[Editor: I was going back and forth with long-time innovation ecosystem builder and advocate Dwayne Johnson — no, not that Dwayne Johnson — this weekend when he shared his documentation of the issues with the Oregon economy around startups and the like. “Have you published this anywhere…?” I asked. He hadn’t. But now… he has.]
The Red Pill: Oregon’s Innovation System Isn’t
Broken — It’s Built This Way
A first-person reckoning from someone who was there
Most people think Oregon’s innovation failures are accidental.
They’re not.
They’re structural — encoded in the social DNA of the state’s institutions, networks, and personalities. And I know this not from studying Oregon from the outside, but from living it across four governors, two legislative generations, and more boards, councils, and initiatives than I can count on both hands.
I’ve been vice chair of the Portland Metro Regional Innovation Hub and the Portland Metro Regional Economic Development District. I ran the state’s small business agenda for several years as chair of the Governor’s Small Business Advisory Council — not just advising on it, but shaping what went to the Governor, what got funded, what got killed, and what the Legislature actually saw. I sat on the Oregon Business Council for seven years. I was part of the ETIC group on the STEM Investment Council and the Workforce Development Board. I’m president of the Oregon Innovation Foundation and past deputy director of Innovate Oregon. I’ve been a seed investor and mentor inside this ecosystem for decades, including through the Startup Champions Network.
So when I say Oregon doesn’t have an innovation ecosystem — it has an innovation archipelago, islands everywhere and bridges nowhere — I’m not offering a metaphor. I’m offering a map I’ve walked myself.
Where We Came From: The First Layer
I was there in the early days — the Dave Chen era, early capital formation, the proto-ecosystem before “ecosystem” was a buzzword. I watched the pattern emerge: a few visionaries, a handful of connectors, a fragile network of angels, founders, and institutions. A genuine moment where Oregon could have built something generative and self-sustaining.
What happened instead is the original sin of Oregon innovation: we built nodes, not networks.
The Engineering and Technology Industry Council (ETIC), born from the 1997 Legislature, was the foundation — and it was real. I was inside it. ETIC built Oregon’s engineering talent base through sustained, bipartisan, multi-biennium legislative commitment: tripling engineering graduates, tripling research expenditures at Oregon State to $37.2M, building nationally competitive programs in robotics, precision health, and advanced manufacturing. It created the human capital pipeline that everything else depended on. It worked because the Legislature funded it across multiple biennia with genuine champions on both sides of the aisle who understood that you don’t build an engineering workforce in a single budget cycle.
Governor Kulongoski understood this compounding logic. When he personally convened 40+ private sector, university, and government leaders in 2005 to create Oregon InC — enshrined in statute by SB 838 — and then signed a $28.2M Innovation Plan launching ONAMI, OTRADI, and VertueLab, he was trying to build architecture on top of the ETIC foundation. Private sector co-champions like Dave Chen and Skip Rung brought Intel, HP, and national credibility to the table. ONAMI has since generated $2.45B in financial leverage, 95% from private capital. These were real returns on real investment, built by connectors who spent years translating between university researchers, corporate partners, and federal funders.
Governor Kitzhaber deepened this. He returned to office with a genuine 10-year systems lens — not a single biennium’s priorities but a long-horizon commitment to treating education, workforce, research, and commercialization as an integrated whole. He created the Oregon Growth Board and Oregon Growth Fund, Oregon’s first structured public venture capital infrastructure. Over 100,000 jobs were created during his tenure. He governed the way you have to govern innovation: as a compounding system, not a program portfolio.
Then, in February 2015, Kitzhaber resigned. The political scandal was damaging enough. But the deeper damage was the rupture of continuity at a structurally critical moment — when ETIC was transitioning from a growth fund to a sustaining fund, when Oregon InC needed its next gubernatorial champion, and when the connective tissue between government, industry, and the entrepreneurial community was most vulnerable to fraying. The system never fully recovered that momentum.
But here’s what I watched even in the best years: everyone built their own thing. Their own fund. Their own accelerator. Their own program. Their own innovation initiative. And no one built the edges — the connective tissue between nodes. This was the original sin, present from the beginning, and it was baked into the incentive structure long before anyone named it.
