University an entrepreneur-making machine for California economy
Looking towards the Main Quad from Green Library at Stanford University. (Photo credit: HarshLight via Flickr)
Two Stanford professors found some very nice things to say about their university, in an economic impact report released today. That's not so surprising, but there are some lessons on innovation that California as a whole should jot down. If we can build an innovation strategy for the whole state, something the Economic Summit is championing, we can be a magnet for more and more innovative companies and, most importantly, their jobs.
The study, titled "Stanford University’s Economic Impact via Innovation and Entrepreneurship" (PDF), covered a survey of alumni that measured how companies those grads formed or been investors in have done.
If those companies became one, they'd be the 10th largest economy in the world and generate $2.7 trillion, say the authors.
Stanford grads have gone on to found companies like Google, Nike, Yahoo and Hewlett-Packard.
Something that stands out is the headquarters of 18,000 companies founded by alumni are right here in California and those companies employ more than 3 million people worldwide.
This radius of innovation and entrepreneurship is significant because there's a high chance graduates will create the next big thing and bring jobs right into Stanford's backyard.
The report noted that:
- 39 percent located their new companies within 60 miles of the university and
- 55 percent said they chose the school for its entrepreneurial mojo
The report explained one reason for the alumni success is there are curricula designed to spawn entrepreneurs. The authors describe a class called "LaunchPad" in the Engineering school "in which student teams imagine, prototype, build, market, distribute and sell a product or service."
Being in Silicon Valley, the schools can attract faculty talent from just down the road to teach how to be entrepreneurs--Google chairman Eric Schmidt, just one example. Google founders Larry Page and Sergey Bring met at Stanford in 1995 and now the companies generates an estimated $37 billion. Not too shabby.
In fact, 32 percent of alumni surveyed said, during their careers, they invested, or worked as an early employee or a served as a board member in a startup.
The report authors said it was vital that the school not just to encouraged students and faculty to get their research to the market but also had a well-developed policy on intellectual property created by that research.
The reason the study is important for the whole of California is because, while the Silicon Valley has rebounded nicely from the recession, other regions are still suffering. It will be important that any economic development in these regions supports innovation that brings together regional schools and local economic strengths, which will hopefully attract more companies to the region.
This is happening in the Fresno County area where partners are building up an "Ag Tech cluster", marrying Silicon Valley know-how and technology with agriculture, the region's biggest moneymaker.
The California Economic Summit has been working on initiatives to reinforce California's status as a hub of innovation. One goal was already realized with the announcement that a regional U.S. Patent Office will finally be created in San Jose, the number one region in patent creation in the country.
The Summit also has a number of other items on the Small Business Innovation Action Team to-do list, including creating an Economic Competitiveness Plan and building up the network of "iHubs" through supporting and fully engaging university partners, national labs and the private sector to speed up the commercialization of technologies from research to the marketplace and to support entrepreneurs and create jobs.