I. Introduction
Thank you and good morning. It is a pleasure to be here and to share with you my optimism
for the future of the Greater Washington region.
Peter Schwartz, the cofounder and chair of Global Business Network and author of The
Art of the Long View, characterizes the time we are in as a remarkable period of
transformation, which he describes as a "long boom." In fact, he sees this as a
40-year boom, spanning from 1980 to 2020. This period of economic and societal transformation,
he says, is driven by a continuing stream of new technology, not the least of which is the
Internet. Another factor is the relentless process of globalization, which opens up national
economies and integrates markets to drive global growth. As we approach the year 2000,
half-way into this 40-year boom, we are surging forward as a New Economy takes hold.
This New Economy, although global in nature, is clearly emanating from within the United
States. And, we, here in the Greater Washington region, possess the tools for fostering
its growthtelecommunications, Internet and E-commerce. We also have the raw materials in
abundancetalent, ideas and intellectual capital. Already the most powerful government in
the world, Washington has evolved into a global technological leader.
Much of this will unfold on its own, as part of the natural economic evolution of this region.
But to realize our full potential, there is much that we can and must do as a community of
leaders, not only to further stimulate economic growth but to ensure a high quality of life
that is pivotal to our success over the long term.
We must intensify our efforts to create and sustain an environment conducive to the
entrepreneurial ways of the New Economy, and we must provide for a quality of living
that will attract and retain the best and brightest talent. Ultimately, our goal is to
create a better way of life for our children and their children and for all those who call
this region home.
Our efforts of the last few years have only started us on this journey. What we do in the
next five to six years is crucial to our destiny. If we truly come together as a region,
widen the circle of leaders who can propel and nurture change, and extend the already
significant efforts underway to build a critical mass around the New Economy, we can,
indeed, become its Digital Capital.
II. A Trip to the Future of the Greater Washington Region
To envision what is possible, let's jump forward to January 9, 2005, just six years from now.
Imagine that we are visitors to the region, about to take a tour of this 21st century
community, which, by 2005, has become one of the fastest growing metropolitan areas in the
world. Our flyover starts as we depart from Dulles Airport. It is hard not to notice the
expansiveness of this facility, now the hub of a world-class network of regional airports.
As we clear the runway, we immediately notice the names of telecom, Internet and E-commerce
firms that mark the new development around Dulles Airport and the Center for Innovative
Technology, as well as the string of new corporate campuses along routes 28 and 7 in Loudoun
County. In Tysons and Reston, E-commerce and Internet firms are so densely concentrated that
they have blurred what had previously been separate commerce centers. The signs along the
Dulles Toll Road read like a Who's Who of E-commerce. Rosslyn, Old Town Alexandria, Ballston
and Falls Church have all become centers of this InfoComm activity, with the expansion moving
westward along route 66 well into Prince William County. From the air, it is abundantly clear
that the efforts of recent years to make Virginia the Internet State have paid off handsomely.
Heading over the Potomac River into Maryland, as we look down we see the brick and glass
buildings of more than 500 bioscience firms and research labs, bordered by the National
Institutes of Health in Bethesda and Johns Hopkins University in Baltimore. Maryland's
long-time commitment to biotechnology and life sciences has now yielded the returns that
folks had forecast for the 1990s. Panning back across I-270 and over to I-95, we find a
concentration of telecommunications suppliers, a cluster that has grown from the anchors
planted in the late 90s by Yurie Systems, now part of Lucent, and Ciena, just outside of
Baltimore. And a little further south, satellite, wireless communications and spatial
systems firms extend out of NASA Greenbelt. Closer to the District, we view the long awaited
revitalization of downtown Silver Spring, now a multimedia entertainment strip with new media
and content businesses that have grown up around the American Film Institute and Discovery
Communications.
As we come back down over the District line, we witness a heartening commercial and cultural
renaissance in the District of Columbia. We are told that for the first time in decades more
people are moving into DC than leaving it, and experts say its population will grow
significantly by 2020. Fueling this growth are clusters of new media firms and design studios
that have sprung up in Georgetown, Lafayette Square, LeDroit Park and Van Ness. Along
New York Avenue, we see a growing industrial corridor, and in NoMA, the area north of Mass
Avenue, there is the further development of a telecom and media complex that has been growing
since Qwest Communications located here in 1999. A bustling, high-tech community stands on
the site of the old Navy Yard, while across the river is a revitalized Anacostia waterfront.
As we tour our region, something else is evident, though harder to see from the air. Throughout
the region there is vibrancy as economic success has helped energize the region's cultural
institutions. The influx of young professionals has created a demand for new theaters, cinemas,
galleries, restaurants, entertainment centers and museums. The universities are more naturally
integrated into their communities, adding to the quality of life in their surrounding
neighborhoods. The region is teeming with activity. People are out and about, yet
surprisingly our streets and thoroughfares appear less congested. The region is alive.
