1. The World’s Largest Science and
Innovation Park
Presentation for:
Seattle Chamber of Commerce
Egils Milbergs
Executive Director
Washington Economic Development
Commission
July 13, 2010

2. Great Recession

4. Global Job Trends
US trailing major economies
in restoring jobs
Source: Organization for Economic Cooperation and Brazil and Chile have seen
Development and the International Labor Organization.
strongest job growth. Asian
economies bounce back

5. Geography of WA Unemployment (May NSA)

7. Path to Recovery

8. Anticipated recovery time by revenue size
(in millions)
Source: 2010 Manufacturing and Wholesale Distributions National Survey

9. The key to economic recovery
2000s
There is no better time like Advantage is Innovation
a downturn to innovate.
Strategy is
“Make something new”
1980s & 1990s
Advantage is Quality
Strategy is
1960s & 1970s “Make it Better”
Advantage is Cost
Over half of Fortune 500 and just under half of
Strategy is 2008 Inc. list began during a recession or bear
“Make it Cheaper” market.
Dane Stangler, Kauffman Foundation

10. Innovation Drives Economic Growth
• The societal rates of return to R&D are between
two to four times private returns.
• At least 2/3 of the increase in per-capita GDP is
from innovation.
• Jobs in technology industries pay approximately
70 percent more than other jobs.
• Innovation is the key source of competitive
advantage against low-wage nations.
10

11. Actually we’re No. 6
 40 countries/regions
 16 Indicators
 Economic Structure
• Human capital (college
education; researchers)
• Innovation capacity (corporate
R&D; government R&D; scientific
publications)
• Entrepreneurship (new firms;
venture capital)
• IT infrastructure (e-government;
corporate investment; broadband)
 Economic Policy (corp. tax;
ease of doing business)
 Economic Performance (trade
balance, FDI, GDP per worker,
productivity)

12. Overall Score
Overall Score
80
70
60
50
40
30
20
10
0
12

13. Decade Trend: The U.S. is Behind….
• 1. China 15. Latvia 28. UK
• 2. Singapore 16. Austria 29. EU-15
• 3. Estonia 17. S. Korea 30. Mexico
• 4. Denmark 18. Ireland 31. Netherlands
• 5. Luxembourg 19. EU-10 32. Australia
• 6. Slovenia 20. Spain 33. Finland
• 7. Russia 21. Sweden 34. Canada
• 8. Lithuania 22. France 35. Germany
• 9. Cyprus 23. Portugal 36. Italy
• 10. Japan 24. Malta 37. NAFTA
• 11. Hungary 25. Belgium 38. Greece
• 12. Slovakia 26. EU-25 39. Brazil
• 13. Czech Republic 27. Poland 40. United States
• 14. India
13

14. Average annual growth of R&D expenditures : 1996–2007
EU = European Union

15. Researchers in selected regions/countries/economies: 1995–2007
NOTES: U.S. data for 2007 estimated based on 2004–06 growth rate. EU includes
all 27 member states. EU = European Union; FTE = full-time equivalent Source: NSF Science and Engineering Indicators 2010

16. Market shares of computer and office machinery manufacturing: 1995–2007
NOTES: EU = European Union. Asia-9 includes India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand,
and Vietnam. China includes Hong Kong. EU excludes Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia.
Source: NSF Science and Engineering Indicators 2010

17. Trade balance in high-technology goods 1995–2008
NOTES: Asia-9 includes India, Indonesia, Malaysia, Philippines, South Korea, Singapore, Taiwan, Thailand, and Vietnam.
China includes Hong Kong. EU excludes Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia.
Source: NSF Science and Engineering Indicators 2010

18. Plan for Washington

19. Washington: A History of
Innovation
Commercial
Airplanes
COSTCO

20. States and regions can be powerful
players in the innovation economy
• States, regions and smaller nations are:
– Large enough to:
• create intellectual capital
• build innovation ecosystem(s)
• connect globally
• respond to innovation opportunities
– Small enough for:
• shared vision and achievable outcomes
• trusted personal relationships
• effective governance

21. Geography of Knowledge Based Industries 2007 Total
Metro Area
Milken Institute Rank Score
San Jose –
1 Sunnyvale-Santa 100.0
Clara, CA
Seattle-Bellevue-
2 Everett, WA
46.4
Cambridge-Newton-
3 Framingham, MA
45.2
Washington-
Arlington-
4 Alexandria, DC-VA-
41.8
MD-WV
Los Angeles – Long
5 Beach – Glendale, 40.2
CA
Dallas – Plano -
6 Irving, TX
21.8
San Diego – Carlsbad
7 – San Marcos, CA
19.3
Santa Ana –
8 Anaheim-Irvine, CA
17.7
New York – White
9 Plains – Wayne, NY- 16.8
NJ
San Francisco – San
10 Mateo-Redwood 16.1
City, CA

22. A New Innovation Growth Curve
We are here
PROSPERITY
TIME

23. A Ten Year Vision
We should not fear to lead
Make Washington State the most
attractive, creative and fertile
investment environment for
innovation in the world.
…, we can’t rest on our laurels, so We must look over the horizon and
let’s commit today to grooming a prepare for the new economy that
workforce and leaders who are will emerge when this recession
agile, creative, and embrace passes.
innovation. Commerce Secretary Gary Locke
Gov. Chris Gregoire March 18, 2009
March 10, 2009
23

24. Entrepreneurs would appreciate this challenge.
The risks inherent to starting a thriving business
in today’s troubled waters are immense, but the
rewards have never been greater.

