Entrepreneurship and U.S. Competitiveness November 4, 2007

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format  Founded in 1986  Non-profit, non-partisan  More than 170 members  Mission is to set a public policy action agenda to:  Raise the standard of living for all Americans  Through productivity growth  And 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, Former CEO, BellSouth Corporation, Former 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, Former CEO, BellSouth Corporation, Former Chairman, Council on Competitiveness The Council on Competitiveness brings together CEOs, University Presidents and Labor Leaders

3 Did you know?

4 Sometimes size does matter.

5 If you’re one in a million in China...

6 there are 1,300 people just like you.

7 In India, there are 1,100 people just like you.

8 The 25% of the population in China with the highest IQs...

9 is greater than the total population of North America.

10 In India, it’s the top 28%.

11 Translation for teachers: they have more honors kids than we have kids.

12 Did you know?

13 China will soon become the number one English- speaking country in the world.

14 If you took every single job in the U.S. today and shipped it to China...

15 it still would have a labor surplus.

16 During the course of this presentation...

17 60 babies will be born in the U.S. 244 babies will be born in China. 351 babies will be born in India.

18 The U.S. Department of Labor estimates that today’s learner will have 10 to 14 jobs...

19 by age 38.

20 According to the U.S. Department of Labor...

21 1 out of 4 workers today is working for a company for whom they have been employed less than 1 year.

22 More than 1 out of 2 are working for a company for whom they have worked less than 5 years.

23 According to former Secretary of Education Richard Riley...

24 the top 10 jobs that will be in demand in 2010 didn’t exist in 2004.

25 We are currently preparing students for jobs that don’t yet exist...

26 using technologies that haven’t yet been invented...

27 in order to solve problems we don’t even know are problems yet.

28 Name this country...

29 Richest in the world Largest military Center of world business and finance Strongest education system World center of innovation and invention Currency the world standard of value Highest standard of living

30 England

31 in 1900.

32 Did you know?

33 The U.S. is 20th in the world in broadband Internet penetration (Luxembourg just passed us).

34 Nintendo invested more than $140 million in research and development in 2002 alone.

35 The U.S. federal government spent less than half as much on research and innovation in education.

36 1 of every 8 couples married in the U.S. last year met online.

37 There are over 106 million registered users of MySpace (as of September 2006).

38 If MySpace were a country, it would be the 11th-largest in the world (between Japan and Mexico).

39 The average MySpace page is visited 30 times a day.

40 Did you know?

41 We are living in exponential times.

42 There are over 2.7 billion searches performed on Google each month.

43 To whom were these questions addressed B.G. (before Google)?

44 The number of text messages sent and received every day exceeds the population of the planet.

45 There are about 540,000 words in the English language...

46 about 5 times as many as during Shakespeare’s time.

47 More than 3,000 new books are published...

48 daily.

49 It is estimated that a week’s worth of New York Times...

50 contains more information than a person was likely to come across in a lifetime in the 18th century.

51 It is estimated that 1.5 exabytes (1.5 x ) of unique new information will be generated worldwide this year.

52 That’s estimated to be more than in the previous 5,000 years.

53 The amount of new technical information is doubling every 2 years.

54 For students starting a four-year technical or college degree, this means that...

55 half of what they learn in their first year of study will be outdated by their third year of study.

56 It is predicted to double every 72 hours by 2010.

57 Third-generation fiber optics has recently been tested by both NEC and Alcatel...

58 that pushes 10 trillion bits per second down one strand of fiber.

59 That’s 1,900 CDs, or 150 million simultaneous phone calls, every second.

60 It’s currently tripling about every 6 months and is expected to do so for at least the next 20 years.

61 The fiber is already there. They’re just improving the switches on the ends, which means the marginal cost of these improvements is effectively $0.

62 Predictions are that e-paper will be cheaper than real paper.

63 47 million laptops were shipped worldwide last year.