The Human Bottleneck: Cliques, Turf, and Zero-Sum Logic
Here’s the part the reports never say out loud. I will.
Oregon runs on cliques, not networks. Small circles of trusted insiders who validate each other, gatekeep newcomers, recycle the same ideas, and confuse longevity with competence. I’ve watched this dynamic play out in board rooms, legislative hearings, and grant committees for twenty years. The faces change. The dynamic doesn’t.
“Me and mine” consistently beats “we and ours.” When something works, the Oregon reflex is not “let’s strengthen the one that already works.” It’s “I’ll build my own version.” This is why Oregon has five small accelerators instead of one strong one, multiple overlapping capital programs, and endless pilot projects that never integrate. The document Toward a More Entrepreneurial, Connected, and Generative Oregon correctly diagnoses this as fragmentation — but it treats it as an oversight. It’s not an oversight. It’s a rational response to a broken incentive structure.
“Snort-dollar” behavior dominates. Everyone wants to be the one holding the grant, the contract, the budget line. The logic is: “If I don’t control the money, I don’t exist.” The result is turf wars, duplication, fragility, and political theater masquerading as innovation strategy. I’ve watched organizations that should have been partners become competitors over a $200,000 grant. I’ve watched initiatives that were working get quietly defunded because they made the wrong institutional enemy. I’ve watched connectors — the people who create the most systemic value — get cut out of rooms they built, by people who arrived later and learned to control the narrative.
When Business Oregon — the agency nominally responsible for Oregon’s economic competitiveness — appoints a director whose entire professional formation was in DEI and immigrant services rather than venture capital, economic development, or startup ecosystems, it is not making a mistake. It is signaling exactly how much the innovation mandate matters relative to other priorities. Oregon fell from #7 to #41 in Economy in CNBC’s Top States for Business rankings across the Brown era. That collapse was not a surprise to anyone paying attention.
Zero-sum thinking in a state that desperately needs positive-sum behavior. Oregon behaves like a resource-scarce ecosystem even when the resources are there. Founders fight for scraps. Institutions fight for relevance. Connectors fight for oxygen. The Oregon Capital Scan 2025 documented the result with precision: Oregon captured 0.8% of national mid-stage startup deal count and 0.02% of national mid-stage venture dollars — despite software GDP growing 163%, faster than the national average. We produce innovation and cannot finance our own growth. That is not a capital market failure. That is a connectivity failure.
The Oregon Reflex: replicate, don’t integrate. This is the deepest cultural pattern. If you build something that works, someone else will copy it, dilute it, compete with it, undercut it, or create a parallel version — not because they hate you, but because the system rewards ownership, not collaboration. I’ve watched it happen to initiatives I built. I’ve watched it happen to colleagues who deserved better. I’ve watched it happen to myself.
Why This Is Structural, Not Personal
This is the part most outsiders never understand. It’s not that Oregonians are petty or territorial. It’s that the system incentivizes fragmentation.
Grants reward program creation, not system integration. Agencies reward visibility, not effectiveness. Institutions reward control, not collaboration. Committees reward consensus, not competence. Oregon’s political culture rewards niceness — the appearance of agreement — over truth.
So the system reliably produces cliques, silos, duplication, fragile networks, invisible connectors, burnout, and stagnation. And it quietly, structurally, without malice, punishes the people who try to build bridges instead of islands.
The evidence is in the governance record across the Brown and Kotek years. Governor Brown’s era: innovation as one of eight pillars in a framework document, never a governing priority. Her signature economic initiative was Future Ready Oregon, a $200M+ workforce development package — important work, but workforce development feeds existing employers; entrepreneurship strategy builds new ones. Governor Kotek arrived with three explicit priorities — housing, mental health, education — and treated economic development as secondary for three years. The Oregon Business Council declared a state of economic emergency in November 2025. The Prosperity Roadmap arrived in December 2025, three years in, deferring the hardest decisions — tax reform — to 2027, a year after the election.
