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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
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”
2000s
Advantage 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 like
a 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 Score
Overall 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
Washington: A History of
Innovation
COSTCO
Commercial
Airplanes
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 Area
Total
Score
1
San Jose –
Sunnyvale-Santa
Clara, CA
100.0
2 Seattle-Bellevue-
Everett, WA
46.4
3 Cambridge-Newton-
Framingham, MA
45.2
4
Washington-
Arlington-
Alexandria, DC-VA-
MD-WV
41.8
5
Los 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
9
New York – White
Plains – Wayne, NY-
NJ
16.8
10
San Francisco – San
Mateo-Redwood
City, CA
16.1
Geography of Knowledge Based Industries
Milken Institute
A New Innovation Growth Curve
TIME
PROSPERITY
We are here
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.
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 Locke
March 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.
Investment
Entrepreneurship
Talent
Infrastructure
Growth
Employment
Prosperity
Quality of Life
Competitiveness
Innovation Policy Framework
GSH
Innovation
Ecosystem
Education
Research
Entrepre
neurs
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
655
827
1,151
0
200
400
600
800
1,000
1,200
1,400
2000 2004 2008
USDollars
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
STARS
IPZs
R&D
EIRs
Patents
Incubators
Innovation
Accelerators
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 COMPUTING
RENEWABLE
ENERGY
GLOBAL HEALTH
ELECTRIC VEHICLE
INFRASTRUCTURE
ADVANCED
MANUCTURING
NEW MATERIALS
HEALTH IT
MEDICAL DEVICES
WATER RESOURCES/
ENVIRONMENT
LOGISTICS/
FREIGHT MOBILITY
DEFENSE
TECHNOLOGY
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 Population
If 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 1,326,376
10. Brazil 1,314,170
11. Russia 1,291,011
12. India 1,170,968
13. PNWER 1,051,841
*2007 GDP in $US Million
PNWER Region (GDP/Pop.)
State/Prov. GDP* Population
Wash. 311,270 6,468,424
Alberta 259,900 3,585,000
Oregon 158,233 3,790,060
B.C. 150,412 4,310,305
Idaho 51,149 1,523,816
Sask. 40,340 1,008,697
Alaska 44,517 686,293
Montana 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
43
Seattle Chamber of Commerce July 13, 2010

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Seattle Chamber of Commerce July 13, 2010

  • 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
  • 3.
  • 4. 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
  • 5. Geography of WA Unemployment (May NSA)
  • 6.
  • 8. Anticipated recovery time by revenue size (in millions) Source: 2010 Manufacturing and Wholesale Distributions National Survey
  • 9. 1960s & 1970s Advantage is Cost Strategy is “Make it Cheaper” 1980s & 1990s Advantage is Quality Strategy is “Make it Better” 2000s Advantage 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 like a downturn to innovate.
  • 10. • 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
  • 11.  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
  • 13. • 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
  • 14. Average annual growth of R&D expenditures : 1996–2007 EU = European Union
  • 15. 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
  • 16. 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
  • 17. 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
  • 19. Washington: A History of Innovation COSTCO Commercial Airplanes
  • 20. 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
  • 21. 2007 Rank Metro Area Total Score 1 San Jose – Sunnyvale-Santa Clara, CA 100.0 2 Seattle-Bellevue- Everett, WA 46.4 3 Cambridge-Newton- Framingham, MA 45.2 4 Washington- Arlington- Alexandria, DC-VA- MD-WV 41.8 5 Los 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 9 New York – White Plains – Wayne, NY- NJ 16.8 10 San Francisco – San Mateo-Redwood City, CA 16.1 Geography of Knowledge Based Industries Milken Institute
  • 22. A New Innovation Growth Curve TIME PROSPERITY We are here
  • 23. 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. 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 Locke March 18, 2009
  • 24. 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.
  • 25. Investment Entrepreneurship Talent Infrastructure Growth Employment Prosperity Quality of Life Competitiveness Innovation Policy Framework GSH Innovation Ecosystem Education Research Entrepre neurs Associations Non- ProfitsGov’t Capital Business Workforce Skills Innovation Drivers Innovation Outcomes Innovation Ecosystem
  • 26. 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
  • 29. Parents disagree about skills to drive innovation Newsweek-Intel Global Innovation Survey Sept -Oct 4,800 adults
  • 30. 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
  • 31. Infrastructure Challenge Post “ICE” Age? Internal Combustion Engine 31 Beyond Oil?
  • 33. 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) 304 365 891 655 827 1,151 0 200 400 600 800 1,000 1,200 1,400 2000 2004 2008 USDollars China Asia NICs*
  • 35. Innovation Model is Shifting Development Linear Model Collaborative Model Research Commercialization Innovation Ecosystem Education Research Entrepreneurs Associations Non- Profits Government Capital Business Workforce Skills
  • 36. 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 STARS IPZs R&D EIRs Patents Incubators Innovation Accelerators Tax Incentives Talent Gap Funding SBIR
  • 37. Source: Washington Technology Industry Association (WTIA) http://wtia.micromaps.com/
  • 38. Emergent Innovation Ecosystems (illustrative portfolio) SMART GRID/ ENERGY EFFICIENCY CLOUD COMPUTING RENEWABLE ENERGY GLOBAL HEALTH ELECTRIC VEHICLE INFRASTRUCTURE ADVANCED MANUCTURING NEW MATERIALS HEALTH IT MEDICAL DEVICES WATER RESOURCES/ ENVIRONMENT LOGISTICS/ FREIGHT MOBILITY DEFENSE TECHNOLOGY FOOD PROCESSING
  • 39. 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
  • 41. PNWER GDP and Population If 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 1,326,376 10. Brazil 1,314,170 11. Russia 1,291,011 12. India 1,170,968 13. PNWER 1,051,841 *2007 GDP in $US Million PNWER Region (GDP/Pop.) State/Prov. GDP* Population Wash. 311,270 6,468,424 Alberta 259,900 3,585,000 Oregon 158,233 3,790,060 B.C. 150,412 4,310,305 Idaho 51,149 1,523,816 Sask. 40,340 1,008,697 Alaska 44,517 686,293 Montana 34,253 967,440 Yukon 1,767 32,714 Total 1,051,841 22,372,731 *2007 population & GDP in $US Million
  • 42. 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
  • 43. 43