Last week I wrote up Part 1 of my interview with David Egner, president of the Detroit-based Hudson-Webber Foundation and executive director of the New Economy Initiative for Southeast Michigan. The coalition of 10 community and philanthropic organizations is working to support economic diversification efforts in the Detroit region. Egner talked about the attitude of complacency and entitlement that left the region ill-prepared to recover from the auto industry’s decline, and about the political divides that have long held back cooperative efforts to develop promising sectors such as advanced manufacturing and logistics.
In our conversation, Egner described how the organizations behind the New Economy Initiative realized that were all working to solve parts of the same big puzzle, and how they might accomplish more if they worked together. (The foundations have pooled $100 million in grant funds for projects that support entrepreneurship, retooling, and workforce development and education.)
In the second half of the interview, which appears below, we talked about the need for better bridges between the region’s high-tech innovators and potential funders such as venture capital firms. We also discussed the future of the automotive business—still Detroit’s anchor industry—and ran through the New Economy Initiative grants and projects that Egner considers the most promising.
One intriguing subject running through my talk with Egner was the fine line that the initiative is trying to walk between making bets on specific industry sectors that may help to define Detroit’s future—areas like alternative fuels, life sciences, manufacturing, and logistics—and merely clearing the way for the marketplace to make those bets. Egner talked over and over about the need for stronger “connecting institutions” in Detroit: groups that could get researchers at Michigan’s top universities talking more often with venture capital partners, creating more opportunities for ideas to blossom into companies. These conversations are so frequent and continuous in Xconomy’s other home cities of Boston, San Diego, and Seattle that it’s easy to take them for granted. But in Detroit, such basic parts of the ecosystem seem to be withered or altogether missing.
Xconomy: We’ve been talking so far about the need for the government, non-profit, educational, and corporate sectors to work more closely together to solve Detroit’s problems. What role does high-tech entrepreneurship play in all that?
David Egner: That’s a crucial component. I think how you do it becomes an interesting discussion. You’ve got within 70 miles of each other, three tier-1 research institutions taking in hundreds of millions of research dollars that are producing tremendous ideas. How we get those three to play in this space becomes, I think, one of the most important issues. The infrastructure already exists inside those institutions. The New Economy Initiative has to help determine how we can develop an infrastructure outside those institutions to aid tech transfer and speed it along. That includes accessing capital.
Having said that, looking at economic development efforts across the last several decades in the United States, it seems that those who have picked specific sectors [to develop] have really struggled, because you can’t guess what tomorrow’s economy is going to be about. NEI is making an investment in a general infrastructure and trying not to get in the way of the marketplace. Ultimately, the market needs to drive innovation, and we need to make sure the building blocks are in place.
X: What types of building blocks are you talking about?
DE: We’re finding that the infrastructure that should naturally exist here, because of the years of neglect, and because we have become so entitled, needs to be rebuilt and repositioned. For example, if you talk about the life sciences—other than the universities, there is still not a natural institution working in the area to push a high-tech life sciences strategy. There is a lot of talk about it, but not a
