Economic Development and Stimulation: The Right Mix of Strategy and Technology for a Growing Economy

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Economic Development and StimulationThe Right
Mix of Strategy and Technology for a Growing
Economy

• Hon. Kelly H. Carnes
• President CEO
• TechVision21

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Economic ContextTechnology Engine of Economic
Growth
Sources of Economic Growth
Source Boskin and Lau, 1992

• Technical progress is the most important factor
  in nations sustained economic growth

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Economic ContextTechnology Engine of Economic
Growth

• Research-intensive industrieschemicals,
  pharmaceuticals, aerospace, computers,
  semiconductors, softwaregrew twice as fast as
  whole US economy over 2 decades.
• Manufacturing firms using advanced technologies
  are more productive, more profitable, pay better,
  and grow faster.

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Economic ContextTechnology Engine of Economic
GrowthThe Phenomenon of Global Clusters

• Successful U.S. Clusters
• Silicon Valley Research Triangle, North
  Carolina Bostons Route 128
• Rising Stars Biotech San Diego, CA
  Montgomery Cty, MD IT Northern Virginia
  Austin, Texas Boise, Idaho Salt Lake City,
  Utah Champagne-Urbana, Illinois
• Global Rising Stars
• Cambridge, England Bangalore, India Tel Aviv
  Israel Dublin, Ireland Helsinki, Finland and
  Taiwan

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Economic ContextTechnology Engine of Economic
Growth

• Benefits of Clusters
• Job Creation98 Job Growth Projected for State
  of Virginia
• High WagesTech Workers Earn 81 More
• Washington State 221 Wage Premium
• Magnet to Attract Foreign Investment

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Economic ContextWhat Is Innovation?

• Transformation of knowledge into products,
  processes, systems, and services
• Innovation is a process, driven by
• Knowledge/Intellectual creativity
• Skilled workforce
• Collaboration/Human Networks
• Entrepreneurial Culture
• Enabling Infrastructure

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Economic ContextGlobalization of the Innovation
Enterprise

• Research and Development
• 1950 US performed twice as much RD as rest of
  world
• 2000 80 of world RD performed in 5 countries
  US, Japan, Germany, France, UK
• Small countries high-impact niches Israel and
  Sweden
• Workforce
• 240 million technically trained workers worldwide
• Impact of ICT
• Lower time/distance barriers for outsourcing,
  collaboration
• Increased global sourcing
• Access to low-cost, high-value labor

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Economic Context The Challenge of Globalization

• Every firmand every communitycompetes with
  global leaders
• A Globally Competitive Community
• Positions itself to Benefit From Globalization
• Possesses High Innovation Capacity
• Possesses High Productivity Potential

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Tech-based Economic DevelopmentWhats the
Formula for Success?

• No One Size Fits All
• Key Ingredients
• Invest in RD
• Develop High Tech Talent
• Foster Entrepreneurship/Risk Taking
• Create Pro-Innovation Business Climate
• Invest in 21st Century Infrastructure

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Formula for SuccessInvest in RD

• Mix of Government and Private RD
• Proximity to world class research institutions
• Alternative Build linkages to such institutions,
  begin building technical capabilities
• Internet infrastructure to support global
  collaboration

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Formula for SuccessInvest in RD

• China Goal to join top 10 by 2010
• New RD Programs and Investments
• Collaboration Attracting Foreign Investment
• Singapore 7B for niche technologies
• Ireland 1996 Can no longer rely on purchasing
  innovation from others
• New investments 560 million pounds
• Focus IT increasing local private research
• Results High-impact IT patents increased
  foreign investment

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Formula for SuccessHigh Tech Talent

• High demand for skilled workers
• Need for continuous learning
• Shift to Web-based training and E-Learning

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Formula for SuccessHigh Tech Talent

• India Goal to be IT superpower
• 1st in available qualified IT workers
• 12th worldwide in RD personnel
• One of worlds strongest compulsory science
  curriculums
• Asia Lure back Tech-trained workers
• Mexico Goal to double RD workers
• Emphasize SE scholarships
• Canada/Switzerlandstop brain drain

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Formula for SuccessPro-Innovation Business
Climate

• Intellectual Property
• Tax and Fiscal Policy
• Legal and Regulatory Framework
• Product Liability
• Trade Policy/Export Promotion

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Formula for SuccessPromoting Entrepreneurship

