Green-Light for Discovery Partners Institute Could Turn Chicago into a Tech Hub—and Keep Talent in Illinois
Though Illinois boasts some of the country’s best universities, its population continues to decline. A crucial question regarding Illinois’ future is: How can we keep, and attract, talent?
One promising option comes from the new Discovery Partners Institute (DPI), a sprawling campus of entrepreneurs, start-ups, academia, research, and innovation on donated land along the Chicago River. In June 2018, the project was greenlit, acquiring the necessary $500 million in state funding.
“With state-secured funding, all systems are ‘go’ for DPI,” said Governor Bruce Rauner, one of the key proponents of the DPI. “It can now get to work on world-changing ideas that investors will put money behind to create Illinois-based businesses and jobs.”
Project leaders Governor Rauner and the University of Illinois announced the concept in October as the first step in part of a larger $1.2 billion public-private project called the Illinois Innovation Network. The Network aims to “ensure a knowledge-based, 21st-century economy in Illinois where discovery and innovation are the focal points” and “nurture the inventors and entrepreneurs of tomorrow by allowing them to hone their talents in Illinois,” according to the governor’s office.
U of I and its campuses in Urbana-Champaign, Chicago, Rockford, Peoria, and Springfield will oversee the network, working with the University of Chicago and Northwestern University as partners.
"DPI and the IIN will add to the momentum that has been building rapidly in Illinois to create an innovation network at a scale that can massively accelerate progress and economic development," U of I President Tim Killeen said. "It also will help reverse an outmigration of top graduates to other states, exposing thousands of students to Chicago, its vibrant business community and everything the city has to offer.”
Killeen and Chicago Mayor Rahm Emanuel praised Rauner at a press conference for what Emanuel expected would be a “transformative force” for the state and its largest metropolitan area, which is also the third largest city in the country.
According to Rauner’s office, the Discovery Partners Institute will house up to 90 faculty and 1,800 students each year, with over 10,000 student entrepreneurs trained every five years, an estimated $500 million in new research and development, and potentially up to $4 billion in annual investments by venture capitalists. That is four times higher than VC investments currently in Illinois, he added.
The DPI innovation center will house hundreds of world-class researchers and faculty members. Since the project’s announcement, the U of I system has been developing construction plans and timetables for the opening of the DPI, and workshops are projected to begin this fall at the current facility on Wacker Drive.
‘Sad to Lose All the Talent They’ve Trained There’
The biggest payoff could be retaining some of the state’s best minds in Illinois, as well as attracting new talent. Engineering graduates who have left the state say the availability of resources like DPI could encourage talent to remain in Illinois.
One such former resident is Nick Farace, a 27-year-old engineer now living in Milwaukee.
In 2008, after Farace graduated as valedictorian of his high school class in rural DeKalb County, he enrolled at the University of Illinois and moved to its flagship campus in Urbana-Champaign to begin his undergraduate degree in general mechanical engineering. He graduated with a Bachelor’s Degree in 2012 and enrolled in a graduate program, eventually earning a Master’s in Systems in Entrepreneurial Engineering.
While his girlfriend, a chemical engineer and fellow U of I graduate, was offered a job in another state, Farace intended to forge a career in mechanical engineering within Illinois. What he found instead were glorified sales jobs that rarely utilized his expertise and education in mechanical engineering.
“I wanted to do something a little more challenging, which I ended up finding [in Milwaukee],” Farace said. “Those kind of engineering jobs, besides maybe in Peoria, aren’t really in Illinois.”
Wanting to put his knowledge and passion to work, Farace left his home state behind and joined his girlfriend in Wisconsin, landing a job as a product engineer.
Had something like DPI existed when he graduated, he may have been incentivized to stay in Illinois, he said.
“If there was something like that [at the time], maybe we both would have stayed there,” Farace said. “A lot of people [who] go to college in Illinois, it’s because they’re from Illinois and they want to stay there. It’s kind of sad to lose all the talent they’ve trained there and have it go somewhere else, like to another state, and start leading those innovations.”
Given Illinois’ current condition, what would it take for him to come back?
“If I wanted to go into a more management-oriented path, then maybe I’d consider moving back to Illinois,” Farace said. “But then again, I’d have to try and justify taking a pay cut with the state income taxes and all that; it’s definitely a little bit less of a financial burden to live in a cheaper state.”
Still, Farace said he thinks an intersection of technology, entrepreneurship, and discovery, like DPI, could be a unique and attractive option for the next generation of recent graduates and future innovators.
