Egils milbergs 1 5 final seattle chamber of commerce july 13 2010

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  • 1. The World’s Largest Science and Innovation Park Presentation for: Seattle Chamber of Commerce Egils Milbergs Executive Director Washington Economic Development Commission July 13, 2010
  • 2. Great Recession
  • 3. Global Job Trends US trailing major economies in restoring jobs Source: Organization for Economic Cooperation and Brazil and Chile have seen Development and the International Labor Organization. strongest job growth. Asian economies bounce back
  • 4. Geography of WA Unemployment (May NSA)
  • 5. Path to Recovery
  • 6. Anticipated recovery time by revenue size (in millions) Source: 2010 Manufacturing and Wholesale Distributions National Survey
  • 7. The key to economic recovery 2000s There is no better time like Advantage is Innovation a downturn to innovate. Strategy is “Make something new” 1980s & 1990s Advantage is Quality Strategy is 1960s & 1970s “Make it Better” Advantage is Cost Over half of Fortune 500 and just under half of Strategy is 2008 Inc. list began during a recession or bear “Make it Cheaper” market. Dane Stangler, Kauffman Foundation
  • 8. Innovation Drives Economic Growth • 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
  • 9. Actually we’re No. 6  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)
  • 10. Overall Score Overall Score 80 70 60 50 40 30 20 10 0 12
  • 11. Decade Trend: The U.S. is Behind…. • 1. China 15. Latvia 28. UK • 2. Singapore 16. Austria 29. EU-15 • 3. Estonia 17. S. Korea 30. Mexico • 4. Denmark 18. Ireland 31. Netherlands • 5. Luxembourg 19. EU-10 32. Australia • 6. Slovenia 20. Spain 33. Finland • 7. Russia 21. Sweden 34. Canada • 8. Lithuania 22. France 35. Germany • 9. Cyprus 23. Portugal 36. Italy • 10. Japan 24. Malta 37. NAFTA • 11. Hungary 25. Belgium 38. Greece • 12. Slovakia 26. EU-25 39. Brazil • 13. Czech Republic 27. Poland 40. United States • 14. India 13
  • 12. Average annual growth of R&D expenditures : 1996–2007 EU = European Union
  • 13. 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
  • 14. 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
  • 15. 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
  • 16. Plan for Washington
  • 17. Washington: A History of Innovation Commercial Airplanes COSTCO
  • 18. 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
  • 19. Geography of Knowledge Based Industries 2007 Total Metro Area Milken Institute Rank Score San Jose – 1 Sunnyvale-Santa 100.0 Clara, CA Seattle-Bellevue- 2 Everett, WA 46.4 Cambridge-Newton- 3 Framingham, MA 45.2 Washington- Arlington- 4 Alexandria, DC-VA- 41.8 MD-WV Los Angeles – Long 5 Beach – Glendale, 40.2 CA Dallas – Plano - 6 Irving, TX 21.8 San Diego – Carlsbad 7 – San Marcos, CA 19.3 Santa Ana – 8 Anaheim-Irvine, CA 17.7 New York – White 9 Plains – Wayne, NY- 16.8 NJ San Francisco – San 10 Mateo-Redwood 16.1 City, CA
  • 20. A New Innovation Growth Curve We are here PROSPERITY TIME
  • 21. A Ten Year Vision We should not fear to lead Make Washington State the most attractive, creative and fertile investment environment for innovation in the world. …, we can’t rest on our laurels, so We must look over the horizon and let’s commit today to grooming a prepare for the new economy that workforce and leaders who are will emerge when this recession agile, creative, and embrace passes. innovation. Commerce Secretary Gary Locke Gov. Chris Gregoire March 18, 2009 March 10, 2009 23
  • 22. 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.
