REMARKS AS PREPARED FOR DELIVERY - SANDY K. BARUAH, ASSISTANT SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT - THE COUNCIL ON COMPETITIVENESS - HPC ADVISORY COMMITTEE – WASHINGTON, DC - "High Performance Computing and Economic Development"

THURSDAY, MAY 10, 2007

AS PREPARED FOR DELIVERY

Introduction by Deborah Wince-Smith

Deborah, thank you for your kind introduction and for the opportunity to be here today with the certified smart people of the Council’s High Performance Computing Advisory Committee. I thank you and the Council for your continued strong leadership in advancing strategies that will keep America competitive as we enter the 21st Century. You and the Council are true leaders and I am proud to be associated with you on so many different efforts.

I am pleased to see so many leaders in high performance computing (HPC) gathered here. Expanding HPC usage holds great promise for enhancing U.S. competitiveness, which is a matter of great importance to us all.

HPC fosters innovation – which is our nation’s – and any other nations’ – only potential sustainable competitive advantage. In addition, HPC can give us more of the one thing we need most in our ever accelerating world-wide economy: time. The benefits of HPC can be seen with the development of the new Boeing 787 “Dreamliner” where the utilization of HPC allowed Boeing to skip entire phases of modeling and pre-production allowing this innovative aircraft to come to market much more quickly. HPC has allowed Boeing to fundamentally change they way they develop an aircraft. We see the same time savings as a result of HPC use in Mercedes’ development of their new C-Class model, which is just now hitting the streets in Europe.

My goal today is to provide an overview of the Economic Development Administration, and to provide some thoughts on how the HPC community and EDA might work together. I would like to approach this by discussing three topics:

1. EDA’s priorities for promoting innovation;

2. The global competitiveness context in which we are all working as we develop strategies for advancing innovation;

3. And areas in which the HPC community and EDA might connect.

EDA OVERVIEW

The Economic Development Administration can be described as the venture capital arm of the U.S. Department of Commerce. We lead the federal economic development agenda by promoting innovation and competitiveness, and preparing U.S. regions for growth and success in the worldwide economy. At EDA, we are in the “what’s next” business. What is the next strategy that will keep our economy growing? What do our economies need to do today in order to take advantage of the next big thing tomorrow?

To answer these questions, EDA places a strong emphasis on making investments that:

• support innovation and competitiveness,

• encourage entrepreneurship, and

• support collaborative regional economic development approaches.

The agency invests in locally-developed, regionally-based economic development initiatives that achieve the highest return on the taxpayers’ investment and directly contribute to regional and national economic growth. At the end of the day, EDA investments must create higher-skill, higher-wage job creation and attract private sector investment.

Our investment programs are competitive in nature. We can help government entities (states, counties, cities) or nonprofit institutions (universities, chambers of commerce, development organizations) help build something – through investments in infrastructure, or plan for the future – such as EDA’s strategic planning or technical assistance.

During my now six years with the Administration, I have come to believe there are 5 New Realities of the 21st Century global economy. I’d like to share them briefly as a way to frame our discussion.

THE FIVE NEW REALITIES

Let’s begin with New Reality #1 of the 21st Century economy: While perhaps the most obvious, it’s the most important, which is that we are truly in a Global Economy. In the new global marketplace, competition is not just from the firm down the road; our competition comes from any person in any corner of the globe with a good education, a good idea, and a good Internet connection.

New Reality #2: Competition is intense, and the pace of change will continue to accelerate. As you know from reading the Council’s materials, it took 55 years for the automobile to spread to one-quarter of the U.S. population. It took 35 years for the telephone to do the same thing. The personal computer accomplished the same level of market penetration in 16 years, 13 years for the cell phone and only 7 years for the Internet.

As cycle times for products and ideas continue to shrink, all institutions – public, private, educational, and non-profit – are required to continually adapt and change due to new demands and challenges. Those that don’t are at risk. Those that do have the opportunity for reward.

New Reality #3: Yes, the world becomes a bit more complicated every day. In order to respond to this increased complexity, we must realize that we have reached a point where the components of competitiveness can no longer be pursued separately.

