Remarks by Steve Ballmer, CEO of Microsoft, on the need for innovation to foster economic growth
Dallas Regional Chamber Technology Business Council
May 7, 2009
STEVE BALLMER: Well, thanks, thanks very, very much. It’s an incredible honor to be here in Dallas, and a particular privilege to be able to speak here today at the Dallas Regional Chamber’s Technology Business Council.
I want to start by acknowledging the important role that I think you play in making
Dallas-Fort Worth one of the nation’s most important and dynamic economic regions. I was hearing during the remarks about this being the hundredth anniversary of the Regional Chamber, and I think that in no small measure you should feel good about your efforts in really driving Dallas to be a leading center for innovation in technology, with more technology companies than any other region in the U.S. except for Silicon Valley. I’m not sure I would set that as a design goal, might be tough to achieve, but certainly it speaks well for what’s going on here.
It takes a lot of leadership and hard work from organizations like the Dallas Regional Chamber to create the dynamic business environment that fosters competitiveness and growth, and I really want to applaud everybody in the room for your commitment and for your success.
Since this is the annual state of technology luncheon and innovation showcase, I guess I’d like to take a few minutes and really share my thoughts on the role that technology innovation will play and needs to play in driving economic growth in the years ahead.
It’s an interesting time to talk about technology driven economic growth. After a long period of global economic expansion and prosperity, we’re all struggling to respond to the worst economic situation any of us has ever faced in our lives.
As business and consumers continue to keep a tight rein on spending — we were talking at our table, it sure feels awful tight out there to many of us, but as businesses and consumers hold things tight, the focus for most companies today is efficiency and cost cutting.
It’s certainly something we’re going through ourselves at Microsoft. These are tough adjustments for our own company, which until this year, for 30 years consecutively has grown steadily and consistently, and we all see this tight focus.
Tightening operations is something that responsible business leaders must do in today’s economic environment, but it’s going to take more than just cost cutting for companies to emerge from this economic downturn stronger than they were when they went into it. There has to be a key focus on making smart investments in innovation, particularly technology-based innovation.
In fact, despite the challenges posted by the global economic situation, I’m actually very optimistic about the future and about our long term opportunities and prospects.
I’m optimistic because while some of the growth recent past was built on unsustainable levels of debt, much of the economic growth of the past years was actually based on innovation in science and in technology that gave us dramatic improvements in business productivity, communications, and new products that let us move forward at a very rapid rate.
All of that innovation, the good part of our economic growth for the past several years, really just sets the stage for even greater progress in the years ahead.
I think a number of trends will combine to really make that possible. One, from our standpoint sitting in the information technology, field is the increasing ubiquity and power of computing. Today, laptops actually have more power in them than mainframe computers did when I started at Microsoft in 1980. Our mobile phones are more powerful than the PCs that existed at the beginning of the Internet era 10 years ago.
But over the next few years, we’ll take a leap into uncharted territory as multi-core processors, processors that actually have multiple processors on them, become commonplace, and we develop new, totally new ways to write computer programs that take full advantage of all that power.
This will lead to anticipated and unanticipated breakthrough applications that are intelligent, that are aware of the environment, can anticipate the information and capabilities you need based on what you’re doing.
All of us have suffered that frustration of wanting to tell the computer I just want to do something, and then, of course, the computer says, what menu item do you want: File, Open? Take your pick.
The next few years are also going to see dramatic changes in the way that people interact with technology. You’ll touch the computer. You’ll wave at the computer. You’ll write on the computer. You’ll express yourself in your own language instead of the menus and language of the computer. That will all be normal over the course of the next five and 10 years, and it’s super important.
Today, I could sit here and just say, hey, look, I really want to show you what I mean: snap my fingers and the camera in the screen would recognize it and go there immediately; or I can manipulate and change the environment just with my voice, with my gestures. That’s a great world.
A third trend that I think is super important relates to screens and displays. High-definition displays are becoming cheaper, lighter, and more portable. They’ll be embedded literally in walls and in tabletops, and you’ll probably carry a small, high-definition display that’s as thin and light as this piece of paper, and that you can fold and manipulate the way you can paper today but really as a digital screen attached and giving you access to the whole world of the Internet.
Finally, all content, all media, all information will be available digitally. We’re getting closer, we’re getting closer. Ten years from now, though, we won’t know the difference between a newspaper, a television show, a magazine; it will all just be digital content that comes to us and finds us or we find it whenever we want.
These big trends that I just highlighted will lay the foundation for experiences to connect people, information, and software applications in new ways.
Technology innovations, not only in information technology as we think about it, but technology innovations that help drive science, health care, energy, entertainment, will be the catalyst for new businesses and even new industries that are a source of new jobs and new wealth.
