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Jiangsu International Consultation Conference For Development In Jiangsu
A University's Role In The Knowledge Economy:
The University Of Maryland's Experience
C. D. Mote, Jr., President
Glenn L. Martin Institute Professor of Engineering
University of Maryland
College Park, Maryland
Invited address presented at The Jinling Hotel
Nanjing, Jiangsu Province, China
September 8, 2005
I was greatly honored to receive from Mr. Liang Baohua, Governor of Jiangsu Province, the invitation to address this important and illustrious gathering.
It is a special pleasure to visit Nanjing again. The last time I spoke in Nanjing, in 2002, Southeast University was celebrating the centennial of its founding. We are looking forward to continued ties of cooperation and friendship between Jiangsu Province and the University of Maryland, throughout the next 100 years and beyond.
Today, in the next few minutes I will comment on successful collaborations between business, government and universities that can have great impact on economic development. First, I will offer some background points on the knowledge economy and then I will speak briefly about our own University activities in innovation, entrepreneurship, and partnerships.
Background Point: Knowledge Economy
The knowledge economy seeks to increase productivity and market share by assembling a talented workforce at lower cost and by providing it with top technical tools.
We can think of "knowledge as fuel" for a "talent engine" that creates "products" with "high productivity" and "quality." The knowledge economy is not about regions and countries. It is about talent and productivity. The Internet has connected the world so that talent and productivity are assembled on a world scale, not a regional or national one.
The three big players in the knowledge economy are businesses, governments and universities—and everyone is connected to everyone. Today, businesses of all sizes are world businesses, not local ones. For all intents and purposes there are no national businesses. Even a single person working out of her house can be a global business through use of the internet and delivery services. They live everywhere.
Governments must worry about regional affairs and their global interests are interpreted in a local context. Governmental promotion of world business is for local benefit.
Universities are the third leg of the triangle along with government and business. Universities have both local and global responsibilities. University missions are about knowledge, talent, productivity and innovation. Education of the "best and the brightest" is the responsibility of universities.
Therefore universities cannot be on the sidelines in this knowledge economy, for their missions are central to local success in sustained innovation and competitiveness. They must act globally like industry some times, and locally like government at others. Either business, government and universities will go forward together to build an innovative and competitive economy, or they will fail independently when the economy falters.
University of Maryland Activities
We at the University of Maryland recognized the necessity of the symbiosis between government, industry and universities several years ago. Therefore, we have focused attention on innovation, entrepreneurship and partnerships in everything we do, in every action we take. Innovation, entrepreneurship and partnerships underpin a cultural transformation underway at the University. It is an ongoing, continual process. Let me speak about some activities under these rubrics.
I. Innovation—The single most important determinant for increasing productivity, even at universities, is innovation. We must embed the spirit of innovation in every operation of the university, make it an expected work product and even give rewards for it. Every field and every activity at the university can benefit from innovative ideas.
II. Entrepreneurship—The entrepreneurial spirit must be imbedded and valued by tangible actions across every operation of the university. Let me speak about entrepreneurship education, entrepreneurship support and funding, and entrepreneurship services at the University of Maryland.
Entrepreneurship Education
We offer University courses on entrepreneurship for undergraduate and graduate students and also special programs on entrepreneurship for other campus and community people. Our schools of engineering and business created the Hinman
Campus Entrepreneurship Opportunities Program that brings undergraduate students together, outside their major field of study, in a dynamic, living-learning environment that spurs the formation of new companies. I call it the entrepreneur's dormitory. The program features a high-technology living environment that provides students the tools they need to create their own companies, along with weekly seminars, entrepreneurship courses, counsel by professional entrepreneurs and venture capitalists from outside the campus and an annual business plan competition. Winners of the competition receive cash prizes intended to partially fund their promising new ventures. This year alone, more than 100 Hinman CEO students are engaged in more than 20 new companies in various stages of development. In the first year of the program 12 companies were formed and nine received financial support from investors. The Hinman CEO Program won the Price Institutes top prize as the best entrepreneurship program in the country in 2002.
