TECHNOLOGIES FOR TOMORROW

Michael A. Einhorn, Ph.D.Affiliate

Center for U.S. Ukrainian Relationsmeinhornphd@yahoo.com

UKRAINIAN ECONOMIC DEVELOPMENT

• Software and Outsourcing

• Academic Science

• Mining and Metals

• Agriculture

• Energy

HISTORICAL MODELS FOR INDUSTRIALIZATION

• 1860: U. S. and Germany (growth in technology helped by academics and government)

• Poland and Hungary follow

• 1880-1960: Japan (imitation, management)

• 1960-2010 Taiwan and South Korea (information technology)

• 1990: India (software)

STIMULATING ECONOMIC GROWTH

• market economies• Information technology • intellectual property• basic research funding • spillovers & synergies• academic and industrial clusters • first mover advantages • gains from imitation • network and cluster effects • user networks and declining costs • ON THE SHOULDERS OF GIANTS

KEY TRENDS IN INFORMATION TECHNOLOGY

• MAINFRAME TO PC – information becomes more accessible.

• MOORE’S LAW: chip speed double ever 18 months

• MEMORIES improve

• PRIVATE NETWORKS: data can be exchanged through software-defined channels.

• INTERNET, INTRANET, AND WEB: open networks

• CLOUD COMPUTING: move functionalities back into network through software and

• CHEAP INFORMATION APPLIANCES: put software intelligence in network, off personal computer

INFORMATION TECHNOLOGIES

• fiber optic • packet switching • storage • Private and virtual

private networks • computer assisted

design, manufacture, engineering

• world wide web• cloud computing

• outsourcing• joint ventures• strategic alliances• LDC development • cyber-communities• R&D consortia• open source• Open innovation

INFORMATION ARENAS

•outsourcing•joint ventures •strategic alliances •consortium research •cyber-communities •open source•open innovation

• outsourcing• joint ventures• strategic alliances• LDC development • cyber-communities• R&D consortia• open source• Open innovation

CLOUD COMPUTING

• Computing platforms in the network, not the edge• Network provides software-enabled virtual services • PCs need less or no software; they became cheaper

and enable more connectivity• Less need for dedicated capital expenditures • Dynamically scalable• Providers: Sun, IBM, Amazon, Google, Yahoo,

Microsoft, Vmware• Users: General Electric, Procter & Gamble, Vmware

SOFTWARE NETWORKS IN BANGALORE

• General Electric installed first dam in 1902• Understood Indian competence in S&T• Established campus in Bangalore for

engineering research• Developed outsourcing center: 22,000• Call center, back office, software development,

product design, R&D• Virtual plastics plant: Spain/India• 50% of GE’s software is now developed in India

WHAT SOFTWARE ENABLES • Instant access to manufacturing process -- CAD, CAM, CAE

• Process modularity, optimal location, and feedback

• Wider connectivity, cyber-meshes, and team production

• Cloud computing- information in network, not nodes

• Interactivity, Virtual organization, and experimental science

• Knowledge Emergence

• Academic, government, & business interconnection

OPEN RESEARCH & INNOVATION

• Conducted in real or virtual research groups

• Primary data and methodologies can be posted which can be added to/interpreted by any qualified collaborators.

• Virtual scientific experiments are possible

• Knowledge emerges and end-products arise from many contributions distributed throughout the network.

• Can be preferred to proprietary research if positive network effects arise from collaboration

ACADEMIC SCIENCE

• Academics share ideas: German metals, U.S. agriculture

• Industry partnerships; government roundtables

• Academic goes commercial: U.S. Biotechnology

• Spillovers and local economy effects: Stanford, MIT

• National competitive advantage: Japan, Korea, Taiwan

VIRTUAL ORGANIZATIONS

• A virtual organization is one whose members are geographically apart, usually working by computer e-mail and groupware while appearing to others to be a single, unified organization with a real physical location.

