Assessing the Impacts of Changes in the Information Technology R

1
Assessing the Impacts of Changes inthe
Information Technology RDEcosystemRetaining
Leadership in anIncreasingly Global Environment
Computing Leadership Summit Washington, DC 23
February 2009
2
Charge

• Changes to structure, processes, outcomes that
  historically characterized long-term investment
  IT RD
• Issues affecting innovation, human resource
  pipeline
• Maturation of IT research fields
• Economic processes of IT research and production
• International competition and collaboration
• Patterns of funding and the structure of funding
  programs
• Recommendations to sustain and improve
• Health of the relevant research fields
• Technical innovation/national economic security
  benefits

3
Committee

• ERIC BENHAMOU, Benhamou Global Ventures, Co-Chair
• RANDY H. KATZ, University of California,
  Berkeley, Co-Chair
• STEPHEN R. BARLEY, Stanford University
• ANDREW B. HARGADON, University of California,
  Davis
• MARTIN KENNEY, University of California, Davis
• STEVEN KLEPPER, Carnegie Mellon University
• EDWARD D. LAZOWSKA, University of Washington
• LENNY MENDONCA, McKinsey Company
• DAVID C. NAGEL, Ascona Group
• ARATI PRABHAKAR, U.S. Venture Partners
• RAJ REDDY, Carnegie Mellon University
• LUCINDA SANDERS, National Center for Women and
  Information Technology

4
Committee Goals

• Describe IT-specific ecosystem thru which
  innovative, market-creating information
  technologies and products are conceptualized,
  transitioned, and developed into new economic
  sectors and globally competitive products
• Assess ecosystems current health in USA, given
  national RD priorities and global competition
• Identify emerging technology platforms that
  reduce barriers to deployment of new concepts and
  products
• Formulate policy recommendations to enhance
  survival and increase agility of U.S.
  technological and commercial IT RD enterprise,
  by nurturing and sustaining its ecosystem

5
Fact Finding

• Washington, D.C.Fed view of ecosystem,
  university business perspectives on RD,
  overview of DC start-ups
• Mt.Vw., CAinput from Silicon Valley/Bay Area
  cluster, emergence of IT industry in China/India,
  journalist views on changes, experiences of
  serial entrepreneurs and angel investors
• Boston, MAinsights from regional cluster,
  relationship between universities and IT firms
  IT industry development in Israel, Ireland, and
  Scandinavia emerging platforms workforce and
  social issues

6
Table of Contents

• SUMMARY
• 1. DEFINING THE IT RD ECOSYSTEM
• 2. IT THE ESSENTIAL ENABLER FOR THE INFORMATION
  SOCIETY
• 3. THE CHANGING LANDSCAPE OF THE U.S. IT RD
  ECOSYSTEM 1995-2007
• 4. A GLOBALIZED, DYNAMIC IT RD ECOSYSTEM
• 5. FINDINGS AND RECOMMENDATIONS

7
1. Defining the IT RD Ecosystem

• An economic community supported by a foundation
  of interacting organizations and individualsthe
  organisms of the business world. This economic
  community produces goods and services of value to
  customers, who are themselves members of the
  ecosystem
• James F. Moore

8
Ecosystem Key Elements and Relationships
9
2. IT The Essential Enabler for the Information
Society

• Contributions to productivity and economic growth
• Innovation in services
• Infrastructure for all ST
• (Imagine a day without IT)

10
Themes from Past CSTB Studies on IT RD
11
Tire Tracks
12

• Interestingly, during the preparation of the
  tiretracks figure in 1994, members of the
  authoring committee were discouraged because they
  could not identify current research advances that
  were likely to lead to new billion-dollar
  industries. Eight years later, when the second
  version of the figure was being prepared, more
  than half a dozen such industries had emerged,
  which demonstrates that predicting the future in
  a field as dynamic as information technology is
  incredibly difficult, even for experts.

13
IT ResearchThe Boundless Frontier

• Improved Auto Safety
• Designing a Next Internet
• The Personal Memex
• Post-Moores Law Computing
• Personalized Education
• Personalized Health Monitoring
• Mastering IT System Complexity
• Transforming the Developing World
• Augmented Cognition
• Driving Advances in All Fields of Science and
  Engineering

14
3. The Changing Landscape of the Ecosystem,
1995-2007

• Shocks to the system
• Irrational Exuberance
• Y2K Development of the Indian Software
  Industry
• NASDAQ Bust
• Aftereffects of September 11, 2001
• Financial Scandals and Bankruptcies
• Surviving After the Bubble Burst
• The Recovery (2005-2007)
• The 2008-2009 financial crisis (?)

15

• Evolution of Technology Platforms
• Baseline Web 1.0 Platform
• Evolution From Web 1.0 to the Web 2.0 Platform
• The Rise of Open Source
• The Emergence of Mobile and Datacenter Platforms
• Evolution of IT Industry Sectors
• Semiconductor, Computer, and Software Subsectors
• International Development of Clusters
• India, China, Taiwan,

16
Infrastructure to Enable Innovation

• Increase in customer-created value
• Increased revenue from services
• Importance of National demand leadership
• Lagging U.S. infrastructure
• Advanced Wireless vs. European Deployments
• Broadband vs. e.g., Korea

17
4. A Globalized, Dynamic IT RD Ecosystem

• Globalization of product and labor markets
• Continued strong demand for IT workers
• Concerns about sustaining U.S. IT workforce
• Enrollment declines
• Participation of women and minorities
• Concerns about K-12 education
• Globalization of venture capital
• U.S. continues to dominate but share is slipping
• Frictions in the U.S. Ecosystem
• Measure fall-off in IPOs
• Factors
• Globalization of industry and financial markets
• Patent litigation
• SOX

