High-growth firms or
Navy 2011 Opportunity Forum
The Missing Middle
Philip E. Coyle Associate Director National Security and International Affairs Office of Science and Technology Policy June 7, 2011
Innovation for National Security is a Presidential Priority “Reaffirming America’s role as the global engine of scientific discovery and technological innovation has never been more critical … Our renewed commitment to science and technology … will help us protect our citizens and advance U.S. national security priorities.” National Security Strategy, May 2010
2
Small Businesses are Vital to the Nation’s Success
President Obama during his tour of American Cord & Webbing Co. in Rhode Island (Oct 2010)
“…small businesses produce most of the new jobs in this country. They are the anchors of our Main Streets. They are part of the promise of America – the idea that if you’ve got a dream and you’re willing to work hard, you can succeed. That’s what leads a worker to leave a job to become her own boss. That’s what propels a basement inventor to sell a new product – or an amateur chef to open a restaurant. It’s this promise that has drawn millions to our shores and made our economy the envy of the world.” President Obama Sept 2010 3
White House Office of Science and Technology Policy
• Science and technology for policy • Policy for science and technology 4
President’s Strategy for American Innovation Innovation for Sustainable Growth and Quality Jobs • Encourage high-growth and innovation-based entrepreneurship • Promote innovative, open, and competitive markets
• Unleash a clean energy
Catalyze Breakthroughs for National Priorities
revolution • Accelerate biotechnology, nanotechnology, and advanced manufacturing
Spur Productive Entrepreneurship and Promote Efficiency
• Educate Americans with 21st century skills and create a world-class workforce • Strengthen and broaden American leadership in fundamental research
Invest in the Building Blocks of American Innovation http://www.whitehouse.gov/innovation/strategy 5
Elements of Innovation “How then is America to maintain, or preferably enhance, the future standard of living of its citizenry? The answer (and seemingly the only answer) is through innovation. Innovation commonly consists of being first to acquire new knowledge through leading edge research; being first to apply that knowledge to create sought-after products and services, often through world-class engineering; and being first to introduce those products and services into the marketplace through extraordinary entrepreneurship. “ Rising Above the Gathering Storm, Revisited – Rapidly Approaching Category 5 (2010) 6
Science and Technology for National Security
40s
50s
60s
70s
80s
• Nuclear weapons
• Digital computer
• Satellite comm.
• Airborne GMTI/SAR
• GPS
• Radar
• ICBM
• Stealth
• Night vision
• Proximity fuse
• Transistor
• Integrated circuits
• Laser technology
• Phased-array radar
• Strategic CMs
• Personal computing
• Nuclear propulsion
• Defense networks
• IR search and track
• Counterstealth
• Sonar • Jet engine • LORAN
• Digital comm.
• Space track • Airborne surv. network • MIRV
• C2 networks
• UAVs
• BMD hit-tokill
90s
00s
• Wideband networks
• GIG
• Web protocols
• Optical SATCOM
• Precision munitions
• Data mining
• Solid state radar • Advanced robotics
• Armed UAVs
• Advanced seekers • Decision support
• Speech recognition 7
Offshoring Why Amazon’s Kindle 2 Can’t Be Made in the U.S. The Kindle 2 e-reader was designed by Amazon’s Lab126 unit in California. The vast majority of its components are made in China, Taiwan, and South Korea, and it is assembled in China, a center for such work. Flex circuit connector MADE IN CHINA REASON U.S. supplier base eroded as the manufacture of consumer electronics and computers migrated to Asia.
Electrophoretic display MADE IN TAIWAN REASON Its manufacture requires expertise developed from producing flat-panel LCDs, which migrated to Asia with semiconductor manufacturing. Controller board MADE IN CHINA REASON U.S. companies long ago outsourced the manufacture of printed circuit boards to Asia, where there is now a huge supplier base.
Highly polished Injectionmolded case MADE IN CHINA REASON U.S. supplier base eroded as the manufacture of toys, consumer electronics, and computers migrated to Asia.
For national security: is innovation enough? “if any particular manufacture was necessary, indeed, for the defense of the society it might not always be prudent to depend upon our neighbors for the supply.” - Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776
Lithium polymer battery MADE IN CHINA REASON Battery development and manufacturing migrated from the U.S. to Asia along with the development and manufacture of consumer electronics and notebook computers. Wireless card MADE IN SOUTH KOREA REASON South Korea used its infrastructure for designing and Taken from Gary Pisano and Willy Shih, manufacturing consumer electronics to become a center “Restoring American Competitiveness”, for making mobile phone components and handsets, especially Harvard Business Review, July-August 2009 products using CDMA technology, which is widely used in 8 South Korea.
