[Editor's Note: We asked selected Xconomists a series of questions designed to zero in on the big issues of the year, including "What issues would you be willing to throw a punch over?"]

There are two.

The first is the state of the patent system, particularly as it affects computing hardware and software (broadly construed). Just about everything about the system is broken. In my view it is working strongly against real innovation. Major companies amass enormous portfolios of questionable patents that they can use to bludgeon one another (until they sign cross-licensing agreements, at which point only the little guys are left to be bludgeoned). Organizations that are not in the innovation business acquire portfolios that they assert for profit alone. I have absolutely nothing against the licensing of substantive innovations by those in the innovation business, whether by major companies or little guys . But much of what goes on today does not fall into this category, and something needs to change. I am not sufficiently expert to make appropriate detailed proposals, but I am sufficiently expert to smell a rat.

The second is our “blame the teachers and the teachers unions” approach to improving K-12 education. Yes, K-12 education is a mess, more of a mess in the U.S. than in most industrialized nations, and more of a mess in Washington than in almost all other technology states. (For some facts to support the latter assertion, see this.)

But blaming teachers and unions is a cheap way to avoid confronting the many real problems that plague our K-12 education system and are leading us rapidly down the road to an ever-more-stratified society of haves and have-nots, threatening the raw material upon which the innovation economy depends. Here, too, I don’t have an easy or quick solution—there isn’t one. But we are not going to make progress by sitting around playing the blame game.

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[Editor's note: As a New Year's exercise, we asked a select group of Xconomists to answer this question: "What's the craziest idea out there that just might succeed?"]

That technology can actually play a significant positive role in education. The false promises go back at least 100 years—to extravagant claims by Thomas Edison. Certainly “computers in theclassroom” have contributed relatively little to this point—evenhighly principled attempts are yielding results that are, at best,controversial. (See the New York Times recently on Carnegie Learning.)

But one has to believe that there is hope, in the next 10 years, for advanced adaptive tutoring systems, and for games that embody entirely new approaches to interactive learning. Zoran Popovic at the University of Washington, whose Foldit protein folding game was recently credited with solving an AIDS-related molecular puzzle that had baffled scientists for a decade, has $15 million in research funding from the Bill & Melinda Gates Foundation and the Defense Advanced Research Projects Agency to study games for learning in his Center for Game Science.

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It’s impossible to overstate Jobs’s contributions.

First, monumental contributions to design. Design is at least as much about what to omit as it is about what to include, and Jobs was a master of both. As you saw in the New York Times last month, Jobs’s design patents ranged from the Mac Air, the iPhone, and the iPad to power adapters and the glass staircase in the NYC Apple Store.

Second, he made monumental contributions to business models. The iTunes store. The app store. The iPhone. These have revolutionized the music industry, the software industry, and the telecommunications industry.

Honestly, there has been no one like him.

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It’s no secret that there’s extraordinary competition right now for computer scientists. Both nationally and regionally, new graduates from strong programs at all degree levels are receiving extraordinary offers.

This year’s UW Computer Science & Engineering seniors have reported starting salaries as high as $105,000 (that’s the highest I’ve heard – there may be higher) and signing bonuses as high as $30,000 (ditto). Top students are describing experiences such as these (quoting from emails):

“I’ve had 4 emails from startups in the area that got my information from LinkedIn. Also from LinkedIn I got an email from [top tech company]. I’ve also gotten emails from [two top tech companies] – presumably they got my information from the UW CSE resume database. I also got an email from [top tech company] saying they got my information from a professor here; I didn’t respond right away and the guy called my cell phone! All of these were emails asking me to come in to interview. All were unsolicited.”

“I was able to arrange 5 on-site interviews in a two week span. I also got 5 offers in that same span.”

Students still in the program have extraordinary internship opportunities, such as these (again quoting from emails):

“I received an internship offer from [top tech company] after being in the major less than a quarter.”

“In the next three quarters I will be doing consecutive internships with [three top tech companies].”

“I’m a senior who transferred to UW from Shoreline Community College. My employment history is zilch – a little retail, that’s it. Yet [top tech company] offered me a $30/hr internship just based on the fact that I’m in UW CSE.”