18
U.S. Venture Funding
19
A Globalized Industry
20
Worldwide Broadband Deployments
21
Globalization of Invention
22
Federal Funding of IT RD

• Federal investment in IT RD enjoyed generous
  increase in past two decades, but not when
  compared to rapid growth in biomedical funding
• But not in proportion to
• Enormous and increasing importance of the field
• Continued potential for high-impact breakthroughs
• Nations investment in other fields
• Budget level nine years after the release of the
  PITAC report still has not reached the target set
  in that report
• Mirrors underinvestment in Physical Sci. and Eng.
• Engineering Research and Americas Future
  Meeting the Challenges of a Global Economy (2005)
• Rising Above the Gathering Storm Energizing and
  Employing America for a Brighter Economic Future
  (2007)

23
Changing Patronage for IT RD
24
Science/Engineering Funding
25
Funding Three-legged Stool

• Small (single-PI) grants from NSF and Defense
  science offices
• Larger-scale, longer-term, theme-oriented
• NSFs ERC and STC
• DODs MURI
• Critical-mass funding for small teams in context
  of program
• DARPA VLSI project, HPCC
• Essential to transitioning research to size and
  scale that could be commercialized

26
Substitutes for DARPAs historical role in 3rd
leg?

• NSFs ITR
• Large scale but without programmatic context
• CISEs Expeditions in Computing
• Larger scale, longer-term support
• Modest funding (2M/yr 5 yrs, 3 awards/yr.)

27
Findings and Recommendations
28
Objectives

• 1. Strengthen the Effectiveness and Impact of
  Federally Funded IT Research
• 2. Remain the Strongest Generator of and Magnet
  for Technical Talent
• 3. Reduce Friction That Harms the Effectiveness
  of the U.S. IT RD Ecosystem
• 4. Ensure that the United States Has the
  Infrastructure That Enables U.S. IT Users and
  Innovators to Lead the World

29
1. Strengthen the Effectiveness and Impact of
Federally Funded IT Research

• Finding 1.1. A robust program of federally
  sponsored research and development (RD) in IT is
  vital to the nation.
• Finding 1.2. The level of federal investment in
  fundamental research in IT continues to be
  inadequate.
• Recommendation 1.1. As Federal govt increases fed
  investment in long-term basic research in the
  physical sciences, engineering, mathematics, and
  information sciences, it should carefully assess
  the level of investment in IT RD, mindful of the
  economic return, societal impact, enablement of
  discovery across science and engineering, and
  other benefits of additional effort in IT, and
  should ensure that appropriate advisory
  mechanisms are in place to guide investment
  within the IT RD portfolio.
• Should the executive and/or legislative branches
  concur that an increased (or retargeted) focus on
  IT RD investment is warranted, reconsideration
  of what federal advisory mechanisms would be most
  useful may also be warranted. The committee
  believes that it would be important to include
  first-tier IT researchers from academia and
  industry in any future advisory group.

30
2. Remain the Strongest Generator of and Magnet
for Technical Talent

• Finding 2.1. Rebuilding the computing education
  pipeline at all levels requires overcoming
  numerous obstacles, which in turn portends
  significant challenges for the development of
  future U.S. IT workforce talent.
• Finding 2.2. The participation in IT of women,
  people with disabilities, and certain minorities,
  including African-Americans, Hispanics, and
  Native Americans, is especially low and
  declining. This low level of participation will
  affect the United States ability to meet its
  workforce needs and place it at a competitive
  disadvantage by not allowing it to capitalize on
  the innovative thinking of half of its
  population.
• Recommendation 2.1. To build the skilled
  workforce that it will need to retain high-value
  IT industries, the United States should invest
  more in education and outreach initiatives to
  nurture and grow its IT talent pool.
• Finding 2.3. Although some IT professional jobs
  will be offshored, there are more IT jobs in the
  United States than at any time during the dot-com
  boom, even in the face of corporate offshoring
  trends.
• Recommendation 2.2. The United States should
  increase the availability and facilitate the
  issuance of work and residency visas to foreign
  students who graduate with advanced IT degrees
  from U.S. educational institutions.

31
3. Reduce Friction That Harms the Effectiveness
of the U.S. IT RD Ecosystem

• Finding 3.1. Fewer young, innovative IT companies
  are gaining access to U.S. public equity markets.
• Recommendation 3.1. Congress and Federal
  agencies, e.g., SEC and PTO, should consider the
  impact of both current and proposed policies and
  regulations on the IT ecosystemand especially on
  young, innovative IT businessesand consider
  measures to mitigate these where appropriate.

32
4. Ensure that U.S. Has Infrastructure Enabling
U.S. IT Users and Innovators to Lead the World

• Finding 4.1. Most dynamic IT sector likely to be
  in the countries with the most demanding IT
  customers and consumers.
• Finding 4.2. In terms of nationwide availability,
  use, and speed of broadband, U.S.the inventor of
  broadband technologyhas been losing ground
  compared with other nations.
• Recommendation 4.1. U.S. should establish an
  ambitious target for regaining and holding a
  decisive lead in the broad deployment of
  affordable, gigabit broadband services. Federal
  and state regulators should explore models and
  approaches that reduce regulatory and
  jurisdictional bottlenecks and should increase
  incentives for investment in these services.
• Recommendation 4.2. Government (federal, state,
  and local) should foster commercial innovation
  and itself make strategic investments in IT RD
  and deployment so that the United States can
  retain a global lead position in areas where it
  has particular mission requirements.

33

• Questions?