Growing Innovation Clusters for American Prosperity

The Washington Innovation EconomyJune 3, 2009

Egils MilbergsWashington Economic Development Commission

National Academy of SciencesWashington, D.C.

L U V ?

What does a trillion dollars look like?

The Other Washington

World-Class Technology & Innovation

COSTCOCOSTCO

CommercialAirplanes

Washington State Is Innovating • Generations of Ingenuity

• Birthplace of innovative retail models: Costco, Amazon.com, Nordstrom, Starbucks

• 3 companies in world’s top 25 most innovative companies (Microsoft, Amazon.com & Starbucks) (Business Week)

• Home to cutting edge research centers

• World’s largest locally controlled port systemAligned for Growth

• 3rd best US state for business in 2008 (Forbes Magazine)

• 2nd best state in terms of innovation activities and capacity (Kauffman Foundation Report )

• 3rd highest gain in tech jobs in 2008 (Business Journal)

• 3rd “Greenest State” (Forbes.com)• 1st in attracting creative class (Fast Company)

• 164 Venture Capital Deals in 2008 (National Venture Capital Association)

Ten Year VisionMake Washington State the most attractive, creative and fertile investment environment for innovation in the world as a means of achieving long term global competitiveness prosperity and economic opportunity for all the state’s citizens.

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…with change occurring at mind-boggling speed, 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 GregoireMarch 10, 2009

We must look over the horizon and prepare for the new economy that will emerge when this recession passes. Simply put, we must re-build, re-tool and re-invent our national strategies for sustained economic success.

Commerce Secretary Gary LockeFormer Gov. Washington State

March 18, 2009

New Model for Economic Development

Traditional Model Innovation Driven Model

Attracting and retaining companies Investing 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

Locally focused clusters Globally focused clusters

Strategize Organize Operationize

Drivers of Innovation and Growth

TALENTGrow talent in strategic

industries, high demand occupations

INFRASTRUCTUREInvest in smart, clean, and green

infrastructure

INVESTMENTDiversify R&D base, ignite

local innovation and entrepreneurship

STRATEGY

Aerospace

Information Technology

Health Services

Alternative Energy

Defense

Silicon Forest

Agriculture & Wine

“Twilight”

Life Sciences

Some Key Industry Clusters

Smart Grid

Seattle –King County

Source: Sommers,Beyers,Wenzl,Industry Cluster Analysis, 200811

Puget Sound Tech Universe

Source: Washington Technology Industry Association (WTIA)http://wtia.micromaps.com/

Global Health Ecosystem

Ecosystem

Organizing the Innovation Ecosystem

SUCCESS FACTORS• Addressing strategic

opportunities

• Strong organizational leadership

• Innovative project(s) around core competency

• Relationships to accelerate deployment

• Financial plan

• MetricsInnovation Roadmapping Forums

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Connecting the Regions in Washington’s Innovation Ecosystem

Washington Economic Development Commission

Talent• Supply of middle skills• S&E attainment•Verbal, math, science proficiency•Educational attainment• R&D personnel• Life long learning

InnovationDrivers

BusinessPerformance

EconomicGrowth andCompetitiveness

allows investment in

leadsto

necessaryfor

InvestmentEntrepreneurship• University R&D• Private R&D intensity• Intellectual property generated• Company startupInvestment• Equity investment• Federal investment• Foreign capital attracted

InfrastructureTransport• Freight• Information delivery• CommutingBusiness Climate• Cost of business• Business attractiveness

Competitive Companies•New products/services•Productivity growth• Export growth•Market share•High impact firms•Profitability•More investment

Increased, Better Employment• Income growth • Employment• Reduced income disparity

Increased State Revenue• Aligned policy & investment• State revenue generated

Wealth Generated• GDP by state• Standard of living

Success Metrics for theInnovation Economy

Source: WEDC and Washington Technology Center

Considerations for organizing effective regional innovation strategy• making innovation a clear and central mission• focusing on organic growth• enhancing the visibility of regional resources• enabling leadership, entrepreneurship and innovation

culture• adapting policy to different economic

structures/conditions• maximizing results through partnerships, relationships

and intermediaries• rationalizing government and program structure• leveraging federal ARRA programs• measuring performance and outcomes

The best way to predict the future is to invent it.

www.wedc.wa.gov