“I’ve been completely blown away by how well interns are treated within our industry. It’s incredible that CSE students still in school can earn summer salaries twice as high as students from other majors can expect to earn after graduation. My most unique experience has been my opportunity to travel. Last summer I worked for [top tech company] in Seattle. At some point I realized that they had offices in awesome cities all over the world: Sydney, Dublin, Zurich, Paris, London. I told the recruiters I wanted to work at one of these offices. They were able to secure me a position in London. I’ve always wanted to study abroad, but I was worried how well it would fit with computer science. As it turns out, I got a better deal than studying abroad: working abroad. Now all of my study abroad dreams are being fulfilled more wildly than I ever expected: I’m being paid to travel; I’m not losing time, I’m working for an industry leader; and, best yet, I don’t have homework. I don’t think many other students get opportunities like this.”

What’s going on?

Many factors are at work:

• UW Computer Science & Engineering is one of the top programs in the nation, and our students – more than 80 percent of whom are from Washington State and remain in Washington State after graduation – are superb. Every year we’re a leading supplier of students to top companies such as Amazon.com, Google, and Microsoft (as are Berkeley, MIT, and Stanford). In a typical year, 35 percent of our graduates go to those three companies, 15 percent go to other large companies, 30 percent go to small companies and startups, and 15 percent go to graduate school in some field (law, business, medicine, and biology, as well as computer science).

• Seattle has one of the nation’s most vibrant tech sectors. The Washington Technology Industry Association boasts 1,000 member companies with 125,000 tech employees.

• Both nationally and regionally, the tech sector is exploding. Microsoft and Amazon.com are hiring aggressively. Companies such as Google, Facebook, and Zynga have opened Seattle offices in recent years because of our talent pool. Startups are hot.

• Just about every field is becoming an information field, so computer science graduates are in demand across-the-board.

Employer demand

Obviously, employer demand has its peaks and valleys. What’s important is the long-term trend. Here’s what the President’s Council of Advisors on Science & Technology said in a December 2010 report assessing the Federal Networking and Information Technology (NIT) Research and Development Program.

“NIT [computer science] is arguably unique among all fields of science and engineering in the breadth of its impact … Recent technological and societal trends place the further advancement and application of [computer science] squarely at the center of our Nation’s ability to achieve essentially all of our priorities and to address essentially all of our challenges … All indicators – all historical data, and all projections – argue that [computer science] is the dominant factor in America’s science and technology employment.”

Here’s a figure included in the PCAST report. The dominance of computer science has been consistent in Bureau of Labor Statistics projections for many years:

In other words, across all fields of science, engineering, and the social sciences, more than 60 percent of all newly-created jobs, and more than 50 percent of all available jobs (both newly-created and vacancies), are in computing!

Student demand

Student demand, too, is cyclical. There was a peak in 2000-01. There was a valley five years later. Today, most of the top programs report that they have surged beyond the peak of a decade ago:

—At the University of Washington, we teach our introductory course every quarter – four times a year. We track annual enrollment as a four-quarter rolling average. The previous high point was the four quarter period ending in Spring 2001: 1,600 students annually. The low point was the four quarter period ending in the autumn of 2004: 1,200 students annually. Our most recent four quarters: 1,700 students annually.

—At Carnegie Mellon University, high school students apply directly to the computer science major. CMU attempts to enroll between 130 and 150 new computer science freshmen every year. Their previous high water mark for applicants was in 2001: 3,237 applicants for 130-150 places in the freshman class. The low was in 2005: 1,732 applicants. This year: 3,479 applicants.

—At Stanford, computer science course enrollments have been recovering at about 20 percent per year since 2007-08, after turning the corner the year before that. Last year (2009-10), Stanford fell just short of its all-time record enrollment in the introductory course. That record – 762 students total over three regular-term quarters – was set in 1999-2000, at the height of the dot-com boom. This year, though, enrollment totals 1,087 – a year-to-year growth of 51 percent. More amazing, Spring Quarter enrollment is up by 120 percent over last Spring Quarter.

—At MIT, an introductory computer science course, 6.00, is the single most popular course in the MIT OpenCourseWare initiative – OCW includes more than 2,000 MIT courses in a broad range of fields.

The supply/demand gap

Both nationally and in Washington State, there is a significant supply/demand gap in computer science.

The Washington Higher Education Coordinating Board 2011 Regional Needs Analysis Report includes the table below from a study that “identified occupations where the supply of workers coming out of Washington’s higher education system was substantially less than employer demand:”

No other field comes close!

An assessment

Our state will always be a net importer of tech talent – otherwise the talented computer science students who grow up in Nebraska won’t have any place to work. The critical question is, do Washington kids who desire to prepare themselves for tech careers have the opportunity to do so? Here are some facts that indicate the answer is a resounding “No!”:

—Washington is among the bottom states in the nation in bachelor’s program participation per capita (18-23 year olds).

