As we watch the economy start to twitch, showing signs of recovery, we hear a lot about "leading indicators." The stock market is a leading indicator, rising ahead of the general economy. Sadly, we are told, employment may well be a lagging indicator, with businesses wanting to make sure a recovery is underway before starting to hire or rehire.
As a teacher in the College of Business Administration at UIC , I keep my eye on a special type of leading indicator, the attitude of the young people in my classes about their job prospects. I don't do a regular survey on this, but I do run an event each year that gives me a sense of where this leading indicator stands, and I am encouraged.
The business school at UIC has a special emphasis on entrepreneurship and we have a special mission to serve the young people of the Chicago region. I am responsible for the school's Institute for Entrepreneurial Studies, which also includes UIC's Family Business Council, and the Center for Urban Business. So my end of the work is where the intersection with the local economy takes place.
The event that illustrates this intersection is called the Concept2Venture business plan competition (C2V). We invite teams of students from any of UIC's 15 colleges to submit business plans. There is about $70,000 in cash and in-kind services at stake for the winners.
The real life quality of this competition goes beyond hard cash. Each team submits a written business plan and does a 15-minute oral presentation. Watching them in action one senses that these young people are only one step away from pitching for a real business opportunity. In some cases they are. Over the course of the past four years, eight of the student ideas that emerged in C2V have turned into actual businesses.
For example, OrthoAccel Technologies was created in 2005 by a group of MBA students to commercialize an orthodontic device created by UIC dentistry professor Jeremy Mao that speeds up orthodontia. The company quickly attracted venture capital and a professional management team. Their device was recently approved to enter to European market and will do so in early 2010. The product is moving toward FDA approval for the US market and promised to revolutionize the orthodontia industry.
Flux Collection was created in 2008 by a team of undergraduate students from the School of Art and the College of Business Administration. The company designs and sells limited-edition designer messenger bags and t-shirts that feature the original art of well-known Chicago artist. The team acquired seed money, fleshed out their management team, and created and launched a fully functioning e-commerce site.
But at the same time I work with students preparing their plans for the competition, I listen to what they are saying about the economy and their place in it -- students as a leading indicator. I look at the type of ideas that are coming in to see if they are ideas born out of a Recession mentality or out of the assumption that a more vibrant economy lies ahead.
The students are well aware that times are tough. They often worry about whether or not this is a good time to raise venture capital. But the business ideas speak with an optimistic spirit. This year's contest will feature biotechnology, clean energy, e-commerce and information technology companies. In each case, students are projecting high growth and substantial value creation.
With unemployment nationally standing above 10 percent and the actual unemployment rate being much more, it is reasonable to ask why these fine young people are feeling such optimism. Part of it has to do with the spirit of entrepreneurship, which is what we teach. But I suspect that having Chicago as their learning environment has something to do with it as well. The city's economy is so diverse that as students make their way to class, they see the economic engine alive and well. I'm not sure the same would be true if they were on campus far away from the city, with most exposure to the reality of the economy coming on TV, over the web, or -- be still my heart -- in the newspaper.
There is one more piece of good news to consider. These young people who are showing such optimism are not going to take that energy elsewhere when they graduate. Our placement data show that UIC graduates, by a large margin, stay in the Chicago region.
If the attitudes and action of college students can be a leading indicator of the economy, things are looking pretty good.