After landing at Reagan National Airport, we shuttle over to the new Convention Center,
built in 2003, where the fifth annual Internet Policy Summit is in session, with more than
5,000 attendees from all around the world. As we listen in, people are talking about two
moments that forever changed the region.
First, the Human Genome Project, coordinated by the U.S. Department of Energy and the
National Institutes of Health, and advanced by entrepreneurial firms in the region,
completed the full mapping of the three billion human DNA building blocks in 2003, several
years ahead of the original schedule. This success has triggered what some call the
"biocentury." And, with the convergence of InfoComm and bioscience, companies here are
developing "bioinformatics" services for the global marketplace.
Second, America Online has become to E-commerce what GM was for cars, IBM for mainframes and
Microsoft was for PC software. Its growth has fueled an entire industry of digital suppliers
across the region and, in collaboration with the research labs here, advanced breakthroughs
that spawned a thriving new industry known as "usability engineering." As a result, centers
like the University of Maryland's Human Computer Interface Lab and GMU's Visual Information
Technology Lab are now recognized as preeminent in their fields.
What is clear is the depth and breadth of the region's strength in the New Economy. That
strength developed because leaders here were committed to creating a connected communityone
where ideas, information and trust flow freely, breaking down traditional geographic and
industry barriers. Here is what happened:
Access to Capital Increases. The region now ranks with Silicon Valley as the top place in the
world of VC financing, as mezzanine, venture capital, angel funding and M&A transactions rose
dramatically. Several hundred venture firms are located in the region, thanks to the efforts
of the Mid-Atlantic Venture Association (MAVA) to increase awareness of the region's potential.
Even Kleiner Perkins Caufield & Byers, the preeminent Silicon Valley VC firm, opened an office
in the region in 2001. And, those entrepreneurs who made a significant amount of money in
their own ventures gave back by investing in young startups. Two angel groups, the Capital
Investors formed in 1998, and the Dinner Club founded in 1999, sparked this angel-investing
boom.
We Reach Critical Mass. Internet professionals in the region, those who build the tools,
pipes and software to make it all work, mushroomed. Many work in the government research
labs and agencies and in universities and think tanks on the development of newer, faster
versions of the Internet. Internet and software giants like MCI WorldCom, Cable & Wireless,
Network Solutions, MicroStrategy and SkyCache employ thousands. At the same time, increasing
numbers of Internet-focused entrepreneurs feed off the demand of the larger companies and
provide components to make networks function faster, better and easier.
The Federal Government Joins the New Economy. Business and political leaders fully understood
the unique benefits of the federal government's presence here. As the largest consumer of
InfoComm, the government has swelled the ranks of technology vendors that set up operations
to serve the federal market. As the world's largest producer of information, it has spurred
the growth of a thousand businesses that mine and package federal informationall of it
distributed over the Net. And as the country's venture capital source for basic research,
it has channeled huge amounts of funds for research into our universities and labs. This
research has resulted in important breakthroughs, nascent commercial applications and has
stimulated yet another wave of entrepreneurs. Finally, as the world's largest integrator
of technology, the federal government serves as a spawning ground to develop talent that
moves into private enterprise or creates new entrepreneurial ventures.
An Ecosystem Takes Form. The region has taken significant steps to preserve its most
treasured assettalentby developing a network that matches the growing needs of businesses
in the New Economy with the people and firms that can fulfill them. This network has taken
on the qualities of an ecosystem. Firms in dire need of talented people have forged links
with colleges and universities, regional organizations and associations to create this
flexible network. Operating over the Net, it now allows those with the expertise and
critical skills to connect with those who seek it quickly and efficiently, anywhere,
anytime, all the time. This network has been instrumental in mitigating the region's
talent shortage and has served as a powerful incentive to attract and retain talent here.
A Knowledge Industry Emerges. The Greater Washington region is the center of the knowledge
industry, which encompasses everything from corporate training to biological research to
federal and financial data banks. This industry came into being as entrepreneurs exploited
and integrated unique regional assetshuge repositories of information and cultural objects,
content production firms, digital networks for distribution, and associations and trade groups
that provide affinity marketing. Phillips Publishing, National Geographic, VerticalNet,
the Library of Congress, the Smithsonian Institution, HealthScribe, Engenia, Discovery
Communications, Caliber and the Nature Conservancy are all part of the knowledge industry.
Services Go Global. The region's professional services firms and associations are benefiting
from a global demand, as they use the Net for service marketing and delivery. Companies,
like the architectural firm Dreamscapes, deliver high-end residential design work to locations
around the world using digital networks from here in the region so that the principals seldom
have to travel. Similarly, firms here that provide services in management, finance,
transportation, defense and aerospace, hospitality and environmental management now have
a global reach.
