In a presentation to the Southern Growth Policy Board’s 1997 Conference on the Future of the South, argues that partnership, including Public Private Partnerships, for the 21st century needs to be about winning combinations. Describes the change in resources that generate, prosperity, jobs and meaningful futures from natural endowments and geographic location to advanced technologies based on knowledge-based investments, highly skilled personnel and abundant financial assets. Describes breakthrough partnering between the public and private sector as the key to developing technology that will generate wealth, prosperity and newer, higher paying jobs in the future. Describes four freedoms necessary to achieve breakthrough partnering: exchange of ideas, access, trade and enterprise. Argues that bold, innovative leadership is required to reshape and restructure institutions to fit the new economy.IC2 Institut

Kozmetsky, George

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     Title: Building and Creating the Future of the South: Breakthrough Partnerships for the 21st Century  By:  George Kozmetsky  Date: June 23, 1997   Abstract:   In a presentation to the Southern Growth Policy Board’s 1997 Conference on the Future of the South, argues that partnership, including Public Private Partnerships, for the 21st century needs to be about winning combinations. Describes the change in resources that generate, prosperity, jobs and meaningful futures from natural endowments and geographic location to advanced technologies based on knowledge-based investments, highly skilled personnel and abundant financial assets. Describes breakthrough partnering between the public and private sector as the key to developing technology that will generate wealth, prosperity and newer, higher paying jobs in the future. Describes four freedoms necessary to achieve breakthrough partnering: exchange of ideas, access, trade and enterprise. Argues that bold, innovative leadership is required to reshape and restructure institutions to fit the new economy.  Keywords: high tech; policy; public-private partnerships; economic growth; entrepreneurship    IC² Institute Working Paper WP-1997-06-01  © IC² Institute, The University of Texas at Austin http://ic2.utexas.edu  (KY) Building & Creating the Future of the South:Breakthrough Partnerships for the 21st CenturybyGeorge Kozmetsky Chairman, IC  ̂Institute The University of Texas at AustinPresentation toSouthern Growth Policies Board1997 Conference on the Future of the South Renaissance Hotel Nashville, Tennessee June 23, 1997Working Paper #97-06-01IC^ Institute The University of Texas at Austin Austin, TX 78705Building & Creating the Future o f  the South:Breakthrough Partnerships for the 21st CenturyIt is an honor to be invited by Governor Sundquist, Paul Essex, and Lou to  participate in “The Future o f  the South” Conference. The Growth Policy B oard ’s research and work have become critical to the revival and expansion o f  the South’s economy for all your citizens. Governor Sundquist has been actively involved and is to be commended for his leadership in Congress, in the State House and, o f  course, with the Policy B oard and the Technology Council. During the past two years, I have had the pleasure to both w ork and participate in commercializing science and technology in East Tennessee as well as in the Charleston region o f  South Carolina. It has been my privilege to participate in the Oak Ridge Summit, the annual meeting o f  the Tennessee Growth Board, and the South Carolina Governor’s Science and Technology Council. As a member o f  G overnor B ush’s Texas Technology Council, I look forward to Texas working more closely with the Southern Technology Council in the future.I must say a word about my companion at this podium - Bob Van H ook. Bob is to be recognized for his steady hand at the helm o f transitioning this region’s and this nation’s most valuable scientific asset - the Oak Ridge Complex. Bob, know  that all o f  us wish you success in the months ahead.Lou, if I am to be helpful as the Southern Growth Policy Board launches this Commission on the South, I want to be provocative rather than memorable, challenging rather than accommodating, straight-forward rather than diplomatic.1Building Public Private Partnerships is really the way to focus on creating a future for the South as well as for other regions o f the U.S. M ore specifically, partnership for the 21st century needs to be about winning combinations. It is not just simply win-win situations that each o f  you have initiated and implemented in the past. Those partnerships, while important to solve specific issues, are not enough to create a 21st centuty future. For we know that today our society as well as our nation is in a period o f  great chaos. Chaos in the sense that the needs o f  our people overwhelm both our public and private sectors’ financial abilities and resources.Resources that generate wealth, prosperity, jobs, and meaningful futures in the 21st century will not be generated from the resources o f  the 20th century. Natural endowments and geographic location are not tom orrow ’s creative and innovative resources. And just to simply identify science and technology as the fuel that drives the 