The Innovation Pipeline: from Universities to Small Businesses - A Rural Perspective

Chairwoman Valazquez, Ranking Member Chabot, Committee members, I appreciate the opportunity to testify before the committee today. In my previous appearance before this Committee, you afforded me the opportunity to discuss the importance of fostering the entrepreneurial mindset among college students. Today, I'm here to discuss how to leverage these entrepreneurial-minded college students to restore the economic vibrancy of our rural communities.

Universities have an important role to play in the entrepreneurial ecosystem. We can be critical players as the testing ground for the next generation of innovators. This involves not only focusing on what happens in the classroom but also giving students the breadth of knowledge in entrepreneurial thinking and emerging technologies necessary to thrive in any career. That includes opportunities for invaluable real-world experience that will prepare students to create their own business or excel in one.

Project work, internships and employment at innovative companies offer students a chance to experience the messy, complex, sometimes risky, tension-filled aspect of the compromise-driven world of real business and value creation. Our students regularly participate in the #StartupCincy entrepreneurial ecosystem -- Cintrifuse, early-stage investors CincyTech and Queen City Angels, a variety of accelerators, and tech companies such as The Brandery, 84.51, Frameri, and Roadtrippers, to name a few. In addition, Miami offers the San Francisco Digital Innovation Program, which is ranked 5th in the country in Technology Entrepreneurship. In this program, students spend an entire semester living in Silicon Valley. Four days a week, they are in an apprenticeship at a start-up. Like any nascent entrepreneur, they do everything from ideation to product development to cleaning up the office at the end of the day. On the fifth day, they visit executives and thought leaders at companies such as Google, Apple, and Facebook. We were the first undergraduate program of this kind in the Bay Area, and we have since replicated the program in Ohio, Texas, and Luxembourg.

Miami University has a goal that each of our undergraduate students will have two high quality internships prior to graduation. To accomplish this goal, we have employed a "pull" strategy with respect to University intellectual property. A pull strategy revolves around the University seeking out business or government idle IP and allowing our students to create and cobble ideas and strategies together to develop and promote new technology, products, or services. We also are exploring hometown internships as most of our students return home after they complete their first year. Creating hometown summer internship opportunities will allow rural residents to experience opportunities that would not have been available to them as a high school student. This will provide students a comparison point when deciding where to live and work post-graduation.

Whether it is engaging undergraduates in the entrepreneurial ecosystem or in the pull strategy of developing new business ventures, the results of our approach speak for themselves:

• 1,500 Miami alumni currently self-identify their job title as a founder or co-founder on the social network LinkedIn;
• More than $2B in venture funding has been raised by Miami-affiliated high-growth companies since 2011; and
• 94 Miami-affiliated high-growth companies have exited through acquisition since 2011.

We are now looking to apply our techniques to rural America, as the future of the U.S. economy depends on restoring America's Midwestern heartland. We find ourselves in a world with no boundaries – jobs and wealth flow to where they find the greatest competitive advantage. Ohio, like all states, does not compete with Michigan, Indiana, Kentucky, and Pennsylvania but with China, Japan, Malaysia, Korea, etc. The old economy that built powerful middle- and upper-class economies in our towns were based on local specialties – Lorain's and Youngstown's steel, Akron's rubber, Lordstown's automobiles, Hamilton's paper processing, Portsmouth's shoes, East Liverpool's glass, Toledo's glass, cars, and rubber. The threat to those economies forecast by Caught in the Middle: America's Heartland in the Age of Globalism (2008) has become reality. Our larger cities in Ohio – Cincinnati, Columbus, and Cleveland – have roared back with an entrepreneurial mindset and agile, innovative firms, especially in data, artificial intelligence, and health care. But the gap is widening as our small towns struggle and even face extinction. A 50- 100-mile drive in any direction in Ohio reveals once bustling and vibrant towns now facing the harsh reality of globalization.

Fifteen years after Friedman famously declared "the world is flat," the effect of that shift is crushing our once thriving and idyllic local communities. The new order is based on speed, rapid adjustment, time-to-market, and state-of-the-art technologies. Furthermore, the technologies advance at unprecedented rates, and commerce is now defined by continuous change – changing technology, changing skillsets, changing demands, and changing professions. Careers are characterized not by blue-collar jobs or white-collar jobs but by new-collar jobs that require not only sophisticated technical skills in coding, mathematics, statistics, engineering, physical science, and life sciences but also personal values of flexibility, adaptability, grit, ingenuity, creativity, design, inclusivity, and entrepreneurial thinking. This new mindset is a synthesis of the so-called left and right brain, the convergence of STEM disciplines and creativity, art, and design.