25. Innovation Policy Framework
Talent
Education
Research
Workforce Growth
Investment Skills
Employment
Entrepreneurship Business
Entrepre
neurs
Prosperity
GSH
Innovation
Ecosystem Quality of Life
Associations Competitiveness
Capital
Non-
Infrastructure Gov’t Profits
Innovation
Innovation Ecosystem Innovation
Drivers Outcomes

26. New Model for Economic Development
Traditional Model Innovation Driven Model
Attract and retain companies Invest 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
Single disciplines, functions Multiple disciplines, integration
Locally linked clusters Globally linked clusters
Strategize Organize Operationize

27. Four Critical
Challenges

28. Talent Challenge
28

29. Parents disagree about skills to drive
innovation
Newsweek-Intel Global Innovation Survey Sept -Oct 4,800 adults

30. Investment Challenge
Transforming ideas
Into applications
Creating business
models
Researchers and
entrepreneurs
create new ideas
No capital
No capital
Firm creation
Dead and innovation
ideas success
Dead
firms
Double “Valley of Death”
Graphic concept adapted from
Egils Milbergs Dr. Charles Wessner, National Academies
30

31. Infrastructure Challenge
Beyond Oil?
Post “ICE” Age?
Internal Combustion Engine
31

32. Export Challenge

33. Washington’s exports to Asia – per capita goods
exports, 2000-2008
1,400
1,200
1,000
US Dollars
800
China
600 1,151 Asia NICs*
827 891
400
655
200 365
304
0
2000 2004 2008
Data source: www.wisertrade.org
*Newly industrialized countries: Hong Kong, Republic of Korea,
Singapore, and China (Taiwan)

34. Washington
Innovation Ecosystem

35. Innovation Model is Shifting
Linear Model Collaborative Model
Education
Research
Research Workforce
Skills
Entrepreneurs
Development Business
Innovation
Ecosystem
Commercialization
Associations
Capital
Government Non-
Profits

36. Innovation Ecosystems Evolve
Innovation Ecosystem
Innovation
Accelerators Virtual
Cluster
Growth Node
Many nodes
Dense linkages
Virtualized
Talent Nascent Network to Network
functions
IPZs Cluster Accelerated
STARS collaboration
Few to many firms
EIRs Fast growth
Patents Key linkages
None or few firms
Incubators Growth potential
Tax
R&D
Incentives
Gap
Funding SBIR

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

38. Emergent Innovation Ecosystems
(illustrative portfolio)
SMART GRID/ RENEWABLE
CLOUD COMPUTING
ENERGY EFFICIENCY ENERGY
ELECTRIC VEHICLE ADVANCED
GLOBAL HEALTH
INFRASTRUCTURE MANUCTURING
HEALTH IT WATER RESOURCES/
NEW MATERIALS
MEDICAL DEVICES ENVIRONMENT
LOGISTICS/ DEFENSE
FOOD PROCESSING
FREIGHT MOBILITY TECHNOLOGY

39. Marine
Agriculture, World’s Largest Innovation Park
Food Composites
Tourism
Marine Biomedical,
“Twilight”
Energy
IT, gaming, Incubators
Aerospace simulation
Life Sciences, Medical Food
Global Health Devices Processing
Defense Environment
Remediation Wind, Solar,
Data Centers Clean IT
State Fair
New Forestry.
Green Tech Electric
Cars
Wine, Water
Clean Tech,
Biotech, Energy Smart Grid,
Biofuels

40. Extending the Innovation Ecosystem

41. PNWER GDP and Population
If PNWER were a separate country, it PNWER Region (GDP/Pop.)
would rank 13th in total GDP
State/Prov. GDP* Population
Country GDP*
1. US 13,811,200 Wash. 311,270 6,468,424
2. Japan 4,376,705 Alberta 259,900 3,585,000
3. Germany 3,297,705 Oregon 158,233 3,790,060
4. China 3,280,053 B.C. 150,412 4,310,305
5. U.K. 2,727,806
6. France 2,562,288
Idaho 51,149 1,523,816
7. Italy 2,107,481 Sask. 40,340 1,008,697
8. Spain 1,429,226 Alaska 44,517 686,293
9. Canada 1,326,376 Montana 34,253 967,440
10. Brazil 1,314,170 Yukon 1,767 32,714
11. Russia 1,291,011
12. India 1,170,968
13. PNWER 1,051,841 Total 1,051,841 22,372,731
*2007 GDP in $US Million *2007 population & GDP in $US Million

42. WEDC Strategy Timeline
Apr 28
Preliminary Policy
Priorities
WEDC Meetings
Innovation & Jobs Summit
ED Inventory Update
Aug 3
Research Reports
Stakeholder Engagement
Sept 14
Prepare Draft
Dec 14
Final Review
Roll-out

43. 43