The agenda, which included three panels hosted by PBS' Charlie Rose, focused on innovation, green energy, and the global knowledge economy. Panelists included Jerry Yang, John Doerr, Scott McNealy, Reed Hastings, Charlie Giancarlo, and Bill Gates. The day ended with a surprise cameo by Arnold Schwarzenegger.
I thoroughly enjoyed Rose's interviewing style and the thoughtful commentary from our industry's leaders. My key takeaways/observations follow:
- innovation is like pornography - it is hard to define but easy to recognize.
- Rose worked hard to ask the panelists how best to foster and encourage innovation. While the answers varied, a recurring theme centered on the importance of both youth and ignoring convention.
- Irreverence, iconoclasm, idealism - three "i's" - were noted as magical ingredients, but the inability to systematically or coherently explain how to foster innovation is interesting to note. It is clear, however, that there is little obvious correlation between R&D spend and innovation. CSCO spends $4bn a year in R&D and yet the majority of new products stem from an active M&A program.
- Two of Gates' comments struck me: 1) he compared MSFT's focus on low price high volume software (compared to the prevalent IBM model in 1980) to GOOG's focus on low price high volume advertising (compared to traditional Madison Avenue models). Both models commoditized huge industries and enabled new participants and beneficiaries to share in the now larger pie. 2) the greatest strategy sins are ones of omission, missing a market or opportunity. He believes in identifying and entering markets as early as possible as the opportunity to repeatedly play the game (v 1.0, 2.0, etc) allows for iterative innovation not possible if you are not previously commited to the market. Also, markets that take off follow s-curve growth rates and it is often impossible to catch up with the pioneers in front of you.
- free labor markets, government funding of core science, and increased investment in math and science education are vital investments to maintain US innovation and prosperity
- global warming is a global imperative and must be addressed to head off economic and social catastrophe
- resources, and not capital, are they key constraints to providing energy to the 1/3 of the planet's population without ready access to energy. With energy consumption correlated with GDP growth, developing economies will drive huge increases in demand for carbon based energy sources.
- Much like Malthus' views on running out of food supply (people grow exponentially while food supply grows arithmetically), panelists argued that while the world is awash in capital that could fund energy needs that there is a deficit of carbon matter that can power the world's future energy demands.
- Accordingly, the argument goes, the only credible means to service energy demand will be through bio-fuels and other renewable energy sources. Malthus' thesis fell prey to non-linear innovations in agriculture science, and perhaps science will also wean our addiction to carbon fuels
- Green energy cannot be a conscience driven purchase - ie premium-priced. Green can no longer evoke Patagonia but rather Wal-Mart - ie low-cost - if it is to meaningfully take share from carbon sources.
- Stanford is a vital resource for Silicon Valley - many of the panelists and a good number of the innovations discussed trace their pedigree back to the school
- A removal of caps on H1Bs (see my post on this http://willprice.blogspot.com/2005/11/h1-b-aliens-and-myth-of-free-labor.html)
- Free trade
- Government investment in alternative fuels and green energy
- Incentives for math and science degrees
- Healthy university systems
- Entrepreneurship - a vital source of jobs, wealth, and innovation