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Innovation and WashingtonsDefense Economy
Presentation for:
Tacoma-Pierce County ChamberMilitary Affairs Forum
Egils MilbergsExecutive Director
Washington EconomicDevelopment CommissionOctober 13, 2010
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reatRecession
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Geography of WA Unemployment(Aug. NSA)
8.9% State-wide
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ath toRecovery
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1960s & 1970sAdvantage is Cost
Strategy isMake it Cheaper
1980s & 1990sAdvantage is Quality
Strategy isMake it Better
2000sAdvantage is Innovation
Strategy isMake something new
Changing paths to economic recovery
.a l f o f Fo r t u n e 5 0 0 a nd j u s t u nd e r h al f o f 20 08 I n c l i s t b e g a n d
e re i s no be t te r t im e li k e.ow nt u r n t o i nn o va te
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40 countries/regions
16 Indicators
Economic StructureHuman capital (college
education; researchers)
Innovation capacity(corporate R&D;government R&D;
scientific publications)Entrepreneurship (new
firms; venture capital)
IT infrastructure (e-government; corporateinvestment; broadband)
Economic Policy (corp. tax; easeof doing business)Economic Performance (trade
balance, FDI, GDP per worker,productivity)
ow are we doing?
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0
10
20
30
40
50
60
70
80
Overall Scorectually we are.o 6
9
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1. China
2. Singapore
3. Estonia
4. Denmark
5. Luxembourg
6. Slovenia
7. Russia
8. Lithuania
9. Cyprus
10. Japan
11. Hungary
12. Slovakia
13. Czech Republic
14. India
15.Latvia
16.Austria
17.S. Korea
18.Ireland
19.EU-10
20.Spain
21.Sweden22.France
23.Portugal
24.Malta
25.Belgium26.EU-25
27.Poland
28.
. .Behind.
28.UK
29.EU-15
30.Mexico
31.Netherlands
32.Australia
33.Finland
34.Canada35.Germany
36.Italy
37.NAFTA
38.Greece39.Brazil
40.United States
10
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Category FiveRising Above the Gathering Storm, Revisited
& %n g in e e rin g R D in U S d o w n 5 1 in.r p la n ts b e in g b u ilt O n e in U S
, ,rts 6 0 0 0 su p p lie rs 5 0 0 0 in C h in aEF ranks US 48th n science and math ed
S ranks 22nd .n broadband 72nd n
S ranks 40th n rate of innovation in&ies plan R D facilities in China and India
.places US as No 1 exporter
.S mfg companies suffer skills shortages
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. .10 4 57
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lan forWashington
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A Ten Year VisionWe should not fear to lead
Make Washington State the mostattractive, creative and fertileinvestment environment for
innovation in the world.
15
, we cant rest on our laurels, solets commit today to grooming aworkforce and leaders who areagile, creative, and embraceinnovation.
Gov. Chris GregoireMarch 10, 2009
e m u s t l oo k o ve r t h eo ri z o n a nd p r ep a re f or
h e n e w e co no m y t ha t wi l lm er g e w h en t h is
.e ce ss io n p as seso m m e r c e S e c re t a r y G a r yL o c k e
,a r ch 1 8 2 0 0 9
Wh t ill th W ld b lik i
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What will the World be like in
10 years?Prediction is difficult especially when its about the
future What talent, investment and
infrastructure will we need tosucceed in that world?
Is Washington prepared?
What do we need to do?
How will we pay for it? How will we know if we are making
progress?
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A New Innovation GrowthCurve
TIME
PR
OS
PER
ITY
We are here
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ome riticalChallenges
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Marine
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Aerospace
IT, gaming, simulationBiomedical, Incubator
Clean Tech, Smart Grid, Biofuels
Defense
Medical
Biotech, Energy
Wine, Water
Sciences, Global Health
Worlds Largest Innovation Network
Food Processing
Wind, Solar, Data Centers
Marine
Food TourismMarine Energy
Agriculture,Composites
w Forestry. Green Tech
Twilight
MedicalDevices
EnvironmentRemediation
Electric Highway
Clean ITState Fair
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Source: Washington Technologie Industry Association (WTIA)
http://wtia.micromaps.com/
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Talent Challenge
23
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What has changed in 700 years?
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Gap Funding
n rastructure
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n rastructureChallenge
Post ICE Age? InternalCombustion Engine
26
Beyond Oil?
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Export Challenge
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Trade balance in high-technology goods 19952008
NOTES: Asia-9 includes India, Indonesia, Malaysia, Philippines, South Korea, Singapore, Taiwan, Thailand, and Vietnam.China includes Hong Kong. EU excludes Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia.
Source: NSF Science and Engineering Indicators 2010
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a sh in g to nD e fe n seE co n o m y
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ROJECT OBJECTIVESEconomic impact of Washingtonsbases and defense-related economy.Identify emerging opportunitiesfor Washington-based businessesbased on trends in defense strategyand mission.
Develop recommendations for astatewide economic developmentstrategy and expanding WA share ofdefense contracting.
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hidbey Island Naval Air
uget Sound Naval Shipyard oint Baseewis McChordadigan Medical Center
al Submarine Base Bangor
poka ne Fairchi ld AFB
S Coast Guard A Nat l Guard
,S Army YakimaS Marine Corps
ajor WA Military Installations
,91 000 jobs.12 2 billion in output.10 5 billion in labor income.5 2 billion in defense contracts
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E i T d i N ti l
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Emerging Trends in NationalDefense Strategy
Decline in overall defense budget, whileWest Coastincreasingly important strategic location. Smaller scale threats and responses and on emerging
technologies:
Intelligence, Surveillance, and Reconnaissance
Special forces and special operationsNetwork-centric operationsCyber securityComposite materials
Unmanned systems both air and sea
A focus on energy efficiency and alternative energy. Ongoing role in peacekeeping and nation building. Caring forveterans and wounded warriors.
Promote WAs Defense Related
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Promote WAs Defense RelatedEconomy
A.Explicitly include defense in the
States economic developmentstrategy.
B.Promote the economic benefits ofthe defense economy into stakeholdergroups in the State.
C. Elevate and communicate theStates commitment through creation
of central office focused on themilitary, and high level participationin trade shows and relationship-building in Washington D.C.
D.Communicate whats happening and
St t id d I d t
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Statewide and Industry-Specific Efforts
A . -upport emerging defense specific economic:evelopment efforts the Pacific Northwestefense Coalition and Washington Defense.artnership . upport local economic development efforts
, ,y sharing information analysis andpportunities with Associate Development( )rganizations ADOs and other economic.evelopment partnersC . aise awareness of business opportunities
.mong Washington s strong economic clustersD . ake a proactive approach to growing -ashington s defense related economy through- ,luster specific initiatives including an.mmediate pilot effort
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Support Contract Bids and R&DProposals
. n cre a se b u sin e ss tra in in g a n du p p o rt re so u rce s b yn h a n cin g fu n d in g fo rro cu re m e n t Te ch n ica l( )ssista n ce C e n te rs P TA C s. u p p o rt th e d e ve lo p m e n t o f
n lin e re so u rce s a n d to o lk its. tre n g th e n W a sh in g to n s a b ilityo a ttra ct re se a rch a n de v e lo p m e n t fu n d in g
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h e risk s in h e re n t to sta rtin g ah riv in g b u sin e ss in to d a y s ,ro u b le d w a te rs a re im m e n se b u th e re w a rd s h a v e n e v e r b e e n
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DISCUSSION
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