Campus Startup Spinoff Efforts Paying Off In Illinois; Immigrants Often Lead The Way
GrubHub CEO Matthew Maloney, third from right, is applauded as he rings the New York Stock Exchange opening bell, Friday, April 4, 2014. The company emerged from the University of Chicago’s Booth School of Business. (AP Photo/Richard Drew)
University efforts in Illinois to boost entrepreneurship and link big thinkers with seed cash and startup partners seem to be paying off. And immigrants are playing an outsize role in campus spinoffs.
Those were two takeaways from the just-released Illinois Innovation Index, produced annually by the Illinois Science and Technology Coalition.
Illinois universities turned out 285 startups in the 2015-2016 school year, doubling the number from the year before and continuing an upward trend. More than 800 startups have emerged from Illinois schools. And funding for those companies continues to increase, even in the midst of a lull in venture cash.
The data doesn’t just reflect strong academic performers coming out of Northwestern University, the University of Chicago, the University of Illinois, and other schools – in particular the business schools. It speaks to efforts to put technology-developing researchers together with entrepreneurs and mentors, as well as a growing network of Chicago and midwest angel and early-stage VC funds.
“This record growth in entrepreneurial activity speaks to the expanding resources that exist across campuses, including space, capital, and innovative programming,” he said.
Among the leaders is the University of Chicago’s recently expanded Polsky Center for Entrepreneurship and Innovation. John Flavin, who runs the program, pointed to the 2008 economic downturn as another factor driving the recent surge, saying it has pushed some people to seek more control of their business careers.
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“I think a big reason for this is rooted in the Great Recession,” Flavin told the Chicago Tribune’s Blue Sky Innovation. He said entrepreneurship is no longer just about starting a business, “it’s about being empowered to control your own destiny that may include starting a business.”
The report also noted what it called “the outsized role that immigrants play in Illinois’ tech economy.”
While immigrants make up about 15 percent of Illinois residents, they make up about 22 percent of the state’s entrepreneurs, according to the report. And “based on the available information from our university partners, we estimate that at least 30 percent of university startups created over the past five years had a foreign-born founder or co-founder,” the report states.
ISTC officials argue that these numbers highlight the need for immigration reforms.
“The high proportion of startups founded by immigrants – both at Illinois universities and around the country – suggests a tremendous opportunity for US economic growth," the report states. "Indeed, immigrants or children of immigrants established more than 40 percent of current Fortune 500 companies. Immigration reforms, such as the national startup visa and other policies to retain immigrant talent, should be implemented to make it easier for these founders to stay and grow their businesses.”
Illinois startups are spread across a variety of sectors, perhaps reflecting Chicago’s broad economic base. Biomedical and healthcare startups lead the way, representing 17% of startups in the last five years. After that were software, apps and information technology, 13%; finance and business services, 9%; agriculture and food technology, 6%; consumer products 5%; education 4%; electronics and internet of things 3%; clean tech, 3%, and advanced materials and manufacturing, 2%.