This morning Crain's Chicago ran an article by Joe Cahill, 'Not Invented Here' is Killing Chicago R&D. I agree with some of the points Mr. Cahill made in his post, and I disagree with some of them. This blog will be structured as such.
Agree: (Universities)…come to appreciate the importance of freeing researchers to exploit their discoveries.
Mr Cahill started off his post talking about how historically Illinois Universities were not focused on starting up new companies. He even reference the Marc Anderson incident. But then he went on to talk about how the universities are working together to help researchers start up companies. I agree with Mr. Cahill here. Our universtities, especially UIUC, were focused on basic research not applying that research into new ventures. But that has changed in the past couple years. UIUC/UIC and Northwestern have gone through some restructuring with a renewed focus on promoting the entrepreneurial community here in Chicago. The example listed by Mr. Cahill, the Bell Lab like joint facility, is only the most recent example. The Chicago Innovation Mentors (CIM) is probably the most successful example of how our universities are coming together with their alumni to help researchers start new companies. CIM builds mentoring teams around new ventures. So yes, our universities historically were not focused on starting new companies, but that has changed.
Disagree: Chicago-area companies produce precious few breakthroughs. They have a distressing tendency to get blindsided when new technologies developed elsewhere upend their industries…Our companies need a more open approach to innovation. Rather than walling off R&D, they should collaborate with technology incubators, startups and garage tinkerers.
I am paraphrasing, but Mr. Cahill goes on to talk about how our large corporations need to restructure their R&D and look to Universities, Incubators and other startup companies as sources for new innovation. At face value here, I agree, and our large corporations are working in the community to build relationships with universities and provide resources (both human and capital) to help small companies. Baxter, Abbott, Takeda and Astellas all have venture capital arm that invest in the community (not just in Illinois). One example of this is Naurex who in December raised $38M, lead by an investment by Baxter. The large corporations are also lending some of their most valuable resources, their people. The big four have for years invested and actively participated in the iBIO Institute's PROPEL program, helping small companies traverse the valley of death. They are also very active in the CIM program as well. And the corporations are working with the Universities, not just Illinois Universities. And I agree that the Bell Labs like facility provides them with an opportunity to further engage. And Mayor Emanuel's Bio 1871 (Name TBD) is focused on this interaction, bringing together small companies, universities, and large companies in a physical structure to engineer serendipity.
So yes, to some extent our companies are actively engaged in the start up community, but this is not the point Mr Cahill was making, instead to look to them as resources for future innovation. And in some way the big companies are, but the technology from university research and the startup companies are WAY to early for large corporations. These companies have to answer to their investors, who are interested in the the bottom line, which does not like risk. And that is what these companies are, very risky. So corporations wait, they help out and wait for these companies to grow, prove their technology and as soon as they mature to the point of looking at clinical trials, the companies will swoop in and acquire the technology that matches their portfolio. I can understand the point Mr Cahill is making, and in a perfect world it would happen. And in some world it is, Pfizer runs The Pfizer Incubator, a incubator in California to help small companies start up. It is a really cool idea I agree, but I don't know how successful it has been for Pfizer, who faces the same patent cliff that our large corporations have been facing.
Hopefully the “Bell Labs” facility and the Mayors Bio 1871 are successful in bringing the community together to help these small companies grow to the point where they are targets for the large corporations. Building this community has to be a group effort, a public, private, and academic partnership in building programs and identifying funding to help our small companies.
This is a conversation, not an editorial. Did I forget something, get it wrong or do you agree? Please Comment, Like, Re-Tweet and Share.