Accelerating Innovation

President sets aggressive 3 percent goal for R&D and innovation

 

President Obama at the annual meeting of the National Academy of Sciences announced a goal to increase the nation’s investment in basic and applied research “We will devote more than 3 percent of our gross domestic product to research and development. We will not just meet but we will exceed the level achieved at the height of the space race. … The commitment I am making today will fuel our success for another 50 years.”  As a whole the United States  spent $368 billion or about 2.66 percent of GDP on R&D in 2007, more than two-thirds accounted by private industry. Achieving this goal would mean an additional $70 billion a year from government and industry.  The United States is the biggest spender on R&D of any nation.  However, as a share of GDP, the US ranks No. 8 in the world, according to a NSF report, outspent in relative terms by Israel (4.71 percent), Sweden (3.86 percent), Finland (3.51 percent), Japan (3.18 percent), South Korea (2.99 percent), Switzerland (2.93 percent), and Iceland (2.86 percent), although Iceland has more important challenges to deal with the recent financial meltdown. The EU aims to increase the spending of their member nations to 3 percent by 2010. China which is boosting its average of  22.6 percent per year since 1991, spent 1.49 percent of its GDP on research and development in 2007 and expects to reach 2.5 percent by 2020, according to news reports. President Obama also selected an impressively credentialed panel of advisors. Most of the 20 members of the President’s Council of Advisors on Science and Technology are academics, with specialties ranging from climate change and physics to genetics and nanotechnology, but two are active-duty tech execs — Craig Mundie, Microsoft’s chief research and strategy officer, and Google CEO Eric Schmidt

The Puget Sound Technology Universe

Six key organizations have provided the foundation for numerous technology companies that have created the innovation ecosystem we see today in the Puget Sound, In early 2009, Virginia Tech, Seattle University and the Washington Technology Industry Association released a study that traced the genealogy of more than 711 firms, institutions and organizations in the Puget Sound region. The project examines the role of anchor companies and institutions such as Microsoft, Aldus/Adobe, the University of Washington, Amazon, and Boeing. These firms represent the anchor companies in the economic ecosystem. Startups founded by former employees orbit around these 'suns'. Data was gathered through an online survey of technology firms in 2007-8 along with additional firms identified from various listing such as the Puget Sound Business Journal's 2008 Book of Lists, the Seattle Startup 2.0 list, the Xconomy gaming cluster list, and primary research. This project is part of a Virginia Tech project that examines the emergence of high-tech regions.

 

Click on the image below to navigate to the online version of the poster.

Survey results can be viewed here. Sponsors of this project are Accenture, Deloitte, F5 Networks, Madrona Venture Group, OVP Venture Partners, Physio Control, Regence BlueShield, UW Computer Science and Engineering, Voyager Capital LLC and the Washington State Department of Community, Trade and Economic Development. Media sponsor is TechFlash.

For more information about the project, please visit: http://www.nvc.vt.edu/uap/research/knowledge_regions.html.

Dr. Heike Mayer of Virgnia Tech continues to research the emergence of so-called "second-tier" high-technology regions in the United States. These emerging high-technology regions are challenging traditional technology corridors such as Silicon Valley and Boston's Route 128. Case study research is being done on Portland, Kansas City, Boise, and Phoenix. Common to these regions is the fact that even though they lack a world-class research university, they have been able to root high-tech activity through leveraging innovative firms, entrepreneurs and regional assets such as quality of life, talent pools, etc. The research is examining the position of these regions in the global production networks and visualizes entrepreneurial genealogies. Additionally, the research is examining the ways in which local universities are responding to opportunities emerging from high-technology growth. This research is supported through grants and fellowships from the Smith Richardson Foundation and The Brookings Institution.

