Transcript Assessing the Impacts of Changes in the Information Technology R&D Ecosystem Retaining Leadership in an Increasingly Global Environment Computing Leadership Summit Washington, DC 23 February 2009

Assessing the Impacts of Changes in
the Information Technology R&D
Ecosystem
Retaining Leadership in an
Increasingly Global Environment
Computing Leadership Summit
Washington, DC
23 February 2009
Charge
• Changes to structure, processes, outcomes that
historically characterized long-term investment IT R&D
• Issues affecting innovation, human resource pipeline
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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
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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
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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 ecosystem’s current health in USA, given
national R&D 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 R&D enterprise, by nurturing and
sustaining its ecosystem
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Table of Contents
SUMMARY
1. DEFINING THE IT R&D ECOSYSTEM
2. IT: THE ESSENTIAL ENABLER FOR THE
INFORMATION SOCIETY
3. THE CHANGING LANDSCAPE OF THE U.S. IT R&D
ECOSYSTEM: 1995-2007
4. A GLOBALIZED, DYNAMIC IT R&D ECOSYSTEM
5. FINDINGS AND RECOMMENDATIONS
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1. Defining the IT R&D Ecosystem
“An economic community supported by a foundation of
interacting organizations and individuals—the 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
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Ecosystem Key Elements and Relationships
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2. IT: The Essential Enabler for the
Information Society
• Contributions to productivity and economic
growth
• Innovation in services
• Infrastructure for all S&T
(Imagine a day without IT…)
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Tire Tracks
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“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.”
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IT Research—The Boundless Frontier
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Improved Auto Safety
Designing a Next Internet
The Personal Memex
Post-Moore’s 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
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3. The Changing Landscape of the
Ecosystem, 1995-2007
• Shocks to the system
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“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 (?)
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• Evolution of Technology Platforms
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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, …
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Infrastructure to Enable Innovation
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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
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4. A Globalized, Dynamic IT R&D 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
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Federal Funding of IT R&D
• Federal investment in IT R&D 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
– Nation’s 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 America’s Future: Meeting the
Challenges of a Global Economy (2005)
– Rising Above the Gathering Storm: Energizing and Employing
America for a Brighter Economic Future (2007)
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Funding: “Three-legged Stool”
• Small (single-PI) grants from NSF and Defense
science offices
• Larger-scale, longer-term, theme-oriented
– NSF’s ERC and STC
– DOD’s 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
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Substitutes for DARPA’s historical role
in 3rd leg?
• NSF’s ITR
– Large scale but without programmatic context
• CISE’s Expeditions in Computing
– Larger scale, longer-term support
– Modest funding ($2M/yr * 5 yrs, 3 awards/yr.)
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Findings and
Recommendations
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 R&D Ecosystem
4. Ensure that the United States Has the
Infrastructure That Enables U.S. IT Users and
Innovators to Lead the World
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1. Strengthen the Effectiveness and Impact
of Federally Funded IT Research
Finding 1.1. A robust program of federally sponsored research and
development (R&D) 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
R&D, 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 R&D portfolio.
– Should the executive and/or legislative branches concur that an increased (or
retargeted) focus on IT R&D 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.
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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.
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3. Reduce Friction That Harms the
Effectiveness of the U.S. IT R&D 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 ecosystem—and especially on
young, innovative IT businesses—and consider measures to
mitigate these where appropriate.
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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 technology—has 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 R&D and
deployment so that the United States can retain a global lead position in
areas where it has particular mission requirements.
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Questions?