21st century economy domestically and abroad also does not go far enough. M ore bluntly, budget-driven policies in government, private-sector stock prices in corporations, and stand-alone, independent excellence in our individual institutions produce chaos, uncertainty, and individual fear o f  the future regardless o f  w hether or not you have a good job. This is an untenable state o f  affairs for our great nation and your region.The South as a region can no longer rely on using your grandparents’ or parents’ resources. This Commission faces a bold challenge on how  to create the future based on new resources o f  science and technology. In my recently published book, “ Global Economic Competition,” we found that “comparative advantage o f  individual nations is subject to dynamic changes over time. Our ancestors’ concept o f  com parative advantage2was based on nations’ natural endowments such as land, minerals, climate and other factors related to simple technologies. Modern economies, on the other hand, have been built on advanced technologies, which have made production factors move toward knowledge-based investments, highly skilled personnel, and abundant financial assets. Key production factors no longer rely on natural endowments, but can be created and accumulated by any nation that chooses to pursue industrialization by following the example o f  Japan in the 1960s and 1970s, Taiwan in the 1980s, and China in the 1990s. The technology revolution, and entrepreneurial revolution, has completely changed production methods and offers a relatively equal opportunity to all nations around the world.”This Commission must look to resources that can generate wealth and prosperity, provide meaningful jobs in all communities and for all citizens, and meet the critical needs o f  our society in terms o f  security, health, the environment and sustainable individual futures.As I prepared for this presentation today and reviewed your materials from past Commissions, it became evident that we cannot focus on current public and private sector problems, functions and organizational changes o f  the two sectors, or on budgets. Discussions o f  budgets, taxes, regulations and laws are simply only a part o f  the challenge.Technology has always prospered under capitalism and entrepreneurship. The characteristics o f  21st century technology-based entrepreneurship are organizational flexibility and compression o f time to market in a way that integrates and cuts across institutions, suppliers, and industry sectors. This is the basis for 21st century breakthrough3partnering. Breakthroughs in technology are what generate the wealth and prosperity and newer higher paying jobs o f  the future. These types o f  breakthrough partnerships are m ore a matter o f  private-sector choices than public-sector budgets, taxes, regulations and laws. Choices in the 21sl century will be private-sector-driven, government-responsive partnerships.Let me provide an overview at the state level o f  the traditional budget allocation process currently used today which directly and indirectly impacts the development o f science and technology. Our state governments are comprised o f  bureaucracies in which the older carrot and stick, legislatively-mandated initiatives meet the Legislatures’ auditable requirements o f the budget process. Therefore, thinking and acting innovatively outside the box is prevented at best, outlawed at worst. There is no flexibility and limited innovation to solve societal and regional problems.This leads to the private sector having to use its own resources not for productive gain but for maintenance o f  the status quo, which leads private sector leadership to question tax and spending policy. And, in turn, causes busy people in the private sector to band together in formal organizations to address the problems not being resolved by the public sector. Remember, this formality o f  banding together is what the original intent o f  our government institutions was designed to do. The private sector, viewing government as not being able to  take care o f  real-world problems, fearful o f  a limited public policy answer, grows impatient, frustrated, and impolite.By example, let us recall the past ten-year debate on K through 12 education reform versus workforce and skill development required for a high technology economy.4In the future, this debate will and must include raising questions such as: (1) Who will train these needed workers - social service agencies o f the government or industry expertise; (2) W here do we train these workers - in traditional schools or in poly-technical on-site academies; (3) What institution will be in charge o f  the training - government or the private sector or a new breakthrough partnership; and (4) What are all the laws requiring change to allow innovation in education, training and technology development? Simply, the bottomline question we are really asking ourselves when we must make choices about our future is: What are the most efficient and effective uses o f  resources created from taxing business, industry, and property?Creating the future requires strategic partnering between the private and public sectors. The Commission on the South needs to determine how to bring to