US Innovation Landscape 2033

Putting 2033, ten years from now, in the title switches off most readers. I assume some of you are no longer reading this, but hard to tell.

But ten years from now, when we look at US GDP per capita trends and our competitive positioning in the global economy, where we will be is directly, primarily connected to how we did on fomenting and supporting vibrant innovation ecosystems that help create and scale innovation over the next decade.

Our comparative trajectory is not good.

This is the most pivotal point in history to not be bad at this.

We are heading through an industrial revolution scale set of changes in a ten-year window just as S&T accelerates like never before.

We are heading through an industrial revolution scale set of changes in a ten-year window just as S&T accelerates like never before.

(yes I said that twice for emphasis)

This isn't just tech it is materials science, synthetic biology, infrastructure poetics (yes that's a real thing), space-related tech, quantum, nano, energy, biochem, etc etc.

I. Big , Good and Gone

US startup Poolside AI landed a  massive seed round($126M) and decided to move to France. You know, the one in Europe.

They would typically be here in the US, but they have chosen to set up shop in France.

II. Public-Private Partnerships - Better than the US

France has stayed focused for over a dozen years on creating a win-win startup ecosystem with committed private-public partnerships, policy/fiscal changes, and leverage of national assets, including their national university system, talent supply chains, national labs, ministry of defense, national health system, innovation hubs and various branches of the government.

Macron worked closely with John Chambers on this for over a decade. France has a Secretary of State for Digital Transformation, ensuring ministerial-level focus. It is specifically tasked with creating and maintaining a vibrant startup ecosystem. Another example is the prime minister running a work stream on the national AI strategy.

The UK has done similar things with even more aggressive tax policy changes.

China might be the best in the world at scaling startups into the Enterprise space (per INSEAD Prof).

III. Deplorable Process 'Design'

I spent 17 years at FedEx, so I know a little bit about supply chains and process design. If someone mapped the extended innovation supply chain here in the US, including funding, talent, knowledge management, and asset leverage, it would look like some form of complex roulette betting (with other people's money) with built-in inefficiencies and a variety of plain stupid stuff. It would look like something that was broken on purpose. I spend a lot of time in that world coaching CEO's, sitting on boards/ advisory boards, and investing, and it is a system and process 'design' that is not intentional, massively suboptimized, and is misaligned to national needs.

IV. World Champs of Sucking at DIversity

One of the things our global competitors would love is if, at a national level, we disenfranchised a section of the talent pool in this critical area.

The path to startup success is often a different, steep obstacle course for diverse founders. I have seen this up close in excessive diligence, lowball funding valuations, and sociological racist confidence gaps (unconscious and not).

I know a certified genius neuroscience Ph.D. founder from my native Mexico who avoids that he is Latino to bypass different treatment. I know one super diverse startup that had over a dozen diligence meetings with one investor (at their behest)  that ended in a no after sucking up a ton of precious leadership time. I heard a seed investor tell a black founder he would need to approve all hiring to invest.

Anecdotes are interesting. The stats are worse. Black and women founders get roughly 10x (actual weighted average) less funding deals. Valuation amounts are lower. It is worse if you are Latino. It's twice as bad if you are a black and or Latina woman. Less than 10% of VC decision-makers are women. Less than 3% of VC partners are black.

V. Pockets of Excellence

We can be world leaders in this.

In pockets, we already are.

Some examples in whole or in part: UC San Diego School of Engineering, Arizona State University, the innovation 'infrastructure' town of Lake Nona, various National Labs, some climate tech/innovation, NASA, the Intel world (Langley, the Fort, not the chip co.) some inspiring VC's etc. We certainly have an amazing mass of assets we can leverage. No other country can compare when you think about national labs, state universities, NASA, DoD or markets. ASU has a long and impressive innovation and diversity track record.

VI. Critical Mass of Will is the Gap

What to do, how to do it, how to sustain it aren't that hard. We could all make lists of 20 - 30 smart folks who could map out a high-level plan (like Macron did with John Chambers). The problem is the critical mass of will in the right positions of power. There is a beachhead, including some of you.

It is just hard to sell avoiding a trainwreck or that the highway we are on ends with a cliff launch ten years later if we don't act now.

Okay, I will switch to decaf. Enjoy the weekend