Taken from Gary Pisano and Willy Shih, “Restoring American Competitiveness”, Harvard Business Review, July-August 2009
9
The Missing Middle
The “Missing Middle” – A gap in access to capital or other key resources at a crucial step in the development of new businesses or new technology. The gap often occurs at the stage of development where opportunity and uncertainty are both high.
11
Adapted from Dr. Deborah Jackson, 2011
12
12
~$100B Annual Federal Investment
Billions $
Federal R&D Portfolio 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0
Federal R&D Funding – FY11 Request
DoD NIST NSF NASA DOE NIH
Basic Research
Applied Research
~$80B Annual High Tech Trade Deficit*
Development Prototype & Systems Development
* SOURCE: NSF Science & Engineering Indicators, 2010
13
Early-stage funding for startups is drying up as venture capital seeks later-stage investments
14
Net Job Creation within Startups vs. without Startups • High-growth firms or “gazelles” account for a disproportionate share of job creation in any given year, generating roughly 40 percent of new jobs in any given year.
3,500,000
2,500,000
1,500,000
500,000 -500,000 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
-1,500,000
-2,500,000
-3,500,000
-4,500,000
-5,500,000
Source: U.S. Census Bureau, Business Dynamics Statistics Job Creation in Startups
• The fastest-growing young firms (between the ages of three and five) account for less than 1 percent of all companies in the economy, yet generate 10 percent of new jobs each year. Source: Kauffman Foundation Research Series: Firm Formation and Economic Growth High-Growth Firms and the Future of the American Economy, March 2010.
Net Job Creation Absent Startups 15
Shares of annualized net job creation in 2007
The Role of Young, High-Growth Firms Young Firms Account for Largest Share of Job Creation
70 60 50 40 30 20 10 0 1-5
6-10
11-15
16-20
21-25
26-28
Older
Firm Age
What to Do? • focus on creating new firms • remove barriers to emergence of high-growth companies • target areas that are resources for high-growth firms: immigrants and universities Source: Kauffman Foundation
16
Roles in the Missing Middle Government
Private Sector, VCsFunders
Resources
Small Businesses
Large Businesses
High Growth Entrepreneurs Academia Govt. Labs Basic Research
1
Performers
Applied Research
2
3
4
Tech Prototype and Systems Development Development
5
6
7
8
9
Technology Readiness Level 17
Navy Commercialization • Total FY10 Navy Phase III funding was $565M, crossing $500M threshold for first time
In Millions
• “Other DoD” FY10 not available at present • FY10 Navy Phase III funding came from 136 separate contracts to 97 unique firms • FY10 Navy inventory of open Phase IIs: 819 separate contracts to 490 unique firms
DoD-funded Phase III Contracts FY99-FY10 (FPDS Report Data)
18
Navy “Gated” P hase I I .5 Structure Feasibility
ACTIVITY -
Year 1
Technology Development and Prototype Demo. Year 2
Prototype Testing & Evaluation Technology Demonstration & Validation Year 3
Year 4
Year 6
Year 5
Opt. ~ 9 mo.
$≤ 250K Enhancement* ~ 12 mo. Phase 1 Option 6 mo. 6 mo.
$80K
Phase 2 18-24 mo.
$≤ 750k SBIR Cont. Dev. 12 – 18 mo.
$70k Between $500K to $750K Some Require TTP
$≤ 750k SBIR
Phase III Non-SBIR $
TTA Required
variable
AT (Accelerated Transition)* ≤ 2 yr.
