1. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Innovate America: Thriving in a World of Challenge and Change Turning Words into Deeds: An Action Plan for STEM Education Bill Bates Council on Competitiveness November 8, 2005

2. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. The innovation ecosystem concept shifts the debate Federal R&D Spending Offshoring Entrepreneurship Workforce Training K-12 Education Higher Education Technology Transfer Business- University Collaborations S&E Workforce Regional Economic Development Accounting Rules Intellectual Property Manufacturin g Healthcare INNOVATION POLICY Most Policy Makers See Discrete Issues With Narrow Constituencies We See a Single Innovation Policy with a Broad Constituency

3. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Innovation is more than just new technology  “the intersection of invention and insight”  Improves on the existing way of doing things  Generates value for society  Can be a product, process, service, strategy, etc. What Is Innovation?

4. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. The Challenges of Innovation  Faster  Collaborative  Multidisciplinary  Demand-driven  Global 21st Century Innovation

5. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Competition -- Investment

6. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. It’s Not Just Wages...

7. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. INNOVATION Concerns about U.S. competitiveness and INNOVATION U.S. Is Losing Its Dominance in the Sciences New York Times 05/03/04 Is America Losing Its Edge? Innovation in a Globalized World Foreign Affairs Nov/Dec 2004 China Is a New Hotbed of Research New York Times 09/13/04 Competitive Edge of U.S. Is at Stake in the R&D Arena Wall Street Journal 05/17/04 America Retreats from Leadership in Innovation Atlanta Journal Constitution 08/06/05 United States Has Crisis in Innovation Miami Herald 08/11/05

8. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Science and Engineering Degrees

9. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Basic Research

10. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Martin Marietta concluded that it had an unusually rich set of opportunities that could be reaped by increased investment in applied research....The price of our stock plummeted the next day and continued to decline gradually for another eighteen months as we persisted in our strategy. -Norm Augustine, fmr. CEO, Lockheed Martin

11. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Foreign Students

12. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. The Council on Competitiveness has been addressing these issues for 20 years  Founded in 1986  Non-profit, non-partisan  More than 170 members: CEO’s, university presidents and labor leaders  Mission is to set a public policy action agenda to:  Drive U.S. productivity growth  Bolster high living standards  Ensure success in global markets “Our agenda is at the nexus of necessity and opportunity—and we all have an obligation to serve the nation.” –Duane Ackerman, CEO, BellSouth Corporation, Chairman, Council on Competitiveness “Our agenda is at the nexus of necessity and opportunity—and we all have an obligation to serve the nation.” –Duane Ackerman, CEO, BellSouth Corporation, Chairman, Council on Competitiveness

13. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. The National Innovation Leadership Council O'Donnell Foundation Devoted to Excellence in Education

14. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. The NII Presidents Council Business-Higher Education Forum

15. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. The NII Presidents Council cont’d… CASC

16. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Innovate America -- Issued December 2004 TALENT INVESTMENT INFRASTRUCTURE Build the Base of Scientists and Engineers Catalyze the Next Generation of American Innovators Empower Workers to Succeed in the Global Economy Revitalize Frontier and Multidisciplinary Research Energize the Entrepreneurial Economy Reinforce Risk-Taking and Long-Term Investment Create a 21 st Century Intellectual Property Regime Strengthen America’s Manufacturing Capacity Build 21 st Century Innovation Infrastructures

17. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Build the base of scientists and engineers Catalyze the next generation of innovators Empower workers to succeed in the global economy National S&E scholarship fund Portable graduate fellowships Traineeship grants Funding for Professional Science Masters programs Expedited immigration process for foreign S&E students Problem-based learning in K-12 and community colleges Opportunities for students to bridge the gap between research and application Innovation curricula for entrepreneurs and small business managers Lifelong Learning Accounts Portable health and retirement benefits Improved worker transition and training assistance NII Talent Agenda

18. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Revitalize frontier and multidisciplinary research Energize the entrepreneurial economy Reinforce risk- taking and long- term investment Innovation Acceleration grants Long-term research at Department of Defense More support for R&D in physical sciences and engineering Permanent, restructured R&E tax credit Innovation Hot Spots to capitalize on regional assets Coordination of federal economic development programs Tax incentives for angel networks Compensation structures to reward long-term value creation Protection for disclosure of intangible assets Reduce the cost of tort litigation Financial Markets Intermediary Committee to evaluate new regulations NII Investment Agenda 18

19. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Create national innovation growth strategies Create a 21st century intellectual property regime Strengthen America’s manufacturing capacity Federal innovation strategy National and regional alliances New innovation metrics Better quality patents Patent databases as innovation tools Best practices for collaborative standards setting Centers for production excellence Standards for inter- operability Innovation Extension Centers Industry-led roadmaps for R&D priorities NII Infrastructure Agenda 19 Build 21 st Century Innovation Infrastructures– the healthcare test bed Electronic health reporting Standards for integrated health data systems International electronic exchanges Performance-based purchasing agreements

20. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Innovation Requires Private Sector Leadership I.B.M. Unveils Plan to Train Employees to Be Teachers -NYT, September 17, 2005 I.B.M. announced a new program that would pay to train some of its veteran employees for second careers as teachers.

21. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Turning Words into Deeds Change the discussion so that innovation becomes an economic policy. Develop a consensus. Move beyond reports... –Legislation. –2007 Budget. –State of the Union.

22. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. The President’s Agenda to Maintain Economic Growth Keep taxes low and restrain federal spending –Plans to cut the deficit in half by 2009 Reduce America’s dependence on foreign oil –President signed the energy bill to promote energy conservation and better technology –Oil exploration in the Arctic National Wildlife Refuge Education system must prepare the next generation of American workers –Expand the No Child Left Behind (NCLB) Act and Pell Grants Develop a healthcare system that will confront costs and create choice –Creation of Health Savings Accounts and proposal of Association Health Plans –Medical liability reform Confront problems with Entitlement Programs –Failure to control entitlement spending can become a drag on the entire economy Promote trade agreements to bring American goods to more foreign markets –Honor the policies espoused by the Doha trade negotiations

23. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. “The National Innovation Initiative has established a clear linkage between innovation and America’s long-term prosperity.” - Duane Ackerman, Chairman and Chief Executive Officer of BellSouth Corporation and Chairman of the Board of the Council

24. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. China’s Innovation Policy  The Ministry for Science and Technology has translated Innovate America and made it required reading in various ministries, as well as other levels of government, across China.  The theme of “innovation” is a critical one for the Chinese Premier and Ministers. In fact, innovation will be the key topic of a major internal meeting this November (consisting of the Premier, ministers, governors, vice ministers, etc.) to develop national plans and programs across China for the next 20 years.

25. Copyright © 2005 Council on Competitiveness. No reproduction without express consent of the Council on Competitiveness. Bill Bates Council on Competitiveness 202.969.3395 bbates@compete.org NII Final Report, Innovate America, available online at: www.innovateamerica.org and www.compete.org Council on Competitiveness National Innovation Initiative