At the end of the panel I asked each of the panelists, Bob Ackerman of Allegis Capital, Professor Randy Katz of Berkeley, and Dave Robbins of BigFix, to answer the following question:

 "In closing, I would like each of our panelists to comment on the most important change that they would like to see implemented in order to promote the protection of our nation’s critical infrastructure."

Bob Ackerman's answer follows:

"The solution to the critical needs of our country  - whether it is in reinventing our economy or the innovation that is essential to protecting our nation’s critical infrastructure – will depend on the creativity and drive of entrepreneurs. At precisely the same time that political leaders are calling for expanded innovation to meet our national needs, there appears to be an almost all out assault on entrepreneurship in America – by deed if not by word.  Capital and talent are the two most valued and at the same time portable assets in the global economy.  For more than three decades, the United States was the destination for the best and brightest minds from around the world.  In the US, brilliant entrepreneurial risk takers found the resources they required to implement their dreams and an environment that rewarded those that took the risks associated with innovation – and succeeded.  Today, we are making it increasingly difficult for the best and brightest to come the US and stay to contribute to our economy. For those that are here, we are increasing the regulatory hurdles associated with building successful businesses while increasing the taxes associated investments make in long term innovation.  Stock options – once the great wealth builder for employees in start-up companies – have had much of their value striped by regulatory changes.  When combined with the current political overtones that suggest people who have achieved wealth must have somehow “cheated”  - we have created an environment where the risk/reward associated with high risk entrepreneurial innovation is seriously out of balance.  At precisely the same time where we are more dependent than ever on an innovation-driven economy and our competitors have borrowed our historical playbook – we are effectively erecting barriers to innovation in America."

How should we respond?  We need to attract and retain the talent and capital necessary to fuel the engine of innovation.  We need to attract capital and encourage focused, systematic innovation through modifications in our tax code.  Lower tax rates for long term innovation is an excellent place to start.  We need to rethink our approach to regulation with a more constructive understanding of the levels of risk associated with (and appropriate regulation) companies as they grow and prosper.  A successful start-up company and a multi-billion dollar global player should not be subjected to the same level of regulatory oversight – in most cases. Further, our immigration policies need to focus on encouraging the world’s best and brightest to come to the United States, benefit from our educational system and remain here to contribute to our economy.  Today, our policy in this area can almost be described as “Here’s your PhD. – now go home!”.  Rest assured – the capital will follow the talent.

In parallel with the above, we need to take concrete steps to encourage companies to grow in the U.S.  This is a combination of the steps I have previously mentioned while making it easier for young companies to go public – tapping the capital they need to continue growing and adding high paying jobs to our economy.  Regulatory reform can address some of these issues but the venture industry also needs to take responsibility for re-invigorating the investment banking environment upon which a vibrant IPO market is dependent. This is an area where experience will matter.  For example, venture professionals who have lived successfully through these challenges in the past - have an invaluable historical perspective that can contribute to this revitalization.  Unfortunately, many have left or are leaving the industry.  Why – it’s become harder and harder to be successful while the rewards are being diminished.  They either retire – or they follow the entrepreneurs who are voting with their feet and talent and moving to greener pastures – in other countries.

At the end of the panel I asked each of the panelists, Bob Ackerman of Allegis Capital, Professor Randy Katz of Berkeley, and Dave Robbins of BigFix, to answer the following question:

 "In closing, I would like each of our panelists to comment on the most important change that they would like to see implemented in order to promote the protection of our nation’s critical infrastructure."

Dave Robbins’ answer follows:

"First, I would like to see all federal IT groups focus on building a stronger foundation within their core network.  Often, an IT organization gets caught up in the purchase and implementation of a myriad of tools that don’t really solve key and basic problems.  In order to be more secure, you have to have better real time situational awareness: how many assets do we have; where are the assets located; where in the world are those assets now; what applications are running on the asset; what non-approved applications are on the asset; what is the patch level; is AV running.  Secure your core configuration and the rest of the task of security becomes much easier.

Second, make the entire process of selling to the U.S. government easier.  I find it sad and ironic that it is easier to sell governments throughout the world compared to my own. Far too many complicated buying processes and far to many acronyms and archaic terms (skivvy-skree is actually patch management!?!) create an impenetrable wall between young innovative companies and selling to the government.   Dealing direct with the government would make it easier instead of being forced to work through resellers and integrators that have little real knowledge of what makes an innovative company special. 

You have to remember, if you want access to new innovative technology, you must find ways to work with smaller companies. Large companies don’t innovate, they increment, which is the antithesis of innovation.   Patents don’t equal innovation...products equal innovation."

What amazes me is that the discussion on the demise of the traditional media model amounts to a collective shrugging of the shoulders by these experts.  Given that the business model for traditional newspapers is so broken, the disagreements as to the way forward run very deep.   

Some of the suggestions in this morning’s breakfast discussion include that every print article should disclose  metrics as to how many people have read it in order to establish popularity benchmarks—this becomes a way of judging market reach as well.  Risk: 'The New York Times could become the Paris Hilton Times'.  This tension between the eroding credibility and gravitas of the “traditional press” and the “deep but unverified assertions” of many blogs is at the heart of the problem.  Building a business model that scales to capture the high ground of credibility at a large scale online is in the process of evolving.  100-journalist strong online media news organizations are now thriving (meaning profitable), per the panelists.

Chaos currently reigns. Jeff Jarvis recommends reading Clay Shirky's Thinking the Unthinkable.

Commenting on Twitter-- the speakers highlighted the asymmetry of Twitter between The Followed and Followers. Finally the discussion has turned to the fact that Twitter makes no money.  The speakers believe that the Twitter business model will turn into search-based advertising and feel that Twitter is so revolutionary that the successful business model for Twitter is at hand.

I've been a Twitter skeptic but am starting to see it as a useful public utility for crisis situations and spontaneous viral group eruptions (from the incipient Iranian revolution to the Aspen Ideas Festival).

Follow me on Twitter @plevensohn and check out #AIF09 in the Twitter stream to see what is going on at the Aspen Ideas Festival in real time.

The content was very powerful, and many eyes were opened to the interconnected nature of the crisis in America's innovation ecosystem and the negative implications for cybersecurity. As one questioner said, "when are you going to stop talking about the problem and start taking actions, and what are you going to do?"

The question was meant more constructively than it reads on paper, and the answer is, "hopefully, a lot, but we need influential change agents to volunteer to get involved with the SINET to get things done."  Much more to follow...

Scott Draughon, Anyck Turgeon, Robert Rodriguez, Pascal Levensohn

At 4 pm EDT on June 17 Robert Rodriguez, chairman of the Security Innovation Network, and I will discuss the recession's implications on the continuing pace of American innovation on MyTechnologyLawyer, a live radio show.

The title of the hour-long show is "The Innovation Crisis in America." The format for the show will be conversational, and I expect that our hosts, Anyck Turgeon of Crossroads Systems and Scott Draughon, originator and the main host of the show, will elicit some provocative answers through their questions.

Among the questions that we will discuss:

What is Innovation?
What supports the argument that there is an innovation crisis in America?
How does Silicon Valley fit into the innovation ecosystem?
How has global competitiveness changed over the past decade, how do observers measure changes in competition, and what does this mean for America?

Listeners can tune into the show live by going to this link: CLICK HERE

The show will be recorded and accessible for downloads at your convenience at www.mytechnologylawyer.com/crossroads .