Set Stage/Opening – entrepreneurial spirit to drive economic growth Looking around the room and spending time with many of you today, I’m inspired by the tremendous opportunity we have in front of us. Just think of the possibilities if we – from the public and private sectors - could put our heads together to tackle some of the biggest challenges facing our country. Like getting our deficits under control. One way to do it is to unleash the entrepreneurial spirit our country was founded on to fuel economic growth. If entrepreneurs and pubic officials had the chance to work side-by-side every day to find innovative solutions and ideas to issues of all types and sizes, I think that could really make a difference for the country, for the economy, and — most importantly — for creating jobs.
Need – A new, creative approach to tackling debt/economic challengesThat’s what I came here to talk about today - promoting innovation in government. Helping to instill an entrepreneurial spirit – and new technologies and platforms to modernize how our governments works - in a public sector that needs a creative approach to the challenge of having to do more with less. One initiative Dell has been supporting over the past year would help bring the private and public sectors together to not just meet today’s great challenges, but also capitalize on the opportunities that technological innovation can provide. To reimagine government as a more efficient and customer-centric institution and break down some of the obstacles to job creation. I think we need more entrepreneurs in government. And today, I’d like to discuss a new program that would let a government agency get the benefit of its own in-house innovator. An entrepreneur-in-residence. Entrepreneurship…It’s in Our DNA With our founder Michael Dell at the helm, entrepreneurship is quite literally in our DNA and we are in the middle of our own re-imagination. Today, we are much more than a PC manufacturer. Dell today is a global leader in delivering end-to-end technology solutions for customers — whether you’re a business, an individual or a government.
To help keep us in touch with these roots and bring the “outside in”, recently, we adopted the entrepreneur-in-residence concept, making Dell one of the first among the Fortune 50 with an EIR. We saw it as an opportunity to amplify our ability to listen and act on the needs of our customers, especially small and medium-size businesses. Today our Office of the EIR forms the core of our commitment to the entrepreneurial community, furthering our effort to create technology solutions that solve real business problems. If you’ve had the privilege of meeting our EIR, Ingrid Vanderveldt, you would understand why we are such believers in the program. She is a force of nature. A successful businesswoman, a green IT innovator, and a powerful motivator — especially for other women entrepreneurs. We at Dell have tapped into Ingrid’s ambitious and innovative ideas to help create an entrepreneurial community, a network to provide the technology solutions and other kinds of support, including a $100M credit fund for start-ups, that businesses need to scale and succeed. Technology is just one of the four pillars necessary for innovation. Entrepreneurs also need access to financing, networking and know-how to turn a great idea into a successful business, and we work closely with them to provide comprehensive solution. If you aren’t familiar with the EIR concept, it originates from the world of venture capital. They typically give investors access to new ideas and deal flow. But at Dell, as I mentioned, Ingrid’s role is to “bring the outside in,” connecting with the entrepreneurial community and keeping our entrepreneurial spirit and thinking alive. We believe an EIR could play a similar role for agencies at the state and federal level — forming a bridge to enable public officials to be more effective and responsive to the evolving needs of your constituents and to provide government agencies with an innovative, outside perspective to help solve complex problems.
Enabling Entrepreneurship/Investing in Innovation I spend a lot of time entrepreneurs because they’re truly the innovators of our society. Small business owners – especially fast growth businesses - have been responsible for about two-thirds of our job growth over the past decade or so. I have also found entrepreneurs to be some of the most optimistic of all Americans. And that optimism, based on a belief in the power of innovation to overcome challenges, is contagious. So why not open the halls of government to that can-do attitude?....New, innovative thinking to help government keep pace with fast-changing technologies, at a time of shrinking budgets. Investing scarce taxpayer dollars in knowledge — in innovation — would help save money in the long run and act as a down payment for a more dynamic economy. Especially as our country faces the prospect of rising interest payments to service our ballooning debt burden. Research has shown that organizations often aren’t compelled to change until they’re forced to cut more than 5% from their budget. Well, thanks to the unfortunate consequences of sequestration, the entire federal government is now facing that reality. Those self-imposed cuts haven’t just caused immediate hardship for airline passengers or the unemployed, but could also hurt the future competitiveness of the country. The economy could take a $200 billion hit from cuts to agencies that fund R&D alone by 2021, according to the Information Technology and Innovation Foundation. I happen to be a trustee of The Franklin Institute in Philadelphia – my hometown, and I like to consider Benjamin Franklin the country’s first entrepreneur-in-residence. An inspired inventor and believer in the power of both government and innovation to improve mankind, the Founding Father once said, “An investment in knowledge pays the best interest.” So how can we create a government for the future, now? In the face of such challenges? I believe innovation makes it possible.
