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Remaining Competitive in an Age of Global Change

  • Date: 02/04/2000
  • Author: Dr. Luis M. Proenza (President, The University of Akron)
  • Location: Akron Regional Development Board, Small Business Breakfast
  • Thank you, Cheryl, for your kind introduction. I was pleased to learn that you and your husband are UA alumns. As you know, we are celebrating student success in our publicity campaign, and the two of you are further examples for us to lift up and celebrate.

     

    After this morning, hearing Jack stir you into responding "Super fantastic!", I know I will have to pass that on to John LaGuardia, whom I am sure all of you know, because his usual response is typically, "Super!" I will tell him that he has to emulate ARDB by adding the fantastic part.

    This morning I want to help us create some perspectives.

    Indeed, I submit to you that remaining competitive in an age of global change is a matter of creating perspectives amidst change,

    perspectives on CHANGE itself,

    and on its corollary, CHANCE or OPPORTUNITY!

    In will suggest that to remain competitive in this fast changing world, you need to:

    First, be comfortable with change;

    Second, be an active participant in creating change;

    And, third, that you be able to learn from others and join groups such as ARDB in keeping abreast of change and in creating change.

    And to be complete in these perspectives, it will be important for me to touch on the engine that drives change itself, and that is, of course, innovation and its role in economic development . . .

    . . . and innovation, true innovation, comes only from research.


    So here we are in Y2K, embarking upon a whole new century -- and a new millennium.

    All around us, the media and the marketers talk about change as if we had just invented it.

    They speak of change as if something magical, or something distinctly different, is about to happen.

    Now, it has been said that there is nothing so powerful as an idea whose time has come.

    Ironically, if there is one idea that has been around longer than any other and has yet to find its "time" - it is the idea of change itself.

    Never mind that change is the central theme in all of history, whether human or geological; or that change is reflected in time itself; or that it is the essence of the human experience;

    Never mind all of that and more . . .

    . . . somehow, the prospect of change or of going after opportunities always seems to raise a sense of excitement and, simultaneously, a sense of risk.

    For some, risk becomes anxiety. And quite often, even in academic circles, anxiety leads to "analysis paralysis" . . . a condition whereby a problem or opportunity is analyzed without action, or is simply ignored, until it passes you by or becomes intolerable.

    But remember that risk and anxiety are two quite different conditions.

    A simple story will illustrate the point:

    The Surgeon General tells us that cigarettes kill more than 150-thousand Americans each year, and automobiles on our highways kill more than 50-thousand people per year. But, nobody seems to be afraid of cigarettes or automobiles.

    However, according to the Deputy Director of the National Institutes of Health, everyone is afraid of sharks.

    The Navy says that there are about 50 shark attacks worldwide each year. The National Bureau of Health Statistics doesn't even keep a record of shark attacks because there are so few.

    (They know how many people are killed by bee stings, but not shark bites.)

    The best guess is that sharks kill two or three people each year in the United States.

    But, the fact is that if you went to a crowded beach and shouted "shark" - everyone would race out of the water, jump into a car, light up a cigarette, and drive home!

    That's the difference between anxiety and risk.

    Each of us feels this way about various things and some activities in our society.

    How nice it would be if we could put risk and anxiety into perspective, and move to better distinguish the "sharks" in our lives.

    Indeed, where reason and calm prevail, there is always optimism and much that can be accomplished for the common good.

    With these thoughts in mind, let me now share with you some perspectives on this Age of Global Change - social, scientific, and technological perspectives.

    What do I mean by global change?

    Global Change involves dimensions of social, cultural, technological, and economic change which characterize the movement of our civilization away from the parochial and toward the global or universal.

    Dimensions that involve the vast array of technological change, our movement to a global economy, and the pervasiveness of new information tools . . .

    . . . all creating for us radically new sets of capabilities, and the kind of social adjustments so well articulated by Peter Drucker in a 1994 article in the Atlantic Monthly magazine.

    Indeed, it is not that we have just "discovered" change, but that the speed of change is today so great that it is literally outpacing our social and organizational mechanisms for assimilating change.

    Just think about your own experience. About how, in your own lifetime, technology has affected what you do today, what you have yet to learn, and how rapidly other things are looming onto your radar screens.

    Think about the changes our country has seen just in the past 30 years or so with the advent of computers.

    Entirely new industries are here, and the rate of progress continues to rise exponentially, whether in microelectronics or biotechnology . . .

    . . . the rate of progress has become so fast, in fact, that we have to "construct artful analogies" . . . because that is the only way to . . . "comprehend the explosive acceleration of speed and capacity" . . . of our technology.

