Posts Tagged ‘Silicon Valley’

Sean Creighton
by Sean Creighton
Thu Jan 7th 2010 at 5:23pm UTC

Campus Builds Capacity to Absorb Its Own Innovation

Thursday, January 7th, 2010


In University and the Creative Economy, Richard Florida and colleagues build an economic development case around a region’s ability to capitalize on innovative technologies and research being produced at universities. Silicon Valley and Research Triangle are exemplary models. What if a region does not have this ability? Appropriately, they suggest a region work on developing the capacity to absorb university output through campus-industry partnerships. Otherwise, valuable intellectual property goes elsewhere. Or, worse off, and probably more common, it disappears into a black hole of uncommercialized ideas and patents.

Now, for regions that have universities but neither the current ability to absorb, nor the means to create a working capacity, is there an additional solution? Is it time for the universities to build their own infrastructure to absorb and commercialize their own creativity? Maybe this is the crossroads where higher education and economic development policy can tango?

How about new policies that substantially invest in universities absorbing their own innovative output when a region is not equipped? Incentivize the universities to transform economy by building infrastructure to commercialize the talent and academic ingenuity they harness. Maybe University Hospitals is a viable model in health care, but expand into other industry development aligned with a university’s output. Maybe we can learn from Chinese university-run businesses. Let’s equip universities, as my grandma used to say, with the whole “kit and caboodle” so a region can benefit.

What’s the risk in doing so?

Richard Florida
by Richard Florida
Thu Jul 16th 2009 at 9:53am UTC

Global Sources of American Innovation

Thursday, July 16th, 2009

Yesterday, we looked at overall trends in U.S. innovation measured by patents. Today, we break out U.S. patents between U.S.-resident and non-resident or foreign inventors patenting in the U.S.

Numerous studies have shown that, over the past two or three decades, the role of foreign scientists, technologists, and entrepreneurs in U.S. innovation has increased. Recent studies by AnnaLee Saxenian and Vivek Wadhwa and others find that anywhere between a third and half of all Silicon Valley start-ups during the 1990s had a foreign entrepreneur or scientist on their core founding team. As I have previously argued, foreign-born scientists currently make up 17 percent of all bachelor’s degree holders, 29 percent of master’s degree holders, 38 percent of PhDs, and nearly 25 percent of American scientists and engineers. My earlier research shows that Japanese companies – and some European companies as well – chose to locate research labs in the U.S. to access a diverse mix of scientific talent they cannot attract in their home countries.

The graph below shows the overall trend in patenting for U.S.-resident and non-resident foreign inventors between 1980 and 2005. Non-resident inventors have just about pulled even with U.S. inventors in patenting, and their rate of inventive activity more or less tracks that of U.S.-based inventors. But here again, even with two dips since 2000, the rate and level of innovation over the past decade remains up.

Clearly, foreign inventors have become a key feature of the U.S. innovation system. Without them the level of innovation would be much lower. Another way of saying this is that the American system of innovation has become increasingly dependent upon non-resident inventors. Foreign inventors patent in the U.S. to secure intellectual property protection in the large U.S. market. Clusters of sophisticated and demanding consumers and end-users help make the U.S. the place to be for high-end innovation, as Amir Bhidé points out in The Venturesome Economy.

While foreign patenting boosts the overall rate of innovation in the U.S., there is a considerable chance that these patented innovations are commercialized and produced off-shore, and thus that the U.S. economy will accrue less overall economic benefit from those technologies. While this is not direct evidence for Mandel’s innovation interrupted thesis, it provides a possible mechanism that might limit the commercialization and overall economic impact of innovation in the U.S.

Richard Florida
by Richard Florida
Thu Jun 4th 2009 at 9:45am UTC

The Next Silicon Valley Is…

Thursday, June 4th, 2009

Silicon Valley, according to a new Milken Institute report on North America’s high-tech regions. But Seattle, Cambridge, and D.C. are among the nation’s leading high-tech hot spots. The report also charts the tech turnarounds in Rustbelt regions like Kalamazoo, Michigan and Scranton-Wilkes Barre, Pennsylvania, as well as documenting the rise of leading high-tech regions in Canada and Mexico. Here’s the top ten.

