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Session 4 Part 1
K/TT and
National and Global
Perspectives: The
Importance of Regional
Context
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 1
Session 4 Agenda – Part 1
US Perspectives
International Perspectives
Global Networks
Visitor:
Michael Sekora – The Art and Science of
Technology Strategy – 4:40 – 5:30
Happy Hour – 5:30 - ?
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 2
Learning Outcomes
After completing this session you will:
Understand the key characteristics of
successful and sustainable regional
technology-centers
Understand the importance of regional
context to firm growth and entrepreneurship
Explore the links between company,
regional, state, and national levels of analysis
for KTT
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 3
U.S. Technopoleis
Seattle
Boston
Portland Minneapolis
Troy-
Sall Lake City Colorado Albany
Springs New York
Sillicon Valley
Raleigh-Durham
Los Angeles Phoenix Dallas
San Diego
Austin
San Antonio Orlando
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 4
The Label
Technopoleis
Technopoles
Multi-function Polis
Science & Research Parks
High Tech Corridors
University Parks
Economic Development Zones
Clusters (e.g. M. Porter)
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 5
Technopolis: Critical Components
University/Centers of Excellence
Industry: small, medium & large
Science Park(s) ?
Incubator(s) ?
Quality of Life
Smart infrastructure
Grow, Retain, Recruit Talent & Re-training
Timing – “Windows of Opportunity”
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 6
Technopolis: Critical Components
Entrepreneurial Culture
Diverse/Tolerant
“Creative Class”
other…….
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 7
In the late 1980s Austin was most
known for “see through” buildings
and a depressed economy (and
perhaps TV’s Dallas) NOT
entrepreneurship and VCs
Jobs were mostly in government and
education – the area could not retain
most of its educated talent.
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 8
10 Years Later: The Best U.S. Cities
for Business - Top Five Wealth
Creators
1. Austin
2. Las Vegas
3. Salt Lake City
4. Phoenix
5. San Jose
Fortune, November 23, 1998
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 9
Top 15 U.S. Cities for Entrepreneurship
1. Austin 9. West Palm Beach
2. Atlanta 10. Colorado Springs
3. Santa Rosa 11. Fort Collins
4. Boulder 12. Oakland*
5. Boise City 12. Seattle*
6. San Diego 14. Charlotte
7. Orange County 15. Fort Worth
8. San Antonio * tied
Forbes magazine, Vol 165, #13, May 29, 2000, p. 137
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 10
1990-2000 Austin Enjoyed
Spectacular Economic
Growth
Why and How?
The Austin Model
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 11
Technopolis:
Critical Components
Scientific preeminence in technology-
based research
Development of new technologies for
emerging industries
Attraction and retention of major
technology companies
Creation and growth of home-grown
technology companies
Source: Kozmetsky, Smilor and Gibson, 1986
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 12
Four Strategies for
Regional Economic Development
Retention Building
Industrial
and New
Relocation
Expansion Companies
Newer Institutional Alliances/Partnerships
for
Leveraged Economic Development
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 13
The Technopolis Framework
Emergent
networks Companies
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 14
Government, Industry, and Academia
Linkages in Promoting Economic Growth
Basic research New
(university) Knowledge
Applied research
(university or corp)
Tax revenues
(fed. govt.)
Development
Corporate (corp)
Growth
New products Capital
Profit (corp)
(corp) investment
Increased Improved
GNP productivity
Improved
standard University of
STC383 Session 4, Part I, IC2 Institute • Theof living Texas at Austin 15
Recruit/Retain/Grow: without
UTAustin it would not have happened
Tracor – university spin-off (1955)
IBM - from typewriters (1967) to R&D (1990s)
Motorola - low taxes, employees, geography (1974)
MCC – university research potential was key (1983)
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 16
Emergent Companies
Job growth
New industries
Technology transfer
Spin-outs
Start-ups
Relocations
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 17
Regionally-Based Spin-Outs from one Company
1965 1969
1962 Texas
Nova Graphics 15
Sun X
Columbia Nuclear Radian Cematco
Scientific (CSI) (Unitech) 974 BPI 136
Austron Pinson
Meister
Engineering
Zycor 48 1971
1955 164 Associates 25 Odessa Engineering
Tracoustics 44
Key Concepts Gp. 5 AMI 57 Espy
UT TRACOR Huston 562
2200
Austin Weed Instruments 98 Targa, Inc. 2
SGE Inc. 9 Texas
Guerreros Spenco
1984 Continuum Photographic
Research
Inst. 100
System 200
Gp. 4
(Texas Corporate 1972
1981 Corp, TCC, Inc) Texas
700 Telesystems
120
1980 1974
1975
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin
1976 18
Austin: Industry Clusters
Established – and declining ?
• Semiconductors
• Software
• Computers & Peripherals
Emerging - (can Austin do it again?)
• Biosciences
• Nano-technology
• Digital Entertainment
• Multimedia
• Film & Music
• Clean Energy (ACE Initiative)
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 19
Local/Regional Government is
increasingly important (Mayor Watson)
ED planning and quality of life
Austin’s music & life style – KEEP AUSTIN WEIRD
K-12 education - computers in schools/digital divide
Parks - Barton Springs
Downtown Development - CSC
Competitive rate structures
Quality civil/hard infrastructure – light rail and bike
trails
Forum for Civic Entrepreneurship
discussion/collaboration/cooperation/synergy
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 20
But Excellence in any one or all
these sectors is not sufficient!
