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Infrastructure for the Innovation Economy

Shirley Ann Jackson, Ph.D.
President, Rensselaer Polytechnic Institute

The 2007 Economic Summit: Entrepreneurship and Growth in Upstate New York
Saratoga Springs, New York

Tuesday, August 14, 2007

I begin by thanking Congresswoman Gillibrand her wisdom and foresight in bringing to us — and in leading — this collaborative economic summit. With opportunities continually surfacing in a rapidly shifting world, we are wise to explore a new vision for robust economic expansion in the Capital Region and upstate New York. Thank you for inviting me to be a part of this important and interesting event.

Appropriate infrastructure is essential for economic growth of every region. We long have used Peter Drucker’s term, “knowledge economy,” to describe the shift from an economy driven by manufacturing and heavy industry, to one driven by intellectual products and services. It has served us well. Yet, I believe we are seeing another shift — one we might call “knowledge economy 2.0” or the “innovation economy.” Here, the “growth plates” are in bringing scientific discoveries and technological innovation to market.

Indeed, opportunities abound. Opportunities lie primarily in the contemporary challenges we see daily in the headlines — in our region, in our nation, in our world. Energy security which includes energy conservation, and the need for a mix of innovative “clean” energy sources, is one obvious example. There are economic opportunities that are emerging as we work to address energy security in an environmentally sustainable way. Other opportunities lie in the bio-nano-technological mitigation of disease and global pandemics — such as the foot-and-mouth outbreak in Surrey, England, earlier this month.

And, when we optimize opportunities, we establish a threshold to economic growth.

How do we do this? I will examine several infrastructure elements which we need to grow our economic enterprise and support job creation.

To begin, I turn to several lessons from history that provide guidance.

The formula for the unprecedented economic success of the United States during the past six decades was laid out by Vannevar Bush, a key science advisor to President Franklin D. Roosevelt.

With the onset of World War II, Dr. Bush convinced President Roosevelt that the United States needed an all-out mobilization for defense, based on collaborative scientific research. Dr. Bush directed what was then called the White House Office of Scientific Research and Development (OSRD), which controlled the Manhattan Project. With President Roosevelt’s death, and as the war ended, President Harry S. Truman asked Dr. Bush to evaluate how lessons learned from the wartime mobilization of scientific expertise might apply to peaceful pursuits. The result was Vannevar Bush’s strikingly prescient 1945 report, Science — the Endless Frontier.

Its fundamental principles were simple:

  • First, the results of scientific research could be adapted readily to shifting national needs, and could accelerate the pace of innovation, assisting not only in national security, but, also, economic growth and overall societal benefit.
  • Second, the three principal research sectors — government, industry, and academia — could accomplish far more in partnership than they could in isolation. With each sector bringing differing needs and priorities to a project the pace of innovation was enhanced.
  • A third principle focused on the crucial government support for basic research, and the concomitant linkage of research to the advanced education of aspiring scientists and engineers.

The model became the engine which has driven American economics and dominance in scientific discovery and technological innovation for decades. Although we have fallen away, somewhat, from this fundamental compact, in recent years, it is a model which still pertains, today.

We have a number of excellent examples of the essential government-industry-university collaboration modeled, here, in our region. Next month, Rensselaer will open, in the Rensselaer Technology Park, the Computational Center for Nanotechnology Innovations (or CCNI) — a 100 million dollar partnership between Rensselaer, IBM, and New York State. Each partner contributes equally through discounts, product, property, and/or funding, the latter handled through the Empire State Development Corporation. We owe special gratitude to Senate Majority Leader Joe Bruno for his leadership and vision. Cadence Design Systems, a leader in electronic design automation software, and Advanced Micro Devices (AMD), a global supplier of integrated circuits for personal and networked computing and communications, and one of the sponsors of this summit, will collaborate with Rensselaer and IBM in advanced simulation and modeling of nanoelectronic devices and circuitry, computational biology, computational chemistry, computational fluid flow, and related fields.

The collaborating partnership makes possible a supercomputer which ranks seventh in the world and the most powerful of any based exclusively at a university. CCNI has 100 TeraFLOPS of heterogeneous computational power, and 832 TeraBytes of storage. This supercomputing powerhouse has the muscle and speed to enable researchers, from industry and academia, to conduct a wide range of computational studies. An important lesson here is that the real potential of high-end fast computation depends upon high capacity data storage.