• Access to Capital
• Support for SMEs
• RD grants
• Manufacturing Extension
• Business Incubators
• Technology Transfer
• Business Matchmaking
• Fostering Networks of Innovation

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Formula for Success21st Century Infrastructure

• The Internet and other ICTs
• Overcome geographic disadvantages faced by some
  municipalities, regions and nations
• Critical component to support all areas of
  technology-based economic development
• Goals Widespread availability and affordability
  broadband deployment

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Formula for Success21st Century Infrastructure

• Most Connected (2000)
• Sweden (58) Denmark (54) Netherlands (53)
  Finland (51) Austria (48) US (47)
• Broadband Access (2000)
• Korea (40) Canada (16) US (4)
• Canada has deployed a world-class all-optical
  research network
• Taiwan eGovernment a cornerstone of economic
  development strategy

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Formula for Success21st Century Infrastructure

• Approach depends on a nations stage of
  development and resources available
• Poverty Reduction
• Capacity Building
• Business Retention and Expansion
• Business Development
• Fostering Cluster Development
• Carried out at the municipal, regional and
  national level

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Poverty ReductionInternet Kiosks in Rural India

• Rural villagers must travel long distances to
  government district headquarters
• Gyandoot
• Intranet kiosks in rural villages run by local
  operators
• One computer serves 25-30 villages
• Benefits increased transparency, less
  corruption better service delivery greater
  responsiveness

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Capacity BuildingMobile ICT in Africa

• Mobile phones offer cheaper, faster access for
  poor in remote villages
• Majority of Africas telephone infrastructure is
  cellular
• Pay through pre-paid calling cards
• Advanced payment provides capital for faster
  expansion
• 1998 2 million mobile phone users in Africa
• Today More than 30 million
• End of 2003 100 million
• Implications
• ITC infrastructure will develop differently than
  in US, Europe, Asia
• Low-cost mobile ICT technologies such as PDAs
  likely to lead

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Business Development, Retention and Expansion

• Reduce Costs of Starting a Business
• Attract Companies to Relocate
• Encourage business formation/growth
• Create knowledge and innovation networks
• Extension and technology transfer
• Export Assistance Virtual Trade Missions

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Business Development, Retention and
ExpansionReducing Costs

• Cost of legal and regulatory compliance for US
  SMEs nearly 500B, or 7,000 per employee
• On-line Business Compliance One-Stop
• Easy access to legal and regulatory
• Helps companies learn how to comply
• Initial focus in four legal and regulatory areas
  environment, workplace health and safety,
  employment, and taxes
• Many state E-Gov programs target SMEs
• Goal Make SMEs interaction with government
  easy, transparent and inexpensive

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Some Major eGov Initiatives
NB
Australia
California
Finland
1990 Launch GIC 1992 Launch SNB 1996 SNB
Act 2002 Greater Opportunity NBs Prosperity
Plan
1997 Investing for Growth Statement 2000
Government Online - The Commonwealth Governments
Strategy 2002 Better Services Better Government
1994 Information Society Strategy 1998 Decision
in Principal (online targets set) 2000
eEurope Action Plan
2000 Launch My California 2001
Launch Revamped Government Portal
UK
Ireland
US
1999 WebGov 2000 FirstGov 2003 E-Government Act
2002 in Effect
1999 Implementing The Information Society 2000
eEurope Action Plan 2002 Connections Source
IDC-Canada
1999 Modernizing Government 2000 eEurope Action
Plan 2000 UK Online
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Supporting Cluster Development Indias Strategy

• Bangalore
• 8B in IT exports 50 B expected by 2008
• eCommerce transactions originating in India
  projected to reach 4B by 2004
• 770 Indian High Tech Firms in Silicon Valley
• Build from Bangalores success to benefit country
  overall
• Investment in world-class infrastructure fiber,
  satellite and wireless
• IT for all accelerate rate of p.c. ownership 1
  per 50 people by 2008
• Target IT exports

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Key Public Policy ChallengesApplying ICT to
Support Economic Development

• Bridging the Digital Divide race, gender, age,
  income, location
• Accelerating broadband deployment
• Increasing RD investment
• Embracing Any Time, Anywhere learning
• Developing a world-class digital workforce
• Updating Legal and Regulatory Systems
• Political Will

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FOR MORE INFORMATION CONTACT

• Kelly Carnes
• TechVision21
• KCarnes_at_TechVision21.com
• [phone]
• www.techvision21.com