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INNOVATION A 21st Century Imperative

INNOVATION A 21st Century Imperative. Charles M. Vest President Emeritus, MIT NERCOMP Worcester, MA March 20, 2006. “Innovate or Abdicate” -Sam Palmisano, CEO, IBM.

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INNOVATION A 21st Century Imperative

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  1. INNOVATIONA 21st Century Imperative Charles M. Vest President Emeritus, MIT NERCOMP Worcester, MA March 20, 2006

  2. “Innovate or Abdicate”-Sam Palmisano, CEO, IBM

  3. Every morning in Africa a gazelle wakes up.It knows it must outrun the fastest lion or it will be killed.Every morning in Africa a lion wakes up.It knows it must outrun the slowest gazelleor it will starve.

  4. It doesn’t matter whether you’re a lion or a gazelle- when the sun comes up, you’dbetter be running.-Richard Hodgetts

  5. Why Everyone is in a Hurry.

  6. 21st Century Competition Requires Fast Innovation • In today’s competitive environment, many companies set goals for 20-40% of their business to come from products developed within the last 2-4 years. • The specific goal and speed depends on the product sector.

  7. Something to Think About Goldman Sachs analysts estimate that in about a decade 80% of the world’s middle-income consumers will live in nations outside the currently industrialized world.

  8. Just 15 Years Ago • No World Wide Web • No pervasive cell phones or wireless devices • No sequenced human genome • No carbon nanotubes • No dot-com phenomenon

  9. Four Facts Three Consequences One Principle And an Irony

  10. Four Facts • People everywhere are smart and capable. • Science and Technology advance relentlessly. • Globalization is a dominating reality. • The Internet and World Wide Web are democratizing forces.

  11. Three Consequences • Individuals must innovate. • Companies must innovate. • Nations and regions must innovate

  12. One Principle Competition drives Excellence and innovation. • Competition among universities • For the best students, faculty, research, and scholarship • Merit-based awarding of research grants • Competition among companies • To create new markets • To get to market first • To gain market share

  13. An Irony In the 21st century Cooperation and Competition reinforce each other.

  14. America’s Comparative Advantage • A Strong S&T Base • Coupled to a Free Economy • Built on a Base of Democracy • In a Diverse Population.

  15. America’s Innovation System from 1945-2005A Brief history

  16. U.S. Science Policy since 1945 • It began with a letter from President Roosevelt to Vannevar Bush. • Roosevelt asked how the U.S. science community could work in peacetime to secure the nation’s economic vitality, health, and security.

  17. The Bush ReportScience the Endless FrontierPrimary Recommendations • Universities should be the primary national Basic Research Infrastructure. • Federal dollars do double duty: • Procure research results • Educate the next generation • Award research grants based on competitive merit. • Establish a National Science Foundation.

  18. The Bush Report’s Economic Development Assumptions • Linear Basic Research -- Applied Research -- Product Development -- Market Products and Services • Laisser-faire:Do basic research in universities and leave its commercialization to chance and market forces.

  19. What Emerged:The U.S. Innovation System • Government, Academia, and Industry working together to • Create new knowledge and technology through RESEARCH; • EDUCATE young men and women to create and understand the new knowledge and technology; and • Move it to the MARKETPLACE as new products, processes and services.

  20. The Vannevar Bush Modelis an Enormous Success • Economists broadly agree that more than 50% of U.S. economic growth during the last 60 years was due to technological innovation. • Much of the technological innovation came from our research universities.

  21. Or, if you prefer a longer-term view: Everything we know about history, technology, and economic theory tells us that an increase of this magnitude would not have been possible in the absence of technological change. --Paul Romer

  22. Computing Laser Internet GPS (fundamentals) Numerical Controlled Machines WWW (organization) Financial Engineering Genetic Revolution Modern Medicine Etc. University Innovations(Sole or Dominant Role)

  23. From 1945 - 1985 • American research universities, public and private, grew to excel. • American companies dominated • Large corporations dominated- especially mass production. • Corporations developed massive central research laboratories • Attracted outstanding university graduates • Conducted outstanding pure and applied research • Contributed to the commons of S&T knowledge

  24. Tectonic Shifts in the 1980s and 1990s • Japanese companies suddenly dominated manufacturing and U.S. manufacturing companies could not compete. • Quality • Throughput • Product cycle times • American entrepreneurship expanded explosively, driven by: • Information technology from microprocessors • The Internet • Biotechnology

  25. U.S. Corporations Responded • Painful, basic transformations • Downsizing • Process Management • Quality Control • R&D merged with product development • Many American companies emerged strong and globally competitive. • But the U.S. innovation system had changed.