64 The $100 laptop project is expecting to ship between 50 to 100 million laptops a year to children in underdeveloped countries.

65 Predictions are that by 2013 a supercomputer will be built that exceeds the computation capability of the human brain.

66 By 2023, when 1st-graders will be just 23 years old and beginning their (first) careers...

67 it only will take a $1,000 computer to exceed the capabilities of the human brain.

68 And while technical predictions farther out than about 15 years are hard to make...

69 predictions are that by 2049 a $1,000 computer will exceed the computational capabilities of the human race.

70 What does it all mean?

71 Shift happens.

72 Now you know...

73

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Entrepreneurship and U.S. Competitiveness “For the United States to survive and continue its economic and political leadership in the world, we must see entrepreneurship as our central comparative advantage. Nothing else can give us the necessary leverage to remain an economic superpower.” Carl J. Schramm, The Entrepreneurial Imperative: How America’s Economic Miracle Will Reshape the World (And Change Your Life) (New York: HarperCollins, 2006)

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Three key attributes: –Ready access to capital and state-of-the-art research; –A culture that encourages experimentation and risk –A regulatory structure that enables firms to start- up and enter new markets while enabling less productive firms to exit. Entrepreneurship and U.S. Competitiveness

Copyright© 2007 – Permission Required to Reproduce in any Format Entrepreneurship is a major driver of U.S. competitiveness

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Yet Our Advantages Will Decline Because: Most of the growth in consumer demand that will drive innovation will come from emerging markets. By 2020, it is estimated that 80 percent of middle- class consumers will live outside industrialized countries. Countries around the world are striving to become world-class innovators.

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Emerging Markets Are Rapidly Growing Their Economies, Exports and Share of Global Investment Flows Source: World Bank, UNCTAD, U.S. Department of Energy, EIA

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Emerging Markets Now Number Among the World's Leading Technology Exporters Source: Global Insight, Inc.

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Emerging Markets Already Have the Largest, Fastest Growing Populations Source: U.S. Census

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Emerging Markets Now Number Among the World's Leading Technology Exporters Source: Global Insight, Inc.

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Fostering entrepreneurship is becoming critical to regional economic development According to a recent Small Business Administration study the most entrepreneurial regions* in the United States had: 125 percent more employment growth 58 percent more wage growth 109 percent higher productivity than the least entrepreneurial regions 67 percent more patents per labor force participant 63 percent higher percentage of high-tech establishments And spent 54 percent more on R&D * The regional entrepreneurship index was composed of the number of new firms per 1,000 labor force participants, average annual change in the number of new firms and the percent of rapidly growing firms.

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format U.S. Share of Global Output Has Fallen Across a Range of Science and Technology Metrics Source: NSF, Science and Engineering Indicators (2006), OECD, Main Science and Technology Indicators (2006), U.S. Patent and Trademark Office

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format U.S. R&D Investment Remains the World’s Largest, But Others Are Increasing Their Investment Faster Source: OECD, Main Science and Engineering Indicators (2006)

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format U.S. Companies Perform Most Overseas R&D in Developed Economies, But Are Increasingly Turning to Emerging Economies Source: U.S. Bureau of Economic Analysis

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format Global Corporations Rank China as the Most Attractive Location for New R&D Facilities Source: UNCTAD, Survey on the Internationalization of R&D; Current Patterns and Prospects on the Internationalization of R&D (12 Dec 2005)

Entrepreneurship and U.S. Competitiveness Copyright© 2007 – Permission Required to Reproduce in any Format The Bottom Line There’s nothing awry with the U.S. entrepreneurial system, but we’re still leaving ideas on the table. On average, only one in ten patents is ever commercialized. For those ideas that are pursued commercially, only seven out of every 1,000 business plans receive funding. Running in place is not an option for us. The United States will need to work to maintain its leadership position. And this is where you come in.

91 Samuel Leiken Senior Director of Policy Studies Council on Competitiveness 1500 K Street, NW Suite 850 Washington, DC (202)