November 9, 2010
In the face of so many proclaiming the virtues of entrepreneurship and the capacity of new business formation to save our economy, Scott Shane, a professor at Case Western University, argues there is a “myth” to entrepreneurship. His point is that if we all just start a new sandwich shop, or dry cleaner operation, our economy will not improve.
His point is well taken. It’s not the starting of new businesses that matters; it’s the starting of new businesses that contain innovation.
Businesses are simply the legal packaging for a value proposition. What adds value to an economy is when someone figures out how to improve an existing value proposition or how to provide a whole new value proposition. Consider some examples. BIGGBY Coffee isn’t wildly successful because it makes coffee, or even because it makes good coffee—it’s wildly successful because of its tremendous customer service.
Apple’s new iPad isn’t interesting because it provides a new way to read books, but rather because reading books can now be coupled in new and interesting ways with computing operations on the Web and with other new and imaginative opportunities, like social media. The key lesson here is that innovation is not always the next newfangled invention that contains lots of intellectual property.
While the Lansing area certainly is seeing a growing share of these kinds of innovation, whether in nuclear technology with the new FRIB, or bio-economy breakthroughs with MBI, or a growing number of firms in IT, innovation can be just as evident in many new and existing firms in traditional industries, such as food service, real estate and manufacturing.
So how do firms and communities foster both innovation and venture creation? Much of the answer can be found in the intangibles of an “innovation ecosystem.” Over the past several years, the Lansing area has worked hard to create many of the component parts of a sustainable economic ecosystem. These labors are beginning to bear fruit. New industries are emerging in the bio-economy, renewable energy, nuclear physics, IT and transportation, among others.
Dynamic groups of students and young entrepreneurs are starting ventures that are beginning to turn heads. Entrepreneurs are working with city leaders in East Lansing and Lansing to create incubation space. Collaborative efforts driven by LEAP, the SBTDC, the MEDC and others are galvanizing resources and applying these to create a shared vision.
To this impressive, emerging ecosystem, Michigan State University launched the Entrepreneurship Network, or msuENet (www.entrepreneurship.msu.edu). The msuENet is working to educate the next generation of innovation entrepreneurs for our region through courses and certificates open to both students and nonstudents alike.
But perhaps more importantly, msuENet brings together all of the resources for entrepreneurship on campus and couples these with the resources in the community to create just-in-time access for those looking to create innovative, new ventures, or innovate within their current firms.
Recent investments in MSU-Technologies and MSUBusinessConnect to facilitate technology transfer and business development are now connected with the msuENet to facilitate new venture startup and growth. These efforts will be tightly connected to the operation of LEAP and other city and community organizations.
In many ways these efforts are simply taking us “back to the future.” Innovation and entrepreneurship is what created great wealth in autos, electronics and manufacturing throughout the 20th century. It will now be the thing that reinvents our economy in these and other exciting industries and opportunities.
With a growing ecosystem to help, now is the time to try something new, wherever you are.
Bryan K. Ritchie is a political economy professor at Michigan State University, where his current research and consulting focus on how economies upgrade from manufacturing to more knowledge-intensive industries. He is also director of the MSU Entrepreneurship Network and the co-director at the Center for Innovation and Economic Prosperity. Ritchie’s specific areas of expertise include innovation, technological development, skills education and training, and social capital.