Governor Gary Locke’s Remarks
Seattle Chamber of Commerce Leadership Conference 2000, Vancouver, B.C.
October 13, 2000

Good afternoon, and thank you, Kerry (Killinger), for your great introduction. Thank you also to the Seattle Chamber of Commerce for inviting me up here to speak today.

To paraphrase personal management expert Steven Covey, this annual conference has a knack for choosing important and urgent issues, and then tackling them in a constructive way. So I am very pleased to be here this afternoon.

Your conference subject this year -- "High Tech Intersection: Public Policy in the Digital Economy" -- certainly falls in Covey's "first quadrant." This year's topic is critically important because the knowledge-based, Digital Economy is creating tremendous opportunities for our citizens and has the potential to do much more.

The opportunities created by the Digital Economy are plain. The high technology industry is Washington's largest, fastest-growing and highest-paying sector. In the past five years, household median income in our state has jumped 20 percent, and much of that growth has been driven by the tech industry. Forty percent of that total wage growth in the past five years is from wages earned directly in high tech companies.

Technology is an engine of growth for our entire economy. While technology companies directly employ more than 11 percent of our workforce, they create about two-and-a-half more jobs for every job in the technology sector. So in total, high technology business accounts for over 38 percent of total employment.

As Harvard economist Michael Porter has observed, "There is no real distinction anymore between 'high-tech' businesses and 'low-tech' businesses. There are simply 'high-tech' and 'low-tech' ways of competing." The companies that succeed are those that use technology intelligently to produce and distribute the goods and services that customers want.

Washington has been enormously fortunate as home to such technology leaders as Microsoft, Immunex, Active Voice, Amazon.com, RealNetworks, Nextel and countless others.

But we simply cannot take it for granted that these leading companies will choose to grow and expand here, not out of state.

Technology-based business is dependent on access to the most innovative research institutions, the best educated employees, the most reliable high-speed telecommunications services and the most responsive and efficient government.

Other states are taking aggressive steps to do just that. The bar keeps rising, so we must keep getting better if we are to remain a leading "tech-pole."

The good news is we know what we have to do to succeed. In fact, we have done a lot of it already. So we have a strong base. We just have to marshal the will and the resources to sustain this momentum. At least four areas need our attention:

We must strengthen our research institutions.

We must build a workforce for the 21st century.

We must expand our telecommunications infrastructure.

We must educate our children for the Digital Economy.
First we must continue to strengthen our research institutions. Every major study of high-tech economic development cites this as the biggest success factor. Research centers generate intellectual property that drives the knowledge-based economy. These organizations also spawn new products and businesses.

We are blessed with outstanding examples: the University of Washington, Washington State University, the Fred Hutchinson Cancer Research Center and the Pacific Northwest National Laboratory. More than half of the nearly 140 biotechnology and medical-device companies in the state are based on technologies developed in these institutions.

The UW Department of Computer Science & Engineering is ranked among the top 10 in the nation. And it has spawned 10 new companies in just the past four years. In addition, UW is the largest supplier of employees in the nation to Microsoft and to Intel.

But all of these organizations are in fierce competition with their peers: for faculty, for students, for research programs. California has just allocated $300 million in state funds for three new initiatives at the state's research universities - $100 million each. Georgia is directing more than $100 million for computer science, computer engineering and electrical engineering.

We don't have the state funds to match these programs. But we can and should make prudent, targeted investments in our research institutions, which they can leverage to obtain federal research funds and private investment.

Our Advanced Technology Initiative exemplifies this approach. We provided $4 million in state funds to enable UW and WSU to invest in specific fields where a combination of cutting-edge research and new educational initiatives can create new industries or revitalize existing ones.

In turn, they are able to leverage these investments and multiply the state investment tenfold. We need to continue to invest in such collaborative projects.

Second, we must increase the supply of properly educated and skilled "knowledge workers." In 1998, the Washington Software Alliance found the lack of skilled workers a huge obstacle to the growth of their industry. We've gotten results! I've insisted that our colleges and universities increase programs in these high-demand fields of study. We've increased the number of high tech graduates and certificates from community colleges by a third. And, our public universities have increased the number of bachelor's and graduate degrees in high tech fields by 40 percent.

But we must do more. Last year, more than 6,000 high tech jobs were filled by citizens from out-of-state and out-of-country. Twice that number of jobs went unfilled. We need to increase even more the capacity of our universities to graduate more students with bachelors and graduate degrees in computer and engineering fields.

And we must continue to expand community college technology programs. And we need to make sure that all of these programs link together to enable every working-adult learn their way up a "lifelong career ladder."

Two weeks ago, I convened a Technology Workforce Summit with industry and education leaders to figure out better ways to educate more of our citizens for the knowledge-based economy.

Here's what we intend to do:

Invest in high-demand technology programs at the state's universities including the establishment of one or more "technology centers" to substantially increase the number of Bachelor's graduates.

Increase the number of programs in 2-year and 4-year colleges in high-demand fields.

Create partnerships among government, industry, and academia to further match curricula with employment opportunities.

Provide additional funding to colleges and universities for faculty recruitment and retention.

And expand opportunities for distance education and life-long learning.
Third, if our high-tech economy is going to thrive, we must greatly improve telecommunications connectivity for businesses, schools and individuals.

As the Technology Alliance said in 1999, widespread availability of broadband telecommunications services is enormously important to the technology sector. And it is equally important to education, commerce, transportation, entertainment and health care. These services are just as important as railroads, highways and other means of transportation were in previous generations.

Within the past two years, we have spurred investment in advanced telecommunications infrastructure by bringing new businesses to rural areas, reducing regulation, ensuring that competitive-markets work more efficiently and partnering with the University of Washington to create the Pacific Northwest GigaPoP.

But there is more to be done to connect individuals, schools and businesses.

Fourth, let's talk about our children. We must provide our children with the grounding they need to thrive in a knowledge-based world. Now that the K-20 Network connects every one of our school districts with high-speed data, video and internet services, the next challenge is to make the most of this extraordinary resource.

Many innovative programs demonstrate the potential. The Smart Tools Academy has successfully trained more than 2200 school principals and superintendents in the use of technology to support student learning and academic achievement.

At my request, the 1999 Legislature allocated $500,000 for the 1999-2001 school years to provide internet-based curriculum for AP courses in math and science. At my request, the University of Washington is launching a collaborative effort with high school teachers to deliver college-level courses online to selected rural high schools. The first pilot will provide online instruction in foreign language to four high schools, beginning this January.

I have a vision. And I am working with the education, business and nonprofit sectors to achieve it:

Every school acquires, operates and maintains up-to-date computers to make this access meaningful.

Every administrator and teacher knows how to integrate information technology into the educational process.

Every student in the state has access to the highest quality, most diverse curriculum and learning tools that can be made available over the via telecommunications.

We all know what we have to do. But achieving this vision will not be easy or cheap. Clearly, government alone cannot do it. But working together we can, and we must. Thank you.