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Sustainable Innovation AEP Forum Judy Estrin October 22, 2010 COPYRIGHT © JLABS, LLC 2010 Copyright © Judy Estrin 2008 1 Influences on My Perspective Academic Entrepreneurial Corporate Computer science • UCLA • Stanford • Early networking research Advisory Boards • Bridge Communications • NCD • Precept • Packet Design, LLC • CTO Cisco Board member • Disney (current) • FedEx • Rockwell • Sun Microsystems • Mother! Author - Closing the Innovation Gap, McGraw-Hill, 2008 Over 100 interviews with innovators, leaders, educators COPYRIGHT © JLABS, LLC 2010 Copyright © Judy Estrin 2008 Innovation is Not Just a Soundbite Innovation drives economic growth, quality of life and is the only hope of addressing the major challenges that we face It is also very personal, impacting our lives in and out of the office COPYRIGHT © JLABS, LLC 2010 Copyright © Judy Estrin 2008 Innovation Doesn’t Just Happen • Innovation needs to be nurtured • It is messy - you need to be willing to invest without knowing the outcome • Talent is critical - skill, aptitude, passion, drive • Small teams of diverse perspectives (“no larger than a jazz band”) COPYRIGHT © JLABS, LLC 2010 Copyright © Judy Estrin 2008 IDEAS Innovation Builds on Innovation 1 Breakthrough Innovation Invention of something completely new (transistor, credit card) 2 Incremental Innovation Enhancement of current product or process (higher performance system, private labeled credit card) 3 Orthogonal Innovation Combination of existing innovations for use in a completely new way (iPod, debit card, Better Place) 1 & 3 can be “disruptive” creating new markets and industries 2 is necessary, just not sufficient COPYRIGHT © JLABS, LLC 2010 Copyright © Judy Estrin 2008 Interrelated But Not Equal • Creativity: originality of thought or expression • Innovation: new thing or method • Sustainable innovation: environment that enables ongoing innovation (requires both of above) COPYRIGHT © JLABS, LLC 2010 Ecosystem For Sustainable Innovation Ecosystems must be in balance to sustain life COPYRIGHT © JLABS, LLC 2010 Core Values = Capacity for Change Questioning Curiosity, self-assessment, non-judgmental, free flowing Risk Vulnerability, attitude toward failure, fail early, learn from failure Openness To imagine, new data, sharing, surprise, change Patience Tenacity, patient capital Trust In oneself, in others, safety net (bankruptcy, healthcare, education) Values need to be in balance. COPYRIGHT © JLABS, LLC 2010 Many Opportunities for Innovation • Future depends on creation of new industries and disruption of existing mature industries (education, food, transportation, commerce, entertainment…) • Driven by 21st century realities • Energy independence and sustainable environment • Health - expanding to include wellness, enhancements to delivery of care to sick, elderly or disabled and additional focus on affordability (personalized medicine, mhealth….) • Other applications requiring “touch” – direct or cultural such as education or entertainment • Technology – affordability, security, mobility • Intersection of disciplines – bio, nano, IT, social sciences, design….. COPYRIGHT © JLABS, LLC 2010 It’s a Two Way Street Technology inspires the art and the art challenges the technology (Pixar) • Technology innovation impacts the arts • Creation • Distribution • Experience • Creative works advance science and technology • Importance of design • Virtual worlds, video games • Communication, education, engagement COPYRIGHT © JLABS, LLC 2010 National Landscape • “Recovering” from a perfect storm • Related but separate phenomena • Financial Crisis • Economic recession • Decade of zero job growth, vanishing middle class • Increased productivity (technology, working more) • Globalization – competition and off-shoring • Shift in percentage of GDP growth from “empty calories” – value placed on trading and flipping over building and creating • Level and duration of unemployment with potentially significant long term effects on society COPYRIGHT © JLABS, LLC 2010 How Did We Get Here? • Decades of decline in our innovation ecosystem has resulted in an innovation deficit • We have become increasingly shortsighted in business, government and our culture • Decreasing recognition of importance of science and the arts (investment, respect for, education, “discretionary spending” ….) • Insufficient attention to demographic shifts (safety net spending, education) • Sustainable growth (vs looking for next bubble) comes from focusing on building, creating and caring - not just trading/manipulating money COPYRIGHT © JLABS, LLC 2010 Copyright © Judy Estrin 2008 There Is No Quick Fix • Significant growth surges will only come from innovation driven start-ups and new industries. • Connecting investments in innovation with job growth in the U.S. requires scaling here, not just starting here • We must plant seeds for the future while implementing policies, incentives and projects that stimulate spending and provide safety net for short term • Multiple problems with entrepreneurial ecosystem need attention including sources of $ and talent COPYRIGHT © JLABS, LLC 2010 Future Generation Innovators • Our most precious seeds • Our education system and culture are currently working against innovation – undermining core values • Problems are numerous and complex. If we don’t frame the right questions we can end up going in the wrong direction (and we have) • Need both incremental and orthogonal innovation – try many approaches, share/learn from success and failure COPYRIGHT © JLABS, LLC 2010 Copyright © Judy Estrin 2008 21st Century Requirements • Adaptive - ability to learn, capacity for change • Framing questions, not just answering them • Playfulness, exploration, experimentation • Active patience • Collaborative • Interdisciplinary: deep and wide foundation (tech+creative, engr+biology, tech+sports, science+investigation, science+law….) • Scientific and technologic literacy and creativity COPYRIGHT © JLABS, LLC 2010 Copyright © Judy Estrin 2008 The Role of Government • Government is not the entire solution, but it must stop being viewed as part of the problem • Leadership and inspiration - holistic view from the top can ignite and maximize benefits of bottom up innovation • $ for research and education/retraining (and short term job stimulus) • Policy to incent short and long term behaviors - new requirements and re-evaluate existing policy that reinforces status quo (subsidies, regulation) • If government is “bad”, how do we attract the talent to make it work for us? • Regulation can accelerate acceptance of innovation by increasing confidence or trust, but beware of unintended consequences • New models of collaboration in government, large and small business, academia and non-profits COPYRIGHT © JLABS, LLC 2010 Hard Questions • Is this time really any different or do we need to “let the system work”? What happens when capitalism/free market economy becomes too short term focused? Democracy requires an informed public – do we have one? • How do we ensure our competitiveness while accepting and benefiting from globalization (competition and cooperation)? • How do we connect investments in innovation with job growth in the U.S.? Who is “marketing” our workers? • How do we extend the horizon of capital markets and corporations and unlearn a generation of bad habits? COPYRIGHT © JLABS, LLC 2010 Harder Questions • How do we reset expectations of levels of wealth without losing the concept and inspiration of the “American dream”? Standard of living does not necessarily increase with levels of consumption. When did aspirations for prosperity turn into short-term greed? What can we do about it? • Do we have the courage and patience to solve our problems – education, healthcare, energy/environment…..? COPYRIGHT © JLABS, LLC 2010 Fear Works Against Change • Fear comes in many forms: safety, failure, not fitting in, criticism, funding, litigation, political agendas…. • Great leaders turn threats into challenges to inspire and rally individuals • Energy dependence/climate change/sustainability, healthcare, security are all opportunities for innovation that can drive the economy • During hard economic times need to be smart about where to cut and where investment is critical - at personal, organizational and national level • Not everyone wants to, or can be, a leader of other people, but each of us is our own leader - responsible for our path COPYRIGHT © JLABS, LLC 2010 [email protected] www.theinnovationgap.com COPYRIGHT © JLABS, LLC 2010