Creating abundance in the global innovation econ Curtis Carlson

The way we work is our most important innovation

Creating Abundance in the
Global Innovation Economy

Dr. Curtis R. Carlson
President and CEO
SRI International
November 1, 2012
© 2012 SRI International SRI International

SRI’s Innovation Model

$26B $7.5B

Minimally invasive virtual surgery Computer speech recognition

World’s first virtual computer assistant

© 2012 SRI International
2 SRI International

Our Challenge


abundant freedom
abundant technology
abundant labor

abundant land abundant trade

abundant natural resources

abundant energy


Our Economy is Stuck


Drowning in Debt

500%

400

300 ?
200

100

0
1970 1990 2010 2030


World’s Worst Business Taxes

#1 39%

waste
corruption

Rapidly Declining Competitiveness

USA #1 2008

USA # 7
#5 2011
2012


California – Best to Worst

every week


H-1B: America’s “Genius Card”


Educational Results

spending >2X

outcomes = 0

1970 1980 1990 2000 2010


It Gets Worse

8x more likely
to go to jail


Students

China

America

Poor Performance


Companies Going Away – Faster
70
60
Years on S&P 500

50
40
30

20

10
0
1960 1970 1980 1990 2000 2010 2020 2030


Brutal Corporate Reality
"Every CEO will at least give lip service to
the idea that the world is moving faster and
that we need to do a better job at innovation.
But if you go into an organization and
ask people to describe their innovation
system, you get blank looks.
They have none."


Worldwide Standards


most media
most politicians
most educators


they believe in scarcity…


fear
pessimism
protectionism
looking inward – not outward
not adapting


this is not a zero sum game
we can thrive
we have the knowledge


I believe in abundance …


… but we must innovate
abundantly

( ) SRI International
© 2012 SRI International

We Have Been Here Before


nothing seems to be working; it’s
time to pay attention again

we need a new way of working

but now based on the
FUNDAMENTALS of INNOVATION


Global Innovation
Economy


rapid, exponential improvement
unlimited opportunities
huge markets
also = intense competition


Exponential Improvement
Ideas and bits; not just atoms and muscle
9
10
Human
6 Monkey
10
Multiprocessor
3 Lizard
10

1.0
Worm

-3
10

-6
10 Speed/Cost
MIPS for $1000
-9 1997 dollars
10
After Hans Morevac

1900 1920 1940 1960 1980 2000 2020


Unlimited Opportunities

Healthcare; Cloud, Internet, and Social media
regenerative medicine mobile devices

Additive Digital, on-line education Energy
manufacturing

Huge Untapped Markets

7.5%


Innovation
Fundamentals


high-value innovation is our only path to

prosperity security

environmental social
sustainability responsibility


Classic Tech Push

“Build a better mousetrap, and the world will
beat a path to your door.” Ralph Waldo Emerson

U.S. Patent Office issued > 6,000 mousetrap
patents, however, only two have had real success!


Innovation is Not Just…

creativity and imagination
invention and IP
teamwork
entrepreneurship
technical and business skills

these are all inputs

Definition of Innovation

Creation and delivery of new customer
value in the marketplace with a
sustainable business model
for the enterprise producing it


successful innovation is not:
the result of luck
or a lone genius

it is a discipline


Innovation Fundamentals

best teams
important global opportunities
compelling, defensible product & business model
value creation best practices
complete ecosystem and supportive culture
supportive government policies


SRI’s Five Disciplines of Innovation

Important Customer & Market Needs
Top 10
Business Book
Process of Value Creation of the Year

Innovation Champions

Innovation Teams

Organizational Alignment

Market
Disciplines are multiplicative Success

Value Creation Is a Process
C
start over

$ make a profit
Value

B important need

new
knowledge A
Time

Value Propositions

important
customer Need
Approach
Benefits/costs
Competition or alternatives

Almost All Presentations

N B/$ C


Value Creation Forums: Intense Iteration

Hard lesson: value creation can only
be understood by doing it

Morita-san and Jobs Got It

HDTV
Perceptual quality

iPad

Color TV

iPhone
B&W TV

PDAs
CD Walkman
FM iPod

shirt pocket radio
AM

Convenience

Progression of Value

$560B emotions

experiences

services

products
$11B
commodities

Industry
Government
Universities


Not Small Companies – New Ones!

+ 3%

Established
New - 1.2%


National Laboratory Report Card
Major role in national security; but how about commercialization?

best teams?
important global opportunities?
compelling, defensible product & business model?
value creation best practices?
complete ecosystem and supportive culture?
supportive government policies?
Failure increases dramatically as innovation activities
move away from the fundamental’s of innovation

Projects – Not Programs
Just giving researchers money to do good is rarely effective

• DARPA mostly uses the Silicon Valley innovation model
• Paradigm shifting technologies
• 240 employees
• $3.2B budget/year
• Other U.S. R&D organizations adding DARPA-like agencies

GPS Speech translation Internet Computer personal
assistant
48

University “Tech Transfer”
Must bridge the entire R&D spectrum

Tech New
University companies
R&D transfer and licenses
office

Fundamental Basic Applied Product
Production
Science Research Research Development


Value Creation Centers
Must bridge the entire R&D spectrum

Value New
University creation companies
R&D center and licenses

Fundamental Basic Applied Product
Production
Science Research Research Development


Girls Middle School


Kindergarten to Grad School


we have an abundance
of opportunities …

the best time ever …


we have the knowledge …


Play to Win …

exceed world standards
recruit talent
transform education
incentivize new company formation
use innovation fundamentals


To Create High-Paying, Meaningful …

prosperity
environmental sustainability
social responsibility
security

thank you for your attention

discussion

Dr. Curtis R. Carlson
curt.carlson@sri.com
650 859 2878


Creating abundance in the global innovation econ Curtis Carlson

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