The innovative practices of local businesses can be put to work to create new frontiers within state government.

According to Steve Jobs, innovation is what distinguishes a leader from a follower. Jobs, in our day and age, is to the field of technology what Henry Ford was early in the 20th Century to the automotive industry. It comes down to being able to discern what customers want, and finding new ways to deliver.

Finding the path

Every industry, every business seeks to find the undiscovered path to something new and unique – a new twist on a product or a service or a technology that stamps it “the best yet.” And it’s not just industry. Today, even our governments work to redefine our collective notion of what constitutes “bureaucracy” by touting efforts to innovate.

For example, in Pennsylvania, the Governor’s Innovation Office maintains a website devoted to the Commonwealth’s efforts to reduce government costs and improve efficiency. Between January 2011 and June of this year, the Innovation Office counts more than $690 million in cost savings and increased productivity within and among Pennsylvania’s state agencies.

These improvements come primarily through efforts of state departments to find new ways to reduce printing and mailing costs, streamline permitting and certification processes, improve inventory management, employ new IT and web-based training technologies, reduce vehicle fleets and consolidate space.

Very likely, in the world of commerce and industry, cost-cutting and efficiency boosting would be seen as effective management rather than constituting “innovation.” But, we’re talking about government. Any success in reducing the dispensing of red tape and the spending of tax dollars is pretty innovative.

Forging partnerships

Further along the spectrum and spirit of innovation, however, are increased efforts to bring private industry into endeavors that historically have been the sole purview of government agencies. Two years ago, Governor Corbett signed into law the Public and Private Partnerships for Transportation Act, which enables PennDOT and other transportation authorities and commissions to partner with private companies to participate in delivering, maintaining and financing transportation-related projects.

These public-private partnerships, or P3s, will include a private consortium, to be selected sometime this month, that will finance, design and replace more than 500 of Pennsylvania’s worst bridges over four years – in just a third to half the time it would have taken the state to do it by itself. After the bridges are replaced, the consortium will maintain them for 25 years.

This kind of innovative thinking will greatly benefit Pennsylvanians in other ways. I have often referred to our state’s enormous natural gas resources and the opportunities this energy source brings to the commonwealth. Most of what we’ve heard and read about in the news is focused on the gas-rich Marcellus Shale field lying under most of our northern-tier and western counties. But already work is underway to add additional energy resources to the market from deeper-lying gas fields. Construction began this summer on a new Shell Oil-owned Utica Shale natural gas well in Tioga County that will tie directly into a UGI high-pressure line – and thus to Pennsylvania consumers.

The state’s P3 Board, charged with approving the public-private partnerships generated under the new law, last month announced that by next summer, it will select a partner to develop cleaner-burning compressed natural gas (CNG) fueling stations at public transit agencies around the state. This P3 project would also provide public access to the facilities.

What innovative potential does our own source of fuel have for industry and commerce?

Tapping in to potential

According to a study released this month by America’s Natural Gas Alliance (ANGA), the potential is huge. ANGA used an independent study group, Gladstein, Neandross & Associates (GNA), to look at three key areas of the U.S. – the Great Lakes, the Gulf of Mexico and the Mississippi River and its tributaries – to gauge demand for liquid natural gas (LNG) as a marine and rail fuel.

GNA found potential demand for LNG in those regions could reach one billion gallons annually by 2029 – seven times the current domestic LNG consumption. LNG, with its abundant availability, lower cost and cleaner profile, is already in demand for power generation, manufacturing and long-haul on-the-road transportation.

It should come as no surprise, then, that there also exists a potential for LNG as an export commodity. The Federal Energy Regulatory Commission (FERC) this month approved the fourth LNG export terminal in the U.S. at Cove Point, Maryland. Assuming it moves forward, this will be the first such operation in the East Coast and the closest to Marcellus Shale.

Innovation in the business world can be evolutionary, that is incremental and continuous, or it can be revolutionary. The latter brings the kind of change that hits us as new and even disruptive.

Posted on October 17, 2014 by Region's Business in Public Policy

Scott Staruch | This email address is being protected from spambots. You need JavaScript enabled to view it..