The Hinman CEOs Program has graduated 151 students since the first class in Fall 2000. About 25% of the students run a company or team with another Hinman student showing the value added by bringing these students together.
The top eight companies started by these students are generating $1,300,000 in annual revenues (and growing) and in the academic years 2003-05 Hinman companies have won $198,500 in grants and awards.
In another program, the Maryland Technology Enterprise
Institute (Mtech) in the A. James Clark School
of Engineering holds entrepreneurship boot camps on weekends for students, faculty, staff, and community people covering the basics of starting a new business venture. These compressed programs initiate people to issues from business plans and leadership to venture capital and public offerings. They focus on down-to-earth issues surrounding new ventures and their success.
The Robert H. Smith School of Business organizes business plan competitions in China with cash prizes totaling $45,000. It is also home to The
Dingman Center for Entrepreneurship that fosters the growth of student businesses.
The campus Office of Technology Commercialization offers "Invention of the Year" prizes in the life sciences, physical sciences and engineering, files for patents (26 in FY05), executes license agreements (43) for various technologies (55), some (11) developed by University start-up companies.
Entrepreneurship Support and Funding
Let me describe opportunities provided by the University to support and fund entrepreneurship.
The campus Technology Advancement Program (TAP) is the most successful business incubator in the State of Maryland. Created in 1985, TAP is a University-based business incubator providing space, state-of-the-art biotech and IT facilities and both business and technical counsel and support to technology-based early stage companies. The start-ups pay 'market' rent for space and the University acquires 1% of its equity per year to compensate for services and counsel provided. About 400 companies have applied for admission to TAP and 70 were admitted. More than 50 have now graduated. Seventy percent of the graduates are in business after five years, which is high success rate for start-up companies. The private and public investment in TAP companies totals $500 million.
The "New Markets Growth Fund" is a professional, independent, $20 million venture capital fund that invests in early-stage companies in low-income areas around Washington, D.C. A team of MBA students in our Smith School of business analyze potential deals under the direction of professional venture fund managers. Half of the venture fund was raised from private sources and half was loaned by the federal government. The New Markets Growth Fund is the first University-based fund to raise external capital focused on both technology startups and community development.
Backed by a core membership of angel investors, the Dingman Center in the business school launched the Capital
Access Network (CAN) in November 2003. These investors seek quality equity investment opportunities in promising emerging growth companies. It offers entrepreneurs, who typically work with early-stage companies seeking between $250,000 and $1,500,000, the opportunity to provide members with access to capital, professional advice, and management expertise.
Entrepreneurship Services
Now let me describe some entrepreneurship services provided by the University.
The Maryland Industrial Partnerships Program (MIPS) fund allows Maryland companies to leverage their research and development assets and gain access to the creative talents of University faculty and the extensive research base of the University. This enables them to accelerate commercialization of their private technology. Companies must pay a part of the University cost at a rate that depends on their size. The State of Maryland subsidizes the program. MIPS was named the top venture support program nationally by the U.S. Small Business Administration's Office of Advocacy.
Another important service offered by the University is the Bioprocess
Scale-Up Facility, which is a test-bed facility, equipment and staffing that assists small and large companies with the scaling up of bench-level biological processes to a production scale. This facility has been supported by the State of Maryland for twenty years and was expanded by the State last year because of its success in attracting, developing and retaining companies in the State.
And another service is the Maryland Technology Extension
Service (MTES) which is a State subsidized technical extension program providing consultation to private companies on manufacturing. As an outreach arm of the University of Maryland for almost 20 years, it provides business and technical solutions to over 500 industrial companies annually.
Our ASPIRE program provides student research on industrial problems. It broadens the educational experience of undergraduate engineering students through their direct involvement in real-world engineering projects. Students venture beyond the classroom to collaborate with engineering faculty and staff on projects of current relevance to private industry.
