Firm development: universities provide corporate training, business and management
education, and technical assistance to companies in need of field-specific expertise
Industrial cluster development: university innovation parks, incubators, accelerators
and distributed research programs provide a focus for emerging clusters

As universities fulfill these functions, they help drive a new economic base, a 21st century
workforce, and reshaping the area as a quality, connected place with a high quality of life.
Universities can also play an important role in encouraging civic collaboration, and helping the
area’s leadership develop new networks and a new community identity. As all these threads
converge, regional development is well underway.

Universities also play an important role not just for individual regions, but in their states. They
inform policy discussions and provide advice to state leaders.

For an individual university, their role in development ends at the state level. TRE Networks
extends this model based on the tremendous capacity in these institutions to envision a coalition
of universities playing the critical intermediary network role that is needed to ensure prosperity
in all regions – not just in the metropolitan areas that are already centers of innovation, but
nationally, including smaller struggling industrial cities and far-flung rural regions.

TRE Networks – The New Model

A new coalition of exceptional universities — including Penn State, Purdue, Arizona State, the
University of Michigan and the University of Akron — are stepping out as pioneers in the effort
to again become relevant to the thousands of communities that need practical assistance in
navigating the rapids of economic change.

The land-grant and public research university system represents a uniquely American invention.
This current coalition grew from the desire to harness the power of these universities in a
collaborative and synergistic model that was both systemic and systematic in its approach to
supporting current US economic needs. TRE Networks leverages the existing investments in
these great institutions – the crown jewels of public US innovation capacity – and provides a
structure to combine those strengths into a much broader national capacity.

The new coalition goes beyond universities. Also engaged are highly-regarded organizations
such as the Council on Competitiveness, Center for American Progress, Association for Public
and Land-grant Universities (APLU), and the National Association of Manufacturers.

TRE Networks will have two primary areas of activity: the TRE Roundtable and TRE Practice.
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TRE Roundtable

TRE Roundtable is the network development arm of TRE Networks. By creating forums for
dialogue, the TRE Roundtable serves as a gathering place for the so-called ―quadruple helix‖ of
business, government, universities, and non-profits to develop approaches to unleash university
assets in innovation-based regional development strategies. Policy makers and practitioners in
transformative regional engagement share ideas, build agendas, and take collective action.
University and private sector leaders and development practitioners gather—physically and
virtually—to exchange knowledge and shape policy recommendations to foster effective regional
innovation initiatives nationwide.

The TRE Roundtable has been active for two years, with participation from national policy
organizations and universities. Roundtable activities include:
Annual meetings of the TRE Roundtable community to facilitate dialogue about the kinds of
policy needed to advance key TRE objectives
Fora for online tools and resources, including TREpedia, the TRE Toolkit, and Web 2.0
connections for the community

Roundtable partners include:

Arizona State University
Association of Public and Land-Grant
Universities
Association of University Research
Parks
Center for American Progress
Council on Competitiveness
The Greater Milwaukee Committee
Greater Louisville, Inc.
The Manufacturing Institute (National
Association of Manufacturers)
Michigan State University
National Outreach Scholarship
Conference
North Carolina State University
Northern Illinois University Outreach,
Center for Governmental Studies
The Pennsylvania State University
Purdue Center for Regional
Development
Rural Policy Research Institute (RUPRI)
Regional Research Institute (West
Virginia University)
State Science and Technology Institute
(SSTI)
The University of Akron
The University of Georgia, Public
Service & Outreach
University of Maryland
University of Michigan

TRE Practice
TRE Practice is the implementation arm of TRE Networks. TRE Practice cultivates
transformation efforts in small and medium-sized industrial cities, in the urban core, and in
micropolitan/rural regions. TRE Practice is, as the name indicates, a setting in which actual
transformation takes place as regional leaders and TRE Networks experts work together. A
comprehensive portfolio of solutions - workshops, tools, and services - has been assembled from
best-in-class approaches throughout the nation and can be customized for each region’s needs.
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Work in individual regions is based on a framework for change illustrated to below. At the
center of the circle are two processes that are critical to development: enhancing the degree of
civic collaboration in a region, and working with regional leaders to build new networks and
promote new narratives - stories that the region tells about itself and where it is going. Moving
out from the center are the three sectors
which development efforts need to
address:

Brainpower and talent development:

Regions that grow need to attract and
develop a talent pipeline and a workforce
that produces innovation and thinks on
the job.

