The Brookings Institution recently published a white paper titled, “Turning up the Heat: How Venture Capital Can Help Fuel the Economic Transformation of the Great Lakes Region.” In it, Author Frank Samuel, former Science and Technology Advisor to the Governor of Ohio, tackles a problem that has plagued the Great Lakes region for decades – how to transform a former manufacturing mecca into a 21st-century knowledge-based economy. Samuel identifies the following negative trends ailing the Great Lakes region*:
· out-migration of young, educated workers;
· failure to replace manufacturing job losses with new growth industries;
· metropolitan areas that are unable to attract people and businesses
Additionally, Samuel highlights a sad disparity: despite the fact the region contributes 40% of Venture Capital dollars nationwide, produces 31.4% of US patents on annual basis, and receives 35% of NIH grants, only 13.8% of US Venture Capital is invested in the Great Lakes region. This disproportion is insufficient for a region seeking to re-invent itself; absent significant investments, it will be difficult to compete in changing times.
Samuel recommends a “Great Lakes venture capital superfund” as a partial solution to this problem. This $1-2 billion dollar “fund of funds” would invest in Great Lakes-based venture capital firms, placing investment decisions in the hands of regional funds. While not suggesting such a measure as a panacea, Samuel states that it would “help the region grow, and retain, the new businesses and jobs it needs to ensure a more prosperous and secure future.”
Samuel was kind enough to offer his insights in an interview with TECHdotMN [part 1]. Our angle was to assess the local impact from the proposed Great Lakes 21st Century Fund. Responses have been shortened and summarized.