This is one example of a collaborative endeavor engaging the disparate strengths of academia, industry, and government and one which supports the innovation economy. I will return to CCNI shortly.

Another supporting element of infrastructure is the area’s business incubators — of which there are several — SUNY Albany East Campus Incubator, North Albany Incubator, the Center for Economic Growth (CEG) Watervliet Innovation Center, and, of course, the Rensselaer Incubator. These unique platforms are giving life to innovations and new ideas through technology transfer and commercialization. They provide fertile ground for their development, and create and optimize opportunities for their application in the marketplace. Let me give you one example from the Rensselaer Incubator.

The newfound focus on “green” solutions to global energy issues is creating one of the abounding opportunities of which I spoke earlier.

Eben Bayer, who graduated from Rensselaer in June with degrees in a mechanical engineering and product design and innovation, has developed an environmentally friendly organic insulation. The patent-pending combination of water, flour, minerals, and mushroom spores could eventually replace conventional foam insulations, which are expensive to produce and harmful to the environment.

The son of a successful Vermont farmer, Mr. Bayer’s knowledge of Earth science and of fungal growth led him to develop a novel way to bond insulating minerals using the mycelium growth stage of mushroom cells.

Households use nearly a fifth the total energy consumed in the U. S. annually, and of that energy, 50 to 70 percent is used for heating and cooling. Conventional construction use polystyrene and polyurethane foam blends to insulate homes. These require petroleum for production, and they are not biodegradable.

To create the insulation, a panel mold is filled with a mixture of insulating particles, hydrogen peroxide, starch, and water. Mushroom cells are then injected into the mold, where they digest the starch producing a tightly meshed network of insulating particles and mycelium. The end result is an organic composite board that has a competitive R-Value — a measurement of resistance to heat flow — and can serve as a firewall, as well. Organic insulation holds the promise of creating a class of insulation which is energy-saving, cost-effective, and environmentally friendly. Mr. Bayer and a classmate, Gavin McIntyre, have formed a company — “Ecovative Designs” — to commercialize the technology which has already been recognized by a variety of outlets as having the potential to revolutionize the green building industry.

Another exciting example of technological innovation, growing out of basic research is the recent development, by Rensselaer researchers, of a new nano-engineered energy storage device that can operate over a 400° F temperature range, and can operate as both a high-energy battery and a high-power capacitor. It is completely integrated, can be printed like paper, is lightweight, flexible, and geared toward meeting the design requirements of tomorrow’s electronics and implantable medical equipment.

You may have read in this morning’s newspaper about a prototype of this so-called “paper battery” developed by student/professor teams at Rensselaer, under the leadership of Professor Robert Linhardt and other faculty. Made from carbon nanotubes and an electrolyte imbedded in cellulosic material, it is an outgrowth of collaboration among researchers in our Center for Biotechnology and Interdisciplinary Studies, and our NSF-sponsored Nanotechnology Center. This new technology has excellent potential for incubation as it moves from laboratory to market.

The process of taking research discoveries through the patent process, through incubation to market is the natural flow from academia to industry, supported by government policy. It is “tried and true” and has been, in past decades, primarily regionally-based. Now, however, with the “flattening” world there are global opportunities to exploit, and we need to take our incubation efforts to the next level.

Incubators maximize the economic potential of discoveries. They also allow us to go from the local/regional level to the international, in ways which can benefit the region.

One activity, which the Rensselaer Incubator has dubbed “Soft Landings,” welcomes international businesses to our region, assisting them to find locations, markets, and providing the guidance and advocacy they need to successfully do business here. Already, there are partnerships in development with enterprises in France, Israel, and the Ukraine looking to open businesses in the Capital Region.

The flip side of “Soft Landing” is “Global Launch,” a concept being developed at the Rensselaer Incubator. “Global Launch” would assist young businesses with finding and accessing manufacturing and new markets abroad. Mutual international market access is the next generation in the incubation concept.

We have learned the importance of incubation by experience. Four years ago, a group of Rensselaer MBA graduates developed an innovative marine safety product — a personal floatation device (or “PFD”) as the result of a class project. The product wears like a windbreaker but acts like a life vest. The jacket self-inflates automatically within seconds of contact with water, and will flip an unconscious, facedown victim upright, so that their nose and mouth are out of the water. After a two-year review, the U.S. Coast Guard (USCG) approved the PFD as a Type V inflatable life jacket with Type III performance. And Float-Tech, which is located in Troy, began the process of getting their product manufactured in China. Without experience or guidance, the process was difficult, cumbersome, and expensive. This illustrates that Incubator support, mentoring, and access are essential to getting innovations into the marketplace.