Innovation and entrepreneurship: The

regional economic base grows by
innovating to compete and growing new
companies and jobs through
entrepreneurship.

Quality connected places: high-

performing schools, healthcare, housing,
non-profits, amenities, and a flow of
visitors contribute to attracting and
retaining innovative firms and the
brainpower they hire.

The sectors also intersect with one another, shown in the arrows moving out from the center –
for example, as talent and entrepreneurship are both addressed, a growing number of innovative
businesses (the red arrow) are created.

In each region, an anchor regional institution – a university or college – leads the work and
guides the developing competitive strategy, in partnership with a TRE Senior Advisor. The
anchor institution knows the region best and has existing relationships with local leaders. At the
same time, the anchor institution may not have all the expertise and resources the region needs
–gaps that can be filled by the network of other institutions involved with TRE Networks.

How does this process works over time?

Civic collaboration, at the bottom of the ―cone‖ below, is the starting place for regional work.
Some regions may already have a high degree of civic collaboration; others may need to address
years of discord and develop new social systems and disciplines that align, support and craft
regional strategy and direction.

Related to this growing dynamic of cooperation, new networks and narratives will develop over
time as leaders work together. Regions in transition need to communicate their vision in a
compelling narrative, as well as build the social, financial, and technological innovation
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networks that bring resources and connections into a place-based strategy. As the
transformation effort develops, the anchor institution and TRE Networks will play three critical
roles:

First, they can analyze a region’s assets and needs and legitimize the initiative to drive change.
Second, they can convene all sectors of a community, and lead a process to align the many
programs and initiatives that already exist. Finally, very few regions have all the pieces that are
needed to compete globally. The anchor institution can draw on the expertise of all the
universities and other partners in TRE Networks to deliver new programs and solutions,
customized as needed to the region’s needs.

There have been many efforts to involve higher education in regional development. Most use a
―push‖ model; that is, a particular program is designed and marketed as the solution to the
needs of the state or region. In contrast,
TRE Practice offers a ―pull‖ model: the
foundation of the work is a partnership
with existing regional institutions and
other assets. New tools or programs are
introduced only as they fill in identified
gaps in a comprehensive strategy. This
bottom up approach is designed to
respond to specific regional gaps from a
set of products, tools and services are
customized to the regions and are
delivered by participating higher
education or other partners.

These new tools take two forms. The first

is a series of webinars, workshops and
interactions that help regions increase
their skills in civic collaboration and
developing new narratives and networks.
Most are based on an approach called
―strategic doing‖ which quickly matures regions’ ability to do transformative work together.
TRE Networks has partnered with Ed Morrison at Purdue’s Center for Regional Development
(PCRD) to develop this set of offerings; Ed is nationally-known for his work throughout the
country helping communities and regions build their collaborative abilities.

In addition to these foundational tools, a portfolio of leading-edge certified programs offered

through TRE Practice supports specific transformation initiatives. When regions have ideas of
where they are going strategically, they are often in uncharted territory as to how to do that
themselves – for example, how do you start an incubator, a venture fund, a program to reduce
high school dropout rates, a regional institute of collaboration, a network to grow strong
regional supply chains? TRE Networks paves the way, identifying programs to serve as models
to accelerate a region’s progress. But just sharing a website of a successful program is clearly
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insufficient. TRE Networks also develops the resources that will allow regions to implement the
approach for themselves – toolkits, technical assistance, and implementation guidance, all
tailored to the specific profile of the region, be it a small or mid-sized industrial city, a
metropolitan area, or a micropolitan region.

