Universities’ Role In Ecosystem Building

Engine began #StartupsEverywhere to tell the stories of thriving startup ecosystems that have sprung up in every corner of the country. Over the past year, we’ve profiled 32 cities in 30 different states, with the goal of completing all 50. Now, we want to share the lessons we’ve learned to help other communities transform themselves into emerging centers of innovation and to educate policymakers on how they can contribute to the process. This blog series will expand upon some of the inputs, best practices, and policies that regularly appear in our profiles.

Stanford University has been called Silicon Valley’s “original incubator” for its foundational role as a networking and talent development hub. Innovations the university generated at the dawn of the digital age have since come to personify the American technology industry. Stanford’s experience holds important lessons for emerging ecosystems. Namely, how to leverage the presence of a research university to bolster the rate of startup creation and fuel a pipeline of skilled entrepreneurs.

In 2015 alone, university research accounted for the creation of 1,012 startups. This is a product of concerted university efforts to foster cultures entrepreneurship, among both students and faculty. A major component of this process is the expansion of entrepreneurial education programs like the Blackstone LaunchPad, which equips college students with the skills to transform their ideas into successful enterprises.

Paul Gladen, who runs the LaunchPad at the University of Montana said in a recent #StartupsEverywhere interview that programs like his make the university a centralized hub of entrepreneurial activity where ideas and talent can be refined. What’s more, these programs construct mentorship networks that connect diverse aspiring entrepreneurs with the resources required to navigate the early stages of venture formation. Studies show that advising relationships are critical to long-term company performance.

Universities employ a variety of other strategies to promote startup activity. Purdue revised its faculty tenure criteria to promote entrepreneurship and interdisciplinary collaboration between its business school and STEM programs. However, the university went further and became an active contributor to the growth of the city’s startup ecosystem by establishing Purdue Foundry, an on-campus accelerator that seeks to bridge the funding and talent gap.

As local ecosystem-builder Stuart Gutwein noted in our profile of Lafayette, Indiana, Purdue has become an “ideal partner” that provides “invaluable resources” to the startup community there. These initiatives helped yield a four-fold increase in Purdue’s rate of startup creation between 2005 and 2016. Mike Freeman, the CEO of Innosphere, a nonprofit entrepreneurial support organization in Fort Collins, Colorado echoed this sentiment and called nearby Colorado State University an essential part of his high-growth ecosystem’s “secret sauce”. CSU has similar centers for innovative research, venture funding, and entrepreneurship.

Presently, innovation activity is highly concentrated in coastal urban areas who hold a disproportionate share of the skilled labor supply. However, universities with a strong ethos of entrepreneurialism can reproduce these “clusters” of idea generators in nontraditional hubs, bridging the gap in access to talent that often inhibits ecosystem growth. It is of no coincidence that Provo, Utah, the best-performing metropolitan area in the Milken Institute’s 2017 report, is home to two high-powered, STEM-heavy research universities.

Key inputs for the development of any startup ecosystem include access to ideas, talent, capital, and customers. Universities have the capacity to consolidate these resources in a single place, putting them in a unique position to be catalysts for startup growth over the long-term.