January 10, 2005

1
Innovation and Jobs New Imperatives, New
Directions

• January 10, 2005
• NGA Workforce Development Policy Forum
• Miami, FL
• Rohit K. Shukla, CEO Founder Larta Institute

2
The World Turned Upside Down

• Not merely accelerated change but quantum change,
  and continuing, revolutionary change
• The spread of competence global realities,
  gazelle economies
• The lying-in-wait syndrome East Asia and beyond
• Pent-up capacity first manufacturing, now
  services, first routinized, now increasingly
  original and adapted scientific/technical work
• U.S. capacity to innovate historically based on
  fundamentals
• Worldwide talent attracted to open system,
  academic independence, resources
• Technology transfer is a widely-understood art
  and imperative
• Productivity gains have led to faster, design
  in capacity to change incrementally and
  completely
• Paradigm shifts are anticipated and pursued
  with vigor Schumpeter is alive and well

3
Haunting Issues for the U.S.

• White-collar jobs no safer than blue-collar
• From accounting to acknowledgement services,
  from design to drug development, including
  paraprofessional services, cost is the driver -
  relentless off-shoring, outsourcing
• Low enrolment rates among native U.S.-born in
  scientific, technical courses
• More insular attitude toward foreign-born
• Can we lay claim to leadership of the knowledge
  economy?
• Increasing mobility of U.S.-based immigrant
  population
• (reverse brain drain occurring can we capitalize
  on goodwill?)
• Can we see beyond tired, huddled masses in
  post-9/11 world?

4
Haunting issues for states

• Me-too economic strategies (driven by marketing,
  not market-driven)
• Herd instinct plays out (remember silicon
  madness?)
• Single sector focus (remember telecom?)
• Cluster mania, but no focus on global food
  chain/value chain e.g. headquarters bragging
  rights often pursued
• Zero sum incentive policies (remember ABC?)
  instead of pooling capabilities with adjacent
  regions/states
• New entrepreneurial economy based on
  constantly-changing realities a true revolution
• Sector-based planning is difficult and may be
  deadly
• Creativity in existing industries (mature) and
  new industries is well-spring of innovation
• Focus on agility, adaptability (training,
  retraining, spin offs)
• Take a page from emerging networks e.g. Bangalore

5
But.. Reality check

• U.S. is linchpin of gazelle economy efforts
• Market
• Know-how (now will become two-way flow)
• Continuous learning/improvement (also two-way
  flow)
• These regions have significant challenges
• Cultural attitudes are slow to change, innovation
  will be harder to come by
• Environmental folly, planning problems
• Restive populations younger but more impatient,
  glaring inequalities, rural-urban divide
• Internal markets developing but not sufficient to
  keep up with population growth

6
But.. Reality Check (cont.)

• The bottom of the food chain suddenly got
  interesting, e.g. in India
• Infosys, Wipro and the complete makeover of
  corporate systems
• TCSs body shop approach
• Huge supply of technically-proficient,
  under-utilized talent pool
• States responses
• legislate and slam the door
• get over it, and bring in continuous
  learning/innovation through partnerships

7
Larta From Cradle to Cauldron

• Larta was founded in 1993 private, non-profit
  organization
• Evolved into a leading hub for commercialization
  services, market access programs for
  entrepreneurs, marketplace for buyers and sellers
  of innovative technology products and services
• Products training, industry research, technology
  transfer services (from universities, labs and
  larger companies), consulting services
• Life sciences (national commercialization partner
  for NIH) nanotechnology, energy/clean tech etc.
• Clients emerging entrepreneurs, large
  company-buyers, governments, institutional and
  individual capital providers, professional
  service firms

8
Larta Highlights

• Founded in 1993 private, non-profit organization
• Research, training, global/regional program
  design/development
• Managed 12 million in matching innovation grants
  (small amount large leverage)
• 91 Southern California companies many of them
  SBIRs (CalTIP) yielded 48 million in outside
  capital matched programs like ATP, multi-agency
  SBIRs, DoDs BAAs, DARPA, mil. Services
• Commercialization training 1000 entrepreneurs
  trained each year through Larta University
  Larta companies have
• raised 1.5 billion in outside capital
• Global Bridge Program linked So.Cal to Japan,
  Israel, Finland, Sweden, Italy, Canada, etc.)
  entrepreneur-entrepreneur, large/small companies,
  investors-ideas, research-commercialization

9
So, what can we impart?

• Building innovation support activities is a body
  contact sport
• Intelligent network operators on the ground
• Provide mandate to develop effective network
  organized vertically and horizontally
• Limit public funding to cover infrastructure,
  broad mandate and innovation funding (matching,
  multi-regional etc.)
• Decentralized operations, including innovation
  fund management, to match locally-evolving
  entrepreneurial eco-system
• Rework/rebuild training/retraining programs,
  emphasize access to tools, agile learning,
  adaptive curricula
• State sponsor should set broad policy agenda,
  with local input on what defines success,
  negotiated process

10
Furthermore.

• Programs to support or spur innovation should
  focus on building companies, new growth
  businesses, and research that pushes the
  envelope, not on survival strategies
• From a Larta presentation
• (Innovation and Competitiveness)

11
Refresh, build and rebuild

• Refresh
• Incentives
• Stay away from poaching
• Zero-sum
• Focus on your asset map
• Be realistic, sober
• Fill in the gaps by linking to other
  areas/capabilities
• Economic development
• standing econ. analysis team/s
• aggressive foreign market mining
• joint ventures with other regions
• Linkages to entrepreneurs, spinouts, workforce
  initiatives

• Build/Rebuild
• Assistance programs
• Focus on entrepreneurs
• Refocus on competitiveness of existing companies
• Training programs
• Focus on retention of students, refocus on
  company needs, matching skills to projection
  scenarios
• Tech transfer programs
• University/higher learning assets, linkages to
  entrepreneurs, spinouts

12
Imperatives

• Find allies, markets, points of innovation around
  the world
• Establish global context, employ locally
• Understanding the S in strategic alliances
• Part of a deliberate strategy that keeps ahead of
  the curve, and abreast of local sensitivities
• Refresh and adapt
• Your product is people, not things
• Its always about people!

13
A Thought For Always

• "Twenty years from now you will be more
  disappointed by the things you didn't do than by
  the ones you did do. So throw off the bowlines.
  Sail away from the safe harbor. Catch the trade
  winds in your sails. Explore. Dream. Discover.
• - Mark Twain

14
Thank You
Los Angeles, CA Alexandria, VA