Akshat Thirani founded his startup, Amper, which helps manufacturers monitor key metrics of their machines, at Northwestern University. He moved it to a technology accelerator in China, and then to another one in Silicon Valley.
But when it came time to settle Amper in a permanent home, Thirani chose Chicago for two simple reasons: Location and affordability. Our airports offer more direct flights to Amper’s manufacturing customers and the city offers a more affordable place to do business than San Francisco.
My organization, the Illinois Science and Technology Coalition, has been tracking entrepreneurship at Illinois universities since 2009. Stories like Amper’s are becoming increasingly common — so common that Illinois is on the precipice of shaking one of its most nagging brain-drain problems: the flight of young startups to the coasts.
In fact, Illinois is retaining university-bred startups in record numbers.
Consider these most recent statistics:
During the past five years, students and faculty at Illinois universities launched more than twice the number of startups, 942, than they did during the previous five years. It’s the largest volume of startup activity since we began tracking it in 2013.
Nearly three-quarters of those companies remain active, and of them, 81.3 percent, or 566, remain in Illinois, the highest level since we began collecting this data.
Capital raised by these startups also reached a new record in 2017: $877.5 million in the past five years. That is triple the total from 2010-14.
What this means is that Illinois’ once-cocooned universities are linking up to the state’s broader economy, and doing so in new and important ways. Among them: making direct investments in startups — Northwestern invested $50,000 in Amper — as well as providing office and lab space, coaching and introductions to venture capitalists, all of which is further motivation to remain close to home.
For example, last year, the Polsky Center for Entrepreneurship & Innovation at the University of Chicago announced plans to construct a 22-story tower in Hyde Park for biotech, materials science and data-analytics startups. Meanwhile, the University of Illinois has announced a downtown Chicago innovation hub to better connect the university’s world-class scientists and engineers in Urbana-Champaign to Chicago.
But while our universities are doing their part, state officials are not. The University of Illinois system is the backbone of the state’s innovation economy, and it is suffering in the wake of repeated budget cuts and a recent budget impasse, which starved it of resources. This has caused tuition to rise and aid to fall.
The outcome: In 2002, 71 percent of Illinois high school graduates who attended four-year universities chose in-state schools, according to the Chicago Tribune. By 2015, the most recent year data were available, just 55 percent chose Illinois schools.
While the solution to that problem is centered in Springfield, there’s an even bigger problem in Washington: Immigration reform.
An estimated four in every 10 startups coming out of Illinois universities in the last five years have had a foreign-born founder or co-founder. At the ISTC, we’ve partnered with national groups like FWD.us to push the Trump Administration to implement — after more than a year delay — the International Entrepreneur Rule, which allows foreign-born entrepreneurs to launch startups in the United States, provided they meet certain requirements.
The reality is that the most difficult challenge for this large group of ambitious people is not building a product or finding customers — but navigating our immigration system just to stay in the country.
And Illinois can’t afford to lose them.
Mark Harris is the CEO of the Illinois Science & Technology Coalition, which measures, connects and advocates for the state’s innovation economy.
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