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2005: Digital Capital of the New Economy –
A One-Year Retrospective
© Morino Institute, February 2000. All rights reserved.
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Thank you and good afternoon. It is a pleasure to be here
and to share with you—once again—my optimism for the future of
the National Capital region.
On January 9, 1999, Steve Case described an era built on a New
Economy that would change virtually every aspect of our lives.
Building on what Steve outlined, I put forth a further vision that
portrayed the National Capital region as the Digital Capital of the
New Economy. I asked you to imagine that we were visitors to the
region on January 9, 2005, and about to take an aerial tour of this
21st century community, which had become one of the
fastest growing metropolitan areas in the world. As we started our
fly-over, we departed from Dulles Airport to pan out over Northern
Virginia, where we witnessed the explosive growth in Internet and
E-commerce. We headed across the Potomac River into Maryland and saw
the enormous concentration that developed in bioscience and
communications. And, we flew back down over the District line and
witnessed a heartening commercial and cultural renaissance in the
District of Columbia. What was clear when we concluded our tour was
the depth and breadth of the region's strength in the New Economy—which
had become THE economy. That strength developed because leaders here
were committed to creating a connected community within the National
Capital region—one where ideas, information and trust flowed
freely, breaking down traditional geographic, industry and social
barriers.
That vision was, admittedly, optimistic. But it should be at
least as optimistic today. Almost daily in the National Capital
region we are coming to better understand the unprecedented
opportunities before us. As overly optimistic as this vision may
have seemed to some, imagine how incredible I would have sounded had
I offered these predictions then:
- Steve Case would lead AOL in acquiring Time-Warner in the
largest consolidation in business history.
- Michael Saylor would brilliantly reposition MicroStrategy as
an Internet business to drive the firm's market capitalization
to billions in a feat seldom seen before in American business.
- Ted Leonsis and Abe Pollin would bring Michael Jordan to the
Nation's Capital.
So our prognostication for what the region would be like in 2005
may not have been so outlandish after all. In 2005, telecom, the
Internet and E-commerce will continue to drive the growth of our
region's economy, while bioscience, rekindled by its convergence
with IT and the Internet, will be poised to deliver a new wave of
economic expansion over another 10 years. The fulfillment of this
vision, however, was predicated on the assumption of strong,
inclusive regional leadership.
The vision demanded that our leaders—both the younger guard and
the more established group—rise to the challenges facing our
region in a creative form of civic engagement. They had to advocate
improvements, whether in the new foundations they formed for
philanthropic purposes, their engagement of the political process,
or through innovative public/private partnerships. They had to be a
more diverse group—more women, races and nationalities represented
at the table than in the past from all sectors of our region. They
had to function informally, seamlessly, outside of formal channels,
to resolve issues and then disband as the situation dictated. The
leaders themselves had to take on the qualities of the New Economy,
acting with speed and efficiency, free of rigid boundaries, not
waiting on institutional approval, and getting results versus
endless dialogue and activity.
So, how well have we done in fulfilling this vision?
The National Capital region is clearly a changing landscape. As
the new millennium came, the region is more "connected"
with a much more developed entrepreneurial ecosystem. We've
benefited from stunning changes in an improved flow of capital, new
networking organizations that added to the region's connectedness,
new centers for business formation and incubation, a burst of new
service providers and greater media coverage. These changes
manifested themselves in unpredictable ways. People and groups, like
the Indian CEO High Tech Council or the new women's angel network,
have come on the scene to enrich a vibrant ecosystem to support New
Economy entrepreneurship and business development.
But there is still more to do. What do we need to do? To answer
this, I'd like to revisit the five-point call to action, presented
last year, and candidly examine how we've fared against it:
1. Become Advocates for the New Economy.
We got lucky; for this has happened, in spite of our efforts. The
stunning successes of the Internet and E-commerce businesses in the
region have helped many more people appreciate their importance to
the region and their lives. And in turn, these successes stimulated
greater media coverage to bring far greater awareness of the
region's role and potential in the New Economy, both here and
globally. In fact, a coordinated campaign to tell our regional
story, urged by last year's Conference, has now been launched by the
Greater Washington Initiative.
Yet, there is so much more to do to help our educational and
learning institutions align and adjust to society's changing needs,
to digitize all levels of government, and to confront the growing
economic disparities the New Economy is driving here in our region
and across the country.
2. Bring Elected Officials and Public Policy into the New
Economy.
We benefited from progress on several fronts. The New Economy and
Internet themes are now integral topics in national and local
campaigns, with many more elected officials aware of and focused on
these areas—and the wealth and power they increasingly represent.
