Higher Ed’s Higher Revenue

Given the crunch in public and private money available to universities throughout the country, more academic institutions are realizing the potential of revenue generated from academic research. The recently released annual survey of the Association of University Technology Managers showed that more than $1.4 billion was earned from the commercialization of academic research.

While that amount doesn’t seem like very much (considering all of the universities in the country), universities are often the home of many breakthroughs—from the decades-old sports drink, Gatorade, developed at the University of Florida for its football team to combat dehydration, to the recent collaboration of the University of Illinois at Urbana-Champaign with its sister campus in Chicago to create the start-up Xerion Advanced Battery Corporation. Xerion uses nanotechnology to make fast-charging batteries for electronic devices and cars.

In our state, the University of Minnesota raised approximately $84 million from licensing and royalties, with the bulk of that amount (roughly $74 million) coming from royalties paid on its HIV/AIDS medication, Ziagen.

Northwestern University, with more than $191 million in licensing income, led all of the 153 universities that responded to the annual survey. Northwestern’s income represented 10 percent of the total reported for all universities in the survey.

With the rising cost of higher education and escalating student debt being a hot button in the upcoming election, tapping the innovation that already exists in the research halls of universities may lead to an innovative solution to lowering the costs of higher education. Maybe some classes in entrepreneurship are in order.

Employee Engagement

“Employee engagement” is another one of those buzz terms with which you probably want to pepper your conversation the next time you have a meeting with any senior executive. But putting sarcasm and cynicism aside for a moment, employee engagement is a big deal for a variety of reasons—one of the big ones being innovation.

You can label it whatever you want, but it’s been measured and proven that employees who are actively involved, who actually care about what they’re doing, are more creative and innovative. According to Entrepreneur magazine, a Harvard Business Review study found that if employee engagement increased by just 0.1 percent, it made a $100,000 difference in operating income to the bottom line of every Best Buy store annually. And the study also found that recognition was the single most important factor when it came to engagement.

If you’re not already a fan of The Esquire Guy, you may want to check out his regular column in Entrepreneur, because there’s always some very sound advice that’s dispensed with a good dose of not taking yourself or the workplace too seriously. This month’s focused on employee engagement and recognition and provided 11 “recommendations” for giving praise. Three were especially noteworthy, as well as humorous:

1) Praise followed by criticism is not praise.
2) Praise followed by praise is probably a little too much praise.
3) Praise followed by criticism followed by praise is a sandwich.

Pretty much common sense and pretty funny, but how many of us have made all three mistakes? Ah, I thought so. Maybe not so funny now.

When it comes to innovation, you need to have people who not only care about the job at hand, but think beyond that about how they can do things better, or maybe even entirely different. That’s engagement.

Be Innovative: Drop Out of School

While I don’t mean to bite the hand that feeds at least a portion of my living—I do teach a course on creative process at the University of St. Thomas—advanced education may not make any difference when it comes to innovation.

When you look at some of the most innovative people of our times, they’re college dropouts. That was astutely pointed out recently by Michael Ellsberg in “The Education of Millionaires: It’s Not What You Think and It’s Not Too Late.”

While everybody thinks that small businesses provide most of the jobs in the United States, it’s actually start-up businesses that fuel the labor market and provide almost all net job creation, according to the National Bureau of Economic Research.

But let’s get back to those dropouts. You would have had to be living like the Unabomber to have missed the tributes to the late Steve Jobs, who many believed was the most innovative individual of our generation. If he’s not, please write and tell me who you think is. Jobs was a college dropout, as is Bill Gates. Ditto for the founders of Twitter and Facebook.

Friends of mine have a son who dropped out of college his freshman year, and he pointed out to me that many of his friends who graduated from college are now unemployed and about $50,000-plus in debt. He’s debt free and thinking of starting a business—if he does and is successful, he may hire, guess who, some of his college graduate friends.

I’m not anti-education at all, and to even the score with one of my employers, I will point out that St. Thomas was way ahead of the curve when it started offering degrees in entrepreneurship. That said, a good rule for everybody—not just students—is offered by Ellsberg, who writes, “You don’t learn how to network crouched over a desk studying for multiple-choice exams. You learn it outside the classroom [and I’ll add for business folk, outside your office], talking to fellow human beings, face to face.”

Why Steve Matters So Much

Unless you were in a cave in Afghanistan last week (and even if you were, you still may have heard the news): Steve Jobs stepped down from his position at Apple.

While Jobs had been on medical leave and people had speculated that the move was imminent, it was still a shock to hear. Sometimes the gravity of an important event doesn’t have its full impact until it actually occurs, no matter how much you’ve mentally prepared for the change—like getting your dream job, or getting fired from your dream job.

But Jobs has stepped down. And while his successor has been running the company for a while and everybody believes that he’s a capable guy, it won’t be the same because, well, he’s not Steve Jobs.

Jobs matters so much because there are so few business leaders like him today, and he is the type of leader so desperately needed. Sure, there are lots of wannabes, but how many of them can say they got fired from the company they founded, re-joined it more than a decade later, and brought it back from the brink of collapse to become arguably the most admired company in the world?

Uh, that would be none of them.

Desperately needed? Yes.

