The Technopolis Columns     Fred Phillips with contributions from David Gibson, Patricia Hayes, George Kozmetsky, Patricia Mhondo, Chet Orloff, Pierre Ouellette, Ralph Shaw, and Bertha Vallejo       Palgrave, 2006 isbn 1403999511  Sample Chapter

In the 1980s, a University of Texas economics professor told students there are only three routes to wealth: sit on natural resources, buy undervalued stock, or exploit peasants. He never dreamt of mentioning "to create highly valued stock by innovation and entrepreneurship." To think of such a thing still requires a rare mindset, one that is found with relative infrequency outside the United States and only regionally within this country.

Nor is it enough for just one person to think this way; that generally won't make him or her an entrepreneurial success. I would enjoy saying, "it takes a village to raise an entrepreneur," but even that doesn't suffice. To make an entrepreneurial company succeed requires focused social and technological support and a significant communications and transportation infrastructure. This can only happen in a sizeable city, and when institutions in the city reach out to surrounding hinterlands, a self-sustaining entrepreneurial region is made possible. Can in happen in Portland, Oregon?
 
 

The Power of Combination

•  No single company can master all the technologies it needs to succeed in a competitive marketplace. Today's business environment is necessarily rich in licensing, outsourcing, and all the other mechanisms of inter-firm technology transfer.
•  Technology scanning takes on greater importance. Companies need to gather intelligence from broader channels than have been generally considered in the past &endash; and from more than the obvious competitors. A company's "invisible competitors" are in a different industry and possess technology that could become a threat if turned to new markets. An example was the threat to disk drive companies from flash memory semiconductor makers.
•  Alliances are the order of the day. Technology fusion grows out of long term R&D ties with a variety of companies across many different industries.
•  Globalization is driven by the need to fuse technologies and to assess diverse market needs, as well as (of course) by capital liberalization.
•  All this affects entrepreneurship. Global networking is now an essential element of entrepreneurship. Entrepreneurs hoping to survive must be globally connected from day one if they are to find the right technologies, the right markets, the right management talent, the friendliest capital, the most helpful community support programs, and the best suppliers and alliance partners. Obviously, entrepreneurs need help to do this, and this help must come from the local community. This gives rise to the unwieldy but descriptive phrase "globally networked civic entrepreneurship."

Some years back, Craig Fields, then President of MCC, observed that we are living in the age of eight "multis": The new business environment is
   

• Multi-product
• Multi-country
• Multi-culture
• Multi-company
• Multi-industry
• Multi-technology
• Multi-career
• Multi-tasking

   
We must, Fields said, recognize the multis and learn to tolerate them. But even more than that, we can and must combine the multis in a profitable way. This is the power of combination.

Using this power, though, can be like hiring a tiger to rid the town of mice; it makes us nervous if we don't do it, and even more nervous if we do. All creative strategies for dealing with growth dilemmas will be "unpopular ideas" in some quarters.
 
 

Three unpopular ideas

But history shows that regions, like Portland's, that are sparsely populated, that have good ports and abundant natural resources, and that under-invest in education... get colonized. Colonization means little foreign direct investment comes in; value-added activities occur elsewhere; and only low-wage jobs remain. Most important, it means that the colonized lose their self-determination, if not their sovereignty, regaining it, if at all, only after blood has been shed.

2. There are limitations on the growth of new technopoleis. The spatial concentration of both wealthy individuals and successful startup companies, as in Silicon Valley and elsewhere, means that lock-in occurs. It becomes harder to build a viable high technology cluster in other places.

Other places attempt, through tax-abatement programs and the like, to selectively encourage certain kinds of companies to locate in their jurisdictions. However, international capital "liberalization" treaties like NAFTA, WTO and the currently under-negotiation Multilateral Agreement on Investments (MAI) largely prohibit the differential tax treatment of companies, even at the local level.

These forces mean there will be a reduced opportunity for Silicon Valley "wannabes" to catch up. The only counter-measure I can see (aside from some localities' proclaiming themselves "MAI-free zones," which has already happened) is to expand research expenditures and formulate technopolis strategies around niche technologies that could become important in a number of application areas. Chances are improved if these applications include defense, and in the Northwest this might include aviation technologies, and defense applications of flat panel displays.

3. There is a role for government. Most of us do not believe in the government's ability to "pick winners." But government can constructively invest in:

• Funding high-cost, high-risk cooperative ventures, as does NIST's Advanced Technology Program.
• Helping entrepreneurial companies traverse the "Valley of Death" between their first product idea and their first significant investment.
• Stewarding the public's interest in communication and transportation networks. Much high tech these days involves communications networks, and such networks always raise questions of universal service, spectrum allocation, monopolies, etc.

Beyond investing in education and R&D, governments must work with industry and academe to create the entrepreneurial mindset and the entrepreneurial society that I described earlier. How can an entrepreneurial mind and an entrepreneurial society be created? There is no magic recipe, and many regions are struggling to find a locally practicable solution. But I believe the most important ingredient is sharing. Share expertise, share news, share successes and failures, share credit for successes, and share networks of acquaintances and colleagues. Share your vision and share your methods. This is the power of combination!

Let's go back, for a moment, to Australia. During World War II, Australians were terrified of being overrun by Asia. But by 1980, the majority of cars on Australian streets were Japanese. The Australian Minister's "banana republic" speech was widely reviled, but its message struck home. In the years 1980-1999, Australia welcomed entrepreneurial immigrants, handled multi-ethnic democracy with some flair, cast aside the cartographic conceit of Australia as a separate continent, and engaged with Asia. Today, Australia is a stable democracy that attracts Asian stock investment, has developed technology and manufacturing exports, and (despite significant debt) is a leading economy in the Asian-Pacific rim. Australia can be a role model for Portland.

I'll conclude with a word picture of another island nation, from a novel by Stuart Kaminsky: "If a Cuban is at home when the rains come, he feels protected. It is like being in a castle with a great moat. No one will enter. It is a time for peace and security. All are equally trapped and protected by it. It is a time for coffee and love." Sounds like Portland! It is indeed a trap, and Portland must find the key, to be able to enter and exit at will.
 

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