The National Innovation System and Regional Hotspots

1
The National Innovation Systemand Regional
Hotspots

• EIGERlab
• Rockford, Illinois
• January 16, 2005
• Egils Milbergs
• Center for Accelerating Innovation
• www.innovationecosystems.com

2
(No Transcript)
3
Change, Uncertainty and Complexity
Regional Innovation Shifts
Intangible Capital
Disruption and Innovation
Virtual Worlds
Offshore Competition
Global Talent Explosion
Demographics
Technology Acceleration
3 Billion New Customers
4
USA Todays World Economic Superpower (shares
aggregate GDP)
4.0
Rest of World 45.4
6.6
11.1
28.5
Source World Bank
5
Growth Competitiveness Index
Source World Economic Forum
6
Global Innovation Hotspots
Real GDP per Capita 2004, PPP-adjusted, -US
(2002)
Baltic Sea Region
Other EU countries
USA
Other countries
Norway
Iceland
Sweden
Austria
Singapore
Germany
Finland
Denmark
Japan
EU-25
Baltic Sea Region
Taiwan
Slovenia
S Korea
Central Europe
Czech Rep.
Hungary
Estonia
Slovak Rep.
Latvia
Lithuania
Poland
Mexico
Russia
Brazil
China
India
Growth of Real GDP per Capita (PPP-adjusted),
CAGR, 2000-2004
Source EIU (2005), Christian Ketels, Harvard and
Stockholm School of Economics
7
New Economic Superpowers in 2050?China Overtakes
the G3 India is Close Behind
GDP 03USbn
50000
China
US
India
25000
Japan
Germany
0
2000
2010
2020
2030
2040
2050
Source Goldman Sachs, Report 99
8
The Next Innovation Wave
9
Innovation occurs faster for today's technologies
Percent of U.S. households with
Electricity
Television
Air Travel
100
Telephone
Radio
90
80
Automobile
70
PC
60
Cell phone
50
40
Internet
30
PDA
20
10
0
0
10
20
30
40
50
60
70
80
90
100
110
120
Years since product invented
Sources J. Gerry Purdys presentation The Next
50 Years in Mobile and Wireless at Silicom
Ventures, Trade press, Industry sources
10
Innovation Requires Wider Collaboration and
Multidisciplinary Approaches
Example Nanotechnology
Miniaturization Individualization
Complexity of individual components
Structure Size
Macro
Generation of systems
Micro
Utilization of biological principles, physical
laws and chemical properties
Nano
1940
1960
1970h
1980
1990
2000
2010
2020
2030
2040
RD Timescale
Source Dr. H. Fuchs, Wilhelm University of
Munster in Westphalia
11
Intellectual Property Concepts Outdated
Patent Creation vs. Total Shareholder Return
IBM
All other companies in the SP 500 fall into this
category.
(5 of The Top 10 Largest Patent Generating
Companies)
Annual Shareholder Return (1993 - 2003)
SP 500 10yr CAGR 9.8
Sony
Motorola
Note Cannon, NEC, Toshiba, Mitsubishi, and
Samsung round out the top ten largest patent
generating companies, but no shareholder data was
available.
Matsushita
Hitachi
Number of Patents (thousands) (1993 2003)
12
Service Sector Innovation
13
So What is Innovation?
14
(No Transcript)
15
National Innovation Act
Title II Modernization of Science, Education
and Healthcare
Title 1 Innovation Promotion
Caching

• Presidents Council on Innovation
• Innovation Acceleration Grants
• Basic Research Commitment
• Regional Economic Development
• Advanced Manufacturing Systems
• Study on Service Science

• Graduate Fellowships and Traineeships
• Professional Science Master Degree Programs
• Science Education
• Innovation Based Experiential Learning
• 21st Century Healthcare System

• Forwarding based on http information
• Hardware assisted switching

• Integrated caching and delivery
• Local content insertion
• High performance serving

16
National Innovation Act
Title IV Department of Defense
Title III Incentives for Encouraging Innovation
Caching

• Permanent Extension of Research Credit
• Increased Rates of Alternative Research Credit
• Alternative Simplified Credit for Research
• Study on Catastrophic Healthcare
• Life Long Learning Accounts
• Private Foundation Support of Innovation
• Valuation of Intangibles

• Frontier and Multidisciplinary Research
• Enhancement of Education
• Manufacturing RD
• Transformational Mfg. Processes
• Manufacturing Technology Strategies
• Planning for Strategic Innovation
• 300 million authorization

• Forwarding based on http information
• Hardware assisted switching

• Integrated caching and delivery
• Local content insertion
• High performance serving

17
National Innovation Act
Title V Judiciary and other Matters

• Retaining high tech talent
• Study on barriers to Innovation
• Patent Reform

18
Major Advocacy Effort Underway Innovate America
19
Macro Policies for Innovation
Driving job creation through powerful regional
strategies
Improving the innovation process and ecosystem
20
Selected Regional Clusters of Competitive
Industries
Western Massachusetts Polymers
Rochester Imaging Equipment
Omaha Telemarketing Hotel Reservations Credit
Card Processing
Warsaw, Indiana Orthopedic Devices
Boston Biotechnology Minicomputers Mutual
Funds Health Care Venture Capital Software Telecom
munications
Detroit Auto Equipment and parts
Wisconsin/ Iowa / Illinois Agricultural Equipment
West Michigan Office Furniture
Hartford Insurance
Silicon Valley Microelectronics Venture Capital
Providence Jewelry
New York Financial Services Advertising Publishing
Pennsylvania/ New Jersey Pharmaceuticals
North Carolina Household Furniture Synthetic
Fibers Hosiery
Los Angeles Area Defense Aerospace Entertainment
Wichita Light Aircraft
Dalton, GeorgiaCarpets
Baton Rouge/ New Orleans Specialty Foods
Dallas/ Houston Real Estate Development
South Florida Health Technology Computers
Texas/ Louisiana Chemicals
Nashville/ Louisville Hospital Management
21
Silicon Valley Region Worlds Technology Capital
22
(No Transcript)
23
Evolution of Innovation Networks
24
Toward a New Innovation Model
Dynamic Ecosystem
Linear Model
Research
Development
Commercialization
25
Innovation Hubs
26
AOL-TW
MSFT
IBM
27
Silicon Valley Employment WavesAdaptive Pattern
1000

900
800
Thousands
Fourth WaveInternet
700
Third Wave Personal Computer
600
Second WaveIntegrated Circuit
500
400
First Wave Defense
28
SENSE
MEASURE
ANALYZE
RESPOND
29
Source Gartner Group
30
Ecosystem Collaboration
Ideagora
Peer Production Community
Low Self Organizing
Control
Aggregation
Value Chain
High Hierarchical
Low
High
Value Integration
31
(No Transcript)
32
Action Implications

• Dont pick winners foster a habitat
• for innovation and avoid strategic
• Industry lock-in
• Architect the ecosystem, not just the
• inputs
• Map nodes and linkages
• Access external innovation sources
• Build a sensing network
• Pursue lab to market financing
• Break down barriers to collaboration
• Adapt digital support tools
• Leverage policies for rapid commercialization
• Develop and retain creative talent

33
What Stage Is Your Innovation Ecosystem In?
34
DISCUSSION