More information about the case studies may be found here:

• Boise
• Portland
• Kansas City
• Phoenix/Tucson

   Links:
  Portland's Silicon Forest Universe poster: version 1.0 (2003) - version 2.0 (2008)
  TechBoise Universe Poster (2008)
  Puget Sound Technology Universe (2009)

   

  Press Links:

  "Microsoft Layoffs Could Boost Seattle Tech Industry in Long Run", Eric Lai, Computerworld
  http://www.computerworld.com/action/article.do?command=view
  ArticleBasic&articleId=9126590&intsrc=news_ts_head
  
  "Tracing the Ancestry of Puget Sound's Technology Cluster", Luke Timmerman, Xconomy
  http://www.xconomy.com/seattle/2009/01/22/
  tracing-the-ancestry-of-puget-sounds-technology-cluster/
  
  "Puget Sound's Tech Genealogy Depicted on New WTIA Poster", Brier Dudley, Seattle Times
  http://blog.seattletimes.nwsource.com/brierdudley/2009/01/22/states_tech_genealogy_depicted.html
  *Brief also posted in Brier's blog recap: http://seattletimes.nwsource.com/html/businesstechnology/2008656494_brier220.html
  
  "Microsoft Cuts Not Even A 'Hiccup,' Seattle Tech Leaders Optimistic", John Cook, TechFlash
  http://www.techflash.com/venture/Seattle_startup_crowd_
  Microsoft_layoff_not_a_big_hit_to_local_tech_economy38146639.html
  
  "Seattle's Technology Universe: 781 'Planets' and Counting", John Cook, TechFlash
  http://www.techflash.com/Seattle_high-tech_universe_at_781_planets_and_counting37939734.html

US education gap equivalent to permanent national recession

Thanks to Tom Friedman alerting me to a report produced by McKinsey & Company on the consequences of an underperforming education system. It finds that the achievement gap in the US is the economic equivalent of a permanent national recession—one substantially larger than the deep recession the country is currently experiencing. McKinsey's report, The Economic Impact of the Achievement Gap in America's Schools. Download the report (PDF - 772 KB) and supporting materials (PDF - 1.0 MB).

For the economy as a whole, the report shows that:

• If the United States had in recent years closed the gap between its educational achievement levels and those of better-performing nations such as Finland and Korea, GDP in 2008 could have been $1.3 trillion to $2.3 trillion higher. This represents 9 to 16 percent of GDP.
• If the gap between black and Latino student performance and white student performance had been similarly narrowed, GDP in 2008 would have been between $310 billion and $525 billion higher, or 2 to 4 percent of GDP. The magnitude of this impact will rise in the years ahead as demographic shifts result in blacks and Latinos becoming a larger proportion of the population and workforce.
• If the gap between low-income students and the rest had been similarly narrowed, GDP in 2008 would have been $400 billion to $670 billion higher, or 3 to 5 percent of GDP.
• If the gap between America's low-performing states and the rest had been similarly narrowed, GDP in 2008 would have been $425 billion to $700 billion higher, or 3 to 5 percent of GDP.

For individuals, avoidable shortfalls in academic achievement impose heavy and often tragic consequences via lower earnings, poor health, and higher rates of incarceration. Put differently, the persistence of these educational achievement gaps imposes on the United States the economic equivalent of a permanent national recession. The recurring annual economic cost of the international achievement gap is substantially larger than the deep recession the United States is currently experiencing. The annual output cost of the racial, income, and regional or systems achievement gap is larger than the US recession of 1981–82.

So the tragedy of underutilized human potential continues. We have done so little in 26 years since the release of Nation at Risk. Full report of A Nation at Risk. The nonpartisan organization Strong American Schools released a report card of our nation's progress since the initial report. The organization's analysis said:

"While the national conversation about education would never be the same, stunningly few of the Commission's recommendations actually have been enacted. Now is not the time for more educational research or reports or commissions. We have enough commonsense ideas, backed by decades of research, to significantly improve American schools. The missing ingredient isn't even educational at all. It's political. Too often, state and local leaders have tried to enact reforms of the kind recommended in A Nation at Risk only to be stymied by organized special interests and political inertia. Without vigorous national leadership to improve education, states and local school systems simply cannot overcome the obstacles to making the big changes necessary to significantly improve our nation's K-12 schools."