  • 23. Innovation Policy Framework Talent Education Research Workforce Growth Investment Skills Employment Entrepreneurship Business Entrepre neurs Prosperity GSH Innovation Ecosystem Quality of Life Associations Competitiveness Capital Non- Infrastructure Gov’t Profits Innovation Innovation Ecosystem Innovation Drivers Outcomes
  • 24. 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
  • 25. Four Critical Challenges
  • 26. Talent Challenge 28
  • 27. Parents disagree about skills to drive innovation Newsweek-Intel Global Innovation Survey Sept -Oct 4,800 adults
  • 28. Investment Challenge Transforming ideas Into applications Creating business models Researchers and entrepreneurs create new ideas No capital No capital Firm creation Dead and innovation ideas success Dead firms Double “Valley of Death” Graphic concept adapted from Egils Milbergs Dr. Charles Wessner, National Academies 30
  • 29. Infrastructure Challenge Beyond Oil? Post “ICE” Age? Internal Combustion Engine 31
  • 30. Export Challenge
  • 31. Washington’s exports to Asia – per capita goods exports, 2000-2008 1,400 1,200 1,000 US Dollars 800 China 600 1,151 Asia NICs* 827 891 400 655 200 365 304 0 2000 2004 2008 Data source: www.wisertrade.org *Newly industrialized countries: Hong Kong, Republic of Korea, Singapore, and China (Taiwan)
  • 32. Washington Innovation Ecosystem
  • 33. Innovation Model is Shifting Linear Model Collaborative Model Education Research Research Workforce Skills Entrepreneurs Development Business Innovation Ecosystem Commercialization Associations Capital Government Non- Profits
  • 34. Innovation Ecosystems Evolve Innovation Ecosystem Innovation Accelerators Virtual Cluster Growth Node Many nodes Dense linkages Virtualized Talent Nascent Network to Network functions IPZs Cluster Accelerated STARS collaboration Few to many firms EIRs Fast growth Patents Key linkages None or few firms Incubators Growth potential Tax R&D Incentives Gap Funding SBIR
  • 35. Source: Washington Technology Industry Association (WTIA) http://wtia.micromaps.com/
  • 36. Emergent Innovation Ecosystems (illustrative portfolio) SMART GRID/ RENEWABLE CLOUD COMPUTING ENERGY EFFICIENCY ENERGY ELECTRIC VEHICLE ADVANCED GLOBAL HEALTH INFRASTRUCTURE MANUCTURING HEALTH IT WATER RESOURCES/ NEW MATERIALS MEDICAL DEVICES ENVIRONMENT LOGISTICS/ DEFENSE FOOD PROCESSING FREIGHT MOBILITY TECHNOLOGY
  • 37. Marine Agriculture, World’s Largest Innovation Park Food Composites Tourism Marine Biomedical, “Twilight” Energy IT, gaming, Incubators Aerospace simulation Life Sciences, Medical Food Global Health Devices Processing Defense Environment Remediation Wind, Solar, Data Centers Clean IT State Fair New Forestry. Green Tech Electric Cars Wine, Water Clean Tech, Biotech, Energy Smart Grid, Biofuels
  • 38. Extending the Innovation Ecosystem
  • 39. PNWER GDP and Population If PNWER were a separate country, it PNWER Region (GDP/Pop.) would rank 13th in total GDP State/Prov. GDP* Population Country GDP* 1. US 13,811,200 Wash. 311,270 6,468,424 2. Japan 4,376,705 Alberta 259,900 3,585,000 3. Germany 3,297,705 Oregon 158,233 3,790,060 4. China 3,280,053 B.C. 150,412 4,310,305 5. U.K. 2,727,806 6. France 2,562,288 Idaho 51,149 1,523,816 7. Italy 2,107,481 Sask. 40,340 1,008,697 8. Spain 1,429,226 Alaska 44,517 686,293 9. Canada 1,326,376 Montana 34,253 967,440 10. Brazil 1,314,170 Yukon 1,767 32,714 11. Russia 1,291,011 12. India 1,170,968 13. PNWER 1,051,841 Total 1,051,841 22,372,731 *2007 GDP in $US Million *2007 population & GDP in $US Million
  • 40. WEDC Strategy Timeline Apr 28 Preliminary Policy Priorities WEDC Meetings Innovation & Jobs Summit ED Inventory Update Aug 3 Research Reports Stakeholder Engagement Sept 14 Prepare Draft Dec 14 Final Review Roll-out
  • 41. 43