• – VIRTUAL CORPORATIONS outsource the majority

of functions – VIRTUAL BUSINESSES operate without a

corresponding physical identity and transact entirely via the Internet

– VIRTUAL ENTERPRISES share resources to achieve their goals

CLUSTERS & CRITICAL MASSES

• Factor endowment or academic/research geographic core

• Increase cost-economies and process productivities through relationships, scale/scope efficiencies and network effects

• Extend core competencies through learning-by-doing and information-sharing

• Educated labor pool and social relationships

• Create innovations, spin-offs, and economic zones

• Foreign investors, partners, joint ventures, strategic alliances

HI-TECH CLUSTERS

• Computer U.S.: Silicon Valley, Boston, Austin, Research Triangle, Seattle, Albany

• Pharma and Biotech: New Jersey, New Mexico, Research Triangle, Leiden, Switzerland,

• Europe: Delft, Eindhoven, Oeiras, Heidelberg, Stockholm (telecom), Hilversum (multimedia), Toulouse (aerospace), Grenoble (micro-technologies), Cambridge (biotech), Tuttlingen (surgical instruments)

SUPPLY CHAIN MANAGEMENT

• system of agents and technologies involved in transform raw materials and components into deliverable product

• production links include extraction, component construction, assembly, merging, transportation, storage, & distribution.

• optimization balances sourcing, distribution capacity, inventory costs, and T&D.

• global supply chains: Ford, Intel, Apple, Boeing

• manufacture parts, not products

• nations develop and specialize in core competencies.

UKRAINIAN SOFTWARE AND OUTSOURCING

• .

• Termed most attractive and fastest growing outsourcing destination in East. Europe by GoalEurope.com.

• Market size $246 million in 2006, up 47% from previous year . • 30,000 IT graduates per year• Of the 70 companies interviewed, seven employed 300+ people

whilst 21 had 100+.• Economically competitive with EU • Poland and other EU members now seek qualified IT resources

in Ukraine.• Germany employs 6% of all outsourcing resources in Ukraine.

• Big firms: Siemens, Phillips, Alcatel, Flextronics, HP

VIRTUAL DESIGN IN UKRAINE

• planes, ships, trucks buses, cars, trains

• computer and electronic equipment,

• precision instruments

• agricultural machines and sugar refining,

• TV and radiosets,

• chemicals and textiles

• OUTSOURCING, DIFFUSION, & GLOBALIZATION

UKRAINIAN METALS • 25% of industrial output and 40% of goods exports • vast deposits of iron/manganese ores and bauxite • coking coal and non-metallic materials – limestone, molding

sand, and refractory clay. • gold, titanium, potassium, magnesium, table salt, sulfur• dense transport network = efficient delivery of raw materials

and goods to the plants. • reliable workforce training • machine building industry and other industrial buyers • superconducting materials, hard alloys, and pure metals• export goods and ideas ?• import Western/Japanese/Chinese technology ?

UKRAINIAN AGRICULTURE• Wheat harvesting and sugar refining

• Ukrainian research labs (e.g., soil at Lviv & Odessa)

• American land grant universities

• Pollution, toxicity, and pest control

• fertilizer production

• water use and dams

• farm machinery (metals)

• plant genetics and new products

UKRAINIAN ENERGY

• oil substitutes: coal, shale, hydro electric

• safe nuclear

• alternatives: wind, thermal waters, safe nuclear

• superconductivity

• smart (software modulated) grids

• Improved metallurgy

SMART ELECTRICITY GRIDS

• dispatch/routing: automatic efficient self-healing • programmable and controllable appliances• metering, real time pricing, load shedding• can integrate power and telecom channels• now receives 50%+ of venture K in U.S.

cleantech sector • smart devices/integration: Cisco/Google• wide area: Smart Grids Technology in Europe• local: Austin (TX), Ontario, Telegestore (IT)• U.S 2009: $11 b of government aid

ECONOMIC PRESCRIPTION • Extend advantages in ag & mining; move beyond commodity-based

economy

• Promote core competencies in STEM; develop educational and research bases and networks

• Use IT to integrate core-specific technologies with global community

• Develop local economic clusters in ag/mining/academic regions; outsource when possible to rural areas.

• Produce parts and Integrate into global supply chains

• Create accounting transparency; seek direct foreign investment

• Promote exports in world markets; encourage domestic savings