Last week I co-facilitated two workshops held at the Governor’s Mansion as part of Illinois Innovation Day. Hosted by the Illinois Science and Technology Coalition, both sessions focused on clusters as a strategic approach to economic development, a concept that’s spreading like wildfire across the United States.
The Harvard Institute of Strategy and Competitiveness defines an industry cluster as “a geographic concentration of related companies, organizations and institutions in a particular field that can be present in a region, state or nation.” As Michael Porter noted in The Competitive Advantage of Nations, these concentrations lead to efficiency and mutual benefit for all stakeholders, strengthening local economies in the process.
University Technology Park at IIT is an active partner in Chicago’s growing life sciences cluster. Our facilities were designed from the ground up to provide quality lab and office space to early-stage life sciences companies, who in turn benefit from proximity to top pharmaceutical firms like Abbott, Baxter, Takeda and Astellas. With some of the country’s top medical schools and teaching hospitals also nearby and backing from state and local governments, our startups can readily find the resources they need. The Illinois Biotechnology Organization (iBIO), a driving force behind the cluster, also provides them with a wealth of support.
Across the country, communities are working hard to replicate the success of biotech clusters in Boston, San Francisco, and Philadelphia/New Jersey. Chicago has earned its place among these standouts. By 2013, our life sciences cluster included 3,500 companies with $98.6 billion in output and 81,000 direct jobs.
UTP is also actively involved in the growth of Chicago’s smart grid cluster, which has tapped the Obama Administration’s commitment to fund new clusters and strengthen existing ones.
In 2010 the Illinois Institute of Technology, UTP’s parent, won one of 10 competitive contracts awarded by the U.S. Small Business Administration to establish the Illinois Smart Grid Regional Innovation Cluster. Earlier, IIT had leveraged significant Department of Energy Funding to transform its main campus into a smart micro-grid as a test bed for university and industry research into new technologies for grid modernization.
Around this same time, the State of Illinois passed legislation launching a 10-year, $3.2-billion initiative to renew the state’s electric grid, laying the groundwork for a cluster of large OEMs and small startups to supply Illinois utilities with new devices and systems to support the emerging smart grid. Early partners included the Clean Energy Trust, the Illinois Science and Technology Coalition and OH-Community Partners.
Chicago’s smart grid cluster is now co-managed by the Energy Foundry, a non-profit created by the legislation to provide seed funding for startups. In 4 short years, the number of companies receiving direct support from the cluster has grown from 6 to 34 – and the number of startups working on clean energy and smart grid concepts in our area has jumped from 50 to 450. Investment in these companies has gone from nearly zero to an impressive $44.5 million.
UTP is proud to provide high-quality space for many clean energy and smart grid startups, linking them with IIT’s faculty, students, and micro-grid resources to fuel their growth. Earlier this year, the Research Park at the University of Illinois in Champaign-Urbana joined the cluster, seeking to provide similar support for smart-grid startups emerging from UIUC research.
The stimulating talks we heard on Innovation Day confirmed that communities from Rockford to the Quad Cities and Peoria to Carbondale are embracing the cluster strategy to boost their regional economies. I’m betting it won’t be long before we see a wave of fresh concepts in advanced manufacturing, agriculture and food innovation flowing from these efforts.