—Washington is among the bottom states in the nation in graduate degrees awarded in STEM (Science, Technology, Engineering, and Mathematics) fields.

—Washington is among the top states in the nation in the importation of workers with a bachelor’s-level education or greater.

—At UW Computer Science & Engineering, enrollment today is the same as a decade ago – the only enrollment increase funded since 1999 (in 2007) was wiped out (and more!) in subsequent budget cuts. UW CSE can accommodate less than one in three current UW students who seek to major in Computer Science or Computer Engineering.

—Western Washington University recently informed its Computer Science Department that it was on the chopping block.

Our economy is creating great jobs, and they’re going to other people’s kids. Who suffers? The kids who grow up here, and the newer, smaller companies that must recruit locally.

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1. Invest substantially in targeted initiatives at the University of Michigan, and in programs that encourage the state’s best students to attend. Michigan is one of the nation’s truly great universities, public or private. It has superb programs in biomedicine and in engineering. It is a huge attractor of out-of-state funding—a highly successful multi-billion-dollar business. And, like all great universities, its most important output is educated and entrepreneurial young people.

2. Invest in jobs that create other jobs. Policymakers don’t seem to understand the leverage that tech provides. It’s the same here in the State of Washington—they’ll move heaven and earth to keep a sheet metal bender from leaving Tukwila, but when it comes to attracting Intel Labs or Google, we’re pretty much on our own. Jobs are not created by big businesses or by small businesses—they’re created by new businesses and by expanding businesses. Fight to attract startups, and to create them. Don’t be held hostage by incumbents.

3. Seize competitive advantages. Software. Biotech and life sciences. The integration of software with advanced manufacturing. And innovative leaders who think out of the box, like Ford Motor CEO Alan Mulally (a former Boeing executive from Washington state. You’re welcome, Michigan!).

4. Hold candidates for public office responsible for appropriate approaches to education and economic development. Once elected, hold them responsible for walking their talk.

5. Root for the Red Wings (the Tigers are going nowhere).

[Editor's note: To help launch Xconomy Detroit, we've queried our network of Xconomists and other innovation leaders around the country for their list of the most important things that entrepreneurs and innovators in Michigan can do to reinvigorate their regional economy.]

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Forty years ago, in 1969, Neil Armstrong left footprints on the surface of the moon. It was an extraordinary accomplishment.

Also in 1969, with much less fanfare and at much less expense, Len Kleinrock’s programmer Charley Kline sent the first message over ARPANET. (The message was “lo” – the first two letters of “login.” Then the system crashed.)

With forty years of hindsight, which of these events has had the greater impact? Unless you’re really big into Tang and Velcro, the answer is clear. From four computers in 1969, the Internet has grown to more than half a billion computers and more than a billion regular users, and is impacting every aspect of our lives.

“Exponentials R Us.” That’s the magic of computer science. It’s what differentiates us from all other fields. (To the extent that other fields are experiencing exponentials, it’s because of computer science – for example, the sensor technology and computational power that are driving biotech.) “Exponentials R Us” is the past, the present, and the future of computer science. If you think you can have greater impact doing something else, you’ve got your head wedged.

With that as context – as the single most important message – here are a few things that have been particularly cool in the past decade:

1. Search. Ten years ago, you would painstakingly organize things – label them and file them – so that you could find them. How 1990s! Today, you can search more than 500 Terabytes of the web (not to mention your own desktop) in 100 milliseconds.

2. Scalability. In the 1990s, Jeff Bezos’s smiling face appeared in advertisements for DEC multiprocessor servers, because the scalability of Amazon.com was limited by the size of the largest computer that DEC could build. Today, that’s laughable—we use hundreds of thousands of piece-of-junk computers running innovative software to create arbitrarily reliable, available, and scalable web services.

3. Digital media. Text. Music. Images. Video. All of it is digital. Downloaded and streamed. Seamlessly edited. With you at all times. Interactive. “It’s just bits.” It’s totally different.

4. Mobility. A decade ago, your mobile phone was a brick, and all you could do with it was make calls (if you were lucky!). Today, high-bandwidth connectivity to all of the world’s digital data is ubiquitous. Ain’t no escaping it, for better or for worse. … Next Page »

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The American Recovery and Reinvestment Act of 2009 (ARRA, or “the stimulus”) totaled approximately $787 billion. Of this, approximately $21.5 billion (2.7 percent) was for the support of R&D—$18 billion for the conduct of research and $3.5 billion for facilities and equipment.

