(The following is an open letter to members of the Idaho Legislature)
Dear Idaho Legislator,
As the father of a 9 and 11 year old, “why?” “how come?” and “can you explain?” are very, very common questions in my house these days. Inquisitiveness… Where does this come from? I need look no further than my son and daughter to observe this fundamental and intense desire for children to question and to learn. I’m sure that all of you with children know exactly what I’m referring to.
How does the inquisitiveness of a child create innovation and economic growth? It happens as a result of education. Only with education, will Idaho’s children have a chance to develop innovative technologies or medicines that have a world changing impact on our society. Education is essential to the quality of life we enjoy in the United States. It is essential to our economic prosperity, the freedoms and liberties that we enjoy, and to the continued security of these privileges. One need only look at countries throughout the world to observe the correlation between educational opportunities and economic vitality.
But education is not a birth right. Previous US generations have enjoyed one of the best education systems in the world because our government leaders have provided the vision, priority, and funding to make it successful. In the 1860’s, the land-grant college system was developed which ultimately gave birth to our own University of Idaho. Primary and secondary education was made universally available in the early 20th century. The G.I. Bill in 1944 and the National Defense Education Act in 1958 increased the accessibility of a college education for many. Decisions about the priority of education made in 1860 continue to have a direct impact on our nation and economy today. As a country, we must look at the long-term impact of the education system. It will affect our children, grandchildren and future generations to come.
And you can be sure it will affect the Idaho economy, both today’s and tomorrow’s. The past century has seen an unprecedented evolution in the human condition, from that of an agrarian existence to the industrialized and technically based society of today. In a recent report by the National Academy of Sciences, they reference that up to 85% of the growth in per capita income between 1890-1950 is due to technological change. How has that affected Idaho?
A major component of Idaho’s economy has been based on agriculture production. This heritage is woven into the fabric of our communities today, and is an important attribute of the quality of life we enjoy in Idaho. But the agriculture industry has transformed. The percent of the overall labor force required for farm work has decreased from 38% to less than 3% over the past century. Yields per acre have increased by 2.5 times, and for common crops, the output per person-hour has increased by a factor of 10. Technical advances in agricultural sciences have significantly decreased the farm based employment levels in the state.
Despite this impact to a major portion of the Idaho economy, prosperity in the state remained strong through the last decade, even as the population base increased. And again, it is technological evolution that provided these new opportunities. While technology has been fueling economic growth for decades, it has now named its own industry, the “High-Tech” industry. High-Tech has become a major portion of the Idaho economy. According to the Idaho Office of Department of Commerce, the high-tech industry contributes 18.4 percent of Idaho’s $45 billion Gross Domestic Product (GDP), or $8.4 billion. In fact, they point out that GDP contributed by this “innovation economy” is higher than the combined GDP of all of our traditional industries, and over 60% of the state’s exports are high-tech goods. Finally, the most recent data shows that the 56,000 people working in Idaho’s innovation industries earn average annual wages of $66,000–more than twice the state’s total average wage.
And what of the future? Maybe it appears that technical advancements are a double-edged sword. Agricultural technology decreased employment in this industry, to be replaced with new opportunities in the high-tech industries. There is a great deal of concern in today’s economy about “off-shoring”, the practice of outsourcing production, and recently, service related functions, to overseas locations that offer lower labor costs. This is impacting Idaho jobs today. The fact is, Idaho is competing in a global economy. It is inevitable that competitive forces will continue to motivate companies to change business practices to take advantage of opportunities to reduce their cost of goods sold and to increase market share. We will not turn the clock back to a time when agriculture provides one-third of all employment, and we will not reverse the current trend of electronic manufacturing moving to overseas locations.
Instead, we must continue to adapt an innovate, or be faced with becoming a second-tier nation. The fact that the United States has been a global economic leader is not a mistake or a chance happening – it has been the result of providing the incentives and infrastructure that foster an environment of innovation and development. In a report to the President from the President’s Council of Advisors on Science and Technology (Sustaining the Nation’s Innovation Ecosystems, 2004), the authors refer to an “innovation ecosystem” that allowed the United States to launch entire industries including automotive, steel, chemical, pharmaceutical, computer and information technologies, biotechnology, and the internet. This report further identifies six critical elements of this ecosystem as the following:
1. Human scientific and technical talent – as inventors, innovators, and a skilled workforce
2. Productive R&D centers including corporate and public institutions
3. World class research universities
4. Venture capital willing to invest in entrepreneurial and innovative opportunities
5. Economic, political, and social environments supporting prosperity
6. Government funded basic research focused on high potential discoveries
This “innovation ecosystem” has been developed in the United States over the past century. Today, many others nations are emulating these elements of success. And it may be working. As one example, the Chinese government is investing in the top universities in their country to create world class research institutions. China has also recently formed the Chinese Science Foundation, modeled after the United States National Science Foundation. Since 1991, China has increased their investment in R&D activities by 500% from $14 billion to $65 billion. In the same period, the United States has increased R&D spending by 140% from $177 billion to $245 billion. In another measure of China’s increasing investment in science and technology, since 1975, China has gone from granting essentially no doctorate degrees to a current worldwide portion totaling 12%. In the same period, the United States production of doctorate degrees has decreased on a global basis from 59% to 41%.
In order to maintain our competitive advantage, we need to assure that we have a healthy “innovation ecosystem”. At the national level, there are numerous investigations that identify steps the federal government can take to strengthen the climate for innovation and entrepreneurship. However, I think it may be even more important what is done on the state level. The state can have a fundamental impact on creating an enduring climate promoting innovation, entrepreneurship, and economic growth. Below I offer basic, concrete actions that you, our state legislators can implement that will have a positive long-term impact on the Idaho economy.