These model programs are not necessarily the ones that have made the biggest splash. Instead,
TRE Networks vets candidate programs carefully with three criteria in mind: Is the program
replicable in a setting different than its original incarnation? Is it scalable – that is, will it work
in multiple locations, or does its success lie in its limited deployment? Is it sustainable – does it
rest on a business model that is feasible over the long term? Only programs which meet these
tests become TRE Practice offerings nationwide, allowing for multiple programs to come from a
given region and then be offered nationally, and for a national offering to be customized to
multiple regions, as indicated in the figure above.

What Success Will Look Like

Universities have been engaged in regional development for many years – in many cases
beginning with cooperative extension efforts, and more recently with technology transfer
initiatives. While these efforts have been valuable, TRE Networks represents a fundamental re-
imagining of the role of postsecondary education institutions to meet a new set of challenges,
placing the institutions in the center of a national framework focused solely on regional
economic competitiveness.

Such a model must be accompanied by specific outcomes that will demonstrate the extent to
which the new structure is in fact bringing about effective change in regions around the country.
Those outcomes must encompass shorter-term and activity-based measures (examining the
degree to which regions are implementing the kinds of programs needed) in the three critical
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areas of talent, innovation, and quality connected places. Outcomes must also include long-term
and impact-based measures to which these programs, when deployed in an integrated fashion,
lead—that is, the extent to which region is becoming more competitive. Specific metrics that
TRE Networks will monitor in regions are based on the three sectors that make up the model of
change described above:

Sector Shorter-term/activity-based Long-term/impact-based

university metrics metrics
Brainpower and talent • Doctoral Degree Programs • Per Capita Income
• Masters Degree Programs • Population Ages 25-40
• Baccalaureate Degree • Baccalaureate Degrees
Programs • Post-secondary
• Summer College Internships Participation
• Associate Degree Transfer
Programs
• High School Internships
• Community College
Cert./Terminal Programs
• Intro & Prerequisite College
Courses
• High School Certificate
Programs
• STEM Outreach Programs
• STEM Teacher Prep
Programs

Innovation and • Technology Transfer • High Wage Jobs

entrepreneurship • # Commercialization Support • Business Starts
Services • Business Expansion
– # Patents • Business Recruitments
– # Licenses Venture Capital
– # Publications Investments
• $ Contract R&D
• $ Research Expenditures
• $ Competitive R&D Awards
– # Faculty
– # Technicians
– # Post-docs
– # Grad Students

Quality connected places • R&D Prospect/Client Visits • Relocation Leads

• Cluster-Focused Graduate • Real Estate Sales
Students • Housing Construction
• Cluster-Focused Faculty & • Hotel Bookings
Staff
• Entrepreneurship Support
Services
• Testing & Engineering
Services Companies
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Sources Cited
To read more about the ideas included in this paper, see:

Brookings Institution (2008). MetroPolicy: Shaping a New Federal Policy for a Metropolitan
Nation.

CIA Factbook 2010.

Hagedoorn, J. (2002). Inter-firm R&D partnerships: an overview of major trends and patterns
since 1960. Research policy, 31(4), 477-492.

IMD (2010). World Competitiveness Yearbook, 2010. Switzerland: IMD World Competitiveness
Center.

Litan, R. (2010). Fueling Local Economies: Research, Innovation and Jobs. Testimony to US
Joint Economic Committee, June 29, 2010.

Lopez-Claros, A. (2010). Innovation for Development Report: Innovation as a Driver of

Productitvity and Economic Growth. Basingstoke, UK: Palgrave Macmillan.

Nelson, R. R. (1993). National innovation systems: a comparative analysis. Oxford University

Press, USA.

Partridge, M. D., & Rickman, D. S. (2006). The geography of American poverty: is there a need
for place-based policies? Kalamazoo: WE Upjohn Inst for Employment Research.

Power, D., & Malmberg, A. (2008). The contribution of universities to innovation and economic
development: in what sense a regional problem? Cambridge Journal of Regions, Economy and
Society, 1(2), 233 -245. doi:10.1093/cjres/rsn006

Learn More
For more information on TRE Networks or explore how TRE Practice can help your
region, email us at info@trenetworks.org, or visit www.trenetworks.org.

TRE Networks, Inc.

c/o Office of Public Partnerships & Engagement
Penn State University
Building 329, Suite 416B
University Park, PA 16802