Four Key Ingredients Needed to Spark Innovation in Michigan
Here are four key elements that people here in Michigan should think about as we seek to create a thriving hub of innovation and entrepreneurship:
1. Management: Michigan needs be more attractive for startup management to live and work. The state should work aggressively to lure top management talent to Michgan.
2. Investors: While Michigan has an outstanding cadre of small venture capital groups and seed investors, there are no groups large enough to lead large financings (like the Lycera deal). Such investors are largely on the East or West coasts. These coastal groups should be encouraged to open offices in Ann Arbor, which is arguably the ‘tech capital’ of the state. By having a presence here in the state, potential investors will see more of the technology that’s here, and they’ll see it progressing on a more frequent basis. Establishing these relationships will pay long term dividends.
3. Michigan Economic Development Corporation (MEDC): There is a growing recognition that many programs the state runs to help create businesses and jobs have not worked as well as initially hoped. The state should consider re-investing a pool of funds to create an independent venture capital fund that can lead Michigan-centric startup deals that will attract other VCs from the coasts who can form syndicates. Top venture capitalists should be hired to manage the Michigan-based fund. In the end, such fund could pay for itself, make a return for the state, and stimulate growth of new jobs in Michigan.
4. Education: The entrepreneurial spirit is alive in Michigan, in the research universities and beyond. However, very few entrepreneurs understand how to raise money, how venture capital works, how to spin out businesses, etc. U-M, Wayne State, and MSU should follow the lead of institutions like Stanford and MIT in educating entrepreneurs, which will make them more competitive and successful in the entrepreneurial arena.
[Editor's note: To help launch Xconomy Detroit, we've queried our network of Xconomists and other innovation leaders around the country for their list of the most important things that entrepreneurs and innovators in Michigan can do to reinvigorate their regional economy.]