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 21
Networks 1st and 2nd Level
Influences
Leadership and vision
Personal and professional
networks Regional, national, global
High credibility and trust
Inspire implementers
Cross all segments of the
Technopolis Wheel
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 22
Achieving regional public/private
collaboration/cooperation
Focus and Commitment
The value of a “perceived” crisis
Coordinated Power and Influence (NOT all)
First level influences (visionaries and power)
Second level influences (implementers need protection)
Cultural and physical proximity (Austin’s past)
Effective information gathering and use – how
to involve all key stakeholders
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 23
IC2 Institute - UT Austin as a
Catalyst Organization
The Austin Technology Incubator (1989)
Financial support from the city, the chamber,
and the county
UT-Austin faculty and students
Furniture from UT-Austin and local furniture stores
George Kozmetsky & Laura Kilcrease
In-Kind Know from the business community
Metrics for success
Lightning Rod for the community
The Capital Network - 1989
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 24
Austin’s Current Challenges
• Sustaining Technology-Based Growth
• Sustaining world-class education and research
• Maintaining an accessible & affordable Quality of
Life
• Traffic
• The environment
• Entrepreneurial Fever
• To sustain the “magic”
• A “cool” place for “hot” jobs
• Are there any more George Kozmetsky’s, Admiral
Inman’s, Pike Powers’, Ben Streetman’s out there for
the coming decades ?
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 25
Great initial success in regional
development can put in motion
forces that later lead to:
Unplanned and
unexpected gains
Damage the very assets
that
initially led to success
Cross-sector conflict and How to
dissension measure
success?
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 26
Regional Metrics/Benchmarks for
“Success”
Wealth creation / ROI
High value jobs
Sustainability
– Re-Invention
– Talent, Technology, Capital, Know-How
– Quality of life
– Shared prosperity
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 27
Lessons Learned
Visionaries, influencers, champions are crucial
business/academic/government – shifting leadership
It is happening faster: S.V. To Austin
Out-migration can become in-migration
Money is not “the” answer: Kansai to Austin
It is a “bottom up” and a “top down” process
Build on your strengths & not what others did
Regions are getting smarter about ED
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 28
Lessons Learned
Context is all important (S.V. & Immigrants – Austin
a tolerant city and Texas Friendly)
“access to the food chain at all levels is key”
Is it increasingly possible to “leapfrog” ?
Is it becoming more virtual and global?
Small wins are important: Role models
“Spectacular Success” is nice (Dell)
Community leverage is important: ATI
The right “Branding” sure helps
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 29
Top 10 U.S. Cities: Creativity Index
1. San Francisco 6. Raleigh-Durham, NC
2. Austin 7. Houston
3. San Diego * 8. Washington-Baltimore
3. Boston * 9. Oakland
5. Seattle 10. Dallas *
6. San Diego 10. Minneapolis-St. Paul *
* tied
Richard Florida, The Rise of the Creative Class, 2002
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 30
Questions Often Asked
&
Discussion
1. Regional economic prosperity (or at least
improvement) can be deliberately targeted
and planned through the technopolis
approach, it isn't necessary to accept the
status quo.
2. Cooperation between many sectors of the
community is needed to put in place short-
term and long range action plans.
3. Processes do not need to be invented or
discovered, they've been tested and proven.
4. There will always be the need to adapt to
local circumstances.
5. Some choices are needed to reflect local
"style" but experienced advice can inform
these choices.
6. How to effectively balance “deliberate
technopolis programs” with
entrepreneurial/grassroots activities and
energy
7. Social benefits do NOT easily flow from
improved prosperity
8. If "they" can do it, so can we.
Education/Training is the keystone
University state-of-the-art
technology-based research
and education
– Business know-how
– Global ties
– Quality of life, sports,
museums, entertainment, a
learning environment
Colleges, Vocational, K-12
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 34
Large Companies provide
Visibility
Wealth (tax, salaries)
R&D
Major employers
Source of trained personnel
Magnet for sub-contractors
Spin-outs
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 35
MCC Site Selection Criteria (1983)
Quality of Life Existing high-tech industry
primary and secondary and a supportive business
education environment
affordable housing
Overall cost of doing
low crime
business
recreational and cultural
amenities Airline connections ?
State and local government (attention to detail)
support
__And it was never the same_
Access to a local university
Public/Private Cooperation
and a Can-Do Attitude with the potential to be
Texas-Friendly world-class in targeted areas
electrical engineering
computer science
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 36
Recruit/Retain/Grow
3M - 1984
Sematech – 1988
Start-Ups and IPOs – 1990s
Technologies International
Evolutionary
(MCC/ATI/UT-Austin)
National Instruments (UT-Austin)
Exterprise (3M/ATI/UT-Austin)
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 37
Dell’s Spectacular Growth
U.S. Sales, in
Employees 20,200 employees $billions
30,000 $50
25,000 $40
20,000
$30
15,000
$20
10,000
5,000 Sales $10
0 $0
'95 '96 '97 '98 '99 '00 '01 '02
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 38
Federal and State Government
Support for education
Support for research
Supportive context for
economic development
Competitive tax rates
Competitive infrastructure
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 39
“The role of government is not to create
wealth but to create an environment
where people are willing to risk capital.”
Governor George Bush
Fortune, November 23, 1998
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 40
Support/Networking Groups
are very important
Chamber of Commerce
Business and community groups
Professional associations
Entrepreneurial/Industry
Associations
The Austin Software Council
(IC2 Institute Report, 1993)
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 41
Knowledge/Technology Transfer and Adoption
at the Regional Level
Business
Academic Government
COMMUNITY
Technology Capital
Talent Know-How
MARKET NEED
Established & New to the World
Fast Growth Start-Ups
STC383 Session 4, Part I, IC2 Institute • The University of Texas at Austin 42