Just as technologies are converging to create new fields of innovation, so are the components of competitiveness merging to shape economic growth in the 21st Century. For example, the idea of workforce development, community development, economic development, educational programs, and scientific pursuits occurring in separate silos can no longer be tolerated. These interconnected challenges must and can be tackled in concert.

New Reality #4: Public-private partnerships become more critical every day. While governments at all levels, universities and other non-profit institutions are important players, let’s not forget that the private sector is the most important element of any successful economic development strategy. Unless the private sector is ready, willing and able to invest in a community, economic growth simply will not occur, regardless of how much government spends. The private sector should not just have a seat at the table, but should lead in strategies for economic growth.

New Reality #5: Ultimately, it is the ability to innovate that is the only possible sustainable competitive advantage in the 21st Century. It’s not location. It’s not even the cost of doing business. Factors such as these will continually shift in a dynamic worldwide economy. But if a nation can maintain its edge in innovation, it will grow and prosper.

The 20th Century undoubtedly belonged to the United States. Our leadership was founded on our ability to foster new ideas and bring them to fruition. And, at the dawn of the 21st Century, we must not be complacent in our prominence. More than ever, international competitors are more rapidly commercializing technological advances, educating highly skilled workforces, and offering world-class research opportunities.

Companies – by necessity – must continually innovate to stay one step ahead of their global competitors, especially as the pace of change in our global marketplace continues to accelerate. If they don’t, they will cease to exist. Government has the same responsibility to change and adapt with the times and respond with programs that answer the “what next” question. Using a 1960’s era approach to solve 21st Century challenges is not a recipe for success.

PARTNERING IN ECONOMIC DEVELOPMENT

In today’s competitive environment, business and government are both looking to do things faster, better and cheaper. HPC offers a promising avenue to meet these needs. We must work together as leaders in science, academics, business, and government to explain the benefits and find new solutions to upgrade the competitiveness of our economy.

So, how can we work together? EDA operates in a decentralized fashion with 6 regional offices that coordinate activities for individual regions. These offices are located in Atlanta, Austin, Denver, Philadelphia, Chicago, and Seattle. Their contact information is listed on the back of the blue book that you have.

EDA’s regional offices are responsible for identifying the economic opportunities in these various regions that may not be currently fully participating in the American dream. Of course, these strategies will differ from region to region. While the “plan forward” for the Border States is different than the “plan forward” for Michigan -- both could benefit from the incorporation of HPC.

I propose three steps for building relationships with EDA’s regional offices.

1. As leaders in HPC, you can and should help keep our directors updated on the HPC assets available in their regions.

2. EDA Directors could be invited to tour your facilities and provided information on what HPC is, how is it a competitive advantage, and how EDA and the HPC community can work together.

3. I also encourage you to talk to our Regional Offices regarding information on high technology business incubators in the region and how to link up – benefiting both you and the technology start-ups across the nation.

And of course as a member of President Bush’s administration, the issue of fostering innovation and competitiveness to maintain U.S. leadership in the 21st Century marketplace is a top priority. EDA is certainly part of this effort. That’s why I look forward to using my bully pulpit to highlight the critical resource of HPC – that’s why I am glad to be part of this meeting, because it’s just the beginning of the dialogue between EDA and the HPC community.

From headquarters, we will encourage our regions to consider their HPC resources and educate the audiences we meet in our travels to the opportunities to use supercomputing to gain a competitive edge.

1. We will work with the Council to introduce the leadership of our 6 regional offices to the HPC facilities within their regions and to promote the idea of partnerships to advance innovation.

2. We will work to share these tools with EDA’s stakeholders and investment partners.

3. In my travels and regular interaction with economic development professionals across the country, I will suggest HPC as a vital resource that holds great promise for maintaining and expanding on America’s competitive advantage.

Ultimately, the challenge we share is ensuring that the economic development community and businesses begin to leverage HPC tools – and I look forward to working together on this.

It has been my distinct pleasure to be with you this afternoon. I applaud the efforts of the Council on Competitiveness to advance our nation’s competitive advantage and I look forward to partnering with the Council on this and other efforts.

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