1. Western Research Application Center (WESRAC) Innovation in the Exponential Economy Bio/Nano/ Info The Exponential Economy Ken Dozier Executive Director, WESRAC 12/3/10

2. Western Research Application Center (WESRAC) The Western Research Application Center

3. Western Research Application Center (WESRAC) Schismogenesis

4. Western Research Application Center (WESRAC) Jack Welch, Former Chairmen General Electric The Future “When the Rate of Change Outside is Greater Than the Rate of Change Inside, The End Is In Sight”

5. Western Research Application Center (WESRAC) Controls $90 Billion Cash

6. Western Research Application Center (WESRAC) 6-D Global Commerce Demassification Denationalization Despacialization Disintermediation Disaggregation Decentralization Source: The Social Life of information, Brown & Duguild

7. Western Research Application Center (WESRAC) Source: The world Competitiveness Yearbook IMD International 3.Finland 4.Luxembourg 5.Netherlands 6.Hong Kong 7.Ireland 8.Sweden 9.Canada 10.Switzerland Global Competition 1. 2.

8. Western Research Application Center (WESRAC) Industry Clusters –“Industry Cluster”: collections of competing and collaborating industries in a region networked into horizontal and vertical relationships, involving strong common buyer-supplier linkages, and relying on a shared foundation of specialized economic institutions. Because they are built around export-oriented firms, industry clusters bring new wealth into a region an help drive the regions economic growth. Industry Cluster Electronic Key Export Oriented Firms Key Supplier Oriented Firms Key Economic Infrastructure Providers Consumer Electronic Assembly Computer Hardware Assembly Tool, Die & Machinery Office & Production Supply Specialized Component Supply Education & Training Institutions Physical Infrastructur e Providers Financial and Regulatory Institutions (ERI/McGraw Hill,”America’s Clusters”,1995)

9. Western Research Application Center (WESRAC) Where are the Brains? (ERI/McGraw Hill,”America’s Clusters”,1995)

10. Western Research Application Center (WESRAC) (ERI/McGraw Hill,”America’s Clusters”,1995) Industry Clusters

11. Western Research Application Center (WESRAC) 1940-1965 1965-1990 1990-2015 Motion PicturesAviation Electronics Defense Aviation Automobile Manufacturing Food Processing Agriculture Theme Parks Motion Pictures Television Computer Peripherals Defense Instruments Commercial Aviation Metal Products General Manufacturing Information Processing Defense Aerospace Theme Parks/ Tourism Visual Media Production Professional Services Multimedia Technology Engineering Services Technology-Based Manufacturing General Manufacturing Information Processing Business Services The Evolution of Industry (ERI/McGraw Hill,”America’s Clusters”,1995)

12. Western Research Application Center (WESRAC) Info-Tech Nano-Tech Bio-Tech Technologies Change Fast Source: SRI International 2002

13. Western Research Application Center (WESRAC) We Think We Are This

14. Western Research Application Center (WESRAC) Economic Theory Assumes The Economic Man is: –Rational –Knowledge of All Economic Aspects of His Environment –While His Knowledge is Not Absolute, it is Impressively Clear and Absolute –Has a Well Organized and Stable Set of –Has the Skills to Calculate Which Course of Action Permits Him to Reach The Highest Attainable Point on His Preferential Scale

15. Western Research Application Center (WESRAC) We Are This Richard Thaler Nudge: Improving Decisions About Health, Wealth, and Happiness 2008

16. Western Research Application Center (WESRAC) TruthKnowledgeBelief Universal No Debate Phenomena Social Converge on debate Theory Personal Diverge on debate Guess (Hypothesis) Source: “Ten Philosophical Mistakes”, Mortimer J. Adler 1985 What is Knowledge ? ObservationExplicitTacit

17. Western Research Application Center (WESRAC) The Internet Changes Everything (ICE) Exponential Economy Copyright SRI International 2002

18. Western Research Application Center (WESRAC) Exponential Growth How thick do you think a paper folded in-half 42 times would be? How thick would it be after 100 folds? Source: “Long Range Forecasting” Armstrong 1985

19. Western Research Application Center (WESRAC) Exponential Growth The Answers 42 folds = 440,000 Km (the distance from the earth to the moon.) 100 folds = 850 trillion times the distance from the earth to the sun! Source: “Long Range Forecasting” Armstrong 1985

20. Western Research Application Center (WESRAC) The Singularity is Nearer Than We Might Think Posted by John Moravec on Wednesday, March 18th 2009 http://www.educationfutures.com

21. Western Research Application Center (WESRAC) California Council on Science and Technology 2004

22. Western Research Application Center (WESRAC) Next Generation Biology Simulating 100 microseconds of protein folding could take 10 25 machine instructions This computation would take three years on a PetaFlop computer. –"Jaguar" is one of only two known computers on Earth with peak performance exceeding a million billion (10^15) operations per second. The other one, IBM's "Roadrunner" system at Los Alamos National Lab Keep a 3.2GHz microprocessor busy for the next million centuries. Source: Communications of the ACM. Volume 47, Number 11 (2004), Pages 34-41