11San Jose – Sunnyvale-Santa Clara, CA100.0
23Seattle-Bellevue-Everett, WA46.4
32Cambridge-Newton-Framingham, MA45.2
45Washington-Arlington-Alexandria, DC-VA-MD-WV41.8
54Los Angeles – Long Beach – Glendale, CA40.2
66Dallas – Plano – Irving, TX21.8
77San Diego – Carlsbad – San Marcos, CA19.3
811Santa Ana – Anaheim-Irvine, CA17.7
99New York – White Plains – Wayne, NY-NJ16.8
108San Francisco – San Mateo-Redwood City, CA16.1

Outside the U.S., the report finds that:

  • Toronto, ON jumped 10 places from 2003, showing impressive gains in building and attracting high-tech businesses in manufacturing and reproducing of optical media, biopharmaceuticals, and medical and diagnostic laboratories.
  • Baja California has become a key manufacturing center for high-tech giants such as Casio, Honeywell, Sanyo, and Sony. The state finished in second place in 2003, just after San Jose, in the ranking for manufacturing of semiconductors and other electronic components. It also leads North America in medical equipment and supplies manufacturing.
  • Vancouver, BC showed the greatest rise among the top-10 metros for software publishing, climbing from 14th place in 2003 to ninth place in 2007.

My colleague Charlotta Mellander compared these Milken high-tech rankings with our own regional demographic measures for the top 50 U.S. and Canadian metros and found significant correlations to:

  • Economic Output: Measured as gross metropolitan product per person (0.475).
  • Talent: The Creative Class (0.46),Super-creatives (0.34), and Human Capital – percent of population with a BA and above (0.3).
  • Openness and Tolerance: The Mosaic Index – a measure of openness to foreign-born people (0.45); and also to the Gay Index (0.315) when San Jose – the extreme outlier – is excluded from the analysis.
Martin Kenney
by Martin Kenney
Mon Jun 1st 2009 at 9:40am UTC

Wasting Creative Talent

Monday, June 1st, 2009

Yesterday, The New York Times had one of the most frightening articles I have ever read.

In what I think is one of the most perverse misuses of our creative talent that I have ever heard, President Obama is launching a massive Reagan-like Cybersecurity Cold War that has the military-industrial complex salivating. This is expected to soak up the trained computer scientists from Silicon Valley and put them into super-secret R&D.

Instead of creating value for the global economy, they will now be sequestered in high-security laboratories where the knowledge they create will only slowly, if ever, leak out to the commercial world. Mind you, this initiative is being pushed while Harvard and many other universities are considering firing tenured faculty. If a massive military cybersecurity program is the change that the current administration believes is going to assist the U.S. economy in overcoming the worst crisis of the last 75 years, then the future for us and our creative class is likely to be grim indeed.

It is my belief that openness, information exchange, and creating value for the consumer has been the hallmark of U.S. success and what made us a beacon for brilliant people from around the world. By taking some of best and brightest and sequestering them in laboratories shrouded in secrecy, we are taking a deliberate step in the wrong direction.

Can a creative economy be built on directing resources in such directions?

Richard Florida
by Richard Florida
Sun Mar 29th 2009 at 10:41am UTC

The End of Hollywood?

Sunday, March 29th, 2009

Hollywood is not a place, it’s a business model. The Hollywood model of flexible production, project-based work, and free agents stands as one of the archetypal economic models of the late 20th century – second perhaps only to the Silicon Valley model. Now, according to my good friend, Steve Pearlstein, it’s facing deep and fundamental challenges.