Solution: What Entrepreneurial Thinking/Innovation Can Mean for the Federal Government We actually already laid out some ideas to build on, in a plan put together by the Technology CEO Council, chaired by Michael Dell, called “One Trillion Reasons.” This proposal was first put forward a couple of years ago in the hopes of turning the heated deficit debate in Washington toward a more optimistic view of saving by investing in innovation. By leveraging powerful IT platforms and solutions, government entities can maximize their productivity and save money – helping them quite literally do more with less, a concept that is a very tangible reality for everyone in government these days. This seven-point plan describes how the government can save over $1 trillion over the next decade while laying the foundation for stronger growth in the future by harnessing technology advances and adopting some best practices from the private sector. These CEOs of the tech sector show how the government can slash costs by streamlining government supply chains, consolidating IT infrastructure and applying advanced business analytics to eliminate improper grants and other payments. Let me share a few recent estimates that help to put it into context: Total federal government spending on cloud computing is estimated to approach $800 million this year. By comparison, the market for public cloud services worldwide is expected to reach $131 billion this year. Now, I give the Obama administration a lot of credit. The White House has been very forward-looking about innovating government, implementing a “cloud first” strategy to modernize its IT infrastructure. VivekKundra, the first U.S. Chief Information Officer, estimated that about $20 billion, or a quarter of federal IT spending, could potentially migrate to the cloud. His successor, Steven VanRoekel, has continued the process of fundamentally transforming the government’s approach to buying and using IT. Steven will be speaking later this afternoon, and I hope he won’t be too humble to highlight how the government has already saved about $300 million from its latest initiative to shift low-value IT spending into more innovative programs — called PortfolioStat. It’s just one example of how innovation can drive efficiency.
Federal Government Faces an Explosion of Demands But let’s be honest, it’s an extremely challenging environment for the public sector. Just as the private sector is innovating in order to do more with less, governments with limited resources are confronted with unprecedented demands on their IT infrastructure. With data usage set to double every two years, just the cost of keeping the lights on — managing legacy systems — prevents the government from allocating resources for innovation. Meanwhile, Americans, with greater access to flow and volume of information, are increasingly demanding their government to be more accountable, transparent and efficient. This is a challenge many of you in the room are familiar with — how to achieve the efficiency required by the economic realities while creating a more connected and citizen-facing government. So how do we go about innovating government and addressing these challenges?
We can start by bringing in some fresh thinking to partner with you. In other words, entrepreneurs. What would an EIR do once inside government? The legislation Dell has been supporting is straightforward yet revolutionary. It would create a fellowship program for entrepreneurs, similar to Presidential Innovation and Management Fellows. A select group of 30 EIRs would be placed in key departments for a couple of years at a time. Reporting to agency heads, these innovators would advise on efforts to make operations more efficient and responsive, while exposing federal officials to new ideas. Just like at Dell, the EIR would act as a way to “bring the outside in,” providing fellow entrepreneurs, as an example, with an advocate in government who understands their needs and challenges. They are in the best position to pinpoint a duplicative procedure for obtaining a business license, or to improve how to inform someone starting out a business about environmental or labor regulations, but also to help provide an outside perspective to government agencies as to how the might be able to take a more innovative, or entrepreneurial, approach to solve top problems. I’m optimistic about the creation of a formal EIR program this year. That’s because entrepreneurs have no greater champion than Silicon Valley’s own congressman, Representative Mike Honda. Congressman Honda started laying the groundwork last year, introducing the Entrepreneur-In-Residence Act of 2012. Senator Mary Landrieu, who chairs the Committee on Small Business and Entrepreneurship, introduced a companion piece of legislation. Just this morning, I had a meeting with Congressman Honda (anda potential Republican co-sponsor) about introducing a bipartisan bill in the near future. Hopefully before the August recess.
We’ve been supporting similar efforts to introduce the program to states. Always a tireless advocate for entrepreneurs and entrepreneurial thinking, Dell has been working with three organizations that represent state officials, the National Governors Association, the Council of State Governments and the National Conference of State Legislatures. And building relationships with locally elected officials to help launch EIR legislation in key states. We’re making progress. Bills modelled on Dell’s own EIR program have been introduced in several states, including Texas, Massachusetts and Ohio. The legislation was even enacted in Virginia, though it must be passed again next year before it can go into effect. Six to eight states could soon pass EIR legislation, creating a great benefit to people and businesses trying to succeed in those parts of the country.
