BizBooks: We will begin our interview in an hour and a half.

Judy Estrin: Looking forward to it.

_______________________

BizBooks: Welcome to the 9th segment in the BizBooks Ask the Expert Series.

Today we have with us Judy Estrin.

She is CEO of JLABS, LLC, formerly known as Packet Design Management Company, LLC. Today we will be discussing her book Closing the Innovation Gap.....

In a sustainable ecosystem, a diverse array of plants and animals are allowed to flourish. As the United States moves into a 21st century rife with rising and competing economic powers, how can it cultivate its own flourishing economic ecosystem that encourages the one thing that will maintain its comparative advantage: innovation?

Welcome Judy.....let's get started

Judy Estrin: Thank-you. Happy to be here to talk about such an important topic. I have spent my life and career involved in innovation - in academia, as a serial entrepreneur and as a board member at several of the greatest American corporations including The Walt Disney Company and FedEx Corporation. Now more than ever we need to revive our culture and support for innovation in this country to restart our economy and to address the major challenges we face. It is my passion for innovation and concern for the decline of the support for science and innovation in the US that drove me to write my new book, Closing the Innovation Gap.

_______________________

BizBooks: How did your time at Cisco help you develop your views on innovation?

Judy Estrin: I became the CTO at Cisco in 1998 when they purchased the third start-up that I co-founded, Precept Software. Having spent my career building companies, it was my first experience actually working for a large company. Being at Cisco exposed me to some of the challenges of innovating at scale (Cisco grew from 18,000 to 36,000 people while I was there). This was also during the height of the Internet bubble and it was when I began to be concerned about a focus throughout the tech industry on incremental innovation to drive short term growth to the detriment of longer term innovation - you need a balance of both.

_______________________

BizBooks: You list research, development, and application as the pro-innovation ecosystem's sort of Holy Trinity. Why do we always hear about R&D, but rarely about application?

Judy Estrin: One of my goals in the book is to get people to realize that Innovation is not just about a product or a service, but that it is an "Ecosystem" To have ongoing sustainable innovation you need to have three communities working together - research, development and application. In fact even when people talk about R&D they are typically talking about the development community - the work required to produce products or services. We too often forget about the importance of the research community - furthering understanding of fields of science and training new minds. We also tend to not focus on the importance of the application community. Those who benefit from applying science and technology in new ways. An example is healthcare - doctors apply new medical procedures or pharmaceuticals to save people's lives. All three communities need to be in balance. To address our need for energy independence and reverse climate change we need to change our behaviors in the application community - drive less, turn off lights, lower our carbon footprint. We also need new products from the development community - hybrid cars, new computers, solar panels - that are more energy efficient or "clean". But we also need to invest in research on alternative energy so that long term we have the affordable, clean energy sources to meet our needs.

_______________________

BizBooks: What countries would you point to as having cultivated superior ecosystems for innovation?

Judy Estrin: First let me say that when I use the term "Gap" in the title of the book, I am not referring to the US vs other countries. I am talking about the gap between where we are today and where we were, and where we are today and where we need to be. I do not believe this is an us vs them issue. We want the entire world to be innovative - what is not good is if everyone else gets more innovative as we get less.

That said, I still think that overall the US still has a a superior ecosystem to most other countries - but that will not be true in the future unless we change behaviors that have set in over the last couple of decades, but especially the last 8 years. Other countries that are very focused on innovation include small countries like Singapore or Israel to large countries like China. Each country has its own strength and weaknesses. Some have done a better job in education, others in research, and others in development.

_______________________

BizBooks: Where do you see the United States in 25 years in terms of its world economic position?

Judy Estrin: This is a very hard question to answer since it depends on the actions that we take over the next couple of years. If we continue the trend of the last 8 years, we will not be in a strong position in the future. But if we reverse the decline in our innovation ecosystem, I do believe that we can regain momentum economically. That said the days of us being the sole economic superpower are gone. Our goal should be to regain our strength so that we can collaborate with other countries large and small to make the overall pie bigger - that is what innovation is all about. But we must start now and it will take courage, commitment and great leadership from the top down and bottom up.

_______________________

BizBooks: Which of the two presidential candidates do you see as more likely to cultivate a better ecosystem for innovation? Which of the two parties in Congress?

Judy Estrin: When I began writing my book I was really not very political, having spent 25 years very focused on building companies (and raising my son). But through the process of writing the book - through research and interviews with over 100 people - I took a harder look at what was going on throughout the country. At the end of the journey I was convinced that Barak Obama is the type of leader that we need to move this country forward. He has a strong commitment to science and innovation and he has the leadership style that is required to inspire and rally the nation. In the end innovation is about turning on the leadership in each one of us. I do not see the same understanding of the need innovation, the respect for science or the leadership style coming from the McCain ticket. I could go on for pages on this topic but will stop here ;-)

_______________________

BizBooks: Are they any individual states you can point to that have done a good or bad job cultivating a pro-innovation ecosystem as far state policy is concerned?

Judy Estrin: I did not do a lot of state by state research. But I will say that there are some clear clusters of innovation in the country - typically as a result of a number of strong universities complemented by some larger corporations and a entrepreneurial community. California of course stands out, not because of its policies per se but because it is home to Silicon Valley. I was in Columbus, Ohio last week to give a presentation at a tech event and was impressed by the level of entrepreneurial spirit.