    Consider this analogy from the Washington Post: "If the airplane had advanced as far and as fast as the computer, today's jumbo jet would carry 100-thousand passengers, and it would fly them to the moon and back for $12.50 at 23,400 miles per hour."

    (Washington Post National Weekly Edition, p. 6, May 9-15, 1988)

    What if the automobile had advanced at the same rate as the computer?

    "We could today buy a Rolls Royce for a dollar and drive around the world on a gallon of gas."

    And, here is my favorite of all! What if education also had advanced as far and as fast as the computer?

    ". . . A high school or college education - which still takes 12 and four years respectively to complete at an average cost for either of about $60-thousand - could today be completed in less than 10 minutes for about 5 cents!"

    (Washington Post National Weekly Edition, p. 24, Dec. 25-31, 1989)

    The computer has evolved so far and so fast that one observer has suggested that, in the last 40 years, the computer has evolved as far or further than life itself has in its first 2 billion years!

    (O.B. Hardison, Jr.)

    Imagine what the next 40 or 50 years will bring.

    It simply "blows your mind!"

    Progress, and the rate of technological progress in particular, is advancing at a staggeringly unprecedented rate.

    We have never before experienced such a technological or cultural "time compression."

    So, while we are undeniably in the midst of unprecedented change, we are so overwhelmed that "just because everything has changed, doesn't mean anything has changed.

    In point of fact, change is actively resisted.

    We humans seem to prefer stability, preservation, conservation, or whatever you may call the antithesis of change.

    The mere mention of "change" brings the sharks to a feeding frenzy.

    And the truth is that entire human organizations -- bureaucracies -- have been created to preserve that status quo.

    And so intent are they, that they would preserve the status quo until there is no further status in the quo!

    But believe me, here is where opportunities lie . . .

    . . . because change, through innovation, is the heartbeat of today's knowledge-based, global economy.

    In the new economy, intellectual capital is business capital. And staying close to the source of knowledge creation is not just a good idea; it is a business necessity.

    That is why Tim Ferguson, writing for Fortune Magazine last year said that "In Cleveland's hayday, proximity to water and rail mattered a lot . . . (But) Today, proximity to a university matters a lot."

    And that is why for many years, Don Alstead, the former Chairman of the Lord Corporation, kept an office in 10 to 15 universities, so that he could be the first to "mine" the discoveries being made there and move them rapidly into his business - so that he could keep ahead of the competition.

    ******

    That is why during this past year many of you have heard me say that today education is infrastructure and that the university is an engine for economic development . . .

    ((And, David, this is one you missed in your discussion last month - the role the university has played in transforming and revitalizing the economic landscape of Akron - just as we are about to do again as we begin the $200 million enhancement of our campus))

    The University is an engine for economic development through research and the production of new knowledge.

    Indeed, economists agree that creation of new technological knowledge through research is our most direct economic avenue for acquiring added value.

    When that new knowledge is quantified in a market environment, it creates fuller employment, capital formation, growing profits, and surpluses for reinvestment.

    In other words, it is from research that new companies are born; that new jobs are created;

    It is from research that the economy expands and new wealth is created.

    In the analogy of the "birds and the bees," -- Research begets new companies!

    ****

    And lest you think that this is nothing more than academic rhetoric, let me cite just a few historical examples to prove my point:

    It was research that enabled the agricultural end industrial revolutions at the turn of the last century. And during World War II, research that was initially vital to the Allied war effort laid the groundwork for technological leaps in medicine, aviation, energy, electronics -- developments which today affect virtually every realm of our human endeavors.

    And with the development of transistors, the era of microelectronics began and sowed the first seeds of the Silicon Valley; and from such modest beginnings, we are now immersed in the information age.

    The research we did related to the Space Race not only resulted in Americans walking on the moon . . . but also gave rise to the Space Industry, and enabled new technologies in satellite communications, computer science, robotics and miniaturization.

    As recently as 1970, a single discovery in molecular biology initiated the new industry of biotechnology, an industry from which we are now seeing dramatic advances in medical science and the introduction of effective new technologies such as the production of human insulin by factories of microorganisms.

    And, polymer research at The University of Akron served to fuel and diversify the industrial base of Northeast Ohio.

    These are just a few examples of research as an engine for economic development. Each effectively demonstrates that new knowledge builds new capacities just as surely as materials build new structures . . .

    . . . And each demonstrates that our nation's investments in education and research have built very real assets that have yielded very real returns on those investments.