That’s why Microsoft will invest this year over $9 billion in R&D to drive advances in search, intelligent applications, cloud computing, natural language, and many other areas. Our goal really is to make computing more powerful, beneficial, and of course accessible to more and more people.
But what does it really mean to invest in innovation? Fundamentally, investing in innovation is about unlocking people’s creativity, productivity, and imagination. It’s about encouraging people to dream up new ideas, discover new ways of doing things, find hidden opportunities by really listening and understanding what customers are saying and wanting.
For business leaders it means investing in innovation is about investing in people. It’s people who drive the success of our businesses. It’s their great ideas, their hard work that move our businesses forward. Our jobs – all of us – certainly has to be to provide the tools and culture that enable our people to do their very best work.
For government leaders investing in people is also critical. In today’s knowledge-driven world innovation really does depend on people with a solid background in math and science, along with strong critical thinking skills.
Ensuring that companies have access to a workforce that can analyze business trends, understand markets, and use technology to explore and invent is a fundamental prerequisite for economic growth.
That means we need to transform math and science education at every level, from primary schools to university.
We need to also provide ongoing training to people already in the workforce that have skills and knowledge but need to have them updated in a rapidly changing world.
We need greater government investment in science and technology. Science and technology is the real backbone of our economic success, but government investment in science and technology and engineering as a percentage of GDP has fallen by half since 1970. Today, we need more government investment in basic research so we can pursue breakthroughs in areas such as alternative engineering, bioengineering, parallel computing, and even quantum computing.
I was hearing the story of the founding of UT Dallas, which apparently originally came as a result of an investment and foresight by the founders of Texas Instruments. Whether it’s government or private industry, it’s that kind of push on the education side that is super important.
Supporting entrepreneurs is also critical to driving innovation. Around the world entrepreneurs and small businesses are and will be responsible for a significant percentage of innovation, and the majority of all job creation.
Supporting entrepreneurs and small businesses is an area where I think that private-private and private-public partnerships can be especially helpful.
At Microsoft we’re very pleased to work with local, regional, and national governments to help foster entrepreneurship.
That’s one reason we created a program we launched several months ago called BizSpark. BizSpark is a global initiative to help create jobs by encouraging and supporting startup software companies. Through BizSpark we provide technology startups with access to Microsoft software and tools with no cost upfront. The program includes help with marketing and access to a wide range of support resources: advisors, investors, government agencies, and the like.
BizSpark is just one example I think of what can happen when businesses and government work together to create the conditions for future innovation and growth.
At Microsoft we’ve long recognized the critical role of the public-private partnership and its continued role in creating a workforce with the knowledge and skills that today’s jobs require.
Here in the Dallas area, for example, we work with a wide range of organizations to promote digital literacy and workforce development. Since 2000, we’ve contributed nearly a million dollars in software, cash, and training to the Boys and Girls Clubs.
Last year, as part of what we call our Unlimited Potential program, we awarded more than $1.4 million to the Central Dallas Ministries to support their work to provide computer training and job skills development in low income communities.
And to promote awareness of math, science and technology careers amongst girls and minority students we bring outreach programs like Minority Student Day, and what we call Digi Girls to our Microsoft campus here in Las Colinas where we employ some 1,500 people.
Since 2003, Microsoft has provided more than $85 million in cash and software in the state of Texas through donations and matching gifts directed by our employees.
There’s no doubt that this is a challenging time for all of us, but it’s also a time when old ways of doing things are giving way, and that’s creating new opportunities, strong opportunities for us all.
Historically, tough economic times have also been periods when innovation flourishes and new ideas emerged. It was certainly true for Microsoft. We were actually founded during the middle of a recession over 30 years ago. Actually, I looked it up, General Electric was also founded at the end of — sort of when the bubble of 1873 popped, and it was as bad or worse as the one we’re going through. GE was founded three years later.
So, I think there’s a whole lot of opportunity even in these tougher times to look forward and to be excited about the opportunities and the innovation.
A lot is going to depend on the choices that we make both as business leaders and as society as a whole. Smart investments by businesses in the public sector will create conditions that enable information technology to flourish and help not only in our own field but all fields of scientific and engineering endeavor.
For 100 years the Dallas Regional Chamber has been working to create an environment where businesses can flourish. I certainly look forward to working with all the folks here, and having our staff do everything we can to be a source of innovation, a source of change, a source of opportunity here in the Dallas area and around the world.
I am optimistic about the future, even if I’m quite realistic about the present and the new few years. I hope you can share some of my optimism, and we can all deal as successfully as possible with the realism we also need to bring to the table.
I want to thank you for your time today. I look forward to taking some questions. My guess is we won’t get to all your questions. If you want to contact me afterward, my e-mail address is SteveB@microsoft.com. I won’t promise 24-hour response times, but I’ll get back to you as soon as I can. Thank you all very, very much. (Applause.)