High-tech clusters key to creating jobs
Northwestern professor Chad Mirkin explains the success of nanotechnology companies in the near northern suburbs during the Creating Jobs through Innovation seminar Saturday at Northwestern University. State Representatives Robyn Gabel and Daniel Biss hos
Updated: January 16, 2012 8:10AM
Illinois will have a better shot of creating jobs tied to groundbreaking discoveries if there is a critical mass of high-tech firms. Think Silicon Valley.
That theme reverberated Saturday during a conference on Creating Jobs Through Innovation convened by Northwestern University and north suburban state representatives Robyn Gabel, D-18th, and Daniel Biss, D-17th.
Because joining a start-up venture carries risk, the panel explained, skilled professionals want to know there are other job opportunities to fall back on should the venture fail.
“What the young people look for is, if this start-up fails, is there another start-up down the road I can go to?” said Daphne Preuss, chief executive officer of Chromatin Inc., which uses synthetic chromosome technology to alter plant products for renewable energy markets. “We don’t really have a cluster here.”
“Talent is everything in start-up companies and a lot of the talent in the high tech sector is not in Illinois,” added Chad Mirkin, a Northwestern chemistry professor involved in the launch of three nanotechnology firms now based in the Illinois Science + Technology Park in Skokie. “They don’t like it if there is not a critical infrastructure, because the nature of start-ups is that often we are not going to be successful.”
Gabel and Biss called the conference to hear from innovators about the barriers to job creation and what the state can do to encourage innovators to grow their companies in Illinois. They got an earful about issues ranging from bureaucratic nitpicking and lackadaisical workers to the chilling effect of a state debt load that is crowding out investment in education.
Preuss related the hassles of merely filing an annual report with the state.
“It should be pretty simple,” she prefaced. “We have not been able to successfully file a report, even though we have professional CPAs, without it getting bounced back three or four times.”
One year the report was kicked back because a period was omitted after the Inc. in Chromatin Inc.
“I don’t have that problem with our reports in Texas ... or California,” Preuss continued. “It just feels to me like somebody is trying to get a little bit more money.”
Andy Zoltners launched ZS Associates 25 years ago in Evanston, but about one-half of his software developers are now based in India.
“Twenty year olds in the U.S., they don’t have the aspirations or the energy or the discipline that we see in India,” said Zoltners, whose consulting firm specializes in computer modeling of sales force deployment.
“So not only (does Illinois) have to worry about competing with California, there is this offshoring component,” said Zoltners, a professor emeritus at Northwestern. “I think that helps to explain our 9 percent unemployment rate, if I have half my people sitting in India.”
David Miller of the Illinois Biotechnology Industry Organization said that Illinois needs to focus on the smaller companies.
“There are very few big-company moves each year,” said Miller. As for incentives, “Illinois doesn’t need the richest package because of the other things we have here, but we need to have a competitive package.”
Factors working in the region’s favor, according to the panelists, include the research universities that produce discoveries and the expertise to bring products and services to market.
Moreover, Chicago is highly accessible from a global standpoint, and a direct flight from many of the world’s major cities.
Miller cautioned that the state’s $170 billion in debt and unfunded pension liabilities is a deterrent to long-term investment.
Panelists agreed that venture capital and early “angel investors” are critical to moving innovation forward.
“In the Midwest, there is a dearth of early capital,” said Sono Wang, of Ceres Venture Fund, which says ‘yes’ to the industry average of about one in 200 proposals.
Wang contrasted the Midwest with Silicon Valley, where there is too much money chasing too few deals.
Preuss observed that Midwest companies often under-sell themselves when investors ask how much money the firm will make and how fast it will grow, in contrast to the hyperbolic culture on the east and west coast.
“I don’t advise spinning a tale, but we are the culture that under-promises and over-delivers,” said Preuss.
“We love the fact that Midwestern entrepreneurs are more grounded,” Wang added.