The Region Creates an Internet Institute. An Internet policy and research institute,
established in 1999 by leaders from business, academia and technology associations, has
gained recognition as the forum for legal, economic and technical policy matters of the
Internet. Its very formation was a symbol of the cooperation for which this region is
now known. The institute, in conjunction with the region's universities, has 25 endowed
chairs, each with a $1 million or more in support, and has become an invaluable resource
for businesses and for federal and state public policy makers.
Government Goes Digital. Business and community leaders lobbied heavily for appropriations,
especially at the federal level, and then worked with federal, district and state officials
to digitize the delivery of government services. An ever-increasing amount of government
information is being put online. Much of this work is contracted to systems integration firms
in the region, generating significant revenue into the regional economy, with the flow
expected to continue until 2010. Over the Net, citizens can now process permits, file
their taxes, seek out specialized information, and reach out more effectively to local,
state and federal lawmakers, agencies and other voters. Polls indicate that Americans,
having directly benefited from these actions, are less cynical about government than they
were in the late 1990s.
Break-through Occurs in Education. The region's leaders ensured that the educational system,
at all levels, was fostering the development of critical thinking, analysis, problem solving,
communication, adaptability, team work and technology and information literacybasic skills
for the New Economy. And they concluded this work was not best done by focusing on filling
classrooms with PCs and Internet connectionssomething that technology vendors advocatedbut
by advancing more basic solutions: improved professional development and support of teachers,
better models for parental engagement, alternative sources for education and more effective
leadership in education. They viewed technology as a powerful tool in a larger arsenal for
educational reform, rather than an end itself in educating our children.
Internet Is Viewed as a Regional Resource. The region accepted the Internet as a vital
part of the daily life of its citizens. Just as the railroads, automobile, electricity,
telephone and interstate highway systems radically changed the way we live and work,
so have telecommunications and the Internet. Planners integrated the use of communications
networks into a larger strategy that included improving roadways and expanding the Metro
rail system necessary to address the region's traffic problem. Regional planners now consider
the Internet an essential component of transportation, healthcare, real estate development,
environmental management, entertainment and public safety. These developments have helped to
market this region as a gateway to the future.
Last Mile Is Connected. More than 80% of the region's households are linked into the Net,
with more than half of them using high-speed access. The region's leaders advocated for
increased competition in local markets to push this low-cost high-bandwidth connectivity.
And, the regulators delivered, with policies that helped to open the market to more companies
to provide this crucial resource to tens of thousands of home offices and small businesses.
So in the year 2005, the New Economy is flourishing across the region, with greater
economic balance among Northern Virginia, Maryland and the District. Telecom, the
Internet and E-commerce continue to be the driving force of our economy's growth,
with bioscience poised to deliver the next wave in the following 10 years. A healthy
trade in exports in professional services and the knowledge industry continues to grow
rapidly, while international business in the region continues to expand.
Our leadershipboth the younger guard and the more established grouprose to the challenges
facing our region in a creative form of civic entrepreneurship. They advocated improvements,
whether in the new foundations they formed for philanthropic purposes, in the creation of the
new groups like Capital Investors or Regional Professional Women, their engagement of political
leaders and actions, or through innovative partnerships with educators. They were also a more
diverse groupmore women, races and nationalities represented at the table than in the past.
They formed working groups, at times outside of formal channels, to resolve issues and then
disbanded as the situation dictated. In this way, the leaders themselves took on all the
qualities of the New Economy, acting with speed and efficiency, free of rigid boundaries,
and recognizing the importance of key people with the right skills to get the job done.
The marvel is not only the booming growth that the New Economy has spawned, but also the
quality of leadership that has brought us to where we are in 2005.
III. Conclusion and Call to Action
The vision I have outlined is, admittedly, optimistic. But it should be. Today in 1999,
we understand the opportunities better than we did just a few years back. A rapid succession
of events over the past 12 to 18 months, among them WorldCom's acquisition of MCI, AOL's
buyout of Netscape and the Washington Post's front page series portraying the region as
the "Digital Capital" of the New Economy, confirmed that this is a region of enviable
potential.
Recognition is one thing. Fulfilling a vision, however, is quite another, and in that
regard there is much we can do, as the leaders in the earlier scenario I outlined recognized.
If we fail to tackle these problems, we risk losing our greatest resource: peoplethe very
asset that can make us the Digital Capital of the New Economy. And these people are free to
move to other burgeoning centers or rural areas that would only be too happy to accommodate
them.
So what do we do? I propose a five-point call to action.
- Become Advocates for the New Economy. We must define and communicate the importance of
the New Economy to enable people to understand why a digital infrastructure, digital
products and a futuristic outlook are critical. We must coalesce all of our
organizations around a single image and message. We can do this by organizing a
"get digital" campaign.
