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Assessing the Impacts of Changes in the Information Technology R&D Ecosystem Retaining Leadership in an Increasingly Global Environment. Computing Leadership Summit Washington, DC 23 February 2009. Charge.
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Assessing the Impacts of Changes inthe Information Technology R&DEcosystemRetaining Leadership in anIncreasingly Global Environment • Computing Leadership Summit • Washington, DC • 23 February 2009
Charge • Changes to structure, processes, outcomes that historically characterized long-term investment IT R&D • Issues affecting innovation, human resource pipeline • Maturation of IT research fields • Economic processes of IT research and production • International competition and collaboration • Patterns of funding and the structure of funding programs • Recommendations to sustain and improve • Health of the relevant research fields • Technical innovation/national economic + security benefits
Committee ERIC BENHAMOU, Benhamou Global Ventures, Co-Chair RANDY H. KATZ, University of California, Berkeley, Co-Chair STEPHEN R. BARLEY, Stanford University ANDREW B. HARGADON, University of California, Davis MARTIN KENNEY, University of California, Davis STEVEN KLEPPER, Carnegie Mellon University EDWARD D. LAZOWSKA, University of Washington LENNY MENDONCA, McKinsey & Company DAVID C. NAGEL, Ascona Group ARATI PRABHAKAR, U.S. Venture Partners RAJ REDDY, Carnegie Mellon University LUCINDA SANDERS, National Center for Women and Information Technology
Committee Goals • Describe IT-specific ecosystem thru which innovative, market-creating information technologies and products are conceptualized, transitioned, and developed into new economic sectors and globally competitive products • Assess ecosystem’s current health in USA, given national R&D priorities and global competition • Identify emerging technology platforms that reduce barriers to deployment of new concepts and products • Formulate policy recommendations to enhance survival and increase agility of U.S. technological and commercial IT R&D enterprise, by nurturing and sustaining its ecosystem
Table of Contents SUMMARY 1. DEFINING THE IT R&D ECOSYSTEM 2. IT: THE ESSENTIAL ENABLER FOR THE INFORMATION SOCIETY 3. THE CHANGING LANDSCAPE OF THE U.S. IT R&D ECOSYSTEM: 1995-2007 4. A GLOBALIZED, DYNAMIC IT R&D ECOSYSTEM 5. FINDINGS AND RECOMMENDATIONS
1. Defining the IT R&D Ecosystem “An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. This economic community produces goods and services of value to customers, who are themselves members of the ecosystem” • James F. Moore
2. IT: The Essential Enabler for the Information Society • Contributions to productivity and economic growth • Innovation in services • Infrastructure for all S&T (Imagine a day without IT…)
“Interestingly, during the preparation of the [tiretracks figure] in 1994, members of the authoring committee were discouraged because they could not identify current research advances that were likely to lead to new billion-dollar industries. Eight years later, when the second version of the figure was being prepared, more than half a dozen such industries had emerged, which demonstrates that predicting the future in a field as dynamic as information technology is incredibly difficult, even for experts.”
IT Research—The Boundless Frontier • Improved Auto Safety • Designing a Next Internet • The Personal Memex • Post-Moore’s Law Computing • Personalized Education • Personalized Health Monitoring • Mastering IT System Complexity • Transforming the Developing World • Augmented Cognition • Driving Advances in All Fields of Science and Engineering
3. The Changing Landscape of the Ecosystem, 1995-2007 • Shocks to the system • “Irrational Exuberance” • “Y2K” + Development of the Indian Software Industry • NASDAQ Bust • Aftereffects of September 11, 2001 • Financial Scandals and Bankruptcies • Surviving After the Bubble Burst • The Recovery (2005-2007) • The 2008-2009 financial crisis (?)
