seattle chamber of commerce july 13, 2010
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The World’s Largest Science and
Innovation Park
Presentation for:
Seattle Chamber of Commerce
Egils MilbergsExecutive Director
Washington Economic Development
Commission
July 13, 2010
Great Recession
US trailing major economies
in restoring jobs
Brazil and Chile have seen
strongest job growth. Asian
economies bounce back
Source: Organization for Economic Cooperation and
Development and the International Labor Organization.
Global Job Trends
Geography of WA Unemployment (May NSA)
Path to Recovery
Anticipated recovery time by revenue size (in millions)
Source: 2010 Manufacturing and Wholesale Distributions National Survey
1960s & 1970s
Advantage is Cost
Strategy is
“Make it Cheaper”
1980s & 1990s
Advantage is Quality
Strategy is
“Make it Better”
2000sAdvantage is Innovation
Strategy is
“Make something new”
The key to economic recovery
Over half of Fortune 500 and just under half of 2008 Inc. list began during a recession or bear market.
Dane Stangler, Kauffman Foundation
There is no better time likea downturn to innovate.
• The societal rates of return to R&D are between two to four times private returns.
• At least 2/3 of the increase in per-capita GDP is from innovation.
• Jobs in technology industries pay approximately 70 percent more than other jobs.
• Innovation is the key source of competitive advantage against low-wage nations.
10
Innovation Drives Economic Growth
40 countries/regions
16 Indicators
Economic Structure
• Human capital (college
education; researchers)
• Innovation capacity (corporate
R&D; government R&D; scientific
publications)
• Entrepreneurship (new firms;
venture capital)
• IT infrastructure (e-government;
corporate investment; broadband)
Economic Policy (corp. tax;
ease of doing business)
Economic Performance (trade
balance, FDI, GDP per worker,
productivity)
Actually we’re No. 6
0
10
20
30
40
50
60
70
80
Overall ScoreOverall Score
12
• 1. China
• 2. Singapore
• 3. Estonia
• 4. Denmark
• 5. Luxembourg
• 6. Slovenia
• 7. Russia
• 8. Lithuania
• 9. Cyprus
• 10. Japan
• 11. Hungary
• 12. Slovakia
• 13. Czech Republic
• 14. India
15. Latvia
16. Austria
17. S. Korea
18. Ireland
19. EU-10
20. Spain
21. Sweden
22. France
23. Portugal
24. Malta
25. Belgium
26. EU-25
27. Poland
Decade Trend: The U.S. is Behind….28. UK
29. EU-15
30. Mexico
31. Netherlands
32. Australia
33. Finland
34. Canada
35. Germany
36. Italy
37. NAFTA
38. Greece
39. Brazil
40. United States
13
Average annual growth of R&D expenditures : 1996–2007
EU = European Union
Researchers in selected regions/countries/economies: 1995–2007
NOTES: U.S. data for 2007 estimated based on 2004–06 growth rate. EU includes
all 27 member states. EU = European Union; FTE = full-time equivalent Source: NSF Science and Engineering Indicators 2010
Market shares of computer and office machinery manufacturing: 1995–2007
NOTES: EU = European Union. Asia-9 includes India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand,
and Vietnam. China includes Hong Kong. EU excludes Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia.
Source: NSF Science and Engineering Indicators 2010
Trade balance in high-technology goods 1995–2008
NOTES: Asia-9 includes India, Indonesia, Malaysia, Philippines, South Korea, Singapore, Taiwan, Thailand, and Vietnam.
China includes Hong Kong. EU excludes Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia.
Source: NSF Science and Engineering Indicators 2010
Plan for Washington
States and regions can be powerful players in the innovation economy
• States, regions and smaller nations are:
– Large enough to:
• create intellectual capital
• build innovation ecosystem(s)
• connect globally
• respond to innovation opportunities
– Small enough for:
• shared vision and achievable outcomes
• trusted personal relationships
• effective governance
2007 Rank
Metro AreaTotal Score
1San Jose –Sunnyvale-Santa Clara, CA
100.0
2 Seattle-Bellevue-Everett, WA
46.4
3 Cambridge-Newton-Framingham, MA
45.2
4Washington-Arlington-Alexandria, DC-VA-MD-WV
41.8
5Los Angeles – Long Beach – Glendale, CA
40.2
6 Dallas – Plano -Irving, TX
21.8
7 San Diego – Carlsbad – San Marcos, CA
19.3
8 Santa Ana –Anaheim-Irvine, CA
17.7
9New York – White Plains – Wayne, NY-NJ
16.8
10San Francisco – San Mateo-Redwood City, CA
16.1
Geography of Knowledge Based IndustriesMilken Institute
A New Innovation Growth Curve
TIME
PR
OS
PE
RIT
Y
We are here
A Ten Year VisionWe should not fear to lead
Make Washington State the most
attractive, creative and fertile
investment environment for
innovation in the world.
23
…, we can’t rest on our laurels, so
let’s commit today to grooming a
workforce and leaders who are
agile, creative, and embrace
innovation.Gov. Chris Gregoire
March 10, 2009
We must look over the horizon and prepare for the new economy that will emerge when this recession passes.