$≤ 1.50M SBIR TTA Required
SBIR FUNDS -
NTE $150K
CONTRACT TYPE -
FFP Contract
CPFF or FFP Contract
TRL -
0-3
2-5
NTE $1M
NTE $1.5M NTE $2.65M
CPFF or FFP Contract 4 7
TTA –Technology Transition Agreement -3 -5 yr technical/funding strategy
Any 6-9
* Requires Non-SBIR Funding Commitment 19
SBIR 2.0 Initiatives Clarify data rights for small businesses in SBIR Decreasing timelines to award Expansion of bridge financing programs Intramural technology transfer topics to help small businesses access the capacity of federal labs • Joint solicitations between agencies • Build unified web portal to support improved management • Performance management metrics • • • •
20
Expanding the Defense Industrial Base
21
Startup America http://www.startupamericapartnership.org/
• Expands access to capital for high-growth startups throughout the country • Expands entrepreneurship education and mentorship programs to create jobs • Strengthens commercialization of federally-funded research and development • Identifies and removes unnecessary barriers to highgrowth startups • Expands collaborations between large companies and startups 22
Rapid Innovation Program • Originates from the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (NDAA 2011), Section 1073 (Public Law 111–383) • $499.2M (Department of Defense and Full-Year Continuing Appropriations Act, 2011, Public Law 112-10) • Competitive, merit-based program to accelerate the fielding of technologies developed via: – Small Business Innovation Research Program projects – Technologies developed by the defense laboratories – Other innovative technologies
• • • • •
Stimulate innovative technologies Reduce acquisition or lifecycle costs Address technical risks Improve timeliness and thoroughness of test and evaluation outcomes Rapidly insert technology
23
Revitalizing American Manufacturing FY12 Request strongly supports advanced manufacturing • DOD: $2 billion in advanced manufacturing over five years in DARPA and Mantech • DOE: $500 million R&D for advanced manufacturing technologies in energy • NSF: increase of $87 million in basic and applied research funding to support advanced manufacturing • NIST: $75 million for Technology Innovation Program (TIP), $12 million to establish public private consortia, $763 million for NIST laboratories “When new technologies are developed and new industries are formed, I want them made right here in America. That's what we're fighting for." - President Obama, August 16, 2010 24
PCAST Advanced Manufacturing Study REPORT TO THE PRESIDENT Ensuring American Leadership In Advanced Manufacturing Executive Office of the President President’s Council of Advisors on Science and Technology
http://www.whitehouse.gov/ostp/pcast 25
Resources
Shrinking the Missing Middle through Innovation
Small Business Programs Existing Research Champions Resources
Early Procurement Existing Startup America Commercialization Resources Manufacturing Initiatives
Inventing Research at Universities Adapted from Dr. Deborah Jackson, 2011
Commercializing New Products Sold by Companies
Level of Development 26
SBIR Reauthorization Status • Public Law No. 112-17 (signed June 1) extends SBIR/STTR authorization through FY11 • OSTP supports a longer term reauthorization of the SBIR/STTR program • OSTP looks forward to working with all stakeholders (Congress, executive agencies, SBA, small businesses) to support longer term reauthorization 27
Missing Middle: Performers German Fraunhofer Institutes Ta i w a n ’s I n d u s t r i a l Te c h R e s e a r c h I n s t .
Universities 1
2
3
Industry
9 8 7 6 5 4 Technology and Manufacturing Readiness Levels
Fraunhofer-Gesellschaft: Undertakes applied research of direct utility to private industry. Clustered approach with pilot production centers to close the gap between research and products
ITRI is the Winner – Wall Street Journal Technology Award Sept. 2010.
Taiwan’s ITRI
How can SMALL BUSINESSES help fill this void? 28
Government Procurement as a Catalyst US Semiconductor Market Price and Military Use, 1962-19682
Early military use helped drive semiconductor market development
Helped to push prices lower Lower prices spurred commercial applications
Today’s market is dominated by commercial applications
Global market over $200 billion1
DoD share only 1-2%1
50
100
45
90
40
80
35
70
30
60
25
50
20
40
15
30
10
20
5
10
0
0 1962
1963
1964
1965
1966
1967
Average market price ($)
Share of production designated for military use (%)
1968
Source: 1Morris, Peter Robin. A history of the world semiconductor industry. 1990, pg 75; 2Defense Science Board, "High Performance Microchip Supply“, 2005.
