Last month I visited Scandinavia, and the first thing that struck me was the level of prosperity. The economy appeared to be booming.
This was a surprise. I knew Scandinavia had been hurt by the global recession. Yet the streets around the business districts were packed with shoppers, and restaurants were full. Business appeared to be booming. Scandinavia has clearly recovered well.
Returning home, I looked for reasons. Scandinavia has brought us some well-known companies such as Nokia, Ericsson, Bang & Olufsen, Skype, Ikea and Novo Nordisk, to name a few. Look at their mission and products: All are innovators. Further investigation reveals that Scandinavia relies heavily on its innovation capability. Here are a few facts:
The World Bank developed an index to identify countries with the potential to perform well in the knowledge economy. The index correlates closely to individual income. Of more than 130 countries ranked, four of the top five countries are Scandinavian.
The European Union publishes an "Innovation Scoreboard" for its 27 member countries. At the very top of the list are Sweden, Denmark and Finland.
Over the last couple of decades, Scandinavia moved away from a centralized approach to government. Each region was encouraged to develop a regional innovation system. As part of this effort, local governments pushed universities to develop a more entrepreneurial attitude. In addition to the traditional role of teaching and research, universities were asked to develop new businesses.
Southern Sweden is a case in point. In the late 1970s, Sweden was in the grip of a deep recession. The key bank interest rate reached 500 percent; unemployment grew to 20 percent. In response, a regional official in southern Sweden gathered a group of professors and over the next few years got their commitment and that of their universities to build industry in two areas: biotech and information technology. The official secured land for a science park. Then he connected with a local entrepreneur who has built a successful company, Ikea. He talked the Ikea founder, Ingvar Kamprad, into investing in the Ideon Research Park, which opened in 1983. Over the next few months, 50 companies moved in.
Fast forward to today. Southern Sweden is a key player in Medicon Valley, a biotechnology cluster. In addition to biotechnology, the information technology industry is one of the strongest business clusters in the region. Over the years Lund University has spun off more than a hundred firms dedicated to biotech and IT. Large companies such as Novo Nordisk and Sony Ericsson have been attracted to the area by the talent educated at the university.
Further, Sweden is home to some exciting new biotech and IT products and services. Spotify provides a new way to access music, Edgeware delivers video on a wide range of devices, and Videoplaza manages electronic ad campaigns. Sweden also leads in e-health services providing prescriptions and linking medical devices, stock control and telemonitoring, and biotech such as enzymes to improve fish for consumption.
U.S. universities also have evolved their entrepreneurial mission. Stanford University drives much of the innovation agenda around Silicon Valley. Massachusetts Institute of Technology does the same for the Route 128 area near Boston. Together, these two institutions generate about 40 venture-funded companies a year that take advantage of the universities' people, intellectual property and equipment.
Others around the country are embracing innovation and entrepreneurship as an essential part of their role in society. The University of Texas at Austin, Rice University, the University of Utah, Georgia Tech and Arizona State-each came to its entrepreneurial mission a different way. But in each case, three elements converged with a common purpose: faculty and university leadership committed to the entrepreneurial university; political leadership; and support from the business community.
Today, the Genesee Valley is evolving its share of entrepreneurial universities. Politicians like Assemblyman Joe Morelle and Lt. Gov. Bob Duffy are committed to raising the innovation and entrepreneurial profile of Western New York. Entrepreneurs such as Phil Saunders and Tom Golisano are as committed to growing the Rochester economy as the founder of Ikea was. And both the University of Rochester and Rochester Institute of Technology are committed to building new businesses.
An aggressive but reachable goal would be to spin off 10 venture-funded companies a year. The impact on the economy of Rochester could be enormous. Just travel to Scandinavia!
Ashok Rao is dean of Rochester Institute of Technology's E. Philip Saunders College of Business.7/8/11 (c) 2011 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rb11:29 PM 7/12/2011j.net.