Look at the Prosperity Council itself: sixteen members, co-chaired by Renée James of Ampere Computing and Curtis Robinhold of the Port of Portland, weighted heavily toward established enterprise — Columbia Sportswear, Tillamook, Hoffman Construction. One venture capitalist. No active startup founders. No ecosystem builders. No accelerator operators. No one who has spent twenty years connecting Oregon entrepreneurs to capital and markets. The council tasked with redesigning Oregon’s economic architecture does not include the people who understand how that architecture actually functions at the ground level. This is not an accident. It is the system reproducing itself.
Meanwhile, Intel shed over 3,100 Oregon workers in 2025. The Portland metro lost nearly 9,000 jobs — fourth worst among major metro areas nationally. SB 1507, signed into law in 2026, eliminated Oregon’s Qualified Small Business Stock exclusion, making Oregon the only state where resident founders are penalized on gains that nonresident sellers escape entirely. The Legislature killed the FISH and CHIP Act — which passed the House 46-1 — without even a Senate hearing. Rep. Nguyen’s bill, Senator Sollman’s Oregon JOBS Act targeting advanced manufacturing and R&D tax credits — blocked, stalled, deferred. The legislative champions exist. The system defeats them.
None of this is accidental. Every one of these outcomes is the predictable result of a system optimized for institutional comfort, political safety, budget protection, and narrative control — not for entrepreneurship, capital formation, or statewide opportunity flow.
The Deeper Truth: Only Nodes, Never Networks
The people who tried to build bridges — the connectors, the dealmakers, the ecosystem builders — have been consistently underfunded, underrecognized, politically unprotected, structurally unsupported, and sometimes actively pushed out when they became too effective for someone else’s comfort.
The document I was asked to analyze calls them “the missing meso layer” and recommends treating them as economic infrastructure. That framing is correct. But it understates what actually happens to connectors in Oregon’s system. Infrastructure gets funded. Connectors get thanked and then defunded. Infrastructure gets protected. Connectors get replaced by institutional programs that do a fraction of the work at twice the cost and none of the trust.
I’ve lived this. I’ve watched it happen to others. I’ve watched it happen to myself.
The reason this matters beyond personal experience is systemic: when you consistently underinvest in and underprotect the people who create relationships, the ecosystem cannot compound. It only fragments. ONAMI’s $2.45B in leverage was built by connectors — people who spent years in rooms that didn’t pay well and didn’t offer institutional prestige, translating between worlds that couldn’t talk to each other. When those people leave, age out, or burn out without successors, the network doesn’t decline gracefully. It collapses to its nodes, and the nodes revert to island behavior.
Oregon InC’s current board composition is the proof: strong on institutional representation, absent in active founders, working ecosystem builders, and venture investors. The people who should be shaping Oregon’s innovation governance are not in the room. The people in the room are largely there because of institutional affiliation, not because of demonstrated connector capacity. And the $125,000 Business Oregon RFP to evaluate five years of the Innovation Plan — in an agency managing hundreds of millions — is not a budget line. It is a cultural signal: we will evaluate this system using the same framework that produced it, and we will not be surprised by the conclusions.
The Architect’s View: The System Is Succeeding
This is the part that wakes people up.
Oregon’s innovation system is not failing. It is succeeding at producing exactly what it was designed to produce: small, siloed, controllable, non-threatening initiatives that satisfy institutional stakeholders, generate defensible activity metrics, and pose no challenge to existing power structures.
The system is optimized for institutional comfort. For political safety. For budget protection. For narrative control. For low-risk, low-impact activity.
It is not optimized for entrepreneurship. For innovation. For capital formation. For statewide opportunity flow. For generative networks. For connectors.
This is why the same patterns repeat every decade. This is why every new plan produces the same fragmentation. This is why the 2021 Innovation Plan — a genuine, thoughtful document that correctly identified entrepreneurship, talent, commercialization, inclusion, capital access, and regional collaboration as drivers of prosperity — produced more programs rather than stronger connections. The plan was written within the system’s logic. It could not escape the system’s gravity.