Faced with this new reality, many across America are innovating new futures for our old towns – not just in the cities but across the rural landscape. Recent studies by Tim Wojan and colleagues at the U.S. Department of Agriculture document how rural America innovates. Challenging conventional wisdom, they demonstrate that rural innovation in general is nearly on pace with urban innovation, even greater in larger firms and more patent-intensive fields. "Ultimately, Wojan and colleagues' analysis find a strong statistical association between the arts, innovation, and economic dynamism in rural areas," reports Richard Florida in "The Rise of the Rural Creativity Class" (2018).¹ "And this leads them to conclude that the arts are a direct force in rural innovation, not just an indirect factor that helps to attract and retain talent for all industries."

Although we as a University are on the move and enjoy great success from investments and directions to advance Miami University and the great State of Ohio, our local community and City of Oxford have not been as fortunate. Our community has empty storefronts and has struggled to attract new businesses to advance the City into a more globalized and competitive world where artificial intelligence, science and technology, and data and analytics are paramount. Amazon is taking over retail; artificial intelligence is taking over jobs that used to be controlled by human input, such as travel agencies and so much more activity that once thrived in small towns. We believe that as a university, we must assist Oxford in developing a vision for economic prosperity. We are likely to see more students study away and abroad, more students study online, more students graduate early, nearly all students order items online, more faculty live closer to urban cores for spousal opportunities and newer and more vibrant housing and neighborhood options. All of that threatens the survival of shops, restaurants, and the amenities that make Oxford one of the greatest college towns in the nation. We see in our own mailroom that students are making most of their purchases online. Oxford needs more reasons for companies to come to town, for people to live and work here year-round.

Oxford cannot rely on service, retail and restaurants alone; in fact, we suspect Oxford will have challenges retaining the current levels. It must become innovative in partnership with Miami University. The need is urgent. Our vision is focused on providing spaces for the most innovative and creative companies and talent to locate right here in this wonderful small town. As our property belongs to the state and we are very innovative in our thinking, we can be more flexible and adaptable to companies on rent and leasing, providing the University as an incubator of ideas, novel thinking, and many state-of-the art facilities. We will not only advance Oxford and Miami University but ultimately become a model for thousands of small towns across America that struggle in the face of a globalized and fast-paced world. We will demonstrate how to think big and act bold by leveraging the innovative and creative thinkers at a robust and well-known and respected university for the good of the whole community.

Our aim is to establish a hub of creativity and innovation, imagination and design, art and science. Wojan's studies demonstrate the possibilities in general, and Miami University would like to demonstrate the possibilities in particular. A key component of Wojan's studies is the presence of a strong arts community. For years, the Oxford Community Arts Center (OCAC) has leased space from the University at an annual lease fee of $11.00. OCAC is filled with the creative types and spaces for community engagement that Wojan references. Located directly behind OCAC is a beautiful natural area, with gorgeous landscape and a newly-constructed amphitheater. Across the street is a vacant Miami University building with nearly 40,000 square feet. This former food preparation facility, with multiple floors of wide-open space is ideal for incubator-type activity and for forming an innovation hub where scientists, engineers, and artists can collaborate in coworking spaces, sharing ideas and creativity, ingenuity and design, and so much more. Together, the OCAC building (Building #1), the natural park area, the new innovation and entrepreneurship building (Building #2), and the Oxford Municipal Building housing much of our local administration and Economic Development will comprise the Technology, Entrepreneurship, Creativity Hub (TECH) Corridor. See EXHIBIT A below.

The TECH Corridor would be one of the first of its kind established in an Ohio – and American – small town to foster such collaborations and converge expertise across disciplines. This TECH Corridor will have five strategic pillars:

1. Accessing High-tech Companies. Miami University will recruit an anchor company willing to provide resources and expertise to budding entrepreneurs in economic areas important to our rural economy. We are recruiting The Fisher Group, LLC. It operates similar to a startup, although it is much larger, taking products to market through innovative and flexible manufacturing techniques. It can provide expertise to help other startups, especially student and new graduate start-ups, move their product concept from idea to the marketplace.
   Furthermore, Miami University recently launched one of the most innovative debt-free education options in the country, our Work + Program. Full-time students at our Hamilton Regional Campus work at a local company and receive an hourly wage and tuition remission from the company. The program is off to an incredible start. Our anchor company is a Work Plus partner.
2. Accelerating Innovation. Use Miami University student, staff and faculty talent to move innovative ideas to the marketplace. With the intellectual "horsepower" on campus, TECH will serve as a de-risking mechanism, ensuring that ideas advance to stages that mitigate the chances for failure and loss. Retain our graduates from leaving Ohio, empowering them to start their business and careers right here in Ohio. Provide more interaction with companies, build more startup companies in Oxford. Be a university that not only delivers talented individuals to the workforce but also delivers talented entrepreneurs who create even more jobs.
   The student and graduate talent from these programs and more is the most innovative in the country. More than 3,000 students per year do research on our campus – TECH will multiply their opportunities to find projects that expand knowledge and benefit society.
3. Educating Entrepreneurs. Train 100,000 Ohio entrepreneurs by 2025 through certificates and courses. With Ohio's growing aging community, leverage the retiree population for expertise and startup activity. We will bring Ohioans from everywhere to train in entrepreneurship skills – not only the technical side of startup-business acumen, financial literacy, teambuilding, and intellectual property protection but also the necessary human core values and virtues, developing character of persistence, optimism, humility, and openness that lead to entrepreneurial success. Apply our pull strategy, such as our collaborations with Wright-Patterson Air Force Base via the Wright Brothers Institute and the Air Force Research Laboratory on intellectual property, to bring ideas into TECH for development. Create certificates in small family-run businesses, rural entrepreneurship, health care entrepreneurship; continue the Institute for Entrepreneurship partnership with Uncharted Learning, NFP, to elevate the agency's innovative INCubatoredu entrepreneurship program for high schools.²
4. Synergizing Technology and Arts. Be known as the place where technology and arts are in harmony. Capitalize on the innovative Miami University programs in digital design, fashion, and arts management, along with stand-out programs in theatre, art, and music, to fold into the startup and technology community. Grow the interest in or Oxford Community Center for the Arts to have more individuals set up shop in this space to add vibrancy to the TECH efforts.
   Uniting creativity types with technology and engineering experts generates the power necessary for success in this globalized world, finding success in rural or urban Ohio. The physical proximity between buildings and integration of their activities will create a powerful convergence of technology and arts, design and engineering, and creativity and ingenuity. In addition to the rich diversity of artists already drawn to the Oxford Community Arts Center, many of our College of Creativity Arts programs in the Department of Emerging Technology in Business + Design, Arts Management & Entrepreneurship, Fashion, Theatre, Music, and Art would find rich opportunities at TECH. These are part of a $730 billion industry that accounts for 4.2 percent of GDP and 4.1 million jobs.
5. Empowering Collaboration. Attract more leadership talent, entrepreneurship talent, investors, etc., to our area to see the rich set of ideas and innovations taking place. This will be a site not only for students but also for all Ohioans to collaborate on new ideas for businesses and organizations that add value to our great state. Employers will visit and recruit students. CEOs from Cleveland, Columbus, and Cincinnati as well as our many Miami alumni CEOS will "hotel" for short periods to innovate or seek innovation. We expect to attract leaders from across Ohio and beyond, including successful startups in Cleveland, Cincinnati, and Columbus who are constantly looking for new partners and markets. We already have fruitful relationships with REDI Cincinnati, CincyTech, Cintrifuse, City of Hamilton, BioOhio, Jobs Ohio, and Ohio Third Frontier as well as connections with leading innovators across the country and around the world.

Summary

The Technology, Entrepreneurship, Creativity Hub (TECH) proposed here is unique in several ways: situated in a small town that honestly has struggled with the new world order; in close proximity with a powerful, highly-ranked, nationally-known university; an entire block of infrastructure where technology and art co-exist and thrive together; a broader vision and engagement strategy than one sees at most incubator sites; and a park amenity where creatives and investors can find refreshing green space for reflection, contemplation, and discovery. Research shows that such green space elevates creativity and cognitive processes.³

We propose to capitalize on our existing Miami University investment in the Oxford Community Art Center, where we provide essentially rent-free space, and utilize their creativity constituents to work side-by-side with scientists, engineers, business professors, and entrepreneurs on this rare block with a park and new amphitheater and the Oxford Municipal Building across the street. We are ready to leverage this promising convergence of circumstances and infrastructure for the good of our University, our community, our state, and our nation. 

[1] https://getpocket.com/explore/item/the-rise-of-the-rural-creativity-class?utm_source=pocket-newtab 

[2] https://miamioh.edu/fsb/news/2019/04/entrepreneurship-agreement-incubatoredu.html 

[3] https://bjsm.bmj.com/content/49/4/272?sid=56b97a4c-0e75-46d0-a6ba-41c7f41a089c; https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0051474