 

Washington mood sours over economy, but not everyone

Moore Information, an opinion research and strategic analysis firm, has released the results of a recent survey of Washington voters. Today, a 51% majority of the state's voters describe things in Washington as headed "off on the wrong track," while 37% say things are headed in the "right direction." According to Moore this is the most negative mood since January 2005 (35% right direction, 51% wrong track). However, the story is a bit more complex when looking at the disaggregated data. Seattle/King County residents, Democrats and young people are the most optimistic, while eastern Washington, older folks (over 35) and Republicans are more likely to say the state is on the wrong track. Historically, voter "mood" is directly correlated with the state of the economy – in good economic times, optimism soars, and in bad economic times, hopes fade. 
Link to full report: http://www.moore-info.com/MI_WAMood4.09.htm

Washington Voter Mood: Historic Trends
"Would you say things in Washington State are generally

headed in the right direction, or would you say things

have pretty much gotten off on the wrong track?"

Washington Voter Mood: Key Subgroups

Most Important Issue Facing Washington 
"What, in your opinion, is the most important issue facing

people in Washington State today?" 

Washington Rankings in R&D, Innovation and STEM Education

www.usinnovation.org is a useful web portal to track state level R&D and STEM Education indicators (Science, Technology, Engineering and Math). The data help illustrate the importance of scientific research to state and local economies, job growth, innovation, our standard of living, and national security. A feature of this report is the ranking of states by a variety of indices provided by U.S. Census Bureau, the U.S. Bureau of Labor Statistics, TechAmerica, The Information Technology & Innovation Foundation, Milken Institute and several other organizations. In addition to ASTRA R&D reports (shown below) you can access the following indicator reports:

• Human Capital Investment Composite Index
• 2008 State Technology and Science Index
• Technology and Science Work Force Composite Index
• State New Economy Index: Benchmarking Economic Transformation in the States

Indicators LINK: 2009 State R&D Sheets

Governor Gregoire urges creation of aerospace council

Gov. Chris Gregoire testified before the state House Committee on Community and Economic Development and Trade, urging legislators to move forward with her proposed legislation to create a Washington Council on Aerospace. The council will bring together top officials from aerospace, labor, research universities and community colleges, legislators and cabinet members to achieve several goals. The goals include making sure Washington's excellent aerospace training programs at community colleges across Washington are informed by and benefit from aerospace technology research at the University of Washington and Washington State University, as well as coordinate research programs within the state's higher education system. The council will also focus on creating a one-stop shop for retaining and recruiting aerospace companies, growing the industry to create 21^st century jobs, and advising the governor and Legislature on policies that would benefit the industry.

 "But maybe the Council's most important goal," Gregoire said, "Is to create a structure to foster real-time communication between all the key groups – business, labor, education, research, the aerospace industry as a whole, and working families who depend on this vital sector to thrive."

CTED Director Rogers Weed, Executive Director of the Puget Sound Regional Council Bob Drewel, International Association of Machinists District 751 Political Director Larry Brown, and Chair of the Board of the Greater Seattle Chamber of Commerce Tayloe Washburn also testified on behalf of the legislation.

Boeing has announced that it is adjusting its twin-aisle airplane production plans for 2010 due to significant deterioration in the business environment for airlines and cargo operators driven by unprecedented global economic conditions.

Monthly production of the 777 will decline from seven to five airplanes per month beginning in June 2010. Boeing will also delay previous plans to modestly increase 747-8 and 767 production. No change is being made at this time to the 737 production rate.

President and CEO Scott Carson said: "It's necessary to adjust our production plans to align supply with these tough market conditions. We are in close contact with our customers as we continue to monitor this dynamic business environment."

Arch-rival Airbus is also trimming production.

How bacteria communicate are clues to global health and innovation DNA

Bonnie Bassler discovered that bacteria "talk" to each other, using a chemical language that lets them coordinate defense and mount attacks. Provocative implications for fighting global diseases, pharma industry -- and our understanding of how communities, innovation networks and industry clusters evolve. Energetic and insightful presentation.

