Last spring I taught a seminar on innovation to 24 first-year honors students who could objectively be described as among the brightest teenagers in the world. Halfway through the semester I caught myself flashing back to my former life as a CEO and as a venture capitalist. I spent my entire career attempting to attract and invest in great talent, and I never successfully assembled a group as gifted as the students in that seminar.
When I was fortunate enough to find even a few such individuals in my previous life, my response was always the same: invest in them. In the context of my company, that meant providing them training, mentoring and diverse experiences. As a venture capitalist, it meant deploying millions of dollars and expending an unlimited amount of time and energy to help an entrepreneur and his or her team succeed. Investing in the members of my first-year seminar would result in a healthy return, no matter what the metrics. The more interesting question is what form should that investment take and from where should it come?
The answer lies neither in the halls of Congress nor in a think tank in Washington, D.C. or New York, but back in the seminar room with my students. Have a look at them and read a short biography for each by clicking this link.
The first thing that strikes me about the students is their diversity. Even though they go to a state-supported, public university, over half of the students, or their parents, were born in a foreign country. They don't mention it in their short biographies, but many of these students are recipients of merit scholarships and were the subject of intense recruiting battles. Although they are interested in innovation and entrepreneurship -- the focus of the seminar -- only a few plan to major in business. Instead most will study in the liberal arts. These students hope to make a difference in the world, and most are drawn to challenges such as global warming, gender inequality and extreme poverty.
In my old life in the private sector, we would create a multi-year development plan for each of these students with an eye toward returns far in excess of our investment. If the university, or even the country, were to do the same, what would a plan look like? Based on the students' biographies and my experiences with them, I'll suggest four such plans.
Cliff plans to go to medical school and is also interested in innovation. In college, a liberal arts education will help him explore alternatives and teach him to think critically and solve problems. He also needs some experience with applied scientific research -- the kind that seeks to bridge the gap between the academic lab and the commercial marketplace. Spending one summer working in academic science and another working for a biotechnology company seeking to bring cutting-edge research to market would prepare him to make the most of his medical education. The synergy of those two experiences would encourage him to leverage his interest in innovation into a high-impact career focused on solving big problems and fostering new enterprises that create jobs.
Courtney is a scientist and an innovator. In high school she was on the robotics team, but since arriving at UNC she has become interested in environmental issues. She also has a strong aptitude for math, which is a virtual prerequisite for serious science. To achieve her potential, she will need a global perspective which could be achieved by spending time in a lab abroad, as well as some time on the ground in the developing world. Such a combination would hone her quantitative skills, expand her horizons and fan her passion, preparing her to make a real difference in the world.
Chenxi, known as"Chex," left her landlocked town in China at age 11 to further her education. At 15 she journeyed to Singapore for high school, and after a year of university studies is deeply committed to social science research on global health issues. This summer she is doing research in India and China through grants she secured almost entirely on her own. Chex is remarkably industrious and self-sufficient having lived on her own from an early age. She will corral the resources to do big things. But what happens to Chex when she graduates? Perhaps she can extend her stay through graduate study, but gaining permanent residency is no easy task, even for someone with Chex's tenacity. After recruiting and training this remarkable talent, we bear the risk of losing her to a competitor (China) just when she can make the greatest contribution. The plan for Chex centers on only one issue: keeping her in the United States.
Arjun wants to start a business. This is no surprise because he has been an entrepreneur most of his life, undertaking everything from start-ups to day trading. In college it will be important for him to combine his academic work with real-world experience, meet and work with some entrepreneurs and have the chance to actually start something, even if it fails. Keeping the price of failure low and allowing Arjun to learn the lessons that only failure can teach is an important part of the process of preparing him to enter the fray once he graduates. What will be important for Arjun, when the time comes, is tapping financial and intellectual capital to start his enterprise. Policy incentives for new enterprise creation such as lower or no capital gains tax for investors in such enterprises and technical support for start-ups characterize the kind of climate that supports Arjun's aspirations.
Similar plans can be devised for the other seminar students as well. In some cases all that would be required is two to four sessions a year with a trained coach to help chart their path. For others, small research grants or summer stipends would also be necessary to allow for internships or practical research experience. If the grants further a commercial enterprise, they could be structured as loans. On average, this additional support would average no more than $10,000 over the student's four-year career. Assuming 400 students per year would qualify, it would take around $1.25 million annually to fund such a program on one campus (including the overhead to support it). Scaling the idea to 100 campuses (or the equivalent) would require a national commitment of $125 million a year in investment. The return on that investment in terms of job creation, research accomplished, patents granted and companies created would result in the kind of returns that make a venture capitalist happy.
Other steps must also be taken to ensure an outsized return on investment in students like mine. For those who are not U.S. citizens, we must find a way to keep them here once they earn their degrees. This involves immigration reform as well as creating a business and intellectual climate that welcomes their talents. University research must offer the opportunity to work on what students perceive as big problems where their efforts will truly make a difference. In the world we live in, they can go elsewhere if they think the impact will be greater. Thoughtfully improving the environment for start-ups of all kinds in both the commercial and social sector is also critical. One of this country's strongest competencies is innovation and the best and brightest from all over the world want to be part of what they perceive as "start-up nation."
I don't know of an opportunity around that is better than investing in my 24 students. The good news is there are hundreds more like them in colleges and universities throughout the United States. If we treat them like our most successful corporations would and create a development plan for each of them, the result is an investor's dream -- low risk and high return.
Buck Goldstein is the University Entrepreneur in Residence at the University of North Carolina at Chapel Hill and the co-author, along with Chancellor Holden Thorp, of Engines of Innovation--The Entrepreneurial University in the Twenty-First Century.