thriving in a world of challenge and change suzy tichenor

National Innovation Initiative

SURA IT Committee July 2005 1

Thriving in a World of Challenge and Change

Suzy TichenorVice President and Director, High Performance Computing InitiativeCouncil on Competitiveness

Council on CompetitivenessNational Innovation Initiative



Who We Are



The Council on Competitiveness

2006: 20th anniversary year

Non-partisan, Non-profit 501 c (3)

170+ members: CEOs, university presidents and labor leaders

Goals:

Drive U.S. productivity growth

Bolster high living standards

Ensure success in global markets

“Our agenda is at the nexus of necessity and opportunity—and we all have an obligation to serve the nation.”–Duane Ackerman, CEO, BellSouth Corporation, Chairman, Council on Competitiveness

“Our agenda is at the nexus of necessity and opportunity—and we all have an obligation to serve the nation.”–Duane Ackerman, CEO, BellSouth Corporation, Chairman, Council on Competitiveness



Why Focus on Innovation?



We Are at a Tipping Point

“To thrive in this new world, it will not be enough – indeed, it will be counterproductive – simply to intensify current stimuli, policies, management strategies and to make incremental improvements to organizational structures and curricula.”

-Innovate America



Innovation: the single most important factor in determining success in the 21st century

INNOVATION

High Wage Jobs

Meeting Social Challenges

Economic Growth

Quality of Life

Competitive Advantage



Innovation – More than Just New Technology

“the intersection of invention and insight”

Improves on the existing way of doing things

Generates value for society

Can come from anyone and anywhere

Can be a product, process, service, strategy, etc.

21st Century Innovation

Faster

Collaborative/ Open

Multidisciplinary

Demand-driven

Global

What Is Innovation?



The Pace of Innovation Is Quickening

0 25 50 100 125 150

Automobile

75

Years

20

50

100TelephoneElectricity

Radio

Television

VCR

PC

Cellular

Inte

rnet

% P

en

etr

ati

on



The National Innovation Initiative



Bring together America’s top minds on innovation

Look beyond the traditional tools for economic stimulus– and develop new innovation metrics, networks and best practices

Sharpen our understanding of how innovation is changing and how it can be harnessed for economic growth, higher living standards, etc.

Advocate a strategic, actionable agenda to create a fertile environment for innovation

National Innovation Initiative Goals:

Why?



Program Cte.

PR/MediaPolitical LiaisonEvents Mgmt.Tech. Support

21st Century Innovation

Innovation Finance

Public Sector Innovation

Advisory Cte.

40 innovation leaders from industry, labor, academia, govt.

Innovation Markets

Innovation Frontiers

Innovation Skills

W O R K I N G G R O U P S

Innovation Environment & Infrastructure

NII 2004Principals Committee

19 distinguished senior leaders from industry

and academia



Findings



Innovate America – Thriving in a World of Challenge and Change

•225,000+ Internet Downloads

Innovate America – Thriving in a World of Challenge and Change

•225,000+ Internet Downloads



America leads in many areas – but challenges abound…



Talented scientists and engineers

Strength

Quantity and quality

Weakness




Europe and Asia: each producing more PhDs in natural S&E than the US

0

5,000

10,000

15,000

20,000

25,000

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001

Europe

United States

Asia

Source: National Science Foundation, Science and Engineering Indicators 2004

Natural science and engineering doctoral degrees in the US, Europe, and Asia




Flexible workforce

Strength


Health and retirement benefits and Brain Drain

Weakness




Most US regions lost young, educated residents in late 1990’s

Source: U.S. Census Bureau.

Note: Rate calculated on a per thousand population basis, using 1995 as base year . Based on data from 318 MSAs.

Net migration of young, single, college-educated people 1995-2000

-600

-400

-200

0

200

400

600

U.S. Metropolitan Areas

Net

Mig

rati

on

Rat

e (P

er 1

000)




Flexible workforce

Interested public sector

Strength



Diffuse structures and understanding of innovation

Weakness




The innovation ecosystem concept shifts the debate

Federal R&D Spending

Offshoring

Entrepreneurship

Workforce Training

K-12 Education

Higher EducationTechnology

TransferBusiness-University

Collaborations

S&E Workforce

Regional Economic

Development

Accounting Rules

Intellectual Property

ManufacturingHealthcare

INNOVATION POLICY

Most Policy Makers See Discrete Issues With Narrow Constituencies

We See a Single Innovation Policy with a

Broad Constituency





Flexible workforce


Vibrant capital markets

Strength




Short-term focus

Weakness




Flexible workforce



Strong intellectual property protection

Strength




Short-term focus and cyclicality

Effectiveness of Patent and Trademark Office

Weakness






Flexible workforce




Growing economy

Strength




Short-term focus


Growing Deficit — Trade, Federal Budget and Personal Savings … and Unfunded Liabilities

Weakness



US Twin Deficits:Federal Budget and Current Account

-800

-600

-400

-200

0

200

400

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Federal Budget International Current Account

(Billions of dollars)

Source: Global Insight, Inc.