CapNet has taken hold and is already well accepted. Three tech
councils continue to advocate in their respective jurisdictions, and
the Digital Dialogue, TechForum and other emerging groups
increasingly engage our elected officials. The Internet Policy
Institute, incubated here in the region, has taken wings, announced
its programs, and assembled a great board. A foundation has been
laid to more effectively engage the political process. Now, we have
to increase our focus to achieve meaningful outcomes that advance
our region's best interests.
3. Make Regionalism a Core Principle of Every Leader, Business
and Organization in the Region.
The Potomac Conference, the earlier work by the Potomac
KnowledgeWay and the continuing work of the Council on Governments
and others recognize that the New Economy is not about existing
jurisdictions and boundaries. These efforts are based on an
understanding that the National Capital region must come together.
And, certainly as a result of these efforts, they have helped to
bring about some attitudinal change. Yet we are still too confined
by jurisdictional differences and competition, multiple and detached
leadership circles, and economic and racial divides. These factors
severely limit how we can resolve the systemic problems facing the
region in transportation, education, environment and in other areas
that are so critical to achieving the high quality of life essential
to developing, attracting and retaining people for the region. Our
failure to view the region as a whole will insure even wider
disparities and shortfalls in addressing our broader needs.
4. Advance the Potomac Network.
We didn't. We allowed ourselves to get immersed in process,
losing focus and valuable time, instead of moving proactively to
engage and coalesce the needed players and get something underway.
When one considers my earlier comments on the ecosystem that has and
continues to evolve, one wonders what role the Potomac Network can
play at a time when the New Economy leaders may have already taken
charge in their own way. These leaders are moving quickly,
uninterested in boundaries. In the absence of progress in this area,
they've moved forward to create their own networks—MAVA, the Jade
East, the e-media club, informal kitchen cabinets and a score of
others that have emerged in the National Capital region. We're
seeing the New Economy at work, morphing groups and efforts as
needed to create solutions to meet their changing demands. A key
question for this Conference and our work beyond is how we improve
this collaboration to insure our goals.
5. Define a New Economy Charter.
We made important progress in this area, and, today and tomorrow,
this group will learn of and discuss a vision and strategic
commitments that represent the New Economy Charter we called for in
last year's agenda for action.
Due to the work of many individuals brought together under the
umbrella of the Potomac Conference, a New Economy charter has been
crafted. Its theme is building a world-class connected community.
Its vision is that by connecting our economic assets,
leading-edge research centers, cultural and social institutions,
public and private leadership, we will make our region THE global
center of the New Economy of the 21st century.
Its core values are rooted in connectivity and innovation as the
means to create opportunities for all citizens of the region.
Achieving our vision requires improving and enhancing five strategic
areas within the National Capital Region: education, innovation,
inclusion, quality of life and regional thinking.
When we talk about where we should focus our efforts, we should
look to finding ways that all of us can come together to make our
National Capital region a better place to live and raise our
children.
We must recognize that it is the whole of the National Capital
region that is our strength and value as a global center in the New
Economy, while still enjoying and advancing the benefit of our
respective sectors and jurisdictions.
We need to recognize, nurture and coalesce the many promising
groups and programs already underway, lending our resources and
financial support to help them expand their positive impact here in
the region. We need not create new programs, but build on those
already underway.
We must continue to create a venue for boundary crossing to
coalesce and connect the region's diverse and multi-faceted
leadership circles. We can help achieve this by broadening the tent
of the Potomac Conference and getting new faces involved.
And, more than anything, we need action that achieves results.
As we strive to meet these challenges, we are fortunate to
inherit a legacy of leadership from people like Katharine Graham,
Bob Linowes, Til Hazel, Joe Danzansky, Abe Pollin, to name but a few
that have laid an important foundation for this region. Building on
this legacy, imagine what we can do to advance our economic future
when we connect the talents of the younger guard with the more
established leadership. But as Steve urged last year "let's
tear down the walls" and be even more imaginative. Let us tap
our true potential as a region by connecting a more diverse,
inclusive leadership with more women, races and nationalities
represented. Only then will we have a chance to solve the serious
social problems that will otherwise limit our ability to sustaining
our economic prosperity.
Last year, I touched on the challenge of the serious social
problems that have long plagued our region and the irony that in a
time of such great prosperity, there are thousands of people whose
lives have not changed and, in fact, may have gotten worse. One of
my biggest worries is that there are simply too many young people
who are growing up without caring adults and without the support of
a healthy community.
Recently, the Morino Institute commissioned the Brookings
Institution Center for Urban and Metropolitan Policy to review and
aggregate existing literature about youth in our region.
The picture presented by this data is grim. More than 100,000
children here live in poverty. While most live in the District and
Prince Georges County, more than 30,000 live in Fairfax and
Montgomery counties.