Commerce Secretary Gary LockeMarch 18, 2009
Entrepreneurs would appreciate this challenge. The risks inherent to starting a thriving business in today’s troubled waters are immense, but the rewards have never been greater.
InvestmentEntrepreneurship
Talent
Infrastructure
GrowthEmployment ProsperityQuality of Life Competitiveness
Innovation Policy Framework
GSHInnovation
Ecosystem
Education
Research
Entrepreneurs
Associations
Non-ProfitsGov’t
Capital
Business
Workforce
Skills
Innovation Drivers
Innovation Outcomes
Innovation Ecosystem
New Model for Economic Development
Traditional Model Innovation Driven Model
Attract and retain companies Invest in talent, ideas and infrastructure
Jobs Quality of jobs, per capita incomes
Lowest cost of business inputs Higher value inputs, increasing productivity and outcomes
Top down economic development Bottom-up and organic growth
Competing regions: zero sum game Collaborating regions: value creation
Closed linear innovation system Open innovation ecosystem
Single disciplines, functions Multiple disciplines, integration
Locally linked clusters Globally linked clusters
Strategize Organize Operationize
Four Critical Challenges
Talent Challenge
28
Parents disagree about skills to drive innovation
Newsweek-Intel Global Innovation Survey Sept -Oct 4,800 adults
Researchers and
entrepreneurs
create new ideas
Firm creation
and innovation
success
Transforming ideas
Into applications
No capital
Dead
ideas
No capital
Creating business
models
Dead
firms
Graphic concept adapted from
Dr. Charles Wessner, National Academies
Investment Challenge
Double “Valley of Death”30Egils Milbergs
Infrastructure Challenge
Post “ICE” Age?Internal Combustion Engine
31
Beyond Oil?
Export Challenge
Washington’s exports to Asia – per capita goods exports, 2000-2008
Data source: www.wisertrade.org*Newly industrialized countries: Hong Kong, Republic of Korea, Singapore, and China (Taiwan)
304 365
891
655827
1,151
0
200
400
600
800
1,000
1,200
1,400
2000 2004 2008
US
Do
llars
China
Asia NICs*
Washington Innovation Ecosystem
Innovation Model is Shifting
Development
Linear Model Collaborative Model
Research
Commercialization
Innovation Ecosystem
Education
Research
Entrepreneurs
Associations
Non-Profits
Government
Capital
Business
Workforce Skills
Innovation Ecosystems Evolve
Growth Node
Innovation Ecosystem
Nascent
Cluster
Virtual
Cluster
None or few firms
Growth potential
Few to many firms
Fast growth
Key linkages
Virtualized
functions
Accelerated
collaboration
Many nodes
Dense linkages
Network to Network
STARSIPZs
R&D
EIRsPatents
Incubators
InnovationAccelerators
Tax
Incentives
Talent
Gap
Funding SBIR
Source: Washington Technology Industry Association (WTIA)http://wtia.micromaps.com/
Emergent Innovation Ecosystems(illustrative portfolio)
SMART GRID/ ENERGY EFFICIENCY
CLOUD COMPUTINGRENEWABLE
ENERGY
GLOBAL HEALTHELECTRIC VEHICLEINFRASTRUCTURE
ADVANCED MANUCTURING
NEW MATERIALSHEALTH IT
MEDICAL DEVICESWATER RESOURCES/
ENVIRONMENT
LOGISTICS/FREIGHT MOBILITY
DEFENSETECHNOLOGY
FOOD PROCESSING
Aerospace
IT, gaming,
simulation
Biomedical,
Incubators
Clean Tech,
Smart Grid,
Biofuels
Defense
Biotech, Energy
Wine, Water
Life Sciences,
Global Health
World’s Largest Innovation Park
Food
Processing
Wind, Solar,
Data Centers
Marine
Food
Tourism
Marine
Energy
Agriculture,
Composites
New Forestry.
Green Tech
“Twilight”
Medical
Devices
Environment
Remediation
Electric
Cars
Clean IT
State Fair
Extending the Innovation Ecosystem
PNWER GDP and PopulationIf PNWER were a separate country, it
would rank 13th in total GDP
Country GDP* 1. US 13,811,200 2. Japan 4,376,705 3. Germany 3,297,705 4. China 3,280,053 5. U.K. 2,727,806 6. France 2,562,288 7. Italy 2,107,481 8. Spain 1,429,226 9. Canada 1,326,37610. Brazil 1,314,17011. Russia 1,291,01112. India 1,170,96813. PNWER 1,051,841
*2007 GDP in $US Million
PNWER Region (GDP/Pop.)
State/Prov. GDP* Population
Wash. 311,270 6,468,424Alberta 259,900 3,585,000 Oregon 158,233 3,790,060B.C. 150,412 4,310,305Idaho 51,149 1,523,816 Sask. 40,340 1,008,697Alaska 44,517 686,293Montana 34,253 967,440 Yukon 1,767 32,714
Total 1,051,841 22,372,731
*2007 population & GDP in $US Million
WEDC Strategy Timeline
Preliminary Policy Priorities
Innovation & Jobs Summit
Stakeholder Engagement
Research Reports
ED Inventory Update
Prepare Draft
Final Review
Roll-out
WEDC Meetings
Apr 28
Aug 3
Sept 14
Dec 14
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