These and similar services provided by the University reach 1,000 companies each year. Since 1985 the overall impact of these efforts is estimated to have added $8.5 billion to the Maryland economy.
III. Partnerships
Organizations expand their assets and assemble talent and facilities through the judicious formation of partnerships. Partnerships between universities have been common for many, many years and Maryland has many University partners in China. However, recently University partnerships have extended to both companies and governments. That is to foreign companies and governments as well as U.S. ones. As Thomas Friedman's most recent book points out, "The World is Flat"—everyone is connected to everyone.
Partnerships with major U.S. government agencies, like the National Oceanic and Atmospheric Administration (NOAA,) the Federal Food and Drug Administration (FDA), the National Aeronautics and Space Administration (NASA), the United States Department of Agriculture (USDA), the National Institutes of Health (NIH) and others are particularly convenient because they are located close to the University, they are large and they conduct research appropriate for University participation. Partnerships with overseas
government agencies are also becoming common. For instance in 2004, a partnership with the Argentine government provided training for staff members of the Argentine Senate. In 2002 a partnership between the Ministry of Science and Technology of China and the University of Maryland established the China-U.S.
Science Park, the first research park for the People's Republic of China outside of the mainland.
In November 2004 through a cooperative agreement between the University of Maryland and the China National Office for Chinese as a Foreign Language (NOCFL) of the Ministry of Education, the Confucius
Institute of Maryland was established to teach the language, literature and culture of China. It's operational and flourishing
The University of Maryland established its Institute for
Global Chinese Affairs (IGCA) in 1996 to promote better understanding between the Chinese and American peoples. The institute established training programs lasting from a month to a year on special topics of interest to each training group. About 1,000 Chinese leaders from government, universities, and business have come to the IGCA for training on topics like public administration, management, finance, and banking. The students come from the cities, provinces and central government, as well as from universities. Thirteen groups were sent to Maryland this past year. Jiangsu Province has sent ten groups to Maryland with a total of 291 students over the past ten years.
Partnerships with industry extend to international companies, like Japan's Fujitsu Ltd., that works on human-computer interface problems and to international institutes like Germany's Fraunhofer Institute that undertakes work on software at Maryland. They have a long-term presence and focus on areas of common interest with the University.
The University research park—the University of Maryland
Enterprise Campus—is located about 1 km from the main campus on 50 hectares of University property. The site is intended to attract both government research facilities and private sector companies. We seek research oriented enterprises that will benefit from being located close to the University and whose presence will serve the mission of the University. The park is a partnership between the University, the State of Maryland and a private developer who will build and manage the park properties and business. The build-out of the park will accommodate staffing up to 6,000 employees and utilize 300,000 sq meters of laboratory and office space. The Center for Weather and Climate Predication, a NOAA program with 800 employees, is moving to the park to partner with the University's department of atmospheric and oceanic science and the NASA Goddard Space Flight Center to create a world center of weather and climate prediction. Its building is under design. The first major tenant the University Center for Advance Study of Language. It is located there along with the National Foreign Language Institute making it a national linguistics focal point.
Conclusion
In conclusion success in the knowledge economy requires creating a university culture of innovation and entrepreneurship that balances the partnerships between universities, industry and governments with the fundamental university responsibilities to create and transmit knowledge. This is achieved while responding to the basic drivers of the knowledge economy - assembly of talent for increased productivity.
A key point is that innovation is a culture, not a project. An innovative university is a collective state of mind, not any single action.
Government, industry and universities each have to do their part to make the partnerships go forward; otherwise, like any other highly trained team, it won't work.
As I mentioned at the outset, the last time I spoke in Nanjing, Southeast University was celebrating its 100th anniversary of its founding. This year we at the University of Maryland are celebrating our 150th anniversary. I do hope that many of you—government leaders, faculty members, and students—will be able to join us at some point during our year of festivities.
Together, we must form partnerships across land and sea to fashion a strong, stable and secure world for our future.
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