Though it didn't get as much media attention as
The Big Chill, another important competition was held in Ann Arbor last month. True, it only drew 300 attendees, far less than the Guinness Book Of World Record -setting crowd that witnessed U-M's hockey victory over MSU. But its impact on Southeast Michigan's future will most likely be more profound.
With a half million dollar no-strings-attached grand prize, The Accelerate Michigan Innovation Competition was a battle of business pitches, an
American Idol for start-up companies that are interested in doing business in Michigan. Attracting personal appearances from U-M President Mary Sue Coleman and Governor-elect Rick Snyder, the five-hour final day pitch-off featured 10 finalists vying for more than $1 million in awards and in-kind support services.
"For our first year we're pretty pleased," says recently departed SPARK president and CEO
Mike Finney, whose organization spearheaded the event. "Given that we
had entries from all over the country and world it really means Michigan
start-ups can compete at that level."
The international competition, the first of its kind in Michigan, drew over 600 business plans from 13 states as well as Canada, Switzerland and South Africa.
But more important than the competition, cash prizes, and networking, was the way the competition came together and the identity of those behind it.
The brainchild of the recently-formed
Business Accelerator Network for Southeast Michigan, the event was the result of a carefully planned collaboration between the region's four big business accelerators -
Automation Alley,
Ann Arbor SPARK,
TechTown, and the
Oakland University Business Incubator.
Already successful in their own domains, each of the organizations had, at best, a casual relationship with another. This dynamic changed when the
New Economy Initiative encouraged the leaders of the four accelerators to start getting together to discuss what was working and what wasn't working for their organizations.
"Once they started to understand their self-interest in measuring themselves as a region instead of competing it was pretty easy to get them to start collaborating," Egner says. "By combining their resources they become more competitive for Federal grants and it gives them more strength to service the region."
To understand how important this collaboration is one must consider the context of Southeast Michigan's history. Whether it's multi-county services like mass transit, amenities provided by individual towns and cities, our state universities, or local economic development organizations, the region has a poor track record when it comes to cooperation and sharing resources. Local control is king and the notion that a rising tide lifts all boats has been hard to sustain when every community wants its boat to rise first and fastest.
By focusing on business creation and engagement, the Business Accelerator Network may very well bypass many of the traditional obstacles to regional collaboration.
"The New Economy Initiative bet on the four accelerators because they were not mired in the politics of location," explains Egner. "They're in business to start businesses and incubate them for job creation. Getting the four to work together creates a defacto regional doorway."
I spoke with Egner and Mike Finney, who has just taken the helm of the Michigan Economic Corporation (MEDC), to discuss Southeast Michigan's economic future. These interviews were conducted by phone and edited for clarity and length.
Dave [Egner] stated that soon after the NEI brought the region's four big accelerators together you quickly saw the virtues of working collaboratively. What's one thing you're doing now that you weren't doing before? Why?FINNEY: We have worked together informally for the entire time I've been around. But now because the process has been more formalized, we wake up every day looking for ways to collaborate. When we roll out any of our various programs or initiatives we do it with the others in mind. Whether it's foreign trade missions or boot camps we think about our partners because we have an obligation to. This kind of commitment wasn't really there before. That's what formal relationships do, they create real commitments.
We're also all learning that we each have capabilities that the others didn't necessarily understand.
What would be an example of a revelation you've had about one of the other accelerators?FINNEY: For instance, Automation Alley has the best handle on international trade of any organization I've ever seen. They've really developed relationships around the world and they know how to get companies here and how to identify potential targets for trade around the world. They are very good at finding new business opportunities for local companies. We've learned how we all have something unique to bring to the table. There is some overlap but we are much stronger collaboratively.
It's one thing for the CEOs to get together and play nice, but to get your organizations to collaborate seems like it'd be a whole other skill set.FINNEY: It's a process. We like to practice what we call "Open Source Economic Development". We've really tried to instill that in the culture of our organization. We've set up some planned meetings for our teams that don't include our [the CEOs] participation. We have also planned activities for the marketing leadership of each organization so that they can coordinate strategies.
The criticism of programs like the MEDC and SPARK is that government shouldn't be picking winners and losers by awarding grants, tax incentives etc., that you put existing or competing companies at a disadvantage. How would you address that argument?FINNEY: I would say, that someone should come up with an alternative proposal that makes sense. I'm more than happy to listen to alternatives but they never seem to come forward, only the debate.
It's more than just questioning whether these resources should be made available to companies. If someone is opposed to the idea, then please propose an alternative so that businesses are motivated to grow in our state. It's nice to say that it's purely organic, that things will just happen if we do nothing. Unfortunately, that has been proven wrong on so many fronts. Building a better mousetrap is probably the best analogy others can come up with. But people will not beat a path to your door just because you've created it. You need to find better ways of promoting that mousetrap, of marketing it and manufacturing it. Communities are like any other product that you have to effectively sell to whomever your target customer is. We've touched thousands of companies, start-up or otherwise, that are clamoring for more resources to grow. There is no doubt in my mind that businesses see a value to what we do.