Why R&D as part of the stimulus? Because it employs people (that’s what we do with federal research grant funding), but more importantly, because it lays the foundation for America’s world leadership. Consider my own field, computer science: just about every sector of the information technology industry can trace its roots to innovations arising from federally-sponsored research. The challenges that our nation faces today—in information technology, energy, health care, transportation, and other fields – will only be surmounted with a vigorous program of R&D.

ARRA R&D funding was distributed across the full spectrum of federal science agencies. The National Institutes of Health (NIH) received the lion’s share: $10.4 billion. The National Science Foundation (NSF) was next, at $2.9 billion, followed by the Department of Energy (DoE), at $2.4 billion, and others. Awards are only just beginning to be made—quality is ensured through a highly competitive peer-reviewed proposal process that inserts some unavoidable delay in the loop.

So, how’s it going? NIH is the only agency with an easily accessible database of ARRA R&D awards. As The Seattle Times recently reported, the University of Washington currently is tied with the University of Michigan for the largest dollar value of first-year ARRA R&D awards from NIH: $99 million. (Most research awards extend over multiple years, but the NIH database reports only the first year of funding.)

It’s worth reflecting on how remarkable this is. Here are the numbers for a dozen top-ranked institutions nationally:

First-Year NIH ARRA Research Funding for
12 Universities With Top Research Medical Schools
As of 10/5/2009

Annually for several decades, the University of Washington has ranked among the top few institutions in the nation in federal research obligations—research at UW brings $1 billion to the state annually, employing thousands and enriching the education of thousands more. This NIH ARRA research award performance is consistent. However, despite this extraordinary performance, lack of institutional diversity hurts Washington State overall. Our state has 385 NIH ARRA research awards: 241 to UW, 48 to the Hutch, 21 to Seattle Childrens, and a total of 75 to all other organizations. California, by contrast, has received 1,708 awards; Massachusetts 1,226; New York 1,136; Pennsylvania 807; Texas 668; North Carolina 556; Illinois 502; Maryland 476; Ohio 449; Michigan 395.

What’s the bottom line? America’s competitiveness, and Washington State’s competitiveness, will be dramatically enhanced by R&D funds awarded as part of the stimulus. Our ability to tackle society’s grand challenges depends on it.

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I’d like to throw out a few factoids for your consideration:

1. Washington is a high-tech state. For example, we rank 4th among the 50 states in the number of individuals in science and engineering occupations, as a proportion of our workforce.

2. However, most of these high-tech workers are imported from other states. We rank 36th among the 50 states in bachelors degrees granted as a percentage of the 18-24 year-old population, and 27th among the states in Ph.D’s awarded as a percentage of the 25-34 year-old population.

3. This under-investment in higher education disadvantages kids who grow up here (who are denied the opportunity to prepare for high-tech jobs) and smaller companies (which must recruit from the local workforce).

4. All states are facing severe budget problems this year. But different states are dealing with them in different ways.

5. In Washington, higher education is slated for far deeper cuts than in any other high-tech state. In other words, a system that already disadvantages smaller companies and kids who grow up here is going to get far worse. See the chart below, and more information on how Washington’s budget proposal compares with peer states by clicking here.

6. This craziness could be addressed by making different budgetary choices (as all other high-tech states seem to be doing), and/or by allowing tuition to rise in order to avoid reducing capacity (UW tuition, even with an increase double what the Governor and the State Senate have proposed to allow, would still be the lowest among Global Challenge State peer institutions – less than $8,000 per year for a top-tier education; federal and institutional financial aid increases would maintain affordability).

7. You’ve got to decide what sort of future you want for your kids and your state. And then tell your legislators – you can find them here.

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Washington’s economy is one of the most technology-intensive in the nation. Software. Precision agriculture. Aerospace. Biomedicine. E-tailing. New media. Alternative energy. Public and private research institutions. Even narrowly defined, the technology sector is responsible, directly or indirectly, for nearly 50 percent of the jobs in Washington. East to west, north to south, we are driven by innovation. It benefits all of our citizens. It defines our future.

That’s why this year’s Presidential election, and tonight’s debate, are so important to Washington. There are stark differences between how John McCain and Barack Obama would steer our nation’s science and technology enterprise and how those differences will affect our economy.