Evolution of Technology Platforms • Baseline: Web 1.0 Platform • Evolution: From Web 1.0 to the Web 2.0 Platform • The Rise of Open Source • The Emergence of Mobile and Datacenter Platforms • Evolution of IT Industry Sectors • Semiconductor, Computer, and Software Subsectors • International Development of Clusters • India, China, Taiwan, …
Infrastructure to Enable Innovation • Increase in customer-created value • Increased revenue from services • Importance of National demand leadership • Lagging U.S. infrastructure • Advanced Wireless vs. European Deployments • Broadband vs. e.g., Korea
4. A Globalized, Dynamic IT R&D Ecosystem • Globalization of product and labor markets • Continued strong demand for IT workers • Concerns about sustaining U.S. IT workforce • Enrollment declines • Participation of women and minorities • Concerns about K-12 education • Globalization of venture capital • U.S. continues to dominate but share is slipping • Frictions in the U.S. Ecosystem • Measure: fall-off in IPOs • Factors: • Globalization of industry and financial markets • Patent litigation • SOX
Federal Funding of IT R&D • Federal investment in IT R&D enjoyed generous increase in past two decades, but not when compared to rapid growth in biomedical funding • But not in proportion to: • Enormous and increasing importance of the field • Continued potential for high-impact breakthroughs • Nation’s investment in other fields • Budget level nine years after the release of the PITAC report still has not reached the target set in that report • Mirrors underinvestment in Physical Sci. and Eng. • Engineering Research and America’s Future: Meeting the Challenges of a Global Economy (2005) • Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future (2007)
Funding: “Three-legged Stool” • Small (single-PI) grants from NSF and Defense science offices • Larger-scale, longer-term, theme-oriented • NSF’s ERC and STC • DOD’s MURI • Critical-mass funding for small teams in context of program • DARPA VLSI project, HPCC • Essential to transitioning research to size and scale that could be commercialized
Substitutes for DARPA’s historical role in 3rd leg? • NSF’s ITR • Large scale but without programmatic context • CISE’s Expeditions in Computing • Larger scale, longer-term support • Modest funding ($2M/yr * 5 yrs, 3 awards/yr.)
Objectives 1. Strengthen the Effectiveness and Impact of Federally Funded IT Research 2. Remain the Strongest Generator of and Magnet for Technical Talent 3. Reduce Friction That Harms the Effectiveness of the U.S. IT R&D Ecosystem 4. Ensure that the United States Has the Infrastructure That Enables U.S. IT Users and Innovators to Lead the World
1. Strengthen the Effectiveness and Impact of Federally Funded IT Research Finding 1.1. A robust program of federally sponsored research and development (R&D) in IT is vital to the nation. Finding 1.2. The level of federal investment in fundamental research in IT continues to be inadequate. Recommendation 1.1. As Federal govt increases fed investment in long-term basic research in the physical sciences, engineering, mathematics, and information sciences, it should carefully assess the level of investment in IT R&D, mindful of the economic return, societal impact, enablement of discovery across science and engineering, and other benefits of additional effort in IT, and should ensure that appropriate advisory mechanisms are in place to guide investment within the IT R&D portfolio. • Should the executive and/or legislative branches concur that an increased (or retargeted) focus on IT R&D investment is warranted, reconsideration of what federal advisory mechanisms would be most useful may also be warranted. The committee believes that it would be important to include first-tier IT researchers from academia and industry in any future advisory group.
2. Remain the Strongest Generator of and Magnet for Technical Talent Finding 2.1. Rebuilding the computing education pipeline at all levels requires overcoming numerous obstacles, which in turn portends significant challenges for the development of future U.S. IT workforce talent. Finding 2.2. The participation in IT of women, people with disabilities, and certain minorities, including African-Americans, Hispanics, and Native Americans, is especially low and declining. This low level of participation will affect the United States’ ability to meet its workforce needs and place it at a competitive disadvantage by not allowing it to capitalize on the innovative thinking of half of its population. Recommendation 2.1. To build the skilled workforce that it will need to retain high-value IT industries, the United States should invest more in education and outreach initiatives to nurture and grow its IT talent pool. Finding 2.3. Although some IT professional jobs will be offshored, there are more IT jobs in the United States than at any time during the dot-com boom, even in the face of corporate offshoring trends. Recommendation 2.2. The United States should increase the availability and facilitate the issuance of work and residency visas to foreign students who graduate with advanced IT degrees from U.S. educational institutions.
3. Reduce Friction That Harms the Effectiveness of the U.S. IT R&D Ecosystem Finding 3.1. Fewer young, innovative IT companies are gaining access to U.S. public equity markets. Recommendation 3.1. Congress and Federal agencies, e.g., SEC and PTO, should consider the impact of both current and proposed policies and regulations on the IT ecosystem—and especially on young, innovative IT businesses—and consider measures to mitigate these where appropriate.
4. Ensure that U.S. Has Infrastructure Enabling U.S. IT Users and Innovators to Lead the World Finding 4.1. Most dynamic IT sector likely to be in the countries with the most demanding IT customers and consumers. Finding 4.2. In terms of nationwide availability, use, and speed of broadband, U.S.—the inventor of broadband technology—has been losing ground compared with other nations. Recommendation 4.1. U.S. should establish an ambitious target for regaining and holding a decisive lead in the broad deployment of affordable, gigabit broadband services. Federal and state regulators should explore models and approaches that reduce regulatory and jurisdictional bottlenecks and should increase incentives for investment in these services. Recommendation 4.2. Government (federal, state, and local) should foster commercial innovation and itself make strategic investments in IT R&D and deployment so that the United States can retain a global lead position in areas where it has particular mission requirements.