Aneesh Chopra, Obama’s Chief Techie, on Building a Startup-Friendly Region and Why Now is the Best Time to be an Innovator in America

5/9/11Follow @curtwoodward

As chief technology officer for the Obama administration, Aneesh Chopra has been heavily involved in efforts to expand access to huge amounts of government data, and encourage techies and entrepreneurs to help solve public policy problems using that data. Xconomy’s Wade Roush talked with Chopra last year, producing this in-depth Q&A that included discussions about healthcare innovation, the government’s role in baiting entrepreneurs with competitions, and big data feeding commercial solutions.

Since then, President Barack Obama announced a new initiative called Startup America, a public-private partnership that aims to boost the economy by improving the conditions for entrepreneurs. Chopra has been among the key evangelists of this effort, which he described as “the national call to arms, so to speak, around the opportunities to promote high-growth entrepreneurship.”

As a preview to his appearance tomorrow at the Technology Alliance’s State of Technology Luncheon, I spoke with Chopra about the administration’s efforts, the role of the private sector, and what it takes to produce results that last beyond the next State of the Union speech.

One of his big messages includes a strong dose of economic optimism: “It is my thesis that there’s never been a better time to be an innovator than today, especially when tackling the big challenges that are in front of us.” Specifically, he calls out the nation’s systems for healthcare, education, and energy.

In healthcare, the focus of Obama’s signature domestic policy initiative for his first term, Chopra says there are “three forces that are coming into play that we believe will act as rocket fuel for innovators.”

The first is changing the way society pays for health services.

“In this country, you get what you pay for. And if Medicare pays people more if they perform more procedures, schedule more visits, then what you see is a pretty healthy growth in both of those areas. If you incentivize value, which is making sure people stay healthy, we believe that shift in payments will open up a new market for a range of IT-enabled services that do not exist today,” Chopra says.

The second trend spurring healthcare innovation, he said, is the modernization of health records and information, allowing better sharing among providers and other actors in the system.

“We will have an unprecedented transformation in the healthcare sector to digitize healthcare information that today is locked up in a file cabinet. And we have put in place the technical foundation for that data to be liberated with full respect to patient privacy and security,” Chopra says. “It’s not just the fact that the information is now digital, it’s that it’s now more liquid and accessible.”

The third force boosting entrepreneurship in healthcare, Chopra says, is throwing open the doors to vast troves of government data. The Department of Health and Human Services, he says, “has looked back in its file cabinets and has identified dozens if not hundreds of datasets that … track all kinds of immunization data, health performance indicators, quality data—you name it. And we are liberating that information.”

As a result, Chopra says, “An entrepreneur now is well-positioned to launch the businesses that will help the healthcare system deliver on these efficiencies, as expected. So that’s an example where the policy agenda and these macro trends are coming together. And in the words of John Doerr, not me—the Kleiner Perkins partner—he believes that there will be several billion-dollar companies born tackling this opportunity.”

Chopra says he’s got a similar spiel for the energy and education systems—insisting that the feds and entrepreneurs can work together to tackle big problems, and that this is the best time to do so.

At a recent Treasury Department summit on the state of small-business financing, Chopra heard complaints about the regional nature of early stage investing—while some entrepreneurs said capital wasn’t a problem, startups from other parts of the country complained that there wasn’t enough investment money circulating in their area. (This, of course, is a phenomenon we hear about all the time in the Seattle area.)

On the White House blog, Chopra wrote that this checkerboard effect makes it “important to identify and bridge these market gaps and encourage investors seeking long-term, ‘hidden value’ investment opportunities that exist in all parts of the country.”

That’s an interesting idea for the executive branch to tackle. And it could be risky. On one hand, entrepreneurs in places like Seattle would probably welcome a stronger cross-pollination of investment dollars from other areas. But I’d guess that the region’s existing early stage investors might not love the idea of the feds encouraging out-of-towners to parachute in and start driving up startup valuations.

That made me think of things like tax incentives and regulatory changes that could encourage more investment dollars to flow into different parts of the country. But Chopra says a big focus of Startup America is promoting a much less interventionist role for the feds, and instead pushing the idea that government and business should work together to improve infrastructure for startups. That should increase the chances that new companies will make it past key hurdles and become more attractive to investors, he says.

In this scenario, Chopra says, the administration’s role is focused on supplying R&D money and acting as a convener, bringing business leaders together to encourage more infrastructure for new companies. One major example is the recent announcement that the Blackstone Group, a private-equity giant and early Startup America participant, was pledging $3.6 million through its charitable foundation to team up with universities in creating an “ecosystem” of money, mentorship, and support networks for entrepreneurs in North Carolina.

That addresses the early “valley of death” that startups face when trying to prove whether their concept works. After that, entrepreneurs face the second key test of whether their concept can work on a larger scale. Chopra says Startup America is targeting that crucial point in startup development by pushing more large companies to foster startup growth and work with early stage companies.

“I think those two interventions by Startup America Partnership, even if we didn’t change the dynamic from a capital-access standing, should increase the success rate of companies. And I imagine my message in Seattle will be very much the same spirit, which is to say, how might the local community embody these principals that the Startup America Partnership has called for nationally, to demonstrate the benefits here?

“Nordstrom—what is Nordstrom doing to enable startups to participate in their supply chain? Or the bigger boys, like Amazon and Starbucks?” (It should be noted that Microsoft (NASDAQ: MSFT) is a partner in the Startup America effort.)

There’s plenty more where that came from, including an interesting story—Chopra says it’s his favorite—of how a suggestion from a physician got the feds to convene a group of techies, who hashed out the first standards for a secure network of medical information, allowing the healthcare system to share records electronically. A year after all that code was produced, there’s already a new company using the system—and Chopra says he expects more to follow.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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