More than 60 American Nobel Laureates released a letter on Sept. 25 urging support for Senator Barack Obama. Here is part of what they said:

“This year’s presidential election is among the most significant in our nation’s history. The country urgently needs a visionary leader who can ensure the future of our traditional strengths in science and technology and who can harness those strengths to address many of our greatest problems: energy, disease, climate change, security, and economic competitiveness. We are convinced that Senator Barack Obama is such a leader, and we urge you to join us in supporting him.”

These Nobel Laureates support Senator Obama with good reason. We need strong leadership to implement the kinds of changes that will drive the science and technology industries of our nation and our state. To that end, Senator Obama has promised to appoint a highly qualified science advisor who will report directly to him. That position was abolished under George W. Bush. Senator Obama has also pledged to appoint the nation’s first chief technology officer. Senator McCain, on the other hand, has made no such commitment to ensuring that he will seek the best science advice available.

When Senator Obama was looking for science advice to guide his campaign, he called upon the experts. It was recently revealed that three of his top science advisors have Nobel prizes: Peter Agre in chemistry, Robert Horvitz in medicine, and Harold Varmus, the former head of the National Institutes of Health, in medicine. The McCain campaign, despite being asked many times by the press, has declined to identify its science advisors.

Our nation’s economic future depends upon continuing to be the best place to develop innovative products and services and the best place to build new businesses and jobs around innovation. Senator Obama has laid out detailed plans to ensure continued leadership in research and for giving American producers the incentives they need to get ideas into the market.

Consider, for example, energy. Senator McCain claims to have a plan for getting the nation off of fossil fuels, but a close look reveals that he is banking on more oil drilling, developing new nuclear plants, offering a prize for developing more advanced batteries – and he chose a running mate who doubts the contribution of fossil fuels to global warming. Senator Obama, on the other hand, has offered a detailed set of programs including increases in research, a balanced set of energy options, and strong incentives for implementation of new energy ideas.

Never has it been so critical that we have a President who understands science, technology, and innovation – critical to America, critical to the State of Washington, and critical to you and your children. I urge you to become informed on these issues, and to give them appropriate weight in your decision on November 4.

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By now you’ve seen the 2008 Milken Institute “State Technology and Science Index.” Washington ranks fifth, behind Massachusetts, Maryland, Colorado, and California. Not too shabby? Let’s take a look under the covers.

At the outset, it’s important to acknowledge that all such rankings have a huge bogosity quotient—they’re highly sensitive to the precise criteria that are evaluated, and they’re subject to gaming. Still, there are probably some things to be learned.

The Milken index has five components:

—Risk Capital and Entrepreneurial Infrastructure, where Washington ranks 4th.

—Technology and Science Work Force, where Washington ranks 4th.

—Research and Development Inputs, where Washington ranks 8th.

—Technology Concentration and Dynamism, where Washington ranks 8th.

—Human Capital Investment, where Washington ranks 16th.

Each of these, in turn, has between 10 and 21 sub-components, listed at the bottom of the Web pages. There’s a huge wealth of detail available—I urge you to take a detailed look.

For now, though, let’s not spend any time on the first and second components, where Washington ranks 4th among the states (in both cases, up several notches from the most recent previous ranking, carried out in 2004). Or even on the third and fourth, where we rank 8th.

Instead, let’s focus at the other end—”Human Capital Investment”—where we rank 16th, by far our worst performance.

Don’t take solace in the fact that we’re in the top third of the states. Yes, we beat out North Dakota, Montana, South Dakota, Wyoming, Alaska, Louisiana, Alabama, Tennessee, Idaho, West Virginia, Kentucky, Mississippi, South Carolina, and Arkansas. But that’s not the competition. Every state that you’d think of as a tech competitor—and many that you wouldn’t—dominated us.

Here is our ranking on a few of the sub-components:

—Average Math SAT Scores: 25th among the states
—Average Verbal SAT Scores: 25th among the states
—Recent degrees awarded in science and engineering per 1,000 civilian workers: 35th among the states

Here’s the message, in a nutshell: Our state is doing an outstanding job at competing nationally and globally in the 21st century economy. But we’re doing it by importing talent from elsewhere. This includes me, and it probably includes you.

Our K-12 system is failing our kids—it’s not preparing them for, or teaching them to aspire to, 21st century careers. And our higher education system also is failing our kids—there is insufficient investment in bachelors-level education, and even within that, insufficient investment in science and engineering.

In other words, we’re failing our kids. We’re creating 21st century jobs, and they’re going to other people’s kids.

Ask your state legislator what he or she is planning to do about this. If you don’t, who will?

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…is coming soon.

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