23. Western Research Application Center (WESRAC) Cloud Computing Utility http://compete.org/HPC

24. Western Research Application Center (WESRAC) Adapted from OSC Graphics Council and USC ISI Proprietary Knowing Verses Doing Gap 20 Number of Users Number of Applications 14 64 National Productivity Opportunity Entry Level HPC Users Experienced HPC “Heroes” Nodes 1,00010,000+ Moving Users Forward World Class Computing Government Laboratories & University HPC Centers Experienced Industry Users Filling the Expertise Gap Never Ever Users Mid-Range Users

25. Western Research Application Center (WESRAC) Pre, Post Processor & Solver Hardware: 1 Core 3 GB Memory Software: Windows XP MSC.SimOffice Mathematica Solver Hardware: 8 Cores 48GB Memory Software: Linux 10 times faster Solving than PC Potential gateway to the HPC Cloud Solver Hardware: 100 – 10000 Cores ~ TBs Memory Software: Linux 40 times faster Solving than PC 1 Gbps 1, 12, 40 Gbps Desktop PC Entrance-Level HPCHPC Cloud (Remote)

26. Western Research Application Center (WESRAC) Chart Source: Corporate Information Systems, Applegate Complex Adaptive Systems

27. Western Research Application Center (WESRAC) Incubators and Science Parks created to bridge gap between development and commercialization Chart Source: Corporate Information Systems, Applegate SBIR Government (pull) Venture: Niche markets, public trading (pull) Universities: Curiosity Based, emerging, (push) Large Companies hierarchy, products based, (push) Make & Sell vs. Sense & Respond B01-013

28. Western Research Application Center (WESRAC) Problem: Time Source: Gus Koehler, University of Southern California Department of Policy and Planning, 2002

29. Western Research Application Center (WESRAC) Problem: Layers of Communication Source: Gus Koehler, University of Southern California Department of Policy and Planning, 2002

30. Western Research Application Center (WESRAC) Problem : Government Dynamics Source: Gus Koehler, University of Southern California Department of Policy and Planning, 2002

31. Western Research Application Center (WESRAC) How’s That Intuition Thing Working For You? Source: Gus Koehler, University of Southern California Department of Policy and Planning, 2002

32. Western Research Application Center (WESRAC) Hope: Statistical Physics Proven formalism for “seeing the forest past the trees” –Well established in physical and chemical sciences –Our recent verification with data in economic realm Simple procedure for focusing on macro-parameters –Most likely distributions obtained by maximizing the number of micro-states corresponding to a measurable macro-state –Straightforward extension from original focus on energy to economic quantities Unit cost of production Productivity R&D costs –Self-consistency check provided by distribution functions

33. Western Research Application Center (WESRAC) More Hope: Plasma Theories Advanced plasma theories are extremely important when one tries to explain the various waves and instabilities found in the plasma environment. Since plasma consist of a very large number of interacting particles, in order to provide a macroscopic description of plasma phenomena it is appropriate to adopt a statistical approach. This leads to a great reduction in the amount of information to be handled. In the kinetic theory it is necessary to know only the distribution function for the system of particles. Source: University of Oulu, FInland

34. Western Research Application Center (WESRAC) The Missing Link Seven Organizational Change Propositions Framework, “Framing the Domains of IT Management” Zmud 2002 Business Process Improvement Business Process Redesign Business Model Refinement Business Model Redefinition Supply-chain Discovery Supply-chain Expansion Market Redefinition High β Low β

35. Western Research Application Center (WESRAC) Bio – David Semiotics Syntactics: Plasma Physics * Stamper, Information, Norms and Systems (1996)

36. Western Research Application Center (WESRAC) Cumulative Number of Companies U.S. Economic Census verses Dozier/Chang Model 0 500 1000 1500 2000 2500 3000 3500 4000 0102030405060 Actual Data – Dark Blue Diamonds Dozier/Chang Model – Square (Purple) Points Shipments per Company in $M

37. Western Research Application Center (WESRAC) Why Do We Tolerate This Much Waste? 4 Tier Supply Chain Wilensky, U. (1999). NetLogo. http://ccl.northwestern.edu/netlogo. Center for Connected Learning and Computer-Based Modeling. Northwestern University, Evanston, IL Beer Game Demo Densmore, O. June 2004

38. Western Research Application Center (WESRAC) When We Could Pay Off the National Debt

39. Western Research Application Center (WESRAC) Emplyee Effectiveness Bureaucracies0.25% - 1.0% Large Utilities 0.25% - 1.0% Large Corporations ( 10 k or more employees) 0.50% - 2.5% Medium Utilities 0.25% - 1.5% Medium Corporations (2k or more employees)1.00% - 3.5% Small Companies (100 or more employees)1.00% - 5.0% Tiny Companies (5 or more employees)1.50% - 8.0% American Institute of Business Consultants, J.R. Blake

40. Western Research Application Center (WESRAC) Assessing Your Technology Industry Adoption of Technology Executive’s Approach to Technology CEO Not InvolvedCEO Involved Before Technology (Non-Customer Facing) After-Technology (Customer Facing) CIO Magazine June 2002

41. Western Research Application Center (WESRAC) http://wesrac.usc.edu For more information, please write: Contact Information