Teachers and Faculty: Human scientific and technical talent is listed as the first attribute of a healthy innovation ecosystem. This resource is developed in the education system. Without a doubt, the most important component of the education system is its teachers. The one-on-one interaction between teachers and students is the basis of any education. Most people are able to reminisce of a particular teacher that had a direct impact on his or her life. The teacher that went beyond the lecture on the blackboard. The teacher that cared about you as an individual. What if that teacher had not been there for you? What if the class size had been 25 students instead of 15? Would the one-on-one relationship still have been possible, or would some of that been lost? What if this teacher had been preoccupied with concerns of making the mortgage payment, and not focused on your needs as a student? Teacher salaries are a recognized weakness across the country. Low salaries do not attract new teachers to the profession. Low salaries do not retain the current teachers that have already demonstrated their desire to teach. Teachers will either move to states and regions that pay a more competitive salary, or move to a new profession. In a report completed by the Idaho State Board of Education (Teacher Supply and Demand: 2000-2010), salaries were identified as the most important factor limiting districts’ ability to recruit, hire and retain qualified teachers. In a recent report, the National Education Association identifies Idaho teacher salaries as 30th in the nation — 12% below the national average. This same report shows that the student-teacher ratio in Idaho is the 8th highest in the nation. We need more teachers in the state. We need to offer competitive salaries to attract new teachers, and retain the ones we already have.
Research and Development: The next two attributes of a healthy innovation ecosystem are listed as productive R&D centers including private and public institutions, and world class research universities. Tomorrow’s blockbuster idea is germinating in a research lab somewhere today. Let’s hope this germination is happening in an Idaho research lab. Research centers are a vital aspect of the innovation ecosystem. Successful models of research efforts today include highly collaborative, cross disciplinary teams. The intersection between health care and electronic instrumentation requires biologists to work closely with electrical engineers to develop technologies such as ultrasound imaging, pacemakers, laser eye surgery or insulin pumps. Chemists and physicists work hand in hand with engineers and material scientists to develop new semiconductor memory technologies. To enable these collaborations, the research teams need to have immediate access to a wide spectrum of resources, including instrumentation, students, and each other.
The technology industry has largely developed in regions that provide this access. The co-location of major research universities, industrial research labs, and a technical workforce has created regions of incredible economic prosperity. Utah, our neighbors to the south is a prime example of the creation of a state economy that thrives on the synergy of these three elements. Another example would be the software and information technology industry that has developed in Seattle. Would Microsoft have been as successful had they located in Spokane rather then Seattle? Microsoft and the University of Washington are mutually beneficial for each other. Microsoft fuels the demand for a trained workforce and for access to top academic labs, while the University of Washington is able to grow their research portfolio based upon strong demand and collaborations with industry.
The Treasure Valley is the center of the high-technology industry in Idaho. Boise has been recognized as one of the fastest growing high-tech cities in the country. This is creating the demand for increased access to research facilities and advanced academic opportunities. Boise State University has been prominently establishing a reputation as a metropolitan research university. The College of Engineering was established in 1997 to meet the demand for workforce training. This has allowed the high-tech industry in the region to grow. Boise State has also added advanced degrees in engineering, and recently, a doctorate degree in Electrical and Computer Engineering was approved by the State Board of Education. This is a critical step for the university, and for the economic growth of the state. The high-tech industry must have access to a locally available, highly trained workforce. The employees of high-tech firms must train, and re-train in their field of expertise, and need local access to advanced academic programs to enable this. I applaud Boise State University and the Idaho SBOE for recognizing the need, and establishing this doctorate program, but more needs to be done. To truly create a dynamic research center supporting areas of emerging technology, Boise State needs to offer advanced programs leading to Ph.D. degrees in all the major scientific and engineering disciplines, including mechanical engineering, civil engineering, materials science, computer science, biology, chemistry, physics, and mathematics. Idaho has a valuable asset in the Boise region – a successful high-tech industry, and a major university. It is time to grow Boise State University so it can support the future growth of the technology based economy. We need to grow our universities, we need to support their research and economic development activities, and we need to do more then just reshuffle the deck. Again, the state needs to fund realistic operating budgets for these institutions.
How will these suggestions be funded? Maybe we should go back and see how the land grant system was funded. Or how the GI bill was funded. The short answer is it was funded with capital. It was an investment made in the future with no short term payback expected. We are now living off the dividends being realized from these original investments. It is, however, our turn now to invest in the future.
Looking back to the elements of this ecosystem, this letter has suggested actions that will strengthen the first three elements. Looking at the remaining three items, is there more we need to do? National R&D investment is not a state action, however, Idaho benefits from these federal programs, and a stronger academic system should attract more federal dollars. How about the economic, political, and social environment supporting innovation. Could it be improved? Sure. But, Idaho is recognized as a supportive state encouraging business development and entrepreneurship. The final element is having access to venture capital willing to invest in innovation. This is my area of expertise. Venture capital is available. It is looking for opportunities. If Idaho can provide the regional workforce, and can provide the laboratories and academic programs that foster creative ideas, I assure you that the venture capitalists will invest. This really is a case where, “if you build it, they will come”. If Idaho doesn’t make these investments, the venture capitalists will go to regions that have a stronger innovation ecosystem.
In summary, I don’t envy the difficult days ahead for you as you wrangle with our state budget during this legislative session and I’m grateful for the hard work and long hours that you’re about to undertake on behalf of all of the citizens of Idaho. I do believe however that cuts to our education budget will have grave implications that will impact us for generations to come. We owe it to our children to keep education as the number one priority in Idaho. You, our state legislators can make this happen. Please work with the business leaders, the education leaders, and the populace of the state in the implementation process, and to lay the foundation that will assure the success of Idaho throughout the 21st century.
Mark B. Solon