Mission (To Be) Accomplished: Building Houston’s Innovation Ecosystem

Houston—Houston has all the ingredients to be an economic powerhouse, but the city won’t be able to become one unless civic and business leaders support the city’s fledgling tech community.

That finding, and other recommendations on how to support an “innovation strategy” for the city, were presented today to the Houston City Council task force members who were last year asked to uncover ways to boost Houston’s tech scene.

“Houston’s lack of a robust innovation and entrepreneurship ecosystem is a significant threat to our economy as it is the largest driver of job creation, as well as a critical component in attracting corporate investment, venture capital, and talent,” the report concludes.

Right now, Houston’s innovation benchmarks are weak, the report says: Among the top 10 most populous U.S. cities, it is the only one that doesn’t rank in the top 20 cities in the nation with the highest density of startups, according to the Kauffman Foundation. The National Venture Capital Association ranks Houston 31st for VC investment.

The “Houston Technology & Innovation Task Force” began meeting last fall, touring local innovation “assets” such as NASA, while also visiting other cities to learn how those communities fostered high-growth entrepreneurship.

The group singled out Chicago as a peer city that has, in the last five years, created a vibrant innovation cluster anchored by 1871, a technology center that’s home to startups, investors, large tech companies, and other related entities.

Among the recommendations outlined include:
—Encouraging city leaders to become active advocates of the innovation ecosystem; encourage corporate leaders to get more involved with startup programs, including supporting a fund-of-funds to invest in young companies; and seek out technology tools that would help the city run better.
—Seek out tax and public policy tools that would help Houston to create an “innovation district” that encourages the development of startups and makes them part of a vibrant city economy.
—Support efforts to make Houston a “testing ground” for new technologies, especially those such as drones and autonomous vehicles.

“This was really for the education of the council,” task force chairman John Reale, the co-founder and CEO of Station Houston, says of today’s meeting. “We heard a lot from them saying, ‘I didn’t know this; I didn’t know that.’ That’s been our goal to share with them information on the path forward.”

For Yael Hochberg, a Rice University entrepreneurship professor and a task force member, a key feature of this report is not only to recommend that Houston have an innovation district but to also advise on where to place it. In other words, the decision should not be driven by a desire to revitalize a struggling area.

City leaders must locate it “in a desirable neighborhood that already has infrastructure: restaurants and cafes, places where young people want to live, areas where people with money are willing to set up offices,” she says. “If a woman doesn’t feel safe walking to her car at 2 in the morning, it’s not going to work.”

Other members of the task force include: Mercury Fund partner Aziz Gilani, Texas Medical Center CEO Bill McKeon, Houston Technology Center CEO Lori Vetters, and civic tech leader Jeff Reichman.

The task force’s efforts coincide with one by the Greater Houston Partnership, which has put together its own tech and innovation roundtable to look at how Houston’s private sector can boost innovation. In a report the partnership put together with Accenture, the GHP came to similar conclusions about the weaknesses and opportunities in Houston’s innovation community.

Houston Mayor Sylvester Turner was not available for comment. Earlier this month, he led a group of civic and business leaders on a trip to Israel where the group visited with that country’s tech entrepreneurs. Gaurav Khandelwal, CEO of app company Chai One, says he was impressed with the level of investment Israel has committed to building its startup community as well as creating a regulatory environment that promotes innovation.

One lesson Houston can learn from Chicago is the sort of “fantastical change” that can occur when various parts of an innovation community are brought together, Hochberg says. “There needs to be these spontaneous collisions that ecosystems need to thrive,” she adds.

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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