    Indeed, the social return on research and education investments has been estimated to be consistently at between 30 and 50% per year.

    And for each of you, research is something that you do everyday in order to remain competitive; to remain ahead of the game.

    Think about it, all of you do research to advance your business.

    As we speak, Russ Vernon is doing some research to source a product that I asked him about last week.

    All of you in the insurance business maintain a watchful eye on the changing accident and health statistics of our area in order to both price and adjust your products.

    Those of you in construction do research to keep abreast of changing products and building technologies; and often, you introduce new approaches that give you a competitive edge.

    I am sure each of you can think of how you research issues, and bring what you learn through that research into your business; so that you can innovate and improve your product, process, or service.

    And to keep ahead of the competition today, you have to "work in negative time," as a recent Wall Street Journal editorial suggested -- Because you have to work faster and smarter than the competition.

    Let me illustrate with a couple of analogies from the world of sports:

    Today, to be competitive, it is no longer enough to "keep your eye on the ball."

    Today, to be competitive, you have to "skate to where the puck is going to be."

    And we have to do so, not only as individuals, but as a community, collectively.

    We can do so through organizations like ARDB, which in pursuing a common goal, ensure that each an everyone of us can gain in the process. By participating in ARDB, all us hope that we will be rewarded individually. That by sharing in an altruistic process, we will achieve selfish goals as well. I call this "Selfish Altruism."

    And we have to do this by being knowledgeable about state and federal policies, because these affect the climate for business; and we have to be prepared to examine, questions, and suggest how things might work better.

    Let me illustrate with what I am learning about Ohio in the business that I am in:

    A few weeks ago, while meeting with a group of polymer industry executives, I was suddenly struck by a certain irony in my experience.

    The irony was this: Twenty years ago I was telling Georgia to emulate Ohio (because Ohio had then just put in place some innovative approaches to spur its economic development), and now I find myself telling Ohio to emulate Georgia!

    Let me explain the essence of this irony, because it has two important components which we should all appreciate and understand.

    First, it seems that we in Ohio have not fully grasped the investment value of education.

    Any cursory review of legislative language will tell you that this is so, because Ohio's appropriations for higher education are characterized as "subsidies" and not "investments."

    And that is a difference not only in semantics, it is a difference of fact. Because the fact is that the state recoups nearly $2 dollars for each dollar appropriated for higher education, and recouping twice the expense, by any account or measure, is a superb return on investment.

    So here is the irony: Since subsidy is not a "good thing" in today's competitive marketplace, why would our state choose to think pejoratively when in doing so, Ohio not only conveys its ignorance of the facts, but, what is worse, it perpetuates an approach that will doom Ohio to economic mediocrity.

    Second, over the last twenty years, Ohio and other states in the Midwest have lagged in innovation and lost market share in Research & Development.

    As I have noted elsewhere, The University of Akron is the only university in all of Ohio, public or private, to have a basic science & engineering graduate program ranked among the top five nationally.

    And it is a program that serves an industrial cluster which accounts for nearly one quarter of Ohio's manufacturing output.

    Neither Ohio State, nor the University of Cincinnati, nor any other Ohio university can lay claim to such a highly rated research program that serves such a large component of the state's economy - not one!

    This singular national ranking speaks volumes about the strength of our university's polymer program, but it also sends a powerful message about how much Ohio must do to gain leadership in other areas.

    Even in the $20+ billion polymer sector, Ohio's investment to sustain competitiveness seems paltry. For example, Ohio currently provides just $1.4 million to the Edison Polymer Innovation Corporation, but the state easily spends $100 million to support the coal industry.

    If Ohio is to become the leader in science and technology that Governor Taft has called for, our state must once again invest in its future.

    It must invest in higher education, and it must signal strategic intent. And it must do so boldly! Now! Before another twenty years creates yet other ironies of neglect.

    That is why the University of Akron is investing $200 million dollars in your future . . . Why we are creating a new landscape for learning . . . why we will continue to be committed to the economic well-being of Akron and Ohio.

    *****

    Let me come to a close:

    If you remember nothing else from my remarks, please remember this:

    We have a burgeoning research industry in our universities. It makes a "profit" by leveraging new dollars into Ohio. Its "products" impact the way we do business in Ohio, and improve the quality of our lives. It is an engine for economic development.

    Our University mascot is a kangaroo that we affectionately call Zippy; but in the metaphors of financial markets, you need to know that -

    This kangaroo is bullish on Ohio!

    And it packs quite a punch, puts quite a zip, into the Ohio economy.

    THANK YOU!

     

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