Now, however, there is a sense that it may all be coming to an end, that the threat this time is real and that the old business models can’t survive. With the rise of legal and illegal downloading, the Internet has already decimated the music business, and it is just beginning to overturn the economic foundations of the movies, television and electronic gaming as well. Financing is drying up, once-sacred expenses are being cut, whole layers of management eliminated and work shifted elsewhere …

Things are looking considerably more precarious for the television business, where there’s been a dizzying drop in network and station advertising revenue, driven as much by the DVR as the souring economy. Syndication revenue has shriveled, and networks have been forced to move away from prime-time drama and comedy series in favor of reality series and talk shows that employ many fewer actors, directors, screenwriters and technicians. The industry’s hopes are now focused on networks like HBO, AMC and Showtime, whose subscribers are still willing to pay for quality programming. But many of those networks’ biggest hits have been produced elsewhere.

The mood in Hollywood, however, is decidedly anxious.   DVD sales, which for years have driven industry profits, have recently fallen by almost half as consumers turn to cable or the Internet to get movies they want, when they want them, for less than what it costs to buy the movie in a store. And piracy is cutting deeply into sales in fast-growing markets overseas.

At the same time, the Wall Street investment houses and hedge funds that have lavished cheap financing on the industry for the past decade are now in retreat. Some have closed their L.A. offices and are reportedly peddling their ownership interests in upcoming movies at discounts of 30 to 70 percent. Viacom gave up in its effort to raise $450 million from outside investors for its slate of movies, and credit ratings have been reduced on debt used to finance past pictures. Even famed director Steven Spielberg is reportedly having trouble raising the $700 million that his DreamWorks Studios needs for its next round of movies.

No surprise, then, that the number of movies produced is expected to decline again this year, or that many of those will be made outside of Southern California as producers respond to incentives from dozens of states and localities offering tax rebates equal to as much as 40 percent of production costs. To lure back what it considers “runaway” production, a strapped state legislature was forced this year to enact a modest tax break of its own.

Meanwhile, studios are under intense pressure to cut costs from corporate parents that over the years have been foiled in their efforts to rein in the industry’s extravagant ways and earn a decent rate of return on their oversized investments. Movie openings have been canceled, weekend jets grounded and marketing budgets slashed, and even top stars are being told they won’t be paid in full until the studios recoup production costs. Nearly every studio has announced layoffs, and a number are closing down subsidiaries and selling off facilities.

The world will always need entertainment, and Southern California is the odds-on favorite to produce it. It has the history, the people, the infrastructure and the creative energy. But as Detroit automakers and New York’s financiers have learned, these natural advantages can disappear when an arrogant and insular industry comes to view its dominance as inevitable and its outsized compensation as an entitlement.

Richard Florida
by Richard Florida
Sun Sep 14th 2008 at 8:48am UTC

The Boulder Model

Sunday, September 14th, 2008

We’ve heard lots about the high-tech success stories of Silicon Valley, the Route 128 area around Boston, Austin, and Seattle. In this article, Ben Casnocha outlines how Boulder, Colorado transformed itself from a hippie enclave/college town into a center for innovation and high-tech entrepreneurship.

Richard Florida
by Richard Florida
Wed Sep 10th 2008 at 9:50am UTC

Breakthrough Illusion

Wednesday, September 10th, 2008

So you’d think doing cutting-edge research gets you an edge in innovation and economic development? Places that do more R&D should be big economic winners, no?

Given Silicon Valley’s prominence, you would think California dominates. And in one sense it does: California conducts roughly $60 billion in R&D, far outdistancing its nearest competitors – Michigan, Massachusetts, New Jersey, Texas, and Illinois, which conduct between $10-15 billion in R&D, according to the National Science Foundation (via OREDI).

But California lags in terms of R&D intensity – that is R&D spending divided by economic output. Massachusetts has the highest level of R&D intensity, followed by Michigan, Connecticut, and Washington. California ranks fifth. Think about it: Michigan has a higher level of research and development intensity than California.

Could it be that R&D is a better investment in some places then others? Sure economists note local spillovers to R&D, but its results can also travel pretty widely. Research done in Michigan for example can be commercialized in New York.

Your thoughts?