The key message from these examples is this: Incubation for the application of discoveries and innovations is an essential part of the infrastructure to bolster an innovation economy. . .

. . . But, the capacity to innovate rests solely upon a skilled workforce — yet another aspect of infrastructure. This vital, valuable workforce is threatened because our current cohort of scientists and engineers are beginning to retire, many of whom came of age in the post-Sputnik era. At the same time, we are no longer producing sufficient numbers of new graduates to replace them.

The rate of growth of talented international scientists, engineers, and graduate students coming to the U.S. has slowed by 27 percent since 2003. Other nations are investing in their own education and research enterprises, offering new opportunities for their citizens to study and work at home. The “flattening” world means they, also, can find employment elsewhere, not necessarily in the U.S.

While this has been happening, there has been a parallel decline in U.S. investment in basic research, especially in the physical sciences and engineering.

And, our own demographics have shifted. The “new majority” in the United States now comprises young women and the racial and ethnic groups — groups which, traditionally, have been underrepresented in our advanced science and engineering schools. It is to these “nontraditional” young people to whom we must look for our future scientists and engineers.

This “Quiet Crisis” is “quiet” because the true impact unfolds gradually over time — it takes decades to educate a biomolecular researcher or a nuclear engineer. It is a “crisis” because our national innovative capacity — and our regional innovative capacity — rests solely upon their talents and upon our ability to interest and excite them to the marvels of science and engineering — to the wonders of discovery and innovation.

The “Quiet Crisis” is a major challenge to our entire education system, and it must occur against the backdrop of encouraging all (and I do mean all) of our young people to take on the challenge of science and advanced mathematics — in primary and secondary school, and to consider science, engineering, and related majors in college, and beyond. Our paramount mission must be to educate all of our students through high school, into and through the university to graduation, and on to doctoral or professional study.

I have been speaking to this issue for some time — and working with the National Academies, the Council on Competitiveness, the Business Roundtable, and others, to advocate for legislation to address the “Quiet Crisis.” I am pleased to report that last week President Bush signed H.R. 2272, the “America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act,” or the America COMPETES Act. The bipartisan legislation supports a comprehensive strategy to keep America innovative and competitive by strengthening science education and research. It places new emphasis on math, science, engineering, and technology education, and renews a commitment to basic research.

I did note with some concern that on Thursday, the United States officially opted out of the annual Trends in Mathematics and Science Study (TIMSS) an international study comparing high-school mathematics and science students. The United States has ranked very low in comparison to other countries in recent years.

Even as we grapple with state-by-state examination-based comparisons through mechanisms like testing under No Child Left Behind or the New York State Regents’ examination, in a global economic environment, we must be mindful of where we stand relative to other nations.

For those of us in higher education, our challenge is to graduate young people in every discipline:

  • With strong analytical skills, who can define, understand, and solve complex problems;
  • With multicultural understanding, who can operate in a global context; and
  • With intellectual agility, who can see connections between disciplines and between sectors across a broad intellectual milieu.
  • Who can be critical analyzers and consumers of information.

This region is fortunate in hosting panoply of distinguished institutions of higher learning which have a diversity of academic foci. The mix offers upstate New York a rich cadre of graduates. An innovation economy must have this resource — and, conversely, an innovation economy will help us to keep young people in our area, by offering continuing intellectual challenge and vibrant opportunity.

The CCNI, which I touched on earlier, highlights yet another aspect of essential infrastructure — our connectivity. The issues with regard to high speed networking and broadband concern accessibility and capacity.

And, here again, I would turn to history for a lesson in rural electrification.

By the 1930s, nearly 90 percent of urban dwellers in the United States had electricity. However, extending power to remote areas was considered not economically feasible. Hence, about 90 percent rural dwellers did not have electricity. As a result, the United States lagged behind European nations in rural electrification.

And yet, reliable, affordable electricity is essential to economic progress and quality of life.

The 1936 Rural Electrification Act offered federal funding, channeled through cooperative electric power companies, for electrical distribution systems to serve rural areas.