Where Do We Go Now, and Why… As I mentioned at the beginning of my speech, we’re presented with a unique opportunity today to help innovate government. To encourage a more innovative and entrepreneurial approach to government. To reimagine government as an enabler and incubator of entrepreneurial thinking. And as a less budget-constrained, more agile institution that is leveraging next-generation technologies to be more effective and responsive to the needs of its citizens. Over the past year, I have had the privilege of visiting 13 countries, meeting with thousands of CEOs, CIOs and small and mid-size business owners. What they told me is that now, more than ever, any IT investments they make must be solutions to real business problems. These critical investments must work harder to drive growth, reduce risk and improve decision-making. Those are the same principles that will guide government IT leaders as well, as you strive to improve the productivity and effectiveness of your organizations. Developing a more efficient IT infrastructure can be daunting — and expensive in the near term. But the payoff will be worth it, for the government, taxpayers and the economy as a whole. In fact, agencies that have been early adopters of new technologies including cloud, bring your own device, “big data” analytics and social applications - have not only benefitted from more effective operation of their IT environments, but also a positive return on investment. For example, OMB has noted that 25% of the current government IT budget has great potential to migrate to the cloud and the adoption of cloud email alone is estimated to save about $1 million a year for every 7,500 users according to IDC Government Insights. That’s real savings. Gathered here as leaders in the private and public sector, are we prepared to work hand-in-hand to help government join the technological revolution — unleashing a new wave of economic growth and jobs? I think so. And if there is any sector of the population who knows how to do more with less, it’s startups and business founders.
FED TalksAn InnovatingGovernment for the 21stCenturySteve Felice
Global MarketingGlobal Marketing“You dont have to bea genius or avisionary or even acollege graduate tobe successful. Youjust need aframework and adream.”‟ Michael DellEntrepreneurship…it’s in our DNA2
Global Marketing3Entrepreneur in residenceChanging our approach to innovation and problemsolving40 percent of new jobs come from thetop-performing one percent ofcompanies in any given year…unlockpossibilities that go far beyond thebottom line for corporations andinstitutions. America was discovered andbuilt by entrepreneurs; embracing ourheritage could have an effect forgenerations.
Global Marketing“An investment in knowledgepays the best interest”‟ Benjamin Franklin4 Global MarketingSequestration has brought anunprecedented impetus to change,how can we transform thegovernment for the future, now…
Global MarketingWhat innovation can mean for thefederal governmentMotivation to bemore innovative“One Trillion Reasons”“Based on efforts by thecommercial sector to drivedown costs and increase IT value,government organizations aretaking a cue and turning to datacenter consolidation,virtualization, and cloudcomputingas they seek to do the same.”‟ Thom Rubel, VP, IDC Government Insights• Estimated 2013 U.S. FEDcloud spend $792M ‟ 1% oftotalIT spend• Estimated 2015 privatesector cloud spend $177B ‟4% of total IT spend5
Global MarketingBudgets areunder severepressure …… while demandson it continueto increase… and the costof “keeping thelight on” preventsinnovationToday’s Federal organizations face anexplosion of demands1011001001011001100101001101016
Global MarketingEIR in governmentProposal Justification CostEstablish anEntrepreneur-in-Residenceprogram to placeup to 30successfulentrepreneurs infederal agenciesfor no more thantwo years as EIRs.Improve federal ‟private sectorcoordination tohelp governmentbecome moreinnovative and tohelp businessescreate jobs.No expected cost.Agencies would begiven the hiringauthority, bututilize existingfunds in salariesand expensesaccounts to hirethe EIRs.7
Global MarketingBilllikelyto beintroduced soonLegislationcurrentlybeingdraftedand likelyto beintroduced thismonthCurrentlywaiting onactionfromappropriatecommittee afterpublichearingTo beincludedinupcomingInnovationFellowsprogramin 2014Introduced in theSenateand willgo beforea jointcommittee in thenearfutureEIRmeasuresincludedin high-priorityregulatory billSenate haspassed EIRlegislation ‟ Houseto voteshortlyHow is innovation happening?Eight states have proposed State EIR legislationVA Firststate toofficiallyenact EIRlegislationVirginia Texas Massachusetts Ohio Tennessee Connecticut Michigan California8
Global Marketing10Where do we go next?PassEntrepreneur inResidence legislationAllow for rapidadoption of “3rdPlatform” ITplatforms andsolutionsKeep this effortmoving at thestate level1 2 3And why…„ Encourage a more innovative and entrepreneurialapproachin government„ Help to encourage and incubate innovative smallbusinesses„ Reduce budget pressure and operate moreeffectively