The US has now promised away in PV terms the entire net worth of the country – unprecedented in postwar US history

The Unfunded $45 Trillion Dollar Baby

Source: Federal Reserve, Trustees Report on Social Security, Medicare

0

10

20

30

40

50

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03

$ t

ril

lio

ns

Household Net Worth

Federal Liability (NPV)

1990 and 2003 FederalUnfunded Liability data pointsgiven, the rest are interpolated




Flexible workforce




Growing economy

Sustained, high productivity

Strength




Short-term focus


Triple Deficit — Trade, Federal Budget and Personal Savings

Measuring and capturing contribution of “innovation”

Weakness





Flexible workforce




Growing economy

Sustained, high productivity

Performance and reputation as global innovation leader

Strength




Short-term focus


Triple Deficit — Trade, Federal Budget and Personal Savings

Measuring and capturing contribution of “innovation”

We are not alone – and we are not young

Weakness




Recommendations



The NII recommendations are based on three platforms

TALENT

INVESTMENT

INFRASTRUCTURE

• Build the Base of Scientists and Engineers

• Catalyze the Next Generation of American Innovators

• Empower Workers to Succeed in the Global Economy

• Revitalize Frontier and Multidisciplinary Research

• Energize the Entrepreneurial Economy

• Reinforce Risk-Taking and Long-Term Investment

• Create a 21st Century Intellectual Property Regime

• Strengthen America’s Manufacturing Capacity

• Build 21st Century Innovation Infrastructures – the health care test bed



NII Talent Agenda – Selected Recommendations

National “Investing for the Future” S&E scholarship fund Provide tax credits for companies or individuals who contribute

scholarship funds

Portable graduate fellowships Fund at least 5,000 competitive, merit-based fellowships for up

to five years

Expedited immigration process for foreign S&E students Provide automatic work permits and residency status for

foreign students who: a) hold graduate degrees in S&E from American universities, b) have been offered jobs by U.S.-based employers and who have passed security screening tests.



NII Infrastructure Agenda – Selected Recommendations Federal innovation strategy

Develop an explicit national innovation strategy and agenda led by the President

Perform an inter-agency policy, program and budget review and propose initiatives designed to foster innovation within and across departments

National and regional alliances Create a public-private partnership to advocate for national

initiatives and to build broad public support for the NII agenda

New innovation metrics Track and understand national innovation performance



NII Investment Agenda – Selected Recommendations Innovation Acceleration grants

Spur radical innovation by reallocating 3% of all federal agency R&D budgets toward investment in novel, high-risk and exploratory research

Long term research at Department of Defense Direct at least 20% of the total DoD S&T budget to long-term,

basic (6.1) research performed at the nation’s universities and national laboratories

More support for R&D in physical sciences and engineering Ensure that the federal commitment of research to all federal

agencies totals 1% of U.S. GDP Complete the commitment to doubling the NSF budget

Continued



NII Investment Agenda – Selected Recommendations Permanent, restructured R&E tax credit

Extend the credit to research conducted in university-industry consortia

Innovation HotSpotsTM, to capitalize on regional assets Create institutions that foster knowledge transfer, collaboration

and support for start-ups, combining and accelerating the deployment of key elements of the innovation ecosystem



National policies set the context for innovation, but regions are where

innovation happens

34



Regional Hotspots™ Initiative:

Fostering Integration for Regional Prosperity

CommunityDevelopment

TM



Regional Hotspots™ Initiative Objectives

Establish regions as the key geographic unit for economic development efforts; establish innovation as the key economic driver for regional prosperity

Integrate workforce, community and economic development programs into a single regional strategic effort

Create regional groups of public, private, and non-profit sector leaders that will implement strategies regionally and serve as part of a peer-to-peer network nationally

Foster more responsive, flexible, and demand-driven workforce development systems at the national and regional levels

The ultimate goal is to catalyze the development of competitive firms that will expand employment and advancement opportunities for American workers



Implementation



We are now in the implementation phase

Leadership Teams

Public Outreach

Federal Outreach

Global/National/Regional Meetings

Public-Private Sector Collaborations



The NII Leadership Council39

Co-chair Craig R. Barrett, Intel Corporation

Co-chair William R. Brody, Johns Hopkins University

Michael J. Burns, Dana Corporation

John T. Chambers, Cisco Systems, Inc.

