Egils Milbergs presentation on the World\'s Largest Science and Innovation Park

1. The World’s Largest Science and
Innovation Park
Egils Milbergs
Washington Economic Development Commission
May 7, 2010
Tuesday Group
Washington DC
V.1.2

3. A History of Innovation
Commercial
Airplanes
COSTCO

4. 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 4

5. Seattle –King County
5
Source: Sommers,Beyers,Wenzl,Industry Cluster Analysis, 2008

6. 6

7. Geography of WA Unemployment (Mar. NSA)

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

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

10. The risks inherent to starting a thriving business
in today’s troubled waters are immense, but the
rewards have never been greater.

11. The Commission’s 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
innovation.
passes.
Gov. Chris Gregoire Commerce Secretary Gary Locke
March 10, 2009 March 18, 2009
11

12. Innovation Policy Framework
Talent
Education
Research
Workforce Growth
Skills
Investment Employment
Entrepreneurship Business
Entrepre
neurs
Prosperity
GSH
Innovation
Ecosystem Quality of Life
Associations Competitiveness
Capital
Non-
Infrastructure Gov’t Profits
Innovation Innovation Innovation
Drivers Ecosystem Outcomes
12

13. Talent Challenge
Egils Milbergs 13

14. 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
14

15. Smarter, Cleaner, Greener
Infrastructure
Post “ICE” Age?
Internal Combustion Engine
Egils Milbergs 15

16. Leg Notes
WEDC 2010 Scorecard Action
Talent & Workforce
Retrain dislocated workers in high demand fields and occupations..
Deploy education and training resources to meet specific needs of
employers
Sustain the capacity of our higher education system
Investment & Entrepreneurship
Expand STARS program and strengthen Innovation Partnership Zones.
Provide job creation incentives and integrated business services for small
business.
Compete for Federal R&D funds in strategic areas.
Infrastructure
Provide tax increment financing and other tools for local investment.
Streamline the regulatory process for significant projects and small
business
Develop state-wide energy strategy and plan.
Promote next generation broadband.
Apply economic development criteria to transportation projects.

17. 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
17

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

19. 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

20. Global Health Ecosystem
Ecosystem

21. Innovation Ecosystems Evolve
Innovation Ecosystem
Innovation
Accelerators Virtual Cluster
Growth Node
Many nodes
Dense linkages
Virtualized functions
Talent Network to Network
Nascent Cluster Accelerated
IPZs collaboration
STARS
Few to many firms
EIRs Fast growth
Patents Key linkages
None or few firms
Incubators Growth potential
Tax
R&D
Incentives
Gap
Funding SBIR
21

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

23. Extending the Innovation Ecosystem

24. 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

25. Your view of the Pacific Northwest
economy in the next 24 months?
A. Robust growth and
50% 43%
outperforming national 39%
40%
averages 30%
20% 17%
B. Performance in line with
10%
national economy trends 0%
0%
C. Underperforming in most
business sectors
D. Don’t know
25

26. Will innovation be more important in the
next three decades than in the last three?
100% 91%
A. Yes
80%
B. No
60%
40%
20% 9%
0%
Yes No
26

27. Are there significant opportunities in cross
border innovation and collaboration?
1. Yes
2. Maybe 80% 74%
3. No 70%
60%
50%
40%
30% 22%
20%
10% 4%
0%
0%
Yes Maybe No (4)
27

28. Which areas offer the biggest opportunity
for innovation collaboration?
1. Clean Energy 70% 65%
60%
2. Information Technology 50%
3. Health Services 40%
30% 17%
4. Communications 20% 9%
10% 4% 4%
5. Transportation/Logistics 0%
28

29. What is the major factor limiting Pacific
Northwest’s innovation performance?
1. Schools lagging in science
and math education
2. Government not doing 30% 26% 26%
enough to support 25% 22%
technological innovation 20% 17%
3. Business not investing 15%
9%
enough in technological 10%
innovation 5% 0%
0%
4. Workers lacking skills to be
technologically innovative
5. Don’t know
29

30. What primary skills will children need
to drive innovation in the future?
1. Math and science skills 70% 61%
60%
2. Creative approaches to 50%
problem-solving 40%
30% 22%
3. Entrepreneurial and 20% 9% 4%
10% 4%
business skills 0%
4. Knowledge of the world’s
culture
30

31. How effective are your innovation and
R&D collaboration linkages with
neighboring states/ provinces?
1. Absolutely great 50% 43%
40% 35%
2. Good
30%
3. Fair 17%
20%
4. Needs more attention 10% 4%
0%
5. Poor 0%
31

32. What is the biggest hurdle in forging
productive collaborations in the PNW?
1. Disseminating awareness of
opportunities
2. Overcoming cultural, political, 35% 32%
institutional rivalry 30% 27%
3. Finding funds for 25% 23%
collaborative projects and 20% 14%
ventures 15%
10% 5%
4. Removing specific policy and 5%
regulatory barriers 0%
5. Adequately coordinating
relevant stakeholders
32

33. 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
33

34. Considerations for organizing effective regional
innovation ecosystems
• make innovation a clear and central mission
• focus on outcomes and local, organic growth
• enhance the visibility of regional resources
• adapt policy to different economic structures
• enable regional leadership
• maximize results through collaboration
• rationalize government program structure
• creatively leverage public sector programs
• measure performance and outcomes

35. Innovation Inputs Innovation Performance
Investment Business Public
Talent Entrepreneurship
Infrastructure
Performance Impact
New Products
R&D R&D State GDP
Transportation & Services
Personnel Intensity
STEM Innovation Productivity Employment
Broadband
Proficiency Commercialization Growth
Education Business Exports Standard
Pipeline Start-ups
Energy of living
Workforce Capital Business Income
Profitability
Quality Access Climate Distribution
Lifelong Inward Market State
Sustainability
Learning Investment Capitalization Revenues

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