University of Washington CEO Summit: Ideas 2 Innovation (As Written)

September 18, 2006

Thank you, Mark (Emmert), for that kind introduction. And thank you for inviting me to speak to you at this important summit.

As you may know, I graduated from the University of Washington a few years ago.

When I was a student here, I never dreamed that two individuals who played around with computers in their garage would build a software company that would change the way the entire world does business.

I never dreamed that a little coffee shop down at Pioneer Square could make a nonfat-double-soy-Americano an international expression.

And I certainly never dreamed a little kid from Auburn would grow up to be Governor.

The University of Washington made sure that whatever the future had in store for me, however the world would change and our economy would grow, I got the education I needed to succeed.

That�s the opportunity for success every one of our children deserves.

Washington has emerged from an economy that required us to be competitive with other states, into an economy that requires us to compete around the globe.

Ours is the most trade dependent state in the nation. One in three jobs here depend on trade and we�re the only state that I know of with a trade surplus with China.

We must think of ourselves not as a state, but as a small nation -- a nation with the skilled workforce, sound infrastructure and diverse economic base to compete globally.

We need to think of ourselves as an innovative and creative state, producing the highest quality goods, services and agriculture � that�s our niche in the world market.

I know that you are here today because you realize that collaboration between academia, business and government is essential to compete in the global marketplace.

We must be bold. And we must all work together more closely than ever before if we are going to be successful.

My first trade mission was to the Paris Air Show. I went to recruit aerospace suppliers from around the world to locate or expand operations in our state.

Without exception, the number one question from every company I met with was: What is your state�s commitment to education? Are you building a workforce that can adapt as our needs and technology grow and change?

The single most important investment we can make is education.

All of the other economic drivers can only work for us as a state if our children are creative and engaged, if our adults have skills at world class levels, and if our companies can find the folks they need right here in Washington.

I�ve convened the Washington Learns education reform committee to make recommendations for a seamless, world-class, learner-focused approach to education.

Forget being the best in our country. We cannot compete if we continue to compare ourselves to the mediocrity of the rest of this nation�s education system. We must develop the best education system in the world.

We must ensure that our workers, our companies and our state can compete with India and Ireland, Germany and China.

We need to increase the amount and quality of research that happens in Washington, particularly at our four-year universities.

We need to facilitate the transition of that research into commercial applications.

And we need to promote business formation and trade relationships to make those commercial applications successful in the marketplace.

In Walla Walla, the thriving wine industry was just a bright idea for a few determined entrepreneurs not long ago. In the span of a few years� time, wine has become a vital, statewide industry.

Our quality Washington wine industry owes much of its opportunity to research at WSU on soil and crop varieties. But it took the energy of entrepreneurs, like many of you, to turn these ideas into an economic gold mine. That�s a powerful partnership and one that has built many sectors of our economy.

Not far from here, in South Lake Union, you find a concentration of the acknowledged world experts in world health. The scientific work at the Fred Hutchison Cancer Research Center and the Bio-Medical Research Institute has deep roots in the University of Washington.

In fact, Dr. Lee Hood founded the Institute for Systems Biology over there, a spin-off from his labs at University of Washington.

Through the Life Science Discovery Fund, we�re building on that work and investing in this new industry. Lots of states are trying to enter that economic and scientific space. We�ve got a head start. The Life Science Discovery Fund is all about leveraging additional activity, additional resources, and ultimately realizing the dream of predictive, preventive, and personalized health care.

Funding is not the only way to encourage more research. During my Australia trade mission, I signed breakthrough collaboration agreements on the life sciences.

Working together across the lines of academia and business and around the world, we have the opportunity to find the cures to some of the world�s most dreaded diseases.

Right now, in laboratories in this state, researches are working on Malaria, Tuberculosis and diabetes � crippling and killing diseases that no one in the world should have to face.

What a gift this state can make to humanity if we are able to alleviate suffering and enhance the quality of life with our medical breakthroughs.

When the President of China, Hu Jintao, visited our state last spring, I asked him what challenges his country faced. He told me that the Chinese are very worried about the lack of energy resources and environmental problems created by industrialization.

Here in Washington, we know a lot about cleaning up the environment. Investing in environmental engineering research means we can clean up our own problems, like Puget Sound and Hanford, and it means we can export that knowledge and technology to help countries like China.

We can do all the research and development we want, but if we can�t get those ideas out of the laboratory, they don�t do any of us very much good.

To move ideas from research to products, we took an important step forward making changes in state ethics laws to facilitate faculty participation in commercially-viable research. This change was a long time coming, but we got it done.

I want to complement the University of Washington and the Washington State University on their efforts to get these changes made and we look forward to using this new flexibility.

When researchers uncover a great idea, and entrepreneurs find a way to put that idea to use, we then need to help those ideas flourish in the global market. It�s state government�s job to keep Washington open for business.

We need to expand on-line options for more business services. We need to make it as easy as possible to do business in Washington.

We also need to facilitate the connections you need to sell products all over the world.

That�s why I go on trade missions. Those missions have contributed to:
� A 39 percent increase in trade in the first six months of this year � We�re headed toward a $45B record year in exports.
� Expansion or relocation of six European aerospace supplier operations to Washington;
� Elimination of a high tariffs and other obstacles to our products;
� Agreements to expand education programs by our colleges and universities in other countries;
� Agreements with British Columbia, and soon with Mexico, to expand cross-border trade and tourism; and
� Agreements with Queensland, Australia to share bio-tech information and research.

Two weeks ago, more than 550 people attended my workforce and economic development conference to hear about the Next Washington � growing jobs and income in the global economy - my vision for our economic future.

This vision cannot be mine alone and it did not start with me. To reach it, I convened a Global Competitiveness Council to seek advice from business and community leaders about how to ensure Washington�s global leadership.

I met with political leaders and CEO�s from around the world on my trade missions and I traveled around the state on a listening tour, asking Washingtonians what should our priorities be and how do we define success.

Here is what I have learned:

From Spokane to Vancouver, from Richland to Seattle, people told me they are hopeful but concerned about their economic future and the future of their children. They recognize that there is not one single �Washington economy� � rather, there are many regional economies.

They tell me that we need to plan for the future. They tell me that health care, education and the economy are their key priorities.

In short, they are optimistic about future success, but want to know how we get there.

I�d like your feedback on my discussion draft of the Next Washington report and the draft Washington Learns recommendations. They�re both out for comment.

I�ve proposed a series of answers to the question �What next?�

Our strategy has three components:

First, education and skills are the most important investment we can make in our economic future.

Second, the foundation for economic success is our strategy for traditional infrastructure investment, but also for the broader underpinnings of the modern economy; success in today�s global market requires more deliberate approaches to energy, telecommunications, water and transportation.

Third, Washington is Open for Business is our approach to making Washington even more business-friendly by making it easier and less expensive to operate a business in Washington.

We must invest in 21st century industries and research at our higher education institutions. State investment can bring venture capital to Life Sciences and alternative energy research.

Given limited state funds, we must identify what the most important next step is that we can take to create more commercial opportunities from university research.

I want you to know how excited I am about the future of our state. We are poised for greatness.

We must work together across party lines, across the state, across the nation and around the world.

If we do, I know the next Washington will be a powerful force in the global market and a small nation we�ll all be proud to call home.

Thank you.

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