  26. Comment The Japanese Total Quality Movement was the Major Innovation of the 1980s.It changed everything.

  27. Evolution of U.S. Corporate Innovation and R&D • 1970s: Central Corporate Research Labs • 1980s: R&D Absorbed and Transformed into Product Development • 1990s: Purchase High-Tech Startups to acquire Innovation

  28. Evolution of U.S. University Research Basic Scientific Research remains the core, but: • 1970s:The Engineering Science Revolution • 1980s: Design, Manufacturing, Computer Science, Joint Management/Engineering • 1990s: Life Science, Interdisciplinary, More work in “Pasteur’s Quadrant”

  29. U. S. Innovation In any event, Long-Term Basic Research is the Key to our Future. But, … things are changing.

  30. A New Century • 20th Century: • Physics, Electronics, and High-Speed Communications and Transportation • 21st Century: • Biology and Information, • but also Energy, Water, and Sustainability

  31. 21st Century Change Science & Engineering Research: Interdependent, Interdisciplinary, Pasteur’s Quadrant

  32. Interdependent • Science now depends on technology. • Technology now depends on science.

  33. Interdisciplinary • The Genetic Revolution in medicine and agriculture is an integration or fusion of Biology, Combinatorial Mathematics, Robotics and Automation, Microfabrication, and Clinically-Based Medical Insight. • “Nanotechnolgy” is a rapidly evolving integration or fusion of technologies and science that involves almost every discipline. • Synthetic Biology is an amazing melding of Life and Information sciences.

  34. R&D is increasingly performed in “Pasteur’s Quadrant” Research is inspired by: Consideration of use? No Yes Pure Basic Research (Bohr) Use-inspired Basic Research (Pasteur) Quest for Fundamental Understanding? Yes Pure Applied Research (Edison) No Adapted from Pasteur’s Quadrant: Basic Science and Technological Innovation, Donald E. Stokes 1997

  35. R&D is increasingly performed in “Pasteur’s Quadrant” Research is inspired by: Consideration of use? No Yes Pure Basic Research (Bohr) Use-inspired Basic Research (Pasteur) Quest for Fundamental Understanding? Yes Former University Presidents (Vest) Pure Applied Research (Edison) No Adapted from Pasteur’s Quadrant: Basic Science and Technological Innovation, Donald E. Stokes 1997

  36. Good News This is the Most Exciting Era Ever for Science and Technology.

  37. What We See Today. • Exponential advances in: • Knowledge • Instrumentation • Communication • Computation • These create huge possibilities. • Students are crossing disciplinary boundaries in unprecedented ways.

  38. Engineering Frontiers of this Exciting Era Bio Info Nano Macro Energy Environment Manufacturing Communications Logistics

  39. Engineering Frontiers Bio Info Nano Macro Energy Environment Manufacturing Communications Logistics Smaller and Smaller Faster and Faster More and More Complex

  40. Engineering Frontiers Bio Info Nano Macro Energy Environment Manufacturing Communications Logistics Larger and Larger More and More Complex Great Societal Importance

  41. Frontiers and Synergies Natural Science Nano Bio Info Macro Energy Environment Manufacturing Communications Logistics Science and Engineering Are Merging.

  42. Frontiers and Synergies These engineering systems need social science, management, and humanities / communications. Nano Bio Info Macro Energy Environment Manufacturing Communications Logistics Social Science

  43. Frontiers and SynergiesMust be reflected in university education. Natural Science Nano Bio Info Macro Energy Environment Manufacturing Communications Logistics Social Science

  44. 21st Century ChangeWhere the expertise is and will be.

  45. Where the Expertise is Source: Competitiveness Index 2007, Council on Competitiveness, Washington, DC

  46. Where the Expertise will be

  47. First Engineering Degrees(China Rises.) China Japan US Source: Science and Engineering Indicators 2006, National Science Foundation, Washington, DC

  48. 21st Century Change:The Rise of R&D and Innovation in the Service SectorEspecially in North America

  49. What we produce is changing. (The Information Age) U.S. % Employment by Sector History and Projection Source: Stuart Feldman, IBM Research, Presentation at Carnegie-Mellon University, 29 June, 2005

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