‘I See Nothing but...Opportunity’
Another key component in leveraging the potential success of the tech incubator program is its projected location: Chicago.
The DPI will be located downtown within The 78, Related Midwest’s planned 62-acre development. "The 78 is a blank canvas in the heart of the city that will allow the University of Illinois System to create a global technology-based research institute downtown to attract and meet the demands of next-generation leaders," said Curt Bailey, President of Related Midwest.
Mayor Emanuel said the campus would be a “transformative force on the South Side of Chicago and for all of Chicago.” Rauner’s office said it was an “ideal location” for such an incubator because of its position as a “global destination with deep connections to statewide research and its computing, engineering, manufacturing, and agriculture communities,” as well as “world-class healthcare research” and number of academic medical centers and universities.
The DPI has recently expanded its network of collaborative partnerships, including a corporate partnership with OSF HealthCare and an overseas academic partnership with Tel Aviv University. The Tel Aviv University partnership will begin in July 2018 with a series of workshops designed to facilitate collaboration and enterprise between Israeli and American entrepreneurs. Similar partnerships with the National Autonomous University of Mexico (the largest university in Latin America) and Tech de Monterrey (Mexico’s leading private university) are in progress.
According to U of I President Killeen, “In the years ahead, we will connect academic research centers at other universities and share intellectual power with business partners who can turn ideas into job-creating enterprises that will lift communities across the state.”
The DPI also appears to have support from business leaders, who say they’re eager to enter the next strata of research and innovation in Illinois.
“I see nothing but innovation and opportunity for the next wave of diverse professionals,” said Shaniqua Davis, founder and CEO of Noirefy, a job search website that helps connect diverse talent with the right business. “This site provides so many resources and so much opportunity to diverse talent: more research, internships, and opportunities with a direct connection to local companies. It helps small businesses like myself to connect and fill the pipeline with more quality.”
Eric Lefkofsky, the co-founder and CEO of Groupon, said there was “no better place to build a tech company than right here in Chicago,” adding that a “world-class” engineering school and campus would help “produce the next generation of technical talent that this city and nation so desperately needs.”
And because all the University of Illinois locations are participating, the project will have even further reach within the state, according to proponents.
“[It] will serve as a magnet for investors across the nation, while generating the ideas and educating the entrepreneurs that will seed new companies that will find their home in places like Peoria, Rockford, and Chicago,” said Kevin Schoeplein, CEO of OSF Healthcare System.
The melding of tech and academia is essential for new innovation-based start-ups, said Alisyn Malek, founder and chief operating officer of May Mobility and University of Michigan graduate.
Malek is a former strategist and engineer for General Motors who started the company—which focuses on fleets of self-driving vehicles—with two other university alums. The start-up grew out of an accelerator which has already received over $11.5 million in private funding. May Mobility also recently announced its licensing agreement with the University of Michigan, which gave the company access to the school’s “cutting-edge intellectual property.”
“For any technology from an industry that is so cutting-edge, melding of academia and business is absolutely required to launch a successful business,” Malek said. “[The licensing agreement] was very positive because it gave our company a leg up on any competition.”
Not just that, but some of the crucial components to the company’s foundation were formed when its founders were students.
“Without the key research and projects that Edwin Olson and Steve Vozar completed at the University of Michigan, not only would we not have some of our core IP developed, but it would have been harder to find a platform that lends such credibility,” Malek said. “For early-stage companies, this credibility is key in finding angel funding and other types of investment.”
The Detroit-based company has not only seen mutual success in its partnership with the University of Michigan, but it’s helped to reposition Michigan as an up-and-coming hub of innovation and technology.
“Any state that wants to make the most of its investment in its institutions of higher learning should absolutely provide this type of setting that allows people to make use of the cutting-edge research that is taking place and applying it to solve real world issues,” Malek said. “This not only allows the state to grow its impact on the global population, but also often creates jobs which foster the next generation of entrepreneurs and change-makers, creating a long-term impact toward economic sustainability.”
Malek said incubators who partner with institutions help to retain and bring new talent to the state.
“It also helps attract the brightest minds to the institution for future work, which just feeds the virtuous cycle,” she said.
With state funding secured, new partnerships emerging, and plans to expand its Wacker Drive office to over 20,000 square feet of operating space, the DPI is poised to transform Chicago into a hub for research and development. In a recent statement, Governor Rauner said he hopes the DPI will create “an economic engine for Illinois and the Midwest that surpasses Silicon Valley.”
As workshops at the DPI will begin this fall, the economic implications are profound—and the future is bright.