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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
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