What does a cotton bracelet, a food tour in Washington D.C., and new kind of flooring have in common? They are products or services offered by three start-up companies whose owners started their companies with less than $150. They are also the subject of a recent article in the Wall Street Journal entitled Start-Ups on a Shoestring. The article provides an insightful look into the entrepreneurial spirit that drives small business. I found this article fascinating because it doesn’t credit the success of these entrepreneurs to anything but hard work and intuitiveness. Not only was their common thread hard work and little money, these business savvy people were also tech savvy. My suggestion: click the link below and read the full article. You may find some helpful hints or simply be encouraged by start-up successes.
An interesting and provocative perspective on innovation from a venture capitalist as posted today at RealClearMarkets.com:
Dan Smith, dean of Indiana University’s Kelley School of Business, was recently featured in The Economist on innovative new approaches universities can take to help combat rising tuition costs facing students. As Dean Smith articulates, business schools are perfectly positioned to develop new ways of paying for higher education.
Under his direction, the Kelley School is currently exploring an “education circle of life” model of financial support for students. This concept involves the creation of a consulting consortium in which teams of students help mid-sized client companies identify, assess and capitalize on global growth opportunities. As firms pay a fee for the student consulting services, a portion goes toward the students’ tuition costs while the remainder is applied to an endowment account that provides financial aid for deserving students.
The education circle of life model also can create growth for the mid-sized companies utilizing the services, which in turn can produce new jobs. For more detail on this innovative concept, follow the link to the full piece in The Economist.
Thought you may enjoy reading this.
Our previous post has discussed Regionalism and clusters as a tool for economic development and the role of the university in the process. Through our Innovate Indiana initiative, Indiana University has played a significant role in economic development and innovation, particularly with respect to life sciences.
As introduced in the previous post, life sciences in Indiana has developed into a significant industry cluster with a concentration of more than 50 companies and over 52,800 people working within the state’s life science-related companies. In fact, Indiana job growth in life sciences has outpaced national life science job growth since 2001. This is in large part due to the cluster-focused initiatives of BioCrossroads, the state’s leading catalyst promoting the continued growth of Indiana’s life sciences industry.
Indiana University continues to support the state’s life sciences in a myriad of ways. With its world class expertise is medicine, health care, and the sciences, IU has played a significant contributing role in advancing the development of the infrastructure and resource base of Indiana’s life sciences cluster. This cluster stands today as one of the Indiana’s leading economic engines to spur new growth benefitting the state.
The first two posts of this series discussed “regional innovation clusters” – what they are, why they are beneficial, and what makes one successful. We determined in the previous post, that the three examples of clusters that were highlighted – Colorado CleanTech, Indiana Life Sciences and the Michigan Battery Cluster – all have a strong university presence as a key common denominator.
Universities have a huge impact on the local economy; employees of the university, as well as the university itself, all buy items goods and services from the local community, thus supporting local businesses. Economists refer to this as the multiplier effect. According to the US Bureau of Economic Analysis, the multiplier for research university maybe as high as 2.0. However, a study authored by the Rockefeller Institute of Government, “A New Paradigm for Economic Development,” suggests money spent in the local economic community may be somewhat offset if the university is state-supported. Although it is worth noting that the research conducted at research universities typically is fueled by a significantly higher percentage of federal funds as compared to state funds.
The key point is that research universities, such as IU, have the potential to transform basic and applied research, largely enabled by private and federal funds, into new innovation and jobs. From 2006-2008, only 2% of IU’s research expenditures were directly funded by the state. A recent Milliken report stated that the key to fostering a high-tech industry is to first foster robust research universities and institutions and that research universities are “undisputedly the most important factor in incubating high-tech industries.”
Very interesting piece on challenges associated with job growth in a global marketplace and underscoring the criticality of higher education in a fast-changing and uncertain environment.
Since 1978, the IUPUI Center for Economic Education has worked to improve the economic literacy of citizens in Central Indiana. Its mission is to increase the economic understanding and decision-making skills of students by providing educators in grades K-12 with a basic understanding of economics, classroom strategies, and classroom materials that are objective and consistent with state and national educational reform initiatives. The Center also directs a variety of credit and noncredit programs for other groups, including the general public. Through institutional support from the Indiana Council for Economic Education and IUPUI, along with various public and private grants, the Center has been able to offer its programs at little or no cost to participants.
Previously, we discussed “Regional Innovation Clusters” and why they an important driver of economic growth. The Brookings Institute posits that “clusters generate powerful synergies in local economies by organizing, matching, and linking the key actors and assets.”
The question then becomes, what characteristics are associated with Regional Innovation Clusters? The same report cited several examples as evidence that biotechnology, and other technology-based companies, are likely to be much more innovative if they are located in a clusters with strong specializations in their own technologies.
In its recent study of regionalism, the Council on Competitiveness emphasized the three “Cs” of successful regional collaboration: connection, converstaion, and capacity. Its assertion that “regionalism is a contact sport best pursued through personal interactions at every stage of the game” especially rings true in a highly innovative economy where most projects are multi-disciplinary in their approach.
Capacity building, as related to regional clusters, involves leveraging assets that a particular region has to offer and connecting them with start-up companies. Connecting start-ups to professional services and universities can then lead to connections with key capital resources. The common denominator of the renewable energy industry in Colorado, the battery industry in Michigan and Indiana’s own life sciences industry cluster is not only are they regional innovation clusters, but that they are all also highly integrated with strong research universities that closely support the cluster.
What does the renewable energy industry in Colorado, the battery industry in Michigan, and Indiana’s own life sciences industry all have in common? All of these are regional industry clusters, and perhaps more importantly, they are highly innovative “Regional Innovation Clusters.”
A recent study by the Brookings Institute entitled The New Cluster Moment: How Regional Innovation Clusters can Foster the Next Economy identified the importance of thinking differently about economic development. The study reinforced the idea, as the recent recession reminded us all, that a new approach to economic development is needed; an approach that depends less on bubbles and consumption. Brookings’ answer, as well as many others, is “Regional Innovation Clusters.”
What is a regional innovation cluster? The idea of “clusters” as a tool for economic development was introduced by Michael Porter, the famed Harvard Business School professor twenty years ago. A cluster is a geographic concentration of interconnected firms and supporting or coordinating organizations and associated institutions, such as universities.
The Brookings study recognized regional economies and clusters as “hot spots of productivity and collaboration” and are innovation and opportunity driven. In the end, supporting cluster development will promote growth in productivity, wages and jobs. Perhaps Porter himself said it best when wrote, “there is no national economy…but a series of regional economies that trade with each other and the rest of the world”.