Transcript Arkansas's Needs for Economic Growth and Competitiveness

Arkansas' Needs for Economic
Growth and Competitiveness
John W. Ahlen, Ph.D., President
Arkansas Science & Technology Authority
February 19, 2008
Seeing the Future
The future is
already here.
It’s just not
evenly
distributed
yet.
William Gibson
Three Things to Know
1. The Knowledge-Based Economy is real
and it is here.
2. Good News:
Arkansas can compete in the KBE.
Bad News:
We need to be much more competitive.
3. The Knowledge-Based Economy is
fundamentally different from the industrial
economy it is overtaking.
January 24, 2005
The Quiet Crisis
from The World Is Flat
“… we should be embarking on an all hands
on deck, no holds barred, no budget too
large crash program for science and
engineering education immediately. The fact
that we are not doing so is our quiet crisis.
Scientists and engineers don’t grow on trees.
They have to be educated through a long
process, because, ladies and gentlemen, this
really is rocket science.”
The Fundamental Rule
The Value Added Imperative
from Trent Williams
• Export Goods and Services
• Import Cash
• Create Jobs; Pay Higher than Average
Wages
• Create Wealth
• Create a Primary Enterprise that Supports
a Cluster of Secondary Firms
Extract/Grow/Manufacture/Know
The System
The Life Cycle
Development
Introductory
Growth
Maturity
Decline
The Workforce
Average Annual Earnings in 2003
$160,000
$140,000
$120,000
$100,000
Annual
Earnings
$80,000
$60,000
$40,000
$20,000
55--64
$0
45--54
Less than
High school
High school
9th grade
dropout
graduate
35--44
Some
Associate's
college, no
degree
degree
Education Level
Bachelor's
degree
Ages: 25--34
Master's
degree
Doctorate
Professional
degree
Age
Keys to the Old and New Economies
ISSUE
OLD ECONOMY
NEW ECONOMY
Economy-wide Characteristics:
Markets
Stable
Dynamic
Scope of Competition
National
Global
Organizational Form
Hierarchical, Bureaucratic
Networked, Entrepreneurial
Potential Geographic Mobility of Business
Low
High
Competition Between Regions
Low
High
Industry:
Organization of Production
Mass Production
Flexible Production
Key Factor of Production
Capital/Labor
Innovation/Knowledge
Key Technology Driver
Mechanization
Digitization
Source of Competitive Advantage
Lowering Cost Through Economies of Scale
Innovation, Quality, Time to Market, and Cost
Importance of Research/Innovation
Moderate
High
Relations with Other Firms
Go it Alone
Alliances and Collaboration
Workforce:
Principal Policy Goal
Full Employment
Higher Wages and Incomes
Skills
Job-specific Skills
Broad Skills, Cross-Training
Requisite Education
A Skill
Lifelong Learning
Labor-Management Relations
Adversarial
Collaborative
Nature of Employment
Stable
Marked by Risk and Opportunity
Government:
Business-Government Relations
Impose Requirements
Assist Firms’ Innovation and Growth
Regulation
Command and Control
Market Tools, Flexibility
Source: Atkinson, Robert D., Randolph H. Court, and Joseph M. Ward. THE STATE NEW ECONOMY INDEX: Benchmarking Economic Transformation in the
States. Progressive Policy Institute, July 1999, p. 5.
Keys to the Old and New Economies
ISSUE
OLD ECONOMY
NEW ECONOMY
Economy-wide Characteristics:
Scope of Competition
Global – Dynamic, Digital
National
Industry:
Organization of
Production
Mass Production
Flexible Production
Key Factor of Production
Capital/Labor
Innovation/Knowledge
Key Technology Driver
Mechanization
Digitization
Importance of
Research/Innovation
Moderate
High
Workforce:
Principal Policy Goal
Full Employment
Requisite Education
A Skill
Higher Wages and
Incomes
Lifelong Learning
[Career Ladders]
Government:
Regulation
Command and Control
Market Tools, Flexibility
2004 14 grades
The Shifts
1970 12 grades
1940 8 grades
1800-1815 Regional Specialization
NE – machine based manufacturing
S – cotton, cheap labor
1836 Statehood
1874 AR Constitution
1880 Census
1941 WWII
1957 Sputnik
1955 AIDC
1983 ASTA
The New Deal 1933
1964 The Great Society
1983 A Nation at Risk
1990 Who will do
science in 2010?
2005 The World
Is Flat
1785
Water Power
Textiles
Iron
1845
Steam Power
Railroads
Steel
1900
Electricity
Chemicals
Internal
Combustion
1950
Petroleum
Electronics
Aviation
Automation
1990
Digital
Content
Software
New Media
Biology
Materials
2030
PCs
------------------------ ------------------------ ------------------------ -----------------------1830
1930
2030
1989 The Flatteners
The Flatteners
from The World Is Flat
Genesis: The Flat World Platform Emerges
• Windows (11/9/89)
• Netscape
• Work Flow Software
The Flatteners
• Open-Sourcing
• Outsourcing
• Offshoring
• Supply-Chaining
• Insourcing
• In-forming (search engines)
The Steroids: Digital, Mobile, Personal, and Virtual
10-12-07 The first boomer files for Social Security (Ed Gordon)
African Proverb
from The World Is Flat
Every morning in Africa, a gazelle wakes up.
It knows it must run faster than the fastest lion or it will be
killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle or it will starve
to death.
It doesn’t matter whether you are a lion or a gazelle.
When the sun comes up, you better start running
In his earlier book, The Lexus and the Olive Tree (1999), Tom Friedman
contrasts the globalized fast world and the slow world; he suggested that
people choose the slow world because the fast world is too fast, too scary, too
homogenizing, or just too demanding.
Can We Do It Here?
•
•
•
•
Case Study
$30,200 Applied Research Grant;
$30,000 matching funds from industry
$420,000 NSF Grants (2) – professor and
graduate students
$1.35 million in SBIR Grants (4) – PhDs, MSs,
entrepreneur
$1 million early-stage risk capital being sought –
PhDs, MSs, 2-year college technicians
• 2008: $410,000 DoD Grant
Three faculty; four companies; 32 employees
The STEM Coalition
April 24, 2007
• “This is urgent business that needs immediate
attention.”
• “This is a competitive threat.”
• “What we have here is a bunch of perfect storms.”
• “We need to carry the realization of this threat to the
rural schoolhouse.”
• “We simply must connect opportunities to minority
and disadvantaged students in our communities.”
Many communities and educators seem too comfortable
with an Industrial Age model of mass production learning
and an Agricultural Age calendar that bind educators and
students in time, place, and purpose.
Embracing the Information Age (2001)
The Risk of Inaction
Arkansas - Percent of National Income Per Capita
85.0%
Alternative
75.0%
65.0%
Baseline
55.0%
45.0%
1929
1933
1937
1941
1945
1949
1953
1957
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
2017
35.0%
Source: U.S. Bureau of Economic Analysis
Baseline
Insanity is when you keep
doing the same thing over
and over again, each time
hoping for different results.
Edward Deming
Alternative
“Many mainstream organizations
could use additional resources to
revitalize their current offerings.
But when the objective is to get a
system unstuck, it is time to go in
search of catalytic innovations.”
Clayton M. Christensen, Heiner Baumann, Rudy Ruggles, and Thomas M. Sadtler,
“Disruptive Innovation for Social Change,” Harvard Business Review, December 2006.
Comments / Questions?
Thank You!
John W. Ahlen, Ph.D.
501.683.4400
[email protected]
One Final Question: Do you
see it now?
www.asta.ar.gov