G. Wayne Clough, Georgia Institute of Technology

Mary Sue Coleman, University of Michigan

Denis A. Cortese, Mayo Clinic

Robert C. Dynes, University of California System

John M. Engler, National Association of Manufacturers

Robert M. Gates, Texas A & M University

E. Gordon Gee, Vanderbilt University

Sheryl Handler, Ab Initio

Karen A. Holbrook, Ohio State University

Jeffrey R. Immelt, General Electric Corporation

Shirley Ann Jackson, Rensselaer Polytechnic Institute

Martin C. Jischke, Purdue University

Douglas J. McCarron, United Brotherhood of Carpenters & Joiners of America

Clayton Daniel Mote, Jr., University of Maryland

Peter O’Donnell, Jr., O’Donnell Foundation

Samuel J. Palmisano, IBM Corporation

Luis M. Proenza, The University of Akron

Robert L. Reynolds, Fidelity Investments

Kenan Sahin, TIAX, LLC

Carl Schramm, The Ewing Marion Kauffman Foundation

Jeffery Wadsworth, Oak Ridge National Laboratory

Mark Wrighton, Washington University

BOLD = SURA Member



The NII Presidents Council

Business-Higher Education Forum



The NII Presidents Council cont’d…

CASC




Public Outreach Over 250,000 copies of Innovate America downloaded

Extensive press coverage of December Summit

Press coverage continues: Fortune July 25, 2005




Federal Outreach Senators Ensign and Lieberman to propose omnibus legislation

based on the NII recommendations

Meetings with Senate Majority Leader Frist, Senate Finance Committee Chairman Grassley and Secretary of Labor Chao

Listening session with Senate Commerce Subcommittee on Technology, Innovation & Competitiveness

Wayne Clough testimony on manufacturing before Senate Commerce Subcommittee on Technology, Innovation & Competitiveness

Testimony by Leadership Council representatives before House Science Committee




Federal Outreach

Draft Omnibus Legislation…some key points Will authorize NEW $$$ in physical sciences (NSF? NASA? DoD?, DOE?)

Recognizes basic research as an investment…not a cost

Embraces innovation acceleration grants

Increases portable graduate fellowships (DOD, NSF)

Executive Focus on national innovation policy (interagency cmte?)

Focus on patent quality

Advanced manufacturing technology language related to the defense industrial base and DOC MEP program

Plan to introduce in September 2005

Continued




Federal Outreach

Draft Omnibus Legislation

Coalition forming to work for passage

Group of NII leadership companies

Council providing policy direction

Contact Bill Bates, Council Vice President for Congressional Outreach [email protected]




Global/National/Regional Meetings

First Regional Innovation Summit in Atlanta: Symposium on Southern Innovation (Hosted by Duane Ackerman, Wayne Clough and Gov. Perdue) Oct 30-31

http://www.southern.org/main/STC/SI2/symposium.shtml

National Summit on Competitiveness: Investing in US Innovation, sponsored by Rep. Wolf (Chair of the Science-State-Justice-Commerce Appropriations Subcommittee), Council on Competitiveness, AEA, NAM, BRT Dec 2005

Aichi World Expo September 2005

EU Summit April 2005



Public-Private Sector Collaborations

Innovation Metrics

Innovation HotspotsTM

Healthcare Grand Challenge

Energy Grand Challenge




The (New) Path to Prosperity

The most important sources of prosperity are created not inherited Productivity does not depend on what industries a region competes in, but how it

competes.

InnovationInnovation

Competitiveness(Productivity)

Competitiveness(Productivity)

ProsperityProsperity



Chad EvansVice President, National Innovation [email protected]

Randall KempnerVice President, Regional [email protected]

Suzy TichenorVice President and Director, High Performance Computing [email protected]

Bill BatesVice President for Congressional [email protected]

Council on CompetitivenessNational Innovation Initiative

thriving in a world of challenge and change suzy tichenor

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