IEG Spring Board Development Seminar Why Good Governance Matters, Part 2 – Postsecondary Education’s Role as Stewards of

1. IEG Spring Board Development Seminar Why Good Governance Matters, Part 2 – Postsecondary Education’s Role as Stewards of Place Doug Henton President, Collaborative Economics Monday, May 23, 2005 10:30 a.m.

2. Setting the Stage What are the new realities? The realities facing everyone Additional realities facing universities/colleges What are the new requirements? New thinking about leadership New thinking about university/college mission What are the new opportunities? Benefits can be more widely shared A new common ground is possible

3. The Challenge • Four regional conversations today • Innovative Economy: how to succeed in the new economy and ensure everyone participates • Livable Community: how to create communities where people want to live • Social Inclusion:how to ensure inclusive and equitable communities • Collaborative Governance :How to reform government to make it more responsive Collaborative Economics, Inc

4. New Reality: Civic Leadership in Transition • Globalization of business changes the meaning of place • New technologies changes time and space • Changing demographics changes the profile of leadership • New reality: The anonymity of civic leadership

5. The Challenge: Finding Stewards of Place New Leadership Model • Regional Stewardship: commitment to place • Traditional Leadership: commitment to an issue/cause • Stewards understand the interdependence between the economy, society, and environment • Regional stewardship is both an individual and a regional capacity

6. The Challenge • New expectations for university/college contributions to the regional economy—roles in all four conversations • New expectations that universities/colleges step forward as “stewards of place” as they are uniquely situated—embedded—with a sense of place

7. Framework for Regional Leadership:Innovative Economy Innovative Economy Entrepreneurs Entrepreneurs

8. The Evolving Economy “The first 100 years of our country’s history were about who could build the biggest, most efficient farm. The second 100 years were about the race to build efficient factories. The third 100 years are about ideas.” -- Seth Godin Fast Company, August 2000

9. New Growth Theory and Innovation Paul Romer says ideas are the primary source of economic growth. “Recipes (new ideas) combine ingredients (resources) in new and different ways to yield more valuable economic results.” The recipes come from the innovation process.

10. How do Ideas Come About? We know 3 very pertinent things: • Ideas require intelligent seeding; • Ideas that sit on the shelf are worthless. Ideas have to move, grow, and touch lots of people and businesses to provide benefits. • Universities/colleges, traditional sites of R&D and smart people, are certainly part of the equation.

11. Habitat for Innovation and Entrepreneurship “What distinguishes Silicon Valley is not its scientific advances or technology breakthroughs. Instead, its edge derives from a “habitat” or environment that is tuned to turning ideas into products and taking them rapidly to market by creating new firms.” The Silicon Valley Edge

12. Framework for Regional Leadership: Livable Community Livable Community Innovative Economy Entrepreneurs Environmental Community

13. Quality of Place Counts More Than Ever More and more companies and skilled labor locate where they want---not where they must. Ross DeVol, The Milkin Institute Review, 2002

14. More Complex Calculation for Quality of Place Six defining characteristics: • Natural environmentcounts for a lot. • But natural features aren’t enough. Places must have distinctive urban amenities as well. • Choice matters in the talent war. • Being a smart, innovative place matters. • It’s not just about physical attributes. Intangibles such as “hipness,” tolerance, and entrepreneurial culture are part of the calculation. • Speed is a vital amenity. Morrison Institute for Public Policy, 2003

15. Competitive Advantages Lie In Local Things “The enduring competitive advantages in a global economy lie increasingly in local things—knowledge, relationships, motivation—that distant rivals cannot match.” “This role of location has been long overlooked, despite striking evidence that innovation and competitive success in so many fields are geographically concentrated.” Michael Porter

16. Innovation is Place Based • Most innovative work occurs in face-to-face exchange within teams. • Geographic clustering is a powerful mechanism for sharing personal knowledge. • The creative heart and soul of the economy will continue to be tied to place. • Place matters.

17. Framework for Regional Leadership: Social Inclusion Innovative Economy Livable Community Entrepreneurs Environmental Community Social Inclusion Neighborhoods

18. Creating an Inclusive Society • Education and training • Bridging the “digital divide” • Neighborhood improvement • Raising standard of living

19. Source of wealth • The single factor with the greatest power to explain differences in per capita income between states is the percentage of college graduates. • On average, a one-year increase in a metro area’s educational level raises wages by 3 to 5 percent. Source: Milken Institute, 2002

20. Education Attainment More than 25% of population over 25 are college graduates Less than 25% of population over 25 are college graduates Source: Census

21. Urban Revitalization CEOs for Cities: Wake-Up Call for Academia College and University leaders can: • Create an explicit urban ED strategy focused on the surrounding community • Include meaningful community participation and dialogue in formulating this strategy • Charge specific departments with explicit ED goals • Create a high-level coordinator to oversee/advance the effect • Deploy colleges/university leadership to serve on boards • Think long-term Source: Leveraging Colleges and Universities for Urban Economic Revitalization.