_______________________

BizBooks: We see innovation clusters in Silicon Valley, northern Virginia, Cambridge/Route 128, Raleigh-Durham, and elsewhere. Where's the next one in the U.S. going to be? Where's the next one NOT in the U.S. going to be?

Judy Estrin: I don't have a concrete answer, but I do believe that what it takes is the combination great universities, large corporate presence, and a culture and infrastructure support for entrepreneurialism and intelligent risk system.

_______________________

BizBooks: Much of your areas of emphasis make sense given your prior career. But k-12 education--what has inspired you to be concerned with that?

Judy Estrin: The last chapter of my book is called "Next Generation Innovators" and discusses education and culture from the perspective of innovation. In the end adjusting our education system so that we are providing a good education to all Americans, raising the scientific and technologic literacy of the country and inspiring more children to be interested in math, science and engineering is the key to our future.

_______________________

BizBooks: "Innovation Gap". Is the allusion to the "missile gap" of the Cold War years intentional?

Judy Estrin: Although I do talk about how the response of the country's leadership to the Cold War inspired decades of innovation and a generation of scientists - using GAP in the title was not actually tied to the missile gap of that time.

_______________________

BizBooks: In what industries do you see the most promise for the U.S. to establish itself or continue as the lead innovator? In what industries is the U.S. current position the least promising?

Judy Estrin: I believe that looking forward energy and life sciences will be important areas of growth for the US economy if we make the right funding and policy decisions and we adjust our business focus to be a bit more patient and think beyond the next quarter or year. I think we have a real advantage where the entire Innovation Ecosystem comes together, and where large corporations can be complimented by entrepreneurial ventures. We are never going to be the lowest cost producer or out number China in the number of scientist or engineers that we produce. But I learned as an entrepreneur that you don't have to be big to get ahead - but you do have to be innovative, adaptive and learn how to collaborate - how to play well with others (something we as a country have not done as well at as we need to)

_______________________

BizBooks: After reaching record highs only a couple of months ago, the price of oil has plummeted. Should the U.S. want energy prices high, low, or in between, particularly from the standpoint of what will most encourage innovation?

Judy Estrin: What would be really nice is if we could convince the country, businesses and citizens to understand the importance of achieving energy independence with a variety of energy sources that are clean and affordable without having the price of oil high so that people would not suffer so much in the meantime (since it will take a while to get there). However, so far this has not been the case - innovation can be spurred either by the price of oil being high or by policies that encourage new behaviors.

_______________________

Boston, Mass: It seems like the US can compete in the battle for cultural innovation, but haven't we already lost the technology innovation race?

Judy Estrin: I do not believe that we have lost the technology innovation race. In fact I don't think it should be a race. However if you are talking about IT (information technology) something that is important to consider is how its role has changed. IT is very important to the future, not as stand alone technology but how it can be applied to help solve the problems I discussed earlier

_______________________

Washington, D.C.: In the context of the current political campaigns, do politicians' views on social issues--say, on abortion, or on the validity of evolutionary theory--have an impact on the innovation climate?

Judy Estrin: I do believe that these "social" issues have an impact on the innovation climate. Science is such an important part of the Innovation Ecosystem and one of the reasons we have been able to thrive is our "First Freedom" or separation of church and state. This separation has been threatened over the last 8 years which has had a chilling effect on scientific research. We also must make sure that our children know what is science and what is not science. Faith of all types play an important role in our society, but religion should not be confused with science.

Also, innovation requires an open mind - anything that culturally encourages dogma as opposed to openness and questioning will have a tendency to discourage innovative thinking.

_______________________

Raleigh, N.C.: What role do universities play in the ideal pro-innovation ecosystem?

Judy Estrin: Universities are really the home to the "research" community of the Ecosystem. They also play a critical role in training the next generation of innovators and leaders.

_______________________

Washington, D.C.: Is innovation more difficult in today's risk-averse environment, i.e. with job security and the country's financial woes top of mind?

Judy Estrin: One of the problems that the country has is that we have become significantly more risk-averse, in businesses large and small, in the way venture capitalists or wall street invests and the way politicians behave. This is a big problem for innovation which requires intelligent risk (not the type of blind risk that created the current crisis) - I do worry about this and is one of the reasons that wrote the book and continue to speak about the topic. People need to understand the consequences of being so risk-averse.

_______________________

Washington, D.C.: Say you're a burgeoning entrepreneur with a great, innovative idea but little business experience or even acumen. What should your next move be?

Judy Estrin: The first thing I would do is find some people you trust to be open and honest with you and get their feedback. If you have the commitment, passion and drive to move forward then write up a business plan and see if you can get funding (but don't quit your day job until you do, or unless you can afford to go a while without a salary - it is a very difficult time to raise money)

_______________________

BizBooks: Looks like that's all the time we have for today. Thank you Judy for taking the time to answer our questions.

And thanks to everyone for joining us.

Judy Estrin: Thank-you for the great set of questions. For more information on my book, or for anyone who wants to ask me a question directly please go to the web site for my book "Closing the Innovation Gap" at www.theinnovationgap.com

Thanks again, Judy

_______________________

---

---