University research corridor gets low rank in startups

By Alicia Adamczyk, Daily Staff Reporter
Published January 26, 2014

With recent entrepreneurship-focused events like the startup career fair and MHacks fresh in the minds of many students, it might seem that student-created tech and business ventures are everywhere at the University.

But a recent report conducted by East Lansing-based Anderson Economic Group found that the University Research Corridor, a research alliance between the University, Michigan State University and Wayne State University, may need to place more emphasis on entrepreneurship for the URC to remain competitive with the seven other major university research clusters ranked in the study.

According to the study, which was conducted over a five-year period that ended in 2012, though the URC granted more degrees than any of the other clusters, it placed last in tech transfer and next-to-last in launching startups. The University was responsible for 11 of the 14 startups created in the URC during the study’s five-year period, while MSU was responsible for the other three.

However, the URC had a strong showing in other categories against the other clusters, which included North Carolina’s Research Triangle Park, California’s two Innovation Hubs and Massachusetts’ Route 128 Corridor. In fact, the URC placed first in talent production and fourth in research and development spending.

What the University may lack in startup quantity, it makes up for in quality, according Tom Frank, the executive director of the University’s Center for Entrepreneurship. He added that when it comes to talent, the University can’t be beat.

Frank cited Rapt.fm, which encourages freestyle rap and one-on-one rap battles with people from all over the world, and A2B Bike Share as examples of the high-caliber startups created by University students.

“One of the reasons I came here from California is because I’ve never seen this confluence of factors that make Michigan feel like it’s just ripped wide-open in terms of output of scalable, viable businesses,” Frank said of the combination of resources available and student talent.

The startups indicative of the success of the creators, in addition to employing other students and picking up venture capital and other external funding. These factors, combined with the “cutting edge” programs being developed by administrators, indicate that University students will continue to be at the top of the business heap, according to Frank.

“Long-term viability is ultimately what’s going to add the greatest value to the Michigan ecosystem and create jobs here and sustainability,” Frank said. “It’s not always important to say I had 25 contestants that entered the marathon; I’d like to have the top five finishers.”

Ken Nisbet, associate vice president for research at the University’s Technology Transfer Office, said the URC report was less indicative of the University’s overall standing than it was of the need to continue to improve resources in the state of Michigan.

While the University receives the most research funding of any institution in the state, part of the URC mission is to engender communication between the three coordinating units and to share the best practices and talent resources to improve the economy in the region.

“We have a number of success stories out of the University of Michigan startups that are known nationally,” Nisbet said. “We are definitely not underperforming relative to those other states.”

According to a 2013 survey, URC alumni “had started or acquired businesses at double the national average rate among college graduates since 1996 and were 1.5 times as successful as the average U.S. business owner at keeping those startups and acquisitions alive in the previous five years.”

Still, there’s room for improvement. Engineering junior Christopher O’Neil, president of MPowered — a student organization that fosters entrepreneurship within the campus community — said the University could work on increasing its interdisciplinary approach to startup creation in order to maximize student potential.

O’Neil said it would be beneficial if the University offered more project-based undergraduate classes that mix Business, Engineering and Art & Design students who are all focused on creating something together.

“One of the problems with Michigan is that it’s super decentralized,” O’Neil said. “I think it’d be a lot easier for people to start companies if they didn’t have to go search for the designer, search for the engineer, search for the business student.”

He added that the University is on an “upward slope of entrepreneurship,” and will continue to improve its resources and programs for students interested in starting their own companies.

O’Neil said the best is yet to come from University students.

“Even in the time I’ve been here, I can say 100-percent that the culture and mindset has changed at this University. The mindset is there. Now we just need to churn out some better startups.”