Electrification gave farmers lights, of course, but also radio, telephone, refrigeration, electric farm equipment, appliances. The rural population became a robust new market increasing sales for local merchants. Ultimately, farmers consumed — and paid for — more electricity than the average urban dweller.

The program was a huge success — and a lesson learned, as even today, utilities must “build to the perimeter” to provide access for all. Today, the U.S. Department of Agriculture (USDA) maintains a Rural Development Electric Program, providing leadership and capital to upgrade, expand, maintain, and replace America's vast rural electric infrastructure, making direct loans and loan guarantees to electric utilities to serve rural customers. What began as an equalizer grew well beyond its original mission became a powerful economic tool.

Electricity, in the 1930s, was basic “connectivity” of the day, one we now, completely take for granted — until a storm puts out the lights!

But, it is an apt lesson.

Decades into the future, our connectivity has advanced several degrees of magnitude, shrinking time and geography, to bring the world — and its markets, its ideas, its innovations, and its challenges — directly into our businesses and into our homes, making — as New York foreign affairs columnist Thomas Friedman puts it — today’s world entirely “flat,” with opportunities everywhere, for everyone.

We would do well to apply the rural electrification lesson to the issues surrounding broadband service for the Capital Region and upstate New York.

Broadband is the new “connectivity” — the new infrastructure which we must have to bring the fruits of high-speed networking to our region.

But what standard of broadband capacity? The Federal Communication Commission (FCC) defines “broadband” as data transmission speeds exceeding 200 kilobits per second (Kbps), or 200,000 bits per second, in at least one direction: downstream (from the Internet to the user’s computer) or upstream (from the user’s computer to the Internet).

By comparison, the connectivity which we rely upon at Rensselaer is three to four orders of magnitude higher, at 1000 megabits per second — essential to support the increasingly prevalent convergence of data, voice, and video and fundamental university research.

What this means is that the FCC definition is too low to support the level of connectivity upon which an innovation economy can be built and sustained. The connectivity infrastructure needed must be ubiquitous, seamless, and faster.

CCNI, for instance, will support researchers in industry — of any size, from start-ups to established firms — in a wide range of computational studies which would be impossible without both the computing power and the expert researchers at CCNI.

However, expanded connectivity is an essential underpinning for technological growth in the Capital Region and upstate New York.

At Rensselaer we speak often of the 3 P’s: people, programs, and platforms. That phraseology, is apt in the context of “Infrastructure for an Innovation Economy,” because, as I hope my examples illustrate, they are essential infrastructural elements we need: a well-educated workforce — especially a strong cadre of scientists and engineers (whose education begins in K-12 and is solidified in our colleges and universities). People generate the ideas, make the discoveries, drive innovation, create research programs which generate IP and develop new enterprises. They need the educational institutions, the infrastructure, research, laboratories, computational facilities, incubators, and broad-band connectivity to enable and enhance their work. The final key infrastructural element (the 4th P) is partnership — between and among universities, industries, and government. We have excellent examples here in the Capital Region, in upstate New York. Now we must build upon them more strongly, increase them, and garner more Federal support to potentiate them.

Your participation, here today, is an excellent beginning for moving upstate New York to an innovation economy. Rensselaer is excited to be a part of this endeavor.

As I close, I would like to take this opportunity to invite everyone here to attend the CCNI opening ceremonies Friday, September 7th. They include a Presidential Colloquy at 10:30 a.m. on the Rensselaer campus in Center for Biotechnology and Interdisciplinary Studies, followed by a Ribbon-Cutting Ceremony.

The Colloquy, “The Future of Computationally Enabled Discovery and Innovation” will feature:

  • Honorable Arden L. Bement Jr., Director, National Science Foundation;
  • Dr. John E. Kelly III, Senior Vice President & Director of Research, IBM Corporation
  • Honorable John H. Marburger III, Science Advisor to the President, Director of the Office of Science and Technology Policy
  • Dr. Charles M. Vest, President, National Academy of Engineering
  • And myself

There will be tours of the CCNI facility before and after and you can obtain complete information on the Rensselaer Web site: www.rpi.edu.

Source citations are available from the division of Strategic Communications and External Relations, Rensselaer Polytechnic Institute. Statistical data contained herein were factually accurate at the time it was delivered. Rensselaer Polytechnic Institute assumes no duty to change it to reflect new developments.

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