- Bring Elected Officials and Public Policy into the New Economy. With a few notable
exceptions, most of our elected officials have yet to be brought into the digital age.
We need to convince them to move beyond symbolic actions, to act on substantive
investments in strategic areas such as infrastructure, digital government, basic
research and professional development within our educational systems. We must work
with and bolster our legislators to ensure they understand and enact legislation that
supports the New Economy and the entrepreneurship that drives it, and hold them
accountable for these outcomes. Most of all, we must commit ourselves, as civic
leaders, to this action.
- Make Regionalism a Core Principle of Every Leader, Business and Organization in
the Region. The Greater Washington region will best succeed by recognizing that the
whole regionwhat was once proposed as the State of Potomacis far greater than the
sum of the parts of Northern Virginia, Maryland and the District. Although some
organizations have long advocated regionalism, others remain opposed to such a vision.
The New Economy is not about existing jurisdictions and boundaries. We must come
together.
- Advance the Potomac Network. In his keynote, Steve Case urged us "to work together
in an unprecedented regional collaboration to create a greater community." As one
who has invested time and resources trying to overcome barriers to regional
collaboration, I echo his call to recruit "civic leaders who tear down the walls."
We must communicate more openly and frequently, team up on initiatives more often and
generate a broader awareness of existing efforts that require substantial commitment of
resources or interest. We must do more to bring together the various regional groups,
reach across industry clusters and widen the circle of leaders to promote civic
leadership and public policy engagement. That is the purpose of the Potomac Network.
- Define a New Economy Charter. We must define the bold actions needed to create the
connected community of the 21st century that others will emulate. We must do all we
can to fuel our key industry clusters and solidify our position in a competitive and
rapidly changing world. This alone, however, will not be enough. Our charter must go
further to ensure that all people have the chance to contribute to and benefit from the
New Economy. The charter must be driven by civic leaders who are prepared to "tear down
the walls," with a commitment to inclusiveness. And, it demands that we be prepared to
invest in and support its platform.
Four years ago, I delivered a speech to about 100 business leaders on what we now call the
New Economy. A few of you here today were there at that time. I spoke of economic and
social change, propelled by the Internet, and described how our region possessed the
resources and attributes to be a leading port of commerce in the 21st century. Many
were taken aback by my enthusiasm and conviction, but few were ready to break the apathy
that has long inhibited systemic change in this region.
Today, the setting is different. You have heard a chorus of voices speak of the New Economy
and its importance to the region. This time, the words came from luminaries like Steve Case
and Mary Meeker and a compelling group of business leaders. Five years ago, the potential
for gain or loss was not apparent enough to drive substantive action. Now it is. We have
a remarkable opportunityone that is so good, so rich, so exciting, that it is difficult to
fully comprehend. We are blessed with a future that other regions envy.
- We are home to the exploding InfoComm and bioscience sectors that are the backbone
of the New Economy.
- We possess a vibrant, growing entrepreneurial community.
- We have both the physical and virtual gateways to support the New Economythree
world-class airports and the Internet exchanges through which over 50 percent
of all Internet traffic flow.
- We possess the world's largest and richest repositories of information and
cultural objects and an enormous talent base to exploit these resources.
- We have the presence of the federal government, its agencies and labs and an
international community of global institutions, foreign missions and embassies.
- We have a multicultural population and spectacular cultural, historic and natural
resources, including world-class attractions, rivers, mountains and parks that
enhance our quality of life.
The Greater Washington region is unlike any other region in the world, different from
Silicon Valley, Austin, Singapore, Boston, Bangalore or Seattle. We are the capital of
the United States and, with our unique assets, we can and should be the Digital Capital
of the New Economy.
But, our vision will only be complete when we use our new-found wealth, talent and
technologies to solve the vexing social problems that have longed plagued our region.
It is then that we will have written our own proud page in the history books.
This is why we must become engaged in our community. Investing in the future of our region
is an investment in your own future as well as that of your business, your children and their
children. We must believe in ourselves and in this region. Let us be truly civic leaders,
leaders who can and will make this vision a reality by 2005.
Thank you.
These comments, "2005: Digital Capital of the New Economy," were presented by Mario Morino at
Potomac Conference XII. Morino is the founder and Chairman of the
Morino Institute and the
Potomac KnowledgeWay and founder of the
Netpreneur Program.
The conference, a project of the Greater Washington Board of Trade, was the twelfth
annual convening of a representative group of the region's leadership from the public
and private sectors to consider the long-term future of the Greater Washington region.
Its purpose being to build a vision for the future and the means of attaining that vision,
with the guiding principle for this vision to build a world-class connected community.
Special thanks to the many people from a wide range of background whose insights and
suggestions helped shape and refine this vision for 2005.
Copyright (c) 1996-2023 by the Morino Institute.