Entrepreneurial Gap at Local Universities
Caltech, UCLA and USC are three excellent research universities. But when it comes to generating innovation and entrepreneurship in Southern California, give them an F.
Glance north to Silicon Valley and you find Stanford University at the hub of a vibrant, entrepreneurial regional economy that grows on the leading edge of new technologies. While Southern California’s universities have successfully crafted ties with local aerospace firms, they’ve become virtually irrelevant when it comes to spawning new high-technology industries. Granted, aerospace is one of the region’s biggest employers, but these days it takes more than planes to make an economy fly.
“It’s something we’re concerned about,” acknowledges Richard Kaplan, USC’s vice provost for research and academic computing. “What happened here in the 1950s was that the normal paradigm of engineering was building a Spruce Goose or a B-29. Engineers were taught a trade and not so much the skills that now characterize being an engineer. By and large, we were involved in the ‘large systems’ area--not so much in the small, entrepreneurial-type technology. Aerospace doesn’t inspire the David Packards (of Hewlett-Packard) or (Apple Computer’s) Wozniak and Jobs.”
So while Silicon Valley exploded with entrepreneurial electronics and biotechnologies culled from Stanford and other nearby schools, this region’s universities took a more laid-back attitude. “We haven’t had the same spirit,” says Kaplan ruefully. “We always feel we’re lagging Stanford by 10 years or $500 million.”
It’s not as if these universities don’t have the smarts and the technologies to offer. But, outside of aerospace and defense, they’ve historically been reluctant to support emerging industries in the way that a Stanford has.
“Why not UCLA?--I don’t know,” says UCLA Vice Chancellor for Research Albert Barber. “We don’t have the kind of policies and procedures that facilitate it; we don’t hire for it. When people do come on board, there are no peers or mentors doing this. While we do have an extremely good industrial affiliates program, we don’t have very much participation from smaller industry. We don’t have the kind of programs they participate in.”
While Caltech has several professors actively involved in entrepreneurial ventures, there has been very little institutional support until recently. “It’s certainly one of the things I’ve noticed,” says Caltech trustee Benjamin Rosen, a top-notch venture capitalist. “It’s an interest of mine to stimulate that process.” Rosen points out that Caltech recently added legendary venture capitalist Arthur Rock to its board and that the school wants to play a more active role in spurring new ventures locally. Ironically, two of the school’s sharpest professors--Carver Mead in chip design and Leroy Hood in biotechnology--ended up co-founding companies in Northern California.
“You’ve got to have universities interested in economic development,” says Carnegie-Mellon President Richard M. Cyert, who has moved aggressively and successfully to turn the Pittsburgh school into a vehicle for regional growth.
“The school also really has to be interested in entrepreneurship. You have to be teaching it, fostering it in your student body. You have to have an environment where people are on the lookout for new ideas. The results from the Southern California universities would indicate that they have not viewed it that way.”
As schools such as Stanford, MIT and Carnegie-Mellon prove, academic excellence and economic development are not mutually exclusive. Why shouldn’t Southern California universities have both?
Cultural Barriers
The issue transcends public/private questions and, as former University of California President and retiring MIT Chairman David S. Saxon points out: “When you talk about biotechnology and information sciences, you are talking about enterprises that are knowledge intensive, so that the key resource is people, not energy or raw materials.”
The real barriers seem to be cultural. Admittedly, Stanford had a brilliant provost like Frederick Teman to spot the Hewletts and the Packards and build a culture that warmly encouraged university-industry ties.
MIT’s Saxon argues that perhaps there have been too many rules and restrictions on faculty consulting and participation in new ventures. USC Professor Everett Rogers, who has studied patterns of innovation and written extensively on Silicon Valley, notes that Los Angeles “is so big that the whole high-tech idea gets swallowed up in the smog.”
More explicitly, he points out that, unlike Stanford or MIT, “there isn’t a frontier space” for new companies to grow. “If there were nine square miles lying between UCLA and USC then I bet we would see our own version of Silicon Valley.”
Already Exploring
Pick any reason you like--the reality is that this will become a crucial problem for Southern California’s universities. Why? For one, we’re at a time when new ventures are as critical to the advancement of key technologies as universities. Simply to stay at the forefront of knowledge, research universities have got to create links to innovative firms. Stanford and MIT get a lot out of their relationships with new ventures. Entrepreneurial environments tend to stimulate basic research as well.
Another factor is that, as universities continue to raise tuitions and cry for more funding to “remain competitive,” the community will want to see more for its investment than a bunch of graduates and winning football teams. By becoming a resource for new industries, universities can play a vital role in the region’s economic well-being.
In fact, these are issues that the area’s universities have already begun to explore. If they are gutsy enough, these universities will be simultaneously boosting both the quality of education and the quality of life. If they falter, they may find themselves slipping further behind Stanford in reputation, wealth and influence.