The CHIPS Act is perhaps the sharpest illustration. Oregon ranks second in the nation in semiconductor productivity. Oregon received less than 0.002% of available CHIPS R&D funds. Second in productivity. 0.002% of federal investment. That gap is not a grant-writing failure. It is the consequence of a decade without a governor who owned innovation as a personal commitment, without a private-sector co-champion who could walk into a federal agency with credibility, and without a connective infrastructure that could translate Oregon’s assets into a compelling national story.
What It Actually Takes
- You cannot fix a system by adding more nodes.
You fix it by redesigning the edges. - You cannot fix a system by adding more programs.
You fix it by changing the incentives. - You cannot fix a system by empowering institutions.
You fix it by empowering connectors. - You cannot fix a system by writing another plan.
You fix it by rewriting the governance architecture.
The Prosperity Council’s recommendations are due June 30, 2026. They represent a narrow window — the last political moment before another election cycle absorbs the oxygen. For those recommendations to matter, three things must happen simultaneously, not sequentially:
- Restore champion-level leadership with operational credibility. The Governor must own innovation as a personal commitment — not as one pillar among eight, not as a framework document, not as a press release at Lam Research. Business Oregon needs leadership with genuine economic development credentials: someone who has raised capital, built companies, structured public-private partnerships, and navigated federal innovation programs. Oregon InC needs a restructured board that puts active founders, working ecosystem builders, and venture investors in the majority — not as courtesy seats alongside institutional representatives, but as the governing voice.
- Fund connectors directly, explicitly, and with statutory protection. The Oregon Community Foundation’s Thriving Entrepreneurs program is doing this work at small scale — $3.5M over five years, 79% to rural-serving organizations. That is the right model at the wrong scale, without the political protection connectors need to survive contact with incumbent interests. An Oregon Ecosystem Builder Initiative — fellowships, connector grants, peer networks, succession pipelines, backed by statute — would be the most leveraged investment Oregon could make. The precedent is already proven: the ETIC and Oregon InC eras generated $2.8B in federal and private leverage against $50.8M in state funding. That was built by connectors. Fund them. Protect them. Build their successors.
- Stop the active harm. Revisit SB 1507. Address a regulatory environment rated among the most hostile in the nation for small business. Pass the FISH and CHIP Act. Stop treating innovation funding as a discretionary line item subject to biennial renegotiation. The compounding returns from the ETIC and Oregon InC era were built on sustained, multi-biennium commitment — not on annual debates about whether the investment was “working yet.”
The ultimate test is the one the document proposes, and it is devastating in its simplicity: Is it easier to build a company in Oregon today than it was five years ago?
The honest answer, from someone who has been inside this system for twenty years, is no.
The question is whether the people reading this are willing to hear that answer — and whether they have the courage to act on what it actually implies. Not another plan. Not another framework. Not another pilot program that replicates something that already exists. Not another council weighted toward the institutions that created the problem.
A different architecture. Built by and for the people who have the most to gain — and who have been waiting the longest — for Oregon to become what it should have been twenty years ago.
Dwayne Johnson has served as Vice Chair of the Portland Metro Regional Innovation Hub and the Portland Metro Regional Economic Development District, President of the Oregon Innovation Foundation, Chair of the Governor’s Small Business Advisory Council, Deputy Director of Innovate Oregon, member of the Oregon Business Council for seven years, participant in the ETIC era through the STEM Investment Council and Workforce Development Board, and seed investor and mentor through the Startup Champions Network and beyond.
References
- [PDF] Testimony in Support of HB 2582 Dr. Brian Paul House Committee …
- [PDF] scott.ashford@oregonstate.edu
- Oregon Governor Signs $28.2M Innovation Plan
- OREGON’S FIRST SIGNATURE RESEARCH CENTER OPENS – Industry partners working closely with ONAMI researchers also displayed their research and developme…
- Success Stories – ONAMI – These investments have resulted in over $2.45B in financial leverage, of which over 95% is private c…
- Oregon Governor Signs Bill to Create Innovation Council – SSTI – Gov. Ted Kulongoski last month signed Senate Bill 838, creating the Oregon Innovation Council to pro…
- 2015 – 2017
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- Navigating the latest “transitional period” for Oregon startups
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