You need a vision of the future that will lead people to someplace better—and in doing so, engage them in a way that is unique and demonstrates real value to them. That way, they become ardent supporters, the company makes real profits, and at the end of the day, everybody’s happy. That’s pretty much what happens at Apple, and that’s why Steve matters so much.

Innovators like Steve Jobs create jobs, and given what’s happening in businesses today, Steve matters more than ever.

The Most Innovative Countries in the World

This is the time of year for all sorts of rankings to be published. One by the Legatum Institute, a non-partisan think tank, looked at innovation on a global basis and came up with a list of the top 10 innovative countries in the world.

The study based its rankings on the countries that “contribute to the general advancement of mankind’s wellbeing.” No easy task.

The Institute used five criteria to score countries on the aforementioned goal:
• A strong entrepreneurial climate
• Low costs to starting a business
• Public perception of a good entrepreneurial environment
• Ability to commercialize innovation
• IT and telecom infrastructure that enables productive commercial endeavors

And the number one country in the world is . . . Denmark. If you’re an entrepreneur looking to start a business, Denmark may be the place for you, because it has the lowest startup costs in the world, the second lowest level of inequality in economic development, and the seventh-best level of research and development spending.

The U.S. didn’t fare badly, coming in at number three overall. Spending on research and development is 2.2 percent of GDP (Sweden spends 3.1 percent and Iceland spends 2.8 percent). And income from what the study calls “royalty receipts,” or income from intellectual property, total almost $92 billion.

Rounding out the overall top 10 innovative countries are: Denmark, Sweden, United States, Finland, Britain, Norway, Ireland, Singapore, Iceland, and Canada.

The First Thing We Do, Let’s Clone All the Innovators

Minneapolis native, three-time Pulitzer Prize-winning journalist, The World is Flat guy Thomas Friedman has a great idea: Let’s bring all the top innovators in the country together and ask them what it would take to replicate them a million times over. And to make sure we’re planning for the future, let’s also make sure that we’re nurturing the innovators of tomorrow just in case the whole cloning, stem-cell thing doesn’t go over too well when the political pendulum swings back and the folks always in the “right” take control again.

What Friedman’s driving at in one of his recent columns is how the U.S. needs to focus on innovation as a long-term way out of its economic malaise. He’s right.

While the Obama administration has created “temporary highway jobs,” Friedman points out that what we really need to be doing is creating “lasting good jobs that keep America on the cutting edge,” and his suggestion is to start an Innovation Movement.

It shouldn’t take a rocket scientist or a Pulitzer Prize winner to figure out that the U.S. is an idea economy. Our industrial manufacturing edge was dulled long ago by competitive forces from overseas, and with everything from preparing taxes to reading X-rays being outsourced to foreign knowledge workers with many skills just as good as we have here in the states at a fraction of the cost, ideas are the big idea for America.

Helping create more creators can be Obama’s real legacy, according to Friedman, and he points to several national organizations that foster the entrepreneurial spirit among youth. One of those organizations, NFTE (National Foundation for Teaching Entrepreneurship), had a brief run here in the Twin Cities when it was sponsored by Koch Refining—excuse me, now Flint Hills Resources for all you spin doctors out there. The basic idea behind NFTE is to teach entrepreneurial skills to economically disadvantaged youth.

Wouldn’t it be a real opportunity for some Minnesota organization to resurrect NFTE here again?

One example Friedman can take a page from in championing his cry for an Innovation Movement is right here in his home state—the Minnesota Cup. Now in its sixth year, the Minnesota Cup is an open competition for entrepreneurs with significant rewards and could very well serve as a model for other states. Look for the 2010 competition to launch in March.

Sometimes some of the best ideas can be found right in your own backyard, or as another famous Minnesotan, Frances Ethel Gumm (AKA Judy Garland), said as the character Dorothy Gale in The Wizard of Oz, “There’s no place like home.”

Why Innovative Entrepreneurs Aren’t Risk Takers

Think successful innovators like Ted Turner are free-wheeling, gambling, risk takers? Think again.

While we know that innovation requires a certain amount of risk taking, a new perspective by trend expert Malcom Gladwell in the New Yorker says that successful entrepreneurs—like Turner, with whom we typically associate with high-risk behaviors—are actually risk adverse.

Successful entrepreneurs may be innovative to the point of seeming risky, but their business deals and behaviors are not.

As Gladwell points out in Turner’s case, when Turner purchased the station—WJRJ in Atlanta—that would eventually lead to the CNN empire, he paid much less than what similar properties were selling for at the time and did so with a stock-swap deal that meant he didn’t have to put any money down.

Sometimes people forget that at the same time, Turner had inherited the largest outdoor-advertising business in the South, which was a cash cow. Paying $2.5 million for WJRJ with no money down was not exactly a big gamble.

A fascinating study of entrepreneurial behavior by Scott Shane, The Illusions of Entrepreneurship, points out similar behaviors. Shane looks at failed entrepreneurs and finds that they violate almost every sound business practice, even some as basic as writing a business plan. Conversely, successful entrepreneurs take calculated risks.

Let’s also not forget that even one of the legends of successful entrepreneurship, Sam Walton, financed his enterprise with money from his very wealthy in-laws—thus not risking his professional reputation or credit by borrowing from traditional financial institutions.

Before you roll the dice thinking that’s what it takes to be a successful innovator, you may want to make sure its loaded in your favor.