INNOVATION WITHOUT BOUNDARIES
T here are some areas in the world that have had the type of results that STPs have had without really having an STP. “Silicon Valley is an example”, Paul Krutko, President and Chief Executive Officer at Ann Arbor SPARK, mentions. “It's more about creating an organisation that coordinates a number of activities without being tethered to a particular geography.” Which is just what this independent non-profit entity is all about. Ann Arbor in Michigan, US, is centred on the anchor institution of the University of Michigan, which Krutko says has one of the largest research budgets in the whole country – $1.6 million (close to QR6 million) a year and has the largest concentration of IT professionals after Silicon Valley. With a rich ecosystem in place, SPARK acts as a “facilitator” and “coordinates service delivery to companies to where they are located”. The big pull is not space, Krutko says, and this is validated by many of the conversations he has during the conference. “Particularly in the US, innovation districts have organically developed, often in the centre of the city, reflective of young people who like to live and work in that environment. They are not drawn to go to some park separate from the city,” he says.
For more than a decade now, Ann Arbor SPARK, an entity being supported by private companies, the university and local and regional governments, has been an impact on the economic future of the geography through its support for early-stage and mature. “When it comes to startups, our objective is to help identify their markets, get their first customers and send them on their way; not house them for many, many years,” he says. This means a suite of services like access to capital, mentoring, bringing in consultants for those that need help, a CEO-in-residence programme, etc. In fact, due to their track record with early-stage companies, they were given the opportunity to support and operate a programme for State of Michigan where they invested $25 million (QR455 million) in 100 companies on their behalf. “We have the expertise and a good reputation in identifying early companies before the venture capital stage,” he says.
But, like all well-balanced STPs and areas of innovation (AI), mature companies and foreign enterprises also seek out Ann Arbor SPARK's expertise of a different kind. “Nearly half the investment we have had is FDI from overseas, from companies looking to locate operations in North America. And due to the heritage of the region, with Detroit being one of the epicentres of the automotive world, we lead on strategy for the region for Ann Arbor; to be influential in connected, autonomous and automated transportation. All the buzzwords of today.” This is reflected both in the kind of startups they support and the type of MNCs who approach them. “Mature
“ONE OF THE COMPANIES WE ARE WORKING WITH IS THE LEADING MANUFACTURER OF HEART-LUNG MACHINES USED IN HOSPITALS GLOBALLY AND IS DEVELOPING SMALL DEVICES TO ASSIST CONGESTIVE HEART FAILURE.”
companies usually need help to successfully open a new operation in our community,” he says, illustrating how they help them find sites, connect to regulatory committees, give them access to the right talent for their enterprise and generally act as facilitators in helping them settle in. “Mahindra, the Indian MNC which manufactures heavy vehicles, wanted to enter the US market with a new product – an electric scooter that they had designed from the ground up. They had miniaturised the Tesla motor, developed the battery and wanted to produce and sell these in the United States, particularly the sunnier campuses in California and Florida.” SPARK helped Mahindra find a facility to set up the factory, got them government support through some financial incentives and they are now up and running, producing over 100 scooters a month. They similarly helped Faurecia, a large auto supply company based in Paris, to acquire a Ford facility in the community and totally rebuilt it.
“Often STPs try to emulate someone else. But what you need to focus on to be successful are best practices and sectors that stem from what problems you are trying to solve in the community and the assets you have.” Which is why the emphasis there is on the automotive cluster and their strengths in ICT, with a little of devices (particularly, medical) and advanced manufacturing thrown in. “Sometimes STPs can get off track on this because they aren't tethered to what's going on in the community. If you don't have the institutions to support, say, bioscience you have to invest a lot of money to get yourself there,” he says. Investment that oftentimes only the government would be prepared to make. That's why the non-profit private-public partnership is the prevalent model in the US, he says. “Government funding can be tricky because if the funds dry up or the government changes or a new technology minister with different ideas comes in, STPs might find themselves a little vulnerable. It is accepted fact that the most successful parks and regions are where private sector involvement is maximised,” he says, while allowing that in many countries that have aspirations for knowledge economy, like Qatar has, government support is important. “Instead of the leadership saying let's just let things happen, the government makes an intervention in the beginning to jump start the ecosystem, especially in areas that don't quite have a history of innovation.”