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Q&A with University of Michigan

University of MichiganContributors:

Marvin Parnes, Assoc. Vice President for Research
Daryl Weinert, Executive Director, Business Engagement Center
Ken Nisbet, Executive Director of Technology Transfer
Lawrence Molnar, Director, EDA University Center Institute for Research on Labor, Employment, and the Economy (IRLEE)

Q. President Obama set the clear goal of increasing R&D investments to 3 percent of GDP. How will this level of commitment enhance the great work being done at universities around the country?

A. Universities are the pipeline for innovation in America. A stable R&D budget, with appropriate increases year-to-year, is essential for universities to maintain and grow leading edge facilities and give emerging generations of scholars a place to innovate and create the new technologies that drive economic growth and competitiveness. Federal investment in R&D is the primary source of funding for the university research that generates the vast majority of inventions successfully licensed to start-ups and existing firms. Training of talented scientists, engineers, and entrepreneurs is more important than ever. Through programs such as the Center for Entrepreneurship in the College of Engineering, the Zell-Lurie Institute for Entrepreneurial Studies in the Business School, and the TechStart summer internship program, Michigan and other universities are providing opportunities for students to generate successful ventures as part of their education. In recent years, Michigan and other institutions have expanded their research activity with industry and corporate partners, an increasingly important arena for innovation and training. This partnering is a key strategy for regional technology based economic development. Without robust federal funding, universities are less able to accomplish any of these critical undertakings.

Q. Many universities today have special innovation and entrepreneurship programs, with particular emphasis on incubators. Discuss the impact on job creation.

A. Three years ago, U-M Tech Transfer launched its Venture Center to broaden and improve start-up creation services and resources. Recently, we added our "Accelerator" to the Venture Center, a full suite of business formation services and resources, including access to incubator facilities and equipment, to prepare emerging new start-up ventures for sustainable success. This provides a central location to gather and share resources, a critical mass of venture services, a community center for entrepreneurial talent, and an organized system for enhanced venture creation. U-M Tech Transfer has launched ninety-three startups in the past ten years, a record that places U-M within the top ten of all universities. We want the Venture Center to increase our pipeline of new job-creating ventures, but, more importantly, we are focusing on enhancing the quality of our new venture opportunities to produce high value jobs and sustainable ventures.

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EDA-FUNDED TOOL 'Know Your Region'

Know Your Region LogoThe National Association of Development Organizations (NADO) recently released the "Know Your Region" website. For several years, the EDA-funded Know Your Region (KYR) program has offered training and resources to economic development practitioners and policymakers around the country. With the launch of www.KnowYourRegion.org, users can stay abreast of the latest trends in strategic planning, cluster development, regional innovation and economic competitiveness.

The Center for Business Acceleration and Incubation Studies (CBAIS), part of U-M's Institute for Research on Labor, Employment and the Economy, has conducted two national studies on business incubation, both funded by EDA. The1997 study, Impact of Incubator Investments, concluded that business incubation is indeed a strategic job creation tool. On average 468 jobs were directly attributable to a business incubator at a cost of $1,109 per job.

U-M is currently partnering with the National Business Incubation Association, University at Albany-State University of New York, and Cybergroup, Inc. to finish a national study of business incubation best practices. The current study will help delineate how best to structure business incubation programs so that the maximum number of jobs can be created.

For more than 25 years, the University of Michigan has been involved in business incubation and has helped communities conduct market and feasibility studies for business incubators. CBAIS works to ensure that current information on business incubation informs these studies so that resulting incubators follow best practices and are better positioned to generate sustainable new ventures and create jobs.

Q: The America COMPETES Reauthorization Act of 2010, which President Obama signed into law recently, strengthens the Administration's capacity to elevate regional innovation cluster development as a key driver of future jobs growth. Universities are regarded as important partners in cluster development. What is their role and what is the impact on local economies?

A: To function well in a cluster, interfaces among the partners are critical. The University of Michigan has developed a comprehensive approach to managing interactions between the university and the business community. Universities have numerous assets that can contribute to business growth and economic development—faculty expertise, new technology, high-tech facilities, student and alumni talent, continuing education programs student project opportunities, and more. The Business Engagement Center at the University of Michigan connects companies to these U-M resources. The Business Engagement Center also provides a focal point for the university’s relationship with chambers of commerce, economic development groups, trade associations, governmental units and other schools within the region to ensure that the lines of communication are robust and that the level of coordination is high.

Q: The commercialization of technology developed in university and federally-funded labs is key to sustainable economic recovery. EDA’s Office of Innovation and Entrepreneurship is promoting interagency initiatives to help bring new technologies, products, processes, and services out of labs and into the marketplace. Where has the focus on commercialization been most effective and what are some of the best practices you have seen?

A: Over the last ten years, the University of Michigan has made great progress in increasing the number of innovations that reach the marketplace. Our success is the result of some competitive advantages and some innovative practices that work well within our environment. These include:

  • High quality inventions resulting from diverse large scale, leading-edge research
  • A pro-active, encouraging environment for tech transfer
  • Programs to attract, direct and motivate several levels of talent to accelerate our assessment, development and marketing efforts, leveraging our regional partners and international pool of alumni
  • Early stage internal investments, matched by external state and foundation funds, in translational research and “gap funding” activities. The focus is on assessing commercialization hurdles and applying professional resources augmented with student talent to address these issues.
  • Providing a focus on critical competencies, as with our Venture Center for venture development. This provides a “hub” for entrepreneurs and venture partners to engage the university for start-up opportunities, an integrated set of resources managed by experienced professionals, and a system to partner with other university, regional and national organizations to foster venture and job creation.

Q: As Director of The University of Michigan’s EDA University Center, what difference is this program making at your university and the many other institutions that are part of this network?

A: The current economic climate gives the higher education system an opportunity and responsibility to be engaged in economic development, technical assistance, and job creation. The EDA University Center demonstrates the University of Michigan’s commitment to serving the public as an “engaged university,” a goal of this premier public research institution championed by U-M President Mary Sue Coleman and one that is shaping the culture of the institution.

Our University Center has been the lead in many demonstration projects that facilitate economic recovery and transformation, such as the EDA Community Economic Adjustment Program. Through these projects, our ideas, processes, and resources are used to develop replicable and scalable models for other institutions as they also work to build more resilient, innovative communities. Our partnerships with other university centers across the region allow us to share resources and ideas, and work together to enhance our collective capacity to serve our communities.

Nationally, the EDA University Center Program (PDF) provides a network of centers across the U.S. opening access to the expertise, knowledge, research, intellectual property and resources of the nation's higher education infrastructure to communities, regions, companies and individuals. Through organizations such as the University Economic Development Association, the Educational Association of University Centers and the Association of University Technology Managers, knowledge, experience and best practice are discussed and shared, contributing to continuous improvement and increased efficiency and effectiveness in our work.