Ernie Dianastasis, Managing Director, CAI, Chairman of First State Innovation

INNOVATION - A KEY TO DELAWARE'S ECONOMIC FUTURE

We are truly blessed in Delaware to live, work, and play in such a wonderful environment. One of the key elements in maintaining this environment is strong and sustainable economic growth. Over the past several years, Delaware experienced a strong economy that created relatively low unemployment and high wages. This growth has largely been driven by large corporations; first in the chemical industry, and more recently in the financial services industry. While this has served the state well, Delaware has lacked the necessary support structure to foster entrepreneurial growth.

In late 2003, the Council on Competitiveness (based in Washington, D.C.) issued a report that assessed Delaware's "Global Competitiveness". The state received high marks in many categories, such as proximity to major markets, quality of life, etc. However, the state ranks 46th in the creation of jobs in high growth firms (according to the Progressive Policy Institute), and for the past two years, Delaware has ranked 50th out of 50 states in entrepreneurial growth (according to the Kaufman Foundation). I believe that a dramatic increase in entrepreneurial activity will be a key factor in the continued economic vitality of both the state and region. It is particularly important today, given the advance of globalization, to have a diverse, vibrant, and growing economic base that will provide good opportunities for future generations.

In Thomas Friedman's book, The World is Flat, he highlights how many jobs will continue to move offshore to places like India and China where labor rates are significantly lower. To ensure that our children and grandchildren enjoy a similar or better lifestyle than we currently have, we must drive hard and fast to create an "Innovation-based Knowledge" economy. Other regions across the U.S have grasped this concept and made tremendous strides over the last five years. Given the speed of globalization we have a short window to act; the time is now.

First State Innovation (FSI) is a privately led initiative organized as a non-profit entity focused on developing human capital, technological innovation, and entrepreneurial skill. It was created to help grow wealth and the workforce of Delaware's innovation economy. Its primary goal is to assist in creating an environment that makes it easy for emerging companies to locate the resources that will enable them to incubate, grow, or relocate here. It was formed to find ways to make the state less reliant on big corporations for job growth, by making Delaware more attractive to new businesses. This is especially important given the cutbacks at some of Delaware's largest employers in recent years.

The building blocks that are necessary to accomplish this are: 1. The convergence of innovative ideas; 2. Skilled entrepreneurs; 3. Easy access to funds (venture capital and Angel investors); 4. Large corporations (with research and patents): 5. A supportive public sector (local, state, and federal); 6. A strong relationship with the academic community (students, internships, technology transfer, etc.); and, 7. A network that cements these blocks together.

FSI will seek to act as a catalyst to bring these puzzle pieces together so that Delaware becomes a "hot-bed" of entrepreneurial activity in areas like biotech, advanced materials, information technology, nanotechnology, financial services, and the supporting infrastructure. The FSI Board was selected with this goal in mind. Comprised of the current governor, a former governor, seven large corporation's CEOs, seven entrepreneurial CEOs, a venture capitalist, two university presidents, and the CEO of Delaware Technology Park (DTP), the board represents many different views enabling FSI to be a strong, successful organization.

We are not starting from scratch. There are a number of programs already in place. The DTP is already a good example of how the private sector is working with the academic and public sectors. DTP, led by Mike Bowman, CEO, is a collaborative effort among the private sector, the University of Delaware, and the state. In just 14 years, the DTP has successfully incubated and grown 80 companies creating over 3,200 jobs. FSI plans to work closely with DTP, Delaware Innovation Fund, and other such organizations, including the Delaware Economic Development Office, to accomplish our goal.

FSI will also focus on Delaware's role in being part of a regional economy, which includes Southeastern Pennsylvania, Southern New Jersey, and Western Maryland. Enlightened regions understand that competing against each other for companies and jobs can be counterproductive. In reality this region is competing globally with places like Bangalore, India and Shanghai, China. By leveraging the strengths of the region, Delaware's economy will actually grow faster than going it alone.

The recent Vision 2015 Education initiative, which is a bold, innovative approach of a new model for our K-12 public school system, is focused on our children and preparing them to compete in this new world economy. FSI is about ensuring our children, like us, have an exciting place live, work, and play, as they begin their careers.

A thriving 21st century Delaware economy will be characterized by savvy entrepreneurs, strong technology and knowledge industry businesses, and a united group of progressive thinking civic, business, and political leaders. Bill Gates, Chairman of Microsoft, says it best, "Cutting-edge companies no longer make decisions to locate and expand based on tax policies and incentives. Instead, they base these decisions on a state's talent pool and a culture for innovation." We hope to create a "buzz" that Delaware is a cool place for entrepreneurs to build their businesses.

We must begin this journey now. Through forceful leadership and a lot of passion, we will succeed in creating a bright future for Delaware and its people.

Ernest Dianastasis is Managing Director of CAI's Delaware Valley Operation. CAI is an Information Technology consulting and outsourcing services organization that focuses on IT productivity and has over 2,300 associates world-wide. Ernie is responsible for all CAI's operations in the Delaware Valley including Sales and Marketing, Consulting, Delivery and Quality. He has grown the CAI Delaware Valley operation from 1 to over 725 associates. He has been a member of The Delaware Business Roundtable since 2001 and is currently serving as Chairman. He is a member of the Delaware State Chamber Board of Directors, Chair of the Council on Competitiveness Initiative for Fostering an Entrepreneurial Environment in Delaware, a member of the Executive Committee for Vision 2015, which is focused on making Delaware's Public Education system world class. He also serves on Governor Minner's Strategic Economic Council. In addition, Ernie serves on the Board of Directors of the Greater Philadelphia Chamber of Commerce and the Board of Innovation Philadelphia. Prior to joining CAI, Ernie was with the IBM Corporation. He earned a B.S. degree in Finance and an M.B.A. in Management from Lehigh University.