bear science and technology, infrastructure, and people in partnership to accomplish its mission and goals. The emphasis on partnering this region’s R&D enterprises and capabilities is changing. In the 21st century, national budgets are shrunk, industry has driven costs down to be competitive including outsourcing R&D, there are no great conflicts to spur technology investment as under the Cold War, increasingly economic conflict among nations is driven by technologically-linked infrastructure and knowledge resources.Your challenge is to find how to use partnering o f your technology assets found in your universities, federal laboratories, and corporations. There is a need to focus on choices which delineate your regional industries’ needs to be domestically and globally competitive in terms o f  advanced manufacturing technology, high-performance5computing, Internet and world wide web communications and commerce, simulation and modeling, engineering design and process sciences. This is a big and awesome challenge.The 21st century partnering I am discussing calls for newer arrangements for better productivity, for both virtual and agile organizations, for meeting time-sensitive global competition. There is a need to share facilities, people, technologies, ideas, and, yes, even cultures between our public and private sector institutions including universities and federal laboratories. And there is a need for benchmarking and importing best technology- based practices from foreign industry and emerging markets.In the 21st century, we can’t take the time to wait for scientific breakthroughs to be transferred just through higher education or publication in reference journals. These scientific breakthroughs — which lead to new patents, licenses, enterprises and entrepreneurial firms — need to be advanced today through partnerships.Breakthrough Partnering is key to creating the 21st century knowledge-based economy the South needs. To achieve breakthrough partnering requires the four freedoms that I shared with your counterparts in Beijing, China, less than a month ago. The four freedoms are Exchange o f  Ideas, Access, Trade, and Enterprise.Freedom ofExchange o f  Ideas for the U.S. and the South has focused too long on an exchange between R&D and academics where students and the military were the only beneficiaries. This is not good enough. We need to advance the process o f  applied R&D and to benchmark our nation and our region against global competitors allowing us to leap-frog their economies accordingly. Simply, we need the freedom to learn what does6and does not w ork - and this suggests that we may have to face some failures in both sectors.Freedom o f  Access is defined by the creation o f  networks between human, financial, and technological resources and among industry groups. We must find the means to broaden the access and entry points for all our citizens or we face greater and more serious gaps in our culture.Freedom o f Trade is embodied by the critical need for new distribution systems and how to make supplier chains elements o f  our regional economic well-being. It is time that states foster supplier chains among and between themselves so as to export on a world-wide basis. And states must truly understand that the global customer is seeking to build or install to order the manufacturing, the service, the maintenance and the facility infrastructure from idea and concept to production and sales in less than two years.Freedom o f  Enterprise suggests ways to create firms or divisions in the region avoiding the hurdles and challenges o f  an overly-regulated environment and market, to construct world-class facilities and attract world-class workers at a faster pace, and to obtain the vital research and information which fits the needs o f  an entrepreneurial environment.All o f  these freedoms allow us to create our future through breakthrough partnering which is free first and foremost from the burdens o f  finding the lowest common denominators among the public and private sector. Laws and rules must be changed. Perceptions and myths must be addressed. Innovation and creativity must flourish.7Gatherings such as this, and the drafting o f  the Commission, are occasions to take bold steps for charting the South’s competitive future. To step outside the traditional box and think anew is to change our attitudes and begin to implement viable alternatives from among many choices.The vision o f  utilizing science and technology in the future requires that we rethink, reshape, and restructure our approach to innovation in the coming knowledge economy. W e must reshape and restructure our institutions and programs to fit this new economy by first rethinking the traditional roles o f government, o f  universities and even o f industries. Breakthrough partnering is how we will create our future. This may threaten old structures, challenge old thinking, and force debate among the choices rather than the traditional budget discussions.This will take leadership, bold and innovative leadership. I believe those in this room represent that leadership and are prepared to step forward to encourage and create the 21sl century culture, economy, and citizen.8

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