Child poverty, as we all know, is associated with lower academic
achievement, which leads to lower skills and lifetime earnings and,
therefore, reduced overall economic productivity. This is not a
problem for just a few neighborhoods and communities. It is a
regional problem. We cannot afford to lose the potential of these
children. In our zeal to enhance and strengthen our position as a
global economic power, let us not ignore the very real and very
serious social problems that exist regionwide. Our challenge is to
use our new-found wealth, talent and technologies to address these
problems.
In the eight years that I have been involved in philanthropic
work here, I have learned that there are terrific nonprofit
organizations that have developed good solutions to serious social
problems in their communities. What is needed are not necessarily
new solutions to problems, but new ways to fund and support existing
efforts so that they can grow and build upon their success.
One way that I believe we can do this is through venture
philanthropy. A young and relatively new area of philanthropy,
venture philanthropy means different things to different people.
At its simplest level, it seeks to obtain greater social return
from the nonprofit organizations working to build healthy
communities and environments for young people and their families.
Venture philanthropy borrows and adapts the principles of venture
capital funding, particularly its emphasis on providing strategic
management assistance and support to nurture and develop the
nonprofit organizations in which they invest.
This approach offers great promise harnessing the enormous wealth
and expertise of the New Economy entrepreneurs and, at the same
time, directing resources in ways that help create stronger
nonprofits delivering solutions that meet the needs of the people
they serve.
The Morino Institute is currently working to establish a social
venture fund focusing on improving the services for youth living in
low-income areas in the National Capital region. This fund will
invest in existing and emerging organizations that provide services
to young people and their families. It will focus its investments on
building organizational capacity within these organizations so that
they can improve and expand within their mission, significantly
enhance the value provided the community and establish financial
sustainability. The Institute is working with a core set of business
and community leaders and augmenting its efforts by partnering with
Community Wealth Ventures and the Community Foundation for the
National Capital Region.
In embarking on this effort, we hope to leverage the wealth,
talent and spirit of the New Economy in a way that delivers a
profound, positive impact on this region. Our vision is to advance
high-impact philanthropy, using our efforts as a demonstration and
to improve the effectiveness of philanthropy and the nonprofit
organizations it supports. It's a bold vision that seeks to change
the way philanthropy operates, but one, I believe, we must embrace
for the benefit of too many children in our region who do not have
access to resources and opportunities that we sometimes take for
granted. Already a dozen New Economy players are the core of a
growing and diverse list of leaders who believe in this vision as
well and are committed to this effort.
Last year Steve talked optimistically of how the newer firms had
the ability—and even the responsibility—to give back to the
community. Supporting the core themes of the Potomac Conference's
vision for the region, our effort to establish a social venture fund
provides the venue for the most fortunate to give back and to
demonstrate innovation in philanthropy. It seeks to add to the
region's connectedness by bringing together a base of New Economy
business leaders with community leaders at many levels. And it
strikes at the core of inclusion by helping to build the
organizational capacity of those organizations educating and
developing young people living in low-income areas of the region.
We have an absolutely remarkable opportunity to do what no other
region has yet accomplished: to use our new-found wealth, talent and
technologies to solve the vexing social problems that have long
plagued our region. The social venture fund we are proposing creates
the venue through which we can benefit from the wealth and talent of
the new and traditional business leadership and our knowledge of how
the Internet can be an agent to transform processes, markets and
systems. By so doing, we will help improve the services for young
people of our low-income areas, while helping make philanthropic
giving and the nonprofit sector more effective.
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. For many in our region, we are enjoying prosperous
times, and it's "let the good times roll." But formidable
challenges in transportation, education, sprawl, environmental
erosion and economic disparity lie in the wings threatening to
curtail this prosperity. Great leaders are inspirational in bad
times and paranoid about success in the good times. We should savor
these good times, but let's not allow the heady success of the New
Economy blind us to the problems we face. It is during these good
times that we should be paranoid about our future. We must come
together as the National Capital region to solve the challenges that
threaten to limit our future prosperity and quality of life. Let us
be truly civic leaders, leaders who can and will make the National
Capital region the global center of the New Economy a reality by
2005 and one that benefits everyone who calls this region home. We
have the chance to be the region that gets it right. Are we up to
the challenge?
Thank you.
These comments, "2005: Digital Capital of the New Economy
– A One-Year Retrospective," were presented by Mario Morino
at Potomac Conference XIV. Morino is the founder and Chairman of the
Morino Institute and the
founder of the Potomac
KnowledgeWay, the Netpreneur.org
Program, the Youth Development (YDC) Pilot and Venture
Philanthropy Partners.
The conference, a project of the Greater Washington Board of
Trade, was the fourteenth 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
backgrounds whose insights and suggestions helped shape and refine
this vision for 2005.
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