Tapan Munroe, PhD Triple Helix 2011 Conference Stanford University Stanford, CA July 17, 2011

Is Silicon Valley Sustainable?

Tapan Munroe, PhDTriple Helix 2011 Conference

Stanford UniversityStanford, CAJuly 17, 2011

The Innovation Ecosystem Model

Tapan Munroe, PhD

4.Workforce

2. Entrepreneur

s

5.Social and

Professional Networks

6.Quality of Life

8.Integrative

Organizations,QB3,CONNECT

© T. Munroe, 2011

7.Government

3.Investment

Capital

1. Research

Universities

Framework

Innovtion Ecosystem Issues

Discussion of issues relating to each element of the innovation ecosystem follows:

$500 million cut from the UC system ◦ Research budgets cut

◦ Difficult to retain world-class faculty

◦ 3 prominent bio-scientists recently lured away from UC Davis to Rice University in Texas

◦ More may follow from UC Berkeley, UCLA, and UC San Diego

California Budget CrisisThreatens State’s Top Universities

Tapan Munroe, PhD

Key Element #1: Universities

Top Entrepreneurial Universities:U.S.: Only 4 in Top 10 (3 are West Coast)

Rank University Location1st Stanford University Palo Alto, CA, USA

2nd MIT Boston, MA, USA

3rd Cambridge University Cambridge, UK

4th UC Berkeley Berkeley, CA, USA

5th Indian Institutes of TechnologyIndia

6th Oxford University Oxford, UK

7th National Univ. of Singapore Singapore

8th University of Copenhagen Copenhagen, Denmark

9th Stockholm University Stockholm, Sweden

10th UC Davis Davis, CA, USA

Source: YouNoodle.com

Tapan Munroe, PhD

Key Element #1: Universities

Rank based on university’s significance a startup community

Determined by factors:◦ Number and quality of the startups◦ Activity of its groups◦ Business plan competitions◦ Availability of talent◦ Investment in the area◦ Success of past startups

How are Universities Ranked?Algorithm Developed by YouNoodle.com

Tapan Munroe, PhD

Key Element #1: Universities

Business Plan Competitions:Many More Around the World

Source: YouNoodle.com

Tapan Munroe, PhD

Key Element #1: Universities

The Valley’s success depends ona constant process of renewal

◦ Start-ups transform ideas and money into new products and services

Start-ups ultimately create jobs and prosperity ◦ Net U.S. job growth comes from start-ups◦ Need to encourage innovative gazelles◦ Need to support scale –ups.

Start-ups: Key to Sustainability

Tapan Munroe, PhD

Key Element #2: Entrepreneurs

Skills Gap: A Serious Challenge

Workforce Lacks Skills for Today’s Jobs

Growing Number of Unfilled Jobsas U.S. Economy Recovers:

◦ Feb. 2011 - 3.1 million unfilled jobs(mostly STEM related)

◦Much higher in 10 yrs if nothing is doneto the education-to-employment system

Talent War in Silicon Valley!

Tapan Munroe, PhD

Key Element #4: Workforce

Eastern Europe:◦ Consistent drain of talent to Western Europe◦ 44% employers listed skills shortages as

their primary obstacle to growth

Middle East:◦ A minimally trained labor force◦ Severe restrictions of foreign labor

Latin America◦ Lack of skilled labor

Sources: NASSCOM, New York Times, McKinsey

Skills Gap is a Global Issue

Tapan Munroe, PhD

Key Element #4: Workforce

Smart people like to live in good places

Silicon Valley is challenged by:

◦Traffic congestion / Limited public transit

◦High cost of housing (even with prices down)

◦Declining educational performance

Place MattersEven in Our Digital Age

Tapan Munroe, PhD

Key Element #6: Quality of Life

U.S. fiscal crisis is likely to deter government investments in major cleantech projects

◦ Recommendation: need intense innovation effort in the Valley to make cleantech economically competitive

State (Ca.)and regional governments can’t afford …◦ Critical improvements in infrastructure◦ Subsidies for Valley cleantech projects

Fiscal Crisis MayUndermine Valley Innovation

Tapan Munroe, PhD

Key Element #7: Government

IOs bring elements together and stimulate collaboration ◦ Traditional universities aren’t equipped

to play the entrepreneurial role

States are creating new IO organizations:◦ Within the university (e.g. QB3)◦ Outside (e.g. USTAR, Science Foundation Arizona,

CONNECT, San Diego)

IO’s: “The next generation of industry-university research partnerships” ◦ Focused on creating, sustaining, and growing

the innovation ecosystem

Integrative Organizations(IO’s): Innovation Accelerators

Tapan Munroe, PhD

Key Element #8: Integrative Organizations

Strengths◦ World-class culture of innovation and collaboration

◦ Easy access to capital and expertise

◦ Highly resilient: Silicon Valley has an incredible record of sustained success through numerous boom/bust cycles

◦ Once again the Valley is in a boom after a major recession

Opportunities:◦ Continuous process of innovation

Example: Make cleantech cost effective

◦ New technology breakthroughs

Silicon Valley:Still the Top Innovation Region

Tapan Munroe, PhD

Assessment

Weaknesses: ◦ Quality of life issues

e.g. traffic congestion & education◦ skills gap-local as well as a global issue◦ Poor results with scaling-up of startups.

Threats: ◦ Increasing Competition from other tech regions◦ Another bout of irrational exuberance? ◦ UC campuses losing faculty and funding?◦ Cleantech may lose government subsidies?

Silicon Valley:Facing Many Risks – Local and Global

Tapan Munroe, PhD

Assessment

Observation:

Silicon Valley has the capacity, experience and know-how to remain competitive in the global innovation race

Conclusion: Yes, of course! But, the Valley’s

innovation ecosystem faces many risks.

Is Silicon Valley Sustainable?

Observations & Conclusion

“Global economic competition is all about who can innovate

the best and fastest”…..Marty Beard, President, Sybase 365,in Closing America’s Job Gap, January 2011

Thank YouTapan Munroe, PhD

www.TapanMunroe.comwww.ClosingAmericasJobGap.com

tapan@tapanmunroe.com