22. University/College Role Source: Leveraging Colleges and Universities for Urban Economic Revitalization.

23. Most Important Sources of Prosperity are Created Created Assets Top universities Research centers Entrepreneurial culture Talented people Vibrant downtowns Networks Inherited Assets Geography Climate Population

24. The Challenge: Strategic, Sustained Civic Effort • Some of the most important “quality of place” advantages are not accidental but the result of combined strategic effort and sustained civic effort. • The new century will be a highly competitive one—especially as cities and regions realize that key features are “buildable” and thus can be had by nearly any place that puts its mind to it.

25. Austin: City of Ideas • Three decades ago: Sleepy University/Govt Town (per capita income 85% of US average) • Today one of 20 “Cities of Ideas” (per capita income is 107% of US average) • “Poised for Greatness”-- IT and quality of life • Attracts Motorola, AMD in 70s; MCC research consortium; SEMATECH- 13-firm research consortium; many IT- related firms follow • UT top 10 of engineering graduate schools (1989) • Multiple startups: Dell and spin offs from UT • Keep Austin Weird: convergence of creativity and technology

26. Framework for Regional Leadership: Collaborative Governance Collaborative Governance Local Governments Innovative Economy Livable Community Entrepreneurs Environmental Community Social Inclusion Neighborhoods

27. Challenge: New Responses Required America’s Citistates • Most complex challenges today are regional in scale. • Traditional business, government and civic responses are not adequate • Boundary-crossing is now required • Few know how to engage in this kind of regional civic leadership

28. Universities/Colleges in the Knowledge Economy

29. The Challenge: New Responses Required Overhaul University/College Pillars • From Teaching to Learning • From Research to Innovation • From Service to Network

30. From teaching to learning • Conveys message knowledge is critical • Elevates the overall role of life-long learning • Places learners at the center of decision-making • Recognizes highly-educated adults return to campus; creates a new dynamic of collective learning

31. The Learning Imperative “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” AlvinToffler

32. From Research to Innovation • Recognizes that innovation is key • Creates expectation that continuous innovation is the norm • Recognizes key ingredients for innovation are broader than research per se • Requires human, intellectual, financial and social capital—all part of university

33. The EDI’s of Innovation Expertise Diversity Creativity Interaction • EXPERTISE means talented people • INTERACTION when people come together, there’s a better chance for the passionate exchange of ideas & synergies that create new business models, marketing plans or products • DIVERSITY is important in generating the “Next Big Thing”; people learn most by interacting with people less like themselves. Mary Jo Waits, Morrison Institute

34. Tearing Down Walls “It’s at the intersections of disciplines where sparks fly.” Telecommunications, biotech, software, the Web, great music, architecture, and art.

35. Alliances to Find the Next Big Thing The company-owned research lab, that proud 19th-century invention, has become obsolete. Increasingly, development and growth is taking place not inside the corporation itself but through partnerships, joint ventures, alliances, etc with institutions in different industries and with a different technology. The Economist, 2001

36. From service to engagement • Recognizes universities are the locus for multiple innovation “ingredients” (talent, interdisciplinary teams) for regions • Recognizes that barriers to innovation have been traditional “walls” that separate universities, industries and entrepreneurs • Recognizes the power of “tacit knowledge”

37. Innovation varies greatly across regions Some regions have high levels of R&D investments and numerous specialized research centers, but still lag in terms of innovation output because knowledge is not effectively or rapidly transferred to companies. Clusters of Innovation, 2001

38. New Economy is a Networked Economy Then Vertical integration Large firms Hierarchical relationships Isolated firms Stability Now Specialization Medium & small firms Horizontal relationships Connected firms Change Collaborative Economics, Inc.

39. Business Geography by Product Maturity Source: Cohen, N. Business Location Decision-Making and the Cities: Bringing Companies Back, April 2000.

40. “Dipping-Down” Into the Pool of Knowledge Companies founded by MIT graduates say… • Faculty consulting most important reason they contact MIT/Universities • Followed by professional education, recruiting, joint R&D, and tech licensing • Similar views expressed in a survey of life science companies

41. Culture of Engagement “The Georgia Tech Culture, from president to academic unit, is pervasively oriented toward outreach and engagement with the external world.” Innovation U, 2002 Georgia Research Alliance; Economic Development Institute; Advanced Technology Development Centers

42. College and University Business Engagement Model Source: Leveraging Colleges and Universities for Urban Economic Revitalization.

43. New Sweepstakes The list of America’s top 50 universities will change profoundly in this century based on 3 issues: Location, programs, collaboration Eugene Trani, President, Virginia Commonwealth University

44. Summary • Communities—Four conversations • Higher Education—Plays in all four conversations and can help “connect the dots” • Changing Economy—Requires new responses and new leadership models

45. More Information • A new regional model of leadership is emerging based on collaboration and civic engagement • The new regionalism is not regional government • New models of innovative regional governance are growing www.regionalstewardship.org John Parr, President and CEO