arkansas' needs for economic growth and competitiveness
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Arkansas' Needs for Economic Growth and Competitiveness. John W. Ahlen, Ph.D., President Arkansas Science & Technology Authority February 19, 2008. Do it right the first time. Seeing the Future. The future is already here. It’s just not evenly distributed yet. William Gibson. - PowerPoint PPT PresentationTRANSCRIPT
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
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.
Three Things to Know
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 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 Fundamental Rule
The System
Development Introductory Growth Maturity Decline
The Life Cycle
The Workforce
Less than9th grade
High schooldropout
High schoolgraduate
Somecollege, no
degree
Associate'sdegree
Bachelor'sdegree
Master'sdegree
DoctorateProfessional
degree
Ages: 25--34
35--44
45--54
55--64$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
Annual Earnings
Education Level
Age
Average Annual Earnings in 2003
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 National Global – Dynamic, Digital
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 EmploymentHigher Wages and Incomes
Requisite Education A SkillLifelong Learning[Career Ladders]
Government:
Regulation Command and Control Market Tools, Flexibility
1970 12 grades
1940 8 grades
1941 WWII 1957 Sputnik
2004 14 gradesThe Shifts
------------------------ ------------------------ ------------------------ ------------------------
1830 1930 2030
1800-1815 Regional Specialization NE – machine based manufacturing S – cotton, cheap labor
1836 Statehood1874 AR Constitution
1880 Census
2005 The World Is Flat
1955 AIDC1983 ASTA
1990 Who will do science in 2010?
1983 A Nation at Risk
The New Deal 1933 1964 The Great Society
1845Steam Power
Railroads Steel
1900Electricity ChemicalsInternal
Combustion
1950PetroleumElectronics
AviationAutomation
1990Digital
Content Software
New Media
1785Water Power
Textiles Iron
2030 PCs Biology
Materials
1989 The Flatteners
The Flattenersfrom The World Is Flat
Genesis: The Flat World Platform Emerges • Windows (11/9/89)
• Netscape• Work Flow SoftwareThe 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 Proverbfrom 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
Three faculty; four companies; 32 employees
• 2008: $410,000 DoD Grant
The STEM CoalitionApril 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
35.0%
45.0%
55.0%
65.0%
75.0%
85.0%
1929
1933
1937
1941
1945
1949
1953
1957
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
2017
Source: U.S. Bureau of Economic Analysis
Baseline
Alternative
Baseline
Insanity is when you keep doing the same thing over and over again, each time hoping for different results.
Edward Deming
“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.
Alternative
Comments / Questions?
John W. Ahlen, Ph.D.501.683.4400
www.asta.ar.gov
Thank You!
One Final Question: Do you see it now?