29
Early Adoption Opportunities Biofuels Electric Vehicles
Photovoltaics
Solid State Lighting Prosthetics
30
How You Can Participate
http://www.whitehouse.gov/administration/eop/ostp
31
What Are Your Ideas? • For example: – Expanding small business opportunities in • Intelligence • Homeland Security • Nuclear Weapons Security
– Innovation in contracting – Rotational assignments in government – Targeted programs for veterans – Other…
32
Many Challenges Remain
33
“We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, outeducate, and out-build the rest of the world.” President Obama January 25, 2011 34
35
The Missing Middle
Philip E. Coyle Associate Director National Security and International Affairs Office of Science and Technology Policy June 7, 2011
Innovation for National Security is a Presidential Priority “Reaffirming America’s role as the global engine of scientific discovery and technological innovation has never been more critical … Our renewed commitment to science and technology … will help us protect our citizens and advance U.S. national security priorities.” National Security Strategy, May 2010
2
Small Businesses are Vital to the Nation’s Success
President Obama during his tour of American Cord & Webbing Co. in Rhode Island (Oct 2010)
“…small businesses produce most of the new jobs in this country. They are the anchors of our Main Streets. They are part of the promise of America – the idea that if you’ve got a dream and you’re willing to work hard, you can succeed. That’s what leads a worker to leave a job to become her own boss. That’s what propels a basement inventor to sell a new product – or an amateur chef to open a restaurant. It’s this promise that has drawn millions to our shores and made our economy the envy of the world.” President Obama Sept 2010 3
White House Office of Science and Technology Policy
• Science and technology for policy • Policy for science and technology 4
President’s Strategy for American Innovation Innovation for Sustainable Growth and Quality Jobs • Encourage high-growth and innovation-based entrepreneurship • Promote innovative, open, and competitive markets
• Unleash a clean energy
Catalyze Breakthroughs for National Priorities
revolution • Accelerate biotechnology, nanotechnology, and advanced manufacturing
Spur Productive Entrepreneurship and Promote Efficiency
• Educate Americans with 21st century skills and create a world-class workforce • Strengthen and broaden American leadership in fundamental research
Invest in the Building Blocks of American Innovation http://www.whitehouse.gov/innovation/strategy 5
Elements of Innovation “How then is America to maintain, or preferably enhance, the future standard of living of its citizenry? The answer (and seemingly the only answer) is through innovation. Innovation commonly consists of being first to acquire new knowledge through leading edge research; being first to apply that knowledge to create sought-after products and services, often through world-class engineering; and being first to introduce those products and services into the marketplace through extraordinary entrepreneurship. “ Rising Above the Gathering Storm, Revisited – Rapidly Approaching Category 5 (2010) 6
Science and Technology for National Security
40s
50s
60s
70s
80s
• Nuclear weapons
• Digital computer
• Satellite comm.
• Airborne GMTI/SAR
• GPS
• Radar
• ICBM
• Stealth
• Night vision
• Proximity fuse
• Transistor
• Integrated circuits
• Laser technology
• Phased-array radar
• Strategic CMs
• Personal computing
• Nuclear propulsion
• Defense networks
• IR search and track
• Counterstealth
• Sonar • Jet engine • LORAN
• Digital comm.
• Space track • Airborne surv. network • MIRV
• C2 networks
• UAVs
• BMD hit-tokill
90s
00s
• Wideband networks
• GIG
• Web protocols
• Optical SATCOM
• Precision munitions
• Data mining
• Solid state radar • Advanced robotics
• Armed UAVs
• Advanced seekers • Decision support
• Speech recognition 7
Offshoring Why Amazon’s Kindle 2 Can’t Be Made in the U.S. The Kindle 2 e-reader was designed by Amazon’s Lab126 unit in California. The vast majority of its components are made in China, Taiwan, and South Korea, and it is assembled in China, a center for such work. Flex circuit connector MADE IN CHINA REASON U.S. supplier base eroded as the manufacture of consumer electronics and computers migrated to Asia.
Electrophoretic display MADE IN TAIWAN REASON Its manufacture requires expertise developed from producing flat-panel LCDs, which migrated to Asia with semiconductor manufacturing. Controller board MADE IN CHINA REASON U.S. companies long ago outsourced the manufacture of printed circuit boards to Asia, where there is now a huge supplier base.
Highly polished Injectionmolded case MADE IN CHINA REASON U.S. supplier base eroded as the manufacture of toys, consumer electronics, and computers migrated to Asia.
For national security: is innovation enough? “if any particular manufacture was necessary, indeed, for the defense of the society it might not always be prudent to depend upon our neighbors for the supply.” - Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776
Lithium polymer battery MADE IN CHINA REASON Battery development and manufacturing migrated from the U.S. to Asia along with the development and manufacture of consumer electronics and notebook computers. Wireless card MADE IN SOUTH KOREA REASON South Korea used its infrastructure for designing and Taken from Gary Pisano and Willy Shih, manufacturing consumer electronics to become a center “Restoring American Competitiveness”, for making mobile phone components and handsets, especially Harvard Business Review, July-August 2009 products using CDMA technology, which is widely used in 8 South Korea.
