How Globalization, Innovation, and Culture are Changing ...
Transcript of How Globalization, Innovation, and Culture are Changing ...
How Globalization, Innovation, and Culture Are
Changing Arizona’s Economy
May 7, 2015
Dr. Robert D. Atkinson, President, ITIF
@RobAtkinsonITIF
ITIF: Who We Are
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The Information Technology and Innovation Foundation is a think tank at the cutting edge of designing innovation policies and exploring how innovation will boost economic growth and competitiveness. ITIF focuses on: • Innovation processes, policy, and metrics, • Internet, big data and IT policy, • IT and economic productivity, • Science and tech policy, and • Innovation and trade policy
Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
Arizona Then…
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Arizona Now…
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Arizona Next…?
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Economies: “Engines” That Get Bigger?
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Or Systems That Evolve?
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During My Talk …
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• 25 Patents Will be Issued
• 18 New Products Released
• 18 New Production Processes Adopted
• 150 Firms Will Go Out of Business
• But 166 Firms Will Start Up
Drivers of Economic Evolution
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• Geography and movement of firms and people
• Technological innovation
• Culture and demography
Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
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Geography Drives Economic Evolution
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• Economies are entities that evolve over both time and space
• The U.S. has to generate new industries to replace the ones it loses to low-wage nations
• Competition for “replacement” firms is much stiffer
Real output loss, 2000 to 2010 for selected U.S. manufacturing industries. Source: Bureau of Economic Analysis
Migration of Firms Used to Be National
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Now It’s Global
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Fewer Relocations to Target
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Major Industrial Manufacturing Relocations & Expansions in U.S.
Arizona Has Long Been Lower Cost
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Arizona per-capita income as share of US per-capita income (Source: BEA)
But Low Costs are Less of an Advantage
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Arizona production costs as share of US vs. Mexico’s
Future of Geographic Evolution
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• Continued competition from low
cost commodity nations
• Growing competition from innovation-based economies
Routine Production Metros Will Lag Innovation Metros
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People Move
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Five fastest growing metros (2000-2014): • San Antonio • Las Vegas • Riverside-San Bernardino • Houston • Austin
Immigration of U.S. Knowledge Workers
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Arizona Ranks 41st (2014)
Score: 2014: 12.2 2012: 12.1 2010: 10
Migration of U.S. Knowledge Workers
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Arizona Ranks 34th (2014)
Score: 2014: 13.3 2012: 13.1 2010: 12.9
Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
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Technological Innovation Drives Evolution
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• New production processes
• New products and services
• New business models
IT Drives Innovation
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• 1,200 quintillion transistors in the world: (1,215,500,000,000,000,000,000)
• Up 14,300 times in the last 15 years
IT Changing Enterprises and the Economy
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• Social
• Mobile
• Internet of Things
• Analytics
• Cloud
• Kiosks
Technology Drives Evolution
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Changes in real industrial output by industry and cause
*1998-2011 data Source: Bureau of Economic Analysis
Technology is Making Industries That Were Local…
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National…
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Where’s Technological Evolution Going?
Software Is “Eating the World”
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End of Moore’s Law or Robots Taking Over?
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Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
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Changes in Culture Drive Evolution
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Changes in real industrial output by industry and cause. *1998-2011 Source: Bureau of Economic Analysis
As Industries Become More Footloose, Culture and Quality of Life Enable Growth
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Mid-sized Metros are Growing Faster
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Top 20 20-50
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Large Metros are Losing Employment Share
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Largest Statistical Metro Areas (by 2001 employment data)
Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
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Taking Advantage of Economic Evolution Means Embracing Innovation In…
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Culture
So Now a Region’s Culture and Quality of Life is You Don’t Want This…
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You Do Want This
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Taking Advantage of Economic Evolution Means Embracing Innovation In…
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Institutional Innovation: Doing new things in new
ways
Culture Institutions
Taking Advantage of Economic Evolution Means Embracing Innovation In…
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Economic development policies
• Innovation vouchers (German lander) • Refundable and collaborative R&D tax credits (Norway,
Australia, Ontario) • Design assistance (Ontario)
• “On the spot” new firm registration (Portugal, Chile)
• Industrial Ph.D. program (Alberta)
Taking Advantage of Economic Evolution Means Embracing Innovation In…
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Culture
Institutions,
Economic development policies, and
Government
Some Useful Questions to Ask About Innovation in Your Government
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• Do I know my own innovation track record?
• Do I understand the innovation patterns in governments like mine around the world?
• Do I have a process in place where crazy, out of the box ideas (e.g., innovations) can get a hearing?
• Do I have clear metrics for innovation?
• Do I have effective incentives and rewards for innovating?
Most governments have no answers.
www.globalinnovationrace.com
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Rob Atkinson [email protected]
Thank You Rob Atkinson [email protected]
Twitter: @robatkinsonitif
Facebook: facebook.com/innovationpolicy
Blog: www.innovationpolicy.org
Website: www.itif.org
Follow ITIF:
Thank You