Bonnie Bassler on how bacteria communicate | Video on TED.com

 

World Innovation Hubs Mapped

In times of economic turbulence, innovation remains the most important differentiator separating economic winners from also-rans. McKinsey & Company partnered with the World Economic Forum to create an "Innovation Heat Map," by identifying factors that are common to successful innovation hubs. The project examined the evolution of hundreds of such clusters around the world and analyzed over 700 variables, including those driving innovation (business environment, government and regulation, human capital, infrastructure, and local demand) along with proxies for innovation output (for example, economic value added, journal publications, patent applications) to identify trends among the success stories. The patterns suggest the critical ingredients required to grow, nurture, and sustain innovation hubs. Link to full article: Building an innovation nation

Click the image above to launch an interactive version in a new window.

Legislation proposed to strengthen aerospace competitiveness

Gov. Chris Gregoire proposed legislation to develop a Washington Council on Aerospace to maintain the state's competitive edge in the aerospace industry. Gregoire also announced she is creating an aerospace subcabinet to ensure the council's agenda moves forward. The aerospace industry is important to the state of Washington. The aerospace industry accounts for over $36B in economic value to the state. Washington is the highest per capita aerospace employer at 44 jobs per 1,000 workers.

"The legislation we're pursuing today will help us stay ahead of the curve as we compete with other states and other nations," Gregoire said. "Washington has had the edge in the aerospace industry for 100 years. We need to make sure that edge stays razor sharp. This legislation is about making sure we provide a level of service the aerospace industry needs to continue to thrive and grow in Washington State."
Gregoire's proposed legislation, House Bill 2308, comes after the completion and release of the Aerospace Industry Competitiveness Study by Deloitte Consulting. The governor asked for the report to give her a clearer picture of what needs to be done to keep Washington's edge as the state where the best airplanes in the world are built.
"Not surprisingly, the study found a lot for us to be proud of, and identified some steps we need to take to stay ahead of the competition," Gregoire said. "Our advantages include aerospace's wide presence across the state, our incredible workforce, a competitive tax environment and strong aerospace research. The study also confirmed that we need to do a lot more to stay ahead – from making sure we get the most value from the dollars spent on training, to helping labor and management communicate better."

 

Related Link: Aerospace Industry Competitiveness Study

$27million federal stimulus to support low-income adults and dislocated workers in Washington State

Gov. Chris Gregoire and Employment Security Commissioner Karen Lee announced today that $27 million in federal stimulus grants are being distributed throughout the state to provide training opportunities, financial assistance and employment services to low-income adults and dislocated workers.

 

“By improving the skills of our work force, Washingtonians will be better able to fill jobs that are currently in demand in our state.  Equally imperative is that our communities will be in a better position to attract new jobs and emerge from the recession faster,” Gregoire said.

 

The American Recovery and Reinvestment Act (ARRA) authorized additional funding for local training and employment-assistance programs sponsored through the federal Workforce Investment Act.  The goal is to substantially increase the number of adults who have the skills to fill jobs that are in demand in their communities. Training services for low-income adults range from basic education to a wide variety of training programs, including on-the-job training, classroom education, occupational skills training, private-sector training programs, entrepreneurship training, job-readiness training, a combination of workplace training and classroom instruction, and customized training. 

 

Eligible participants include people receiving public assistance, low-income veterans and their spouses, low-income foster families, homeless individuals and other families who meet the income criteria. Dislocated workers qualify for skill assessments and a broad array of personalized employment and training services.  A dislocated worker is someone who is unemployed or has received a layoff notice and is unlikely to return to his previous occupation or industry. 

 

“The more skills you have, the more likely you are to get and keep a good job,” Lee said.  “And just as importantly, these funds will help ensure that there’s a healthy supply of skilled workers for employers who have jobs to fill.”

 

The Employment Security Department will distribute the money among the state’s 12 workforce development councils based on a federal formula linked to local poverty and unemployment rates.  The training and employment services are made available through local WorkSource centers. Locations are printed the blue pages of telephone books or online at www.Go2WorkSource.com. These grants are in addition to the approximately $20 million awarded to the workforce development councils last week for summer-employment programs for youths and young adults.