Taken from Gary Pisano and Willy Shih, “Restoring American Competitiveness”, Harvard Business Review, July-August 2009
9
The Missing Middle
The “Missing Middle” – A gap in access to capital or other key resources at a crucial step in the development of new businesses or new technology. The gap often occurs at the stage of development where opportunity and uncertainty are both high.
11
Adapted from Dr. Deborah Jackson, 2011
12
12
~$100B Annual Federal Investment
Billions $
Federal R&D Portfolio 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0
Federal R&D Funding – FY11 Request
DoD NIST NSF NASA DOE NIH
Basic Research
Applied Research
~$80B Annual High Tech Trade Deficit*
Development Prototype & Systems Development
* SOURCE: NSF Science & Engineering Indicators, 2010
13
Early-stage funding for startups is drying up as venture capital seeks later-stage investments
14
Net Job Creation within Startups vs. without Startups • High-growth firms or “gazelles” account for a disproportionate share of job creation in any given year, generating roughly 40 percent of new jobs in any given year.
3,500,000
2,500,000
1,500,000
500,000 -500,000 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
-1,500,000
-2,500,000
-3,500,000
-4,500,000
-5,500,000
Source: U.S. Census Bureau, Business Dynamics Statistics Job Creation in Startups
• The fastest-growing young firms (between the ages of three and five) account for less than 1 percent of all companies in the economy, yet generate 10 percent of new jobs each year. Source: Kauffman Foundation Research Series: Firm Formation and Economic Growth High-Growth Firms and the Future of the American Economy, March 2010.
Net Job Creation Absent Startups 15
Shares of annualized net job creation in 2007
The Role of Young, High-Growth Firms Young Firms Account for Largest Share of Job Creation
70 60 50 40 30 20 10 0 1-5
6-10
11-15
16-20
21-25
26-28
Older
Firm Age
What to Do? • focus on creating new firms • remove barriers to emergence of high-growth companies • target areas that are resources for high-growth firms: immigrants and universities Source: Kauffman Foundation
16
Roles in the Missing Middle Government
Private Sector, VCsFunders
Resources
Small Businesses
Large Businesses
High Growth Entrepreneurs Academia Govt. Labs Basic Research
1
Performers
Applied Research
2
3
4
Tech Prototype and Systems Development Development
5
6
7
8
9
Technology Readiness Level 17
Navy Commercialization • Total FY10 Navy Phase III funding was $565M, crossing $500M threshold for first time
In Millions
• “Other DoD” FY10 not available at present • FY10 Navy Phase III funding came from 136 separate contracts to 97 unique firms • FY10 Navy inventory of open Phase IIs: 819 separate contracts to 490 unique firms
DoD-funded Phase III Contracts FY99-FY10 (FPDS Report Data)
18
Navy “Gated” P hase I I .5 Structure Feasibility
ACTIVITY -
Year 1
Technology Development and Prototype Demo. Year 2
Prototype Testing & Evaluation Technology Demonstration & Validation Year 3
Year 4
Year 6
Year 5
Opt. ~ 9 mo.
$≤ 250K Enhancement* ~ 12 mo. Phase 1 Option 6 mo. 6 mo.
$80K
Phase 2 18-24 mo.
$≤ 750k SBIR Cont. Dev. 12 – 18 mo.
$70k Between $500K to $750K Some Require TTP
$≤ 750k SBIR
Phase III Non-SBIR $
TTA Required
variable
AT (Accelerated Transition)* ≤ 2 yr.