Let me give you anecdote; I was talking to the head of a local start-up and his complaint was not that he had a hard time finding new talent, he said there plenty of local grads to draw from. The problem was finding mid-level talent. He claimed that people with more than a couple of years experience leave or are reluctant to move here.EGNER: It's a real problem. In terms of managerial talent for start-ups, we're woefully behind. The talent that could be involved in managing start-ups and various levels of management went to where the businesses were when we were behind. So, we need to develop a long term solution to that issue. Whether that's hiring entrepreneurs in residence, or developing a program like SPARK, attracting management talent in a priority. It's a future focus for the NEI.
FINNEY: I think we need state wide talent strategy to fill that void. One of things I think we do well [at SPARK] is that we have a very strong talent enhancement program. One of our executive's everyday job is identifying exactly the kind of talent you've just described. And it's at the professional, technical, and executive level. It started off with a trickle but we now have an average of 100+ companies every month contacting us for help with their professional and technical talent. So, we know this is a meaningful activity.
Is it scalable to state wide level? I think so. And tapping into the Michigan alumni network that's out there, talent that has a connection with MI --whether it's through universities or relatives or former residents-- we need to target those groups for a return to the state.
The trend is for high tech talent to want to live in vibrant communities close to their jobs. Long commutes are seen as a disincentive for relocation. Metro Detroit is a very big region. Notions of urban density and diverse business sectors are only just starting to be discussed. How do you confront those issues when trying to attract businesses or talent to the area?EGNER: I think where our economic development policy has fallen short in recent years has been in its lack of investment in place. You don't do it in the absence of other economic development but, to quote Sandy Baruah from the Regional Chamber, "All you need to be in business today is a good idea and a good Internet connection." If you don't have a place people want to be and if they don't feel connected to a community and culture and entertainment they won't stay. The notion that incentives alone will drive anybody anywhere is fallacious. We simply haven't invested enough in place.
When people say place doesn't matter I say let's put U-M in Houghton and tell me place doesn't matter. Which came first? It doesn't matter is the answer. If you don't have both place and the university as an engine success won't happen.
Density is also a huge issue, a huge driver for the future. Lou Glazer has looked at new business growth in Ann Arbor and what the talent base in Ann Arbor, given its density, can actually produce. You can't hire enough talented people to run new economy businesses if Ann Arbor doesn't get bigger. The message the city is sending is: the economy we have is the economy we're going to live with and if you don't like it go someplace else.
FINNEY: Economic development, community development and talent development need to connect
in order to find success. You have to build strategies that understand and focus on that fact. So, it brings into play a lot of other things that are not obvious - transportation for example. The transportation infrastructure that we have here definitely warrants improvement and change. The rail project up Woodward is one example of a community resource that would help with the talent question. Easy access to urban environments or to where other jobs are is important. A rail system helps to make that happen. How we connect talent with urban centers is a significant part of what we have to do.
There's a drive to create this collaboration with the business accelerators and other business entities but they don't seem to be interfacing with the kind of community development you're describing. They seem to be the missing puzzle piece.Yes. They've been operating in isolation for quite some time. And as a vision going forward we need to make those connections. Indications are throughout the state - it's more than just SE Michigan-- that these key connections need to happen in order for us to rebuild and have the robust economy that we want, a place where talent wants to be, a place where companies want to be.
I don't think it's going to happen overnight but I think we're on a path to it.
When you think about the kind of success you hope for the region what model do you look to? Is there a community outside Michigan that inspires you?FINNEY: There are a lot of urban environments that have a lot of cool stuff going on. There are some great things going on in Seattle and Portland, Oregon and even Phoenix, that could be emulated.There are places around the country where pieces of the dream, if you will, exists. Is there a place that represents it all? I'm, not aware of one. I think that's an indication of just how challenging it is to really have a robust environment. We have to pick places where we commit resources in the early going very carefully and not change our priorities, chasing whatever the new trend is. We have to focus on economic gardening, working with established companies to find ways for them to grow here. We need to reinvent the entrepreneurial community in our state, which is what the accelerators do well. We also need to create a space in our state for companies in growth mode or looking to expand operations and that's a place where we have not placed a lot of resources. So, it's a complicated equation to do all those things in order to be successful.
EGNER: There are lots of
programs that are instructive when it comes to determining what
principles will work. My 21 years of experience as a grant maker
tells me one thing: Replication is near impossible. You can take the
principles of success and transplant them and they'll root and give
you similar results. What's key here is can we take what would be the
best practices and put them inside the assets, resources and talent
we already have and have them bloom.
Jeff Meyers is the managing editor of Concentrate and Metromode. He is also an award-winning film critic for Detroit's Metro Times.Send your feedback here.Photos:
Mike Finney
Dave Egner at the Accelerate Michigan Innovation Competition
Mike Finnery at the Ann Arbor SPARK offices
Dave Egner
Mike Finney
Mike Finney photographs by Doug Coombe
Dave Egner photos by Edward Wallace Photography