Post on 22-Nov-2021
How Globalization, Innovation, and Culture Are
Changing Arizona’s Economy
May 7, 2015
Dr. Robert D. Atkinson, President, ITIF
@RobAtkinsonITIF
ITIF: Who We Are
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The Information Technology and Innovation Foundation is a think tank at the cutting edge of designing innovation policies and exploring how innovation will boost economic growth and competitiveness. ITIF focuses on: • Innovation processes, policy, and metrics, • Internet, big data and IT policy, • IT and economic productivity, • Science and tech policy, and • Innovation and trade policy
Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
Arizona Then…
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Arizona Now…
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Arizona Next…?
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Economies: “Engines” That Get Bigger?
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Or Systems That Evolve?
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During My Talk …
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• 25 Patents Will be Issued
• 18 New Products Released
• 18 New Production Processes Adopted
• 150 Firms Will Go Out of Business
• But 166 Firms Will Start Up
Drivers of Economic Evolution
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• Geography and movement of firms and people
• Technological innovation
• Culture and demography
Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
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Geography Drives Economic Evolution
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• Economies are entities that evolve over both time and space
• The U.S. has to generate new industries to replace the ones it loses to low-wage nations
• Competition for “replacement” firms is much stiffer
Real output loss, 2000 to 2010 for selected U.S. manufacturing industries. Source: Bureau of Economic Analysis
Migration of Firms Used to Be National
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Now It’s Global
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Fewer Relocations to Target
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Major Industrial Manufacturing Relocations & Expansions in U.S.
Arizona Has Long Been Lower Cost
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Arizona per-capita income as share of US per-capita income (Source: BEA)
But Low Costs are Less of an Advantage
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Arizona production costs as share of US vs. Mexico’s
Future of Geographic Evolution
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• Continued competition from low
cost commodity nations
• Growing competition from innovation-based economies
Routine Production Metros Will Lag Innovation Metros
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People Move
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Five fastest growing metros (2000-2014): • San Antonio • Las Vegas • Riverside-San Bernardino • Houston • Austin
Immigration of U.S. Knowledge Workers
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Arizona Ranks 41st (2014)
Score: 2014: 12.2 2012: 12.1 2010: 10
Migration of U.S. Knowledge Workers
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Arizona Ranks 34th (2014)
Score: 2014: 13.3 2012: 13.1 2010: 12.9
Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
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Technological Innovation Drives Evolution
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• New production processes
• New products and services
• New business models
IT Drives Innovation
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• 1,200 quintillion transistors in the world: (1,215,500,000,000,000,000,000)
• Up 14,300 times in the last 15 years
IT Changing Enterprises and the Economy
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• Social
• Mobile
• Internet of Things
• Analytics
• Cloud
• Kiosks
Technology Drives Evolution
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Changes in real industrial output by industry and cause
*1998-2011 data Source: Bureau of Economic Analysis
Technology is Making Industries That Were Local…
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National…
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Where’s Technological Evolution Going?
Software Is “Eating the World”
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End of Moore’s Law or Robots Taking Over?
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Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
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Changes in Culture Drive Evolution
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Changes in real industrial output by industry and cause. *1998-2011 Source: Bureau of Economic Analysis
As Industries Become More Footloose, Culture and Quality of Life Enable Growth
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Mid-sized Metros are Growing Faster
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Top 20 20-50
Percent employment growth, 2000-2014, top 50 metros (BLS)
Large Metros are Losing Employment Share
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Largest Statistical Metro Areas (by 2001 employment data)
Today’s Presentation
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Understanding Economic (R)evolution Geography-Driven (R)evolution Technology-Driven (R)evolution Culture-Driven (R)evolution Taking Advantage of (R)evolution
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Taking Advantage of Economic Evolution Means Embracing Innovation In…
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Culture
So Now a Region’s Culture and Quality of Life is You Don’t Want This…
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You Do Want This
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Taking Advantage of Economic Evolution Means Embracing Innovation In…
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Institutional Innovation: Doing new things in new
ways
Culture Institutions
Taking Advantage of Economic Evolution Means Embracing Innovation In…
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Economic development policies
• Innovation vouchers (German lander) • Refundable and collaborative R&D tax credits (Norway,
Australia, Ontario) • Design assistance (Ontario)
• “On the spot” new firm registration (Portugal, Chile)
• Industrial Ph.D. program (Alberta)
Taking Advantage of Economic Evolution Means Embracing Innovation In…
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Culture
Institutions,
Economic development policies, and
Government
Some Useful Questions to Ask About Innovation in Your Government
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• Do I know my own innovation track record?
• Do I understand the innovation patterns in governments like mine around the world?
• Do I have a process in place where crazy, out of the box ideas (e.g., innovations) can get a hearing?
• Do I have clear metrics for innovation?
• Do I have effective incentives and rewards for innovating?
Most governments have no answers.
www.globalinnovationrace.com
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Rob Atkinson ratkinson@itif.org
Thank You Rob Atkinson ratkinson@itif.org
Twitter: @robatkinsonitif
Facebook: facebook.com/innovationpolicy
Blog: www.innovationpolicy.org
Website: www.itif.org
Follow ITIF:
Thank You