$≤ 1.50M SBIR TTA Required
SBIR FUNDS -
NTE $150K
CONTRACT TYPE -
FFP Contract
CPFF or FFP Contract
TRL -
0-3
2-5
NTE $1M
NTE $1.5M NTE $2.65M
CPFF or FFP Contract 4 7
TTA –Technology Transition Agreement -3 -5 yr technical/funding strategy
Any 6-9
* Requires Non-SBIR Funding Commitment 19
SBIR 2.0 Initiatives Clarify data rights for small businesses in SBIR Decreasing timelines to award Expansion of bridge financing programs Intramural technology transfer topics to help small businesses access the capacity of federal labs • Joint solicitations between agencies • Build unified web portal to support improved management • Performance management metrics • • • •
20
Expanding the Defense Industrial Base
21
Startup America http://www.startupamericapartnership.org/
• Expands access to capital for high-growth startups throughout the country • Expands entrepreneurship education and mentorship programs to create jobs • Strengthens commercialization of federally-funded research and development • Identifies and removes unnecessary barriers to highgrowth startups • Expands collaborations between large companies and startups 22
Rapid Innovation Program • Originates from the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (NDAA 2011), Section 1073 (Public Law 111–383) • $499.2M (Department of Defense and Full-Year Continuing Appropriations Act, 2011, Public Law 112-10) • Competitive, merit-based program to accelerate the fielding of technologies developed via: – Small Business Innovation Research Program projects – Technologies developed by the defense laboratories – Other innovative technologies
• • • • •
Stimulate innovative technologies Reduce acquisition or lifecycle costs Address technical risks Improve timeliness and thoroughness of test and evaluation outcomes Rapidly insert technology
23
Revitalizing American Manufacturing FY12 Request strongly supports advanced manufacturing • DOD: $2 billion in advanced manufacturing over five years in DARPA and Mantech • DOE: $500 million R&D for advanced manufacturing technologies in energy • NSF: increase of $87 million in basic and applied research funding to support advanced manufacturing • NIST: $75 million for Technology Innovation Program (TIP), $12 million to establish public private consortia, $763 million for NIST laboratories “When new technologies are developed and new industries are formed, I want them made right here in America. That's what we're fighting for." - President Obama, August 16, 2010 24
PCAST Advanced Manufacturing Study REPORT TO THE PRESIDENT Ensuring American Leadership In Advanced Manufacturing Executive Office of the President President’s Council of Advisors on Science and Technology
http://www.whitehouse.gov/ostp/pcast 25
Resources
Shrinking the Missing Middle through Innovation
Small Business Programs Existing Research Champions Resources
Early Procurement Existing Startup America Commercialization Resources Manufacturing Initiatives
Inventing Research at Universities Adapted from Dr. Deborah Jackson, 2011
Commercializing New Products Sold by Companies
Level of Development 26
SBIR Reauthorization Status • Public Law No. 112-17 (signed June 1) extends SBIR/STTR authorization through FY11 • OSTP supports a longer term reauthorization of the SBIR/STTR program • OSTP looks forward to working with all stakeholders (Congress, executive agencies, SBA, small businesses) to support longer term reauthorization 27
Missing Middle: Performers German Fraunhofer Institutes Ta i w a n ’s I n d u s t r i a l Te c h R e s e a r c h I n s t .
Universities 1
2
3
Industry
9 8 7 6 5 4 Technology and Manufacturing Readiness Levels
Fraunhofer-Gesellschaft: Undertakes applied research of direct utility to private industry. Clustered approach with pilot production centers to close the gap between research and products
ITRI is the Winner – Wall Street Journal Technology Award Sept. 2010.
Taiwan’s ITRI
How can SMALL BUSINESSES help fill this void? 28
Government Procurement as a Catalyst US Semiconductor Market Price and Military Use, 1962-19682
Early military use helped drive semiconductor market development
Helped to push prices lower Lower prices spurred commercial applications
Today’s market is dominated by commercial applications
Global market over $200 billion1
DoD share only 1-2%1
50
100
45
90
40
80
35
70
30
60
25
50
20
40
15
30
10
20
5
10
0
0 1962
1963
1964
1965
1966
1967
Average market price ($)
Share of production designated for military use (%)
1968
Source: 1Morris, Peter Robin. A history of the world semiconductor industry. 1990, pg 75; 2Defense Science Board, "High Performance Microchip Supply“, 2005.
29
Early Adoption Opportunities Biofuels Electric Vehicles
Photovoltaics
Solid State Lighting Prosthetics
30
How You Can Participate
http://www.whitehouse.gov/administration/eop/ostp
31
What Are Your Ideas? • For example: – Expanding small business opportunities in • Intelligence • Homeland Security • Nuclear Weapons Security
– Innovation in contracting – Rotational assignments in government – Targeted programs for veterans – Other…
32
Many Challenges Remain
33
“We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, outeducate, and out-build the rest of the world.” President Obama January 25, 2011 34
35
