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State money encourages new high-tech startups
Grand Rapids’ Smart Zone is right in the thick of things.
The Michigan Strategic Fund and Michigan Economic Development Corp. offer the funding for outstanding programs around the state, with a focus on northwestern Michigan, Grand Rapids and suburban Detroit.
The money will support three years of services for each project, said Paula Sorrell, managing director of entrepreneurial services at MEDC. These programs, called “incubator accelerators,” are designed to support startups through an array of resources and services.
“In Michigan, not everyone realizes the importance of starting and growing high-tech companies,” Sorrell said. “Startups need a place to go; they need people who can explain what is important for them. As a state, we need to provide more support.”
Sorrell said the program favors incubators that cooperate with universities, which can provide research and product lines companies need.
“It’s not a requirement, but once there is a technology source, there will be a research institute,” she said.
That’s why MEDC requires incubators that want funding to serve companies in Kent, Macomb, Oakland and Mason counties, according to Sorrell.
An example is the Grand Rapids Smart Zone Local Development Financing Authority, a governmental organization that won MEDC’s last incubator program. It has contracted with Grand Valley State University to provide the incubator and accelerator services, with a primary focus on life sciences and medical device technology commercialization, according to Kara Wood, the city economic development director in Grand Rapids.
Wood said the project also builds and maintains community-wide collaborations in cooperation with the West Michigan Science and Technology Initiative.
Grand Rapids’ Smart Zone supports business startups in development and acquisition, providing them access to capital and improving delivery platforms, she said.
And the results speak for themselves.
“In the past 10 years, our regional job growth rate has been 28 percent,” Wood said. “We have created 46,000 jobs in West Michigan.”
Meanwhile, there is talk of creating a contract between the Smart Zone nearby universities to set up programs that encourage college students to start their own high-tech businesses.
“This is new to us,” Wood said. “We get support from universities so students will get college credit by starting their high-tech business.”
The idea is to provide students with management expertise, legal advice, technology commercialization assistance and other seed-stage development to get their business plan on the table, Wood said.
For some local incubators, recruiting college students is not new.
“They don’t necessarily have to be an inventor,” said Leslie Smith, director of TechTown, a nonprofit organization that is working to re-ignite Detroit’s entrepreneurial culture. TechTown also was part of MEDC’s 2011 program.
Smith said many times a scientist isn’t the right person to start and run a small technology company.
“One is about management, one is about research and discovery,” she said. “They are really different. Its program is to combine these two forces together. Every scientist needs a CEO,” she said. “The right person is a person who has the characteristics to find and adjust to the market and put people together.”
Smith’s group is applying for this year’s grant, and attracting more student managers is one of its main goals.
“The older we get, the less chance we have to innovate,” she said. “Our philosophy is to bring innovative and experienced people together. The more people we have thinking of creating their own companies, the better off we are.”
Smith said innovation strategy takes a long time to produce. “For early-stage, high-tech companies in our region, we need to wait at least 10 years to see how those companies stay active.”
This is what Grand Rapids Smart Zone is working on. Its proposal will focus on providing coaching and mentoring programs for high-tech companies and new products that can go into local markets within a six-month period.
The state also is developing other new support programs, such as helping early-stage businesses get their first significant customers to get cash faster and move to the next level.