Venture Capitalist Larry WilsonMay 14, 2007
Larry, where does this region need to focus its efforts in order to better compete in a global economy?
When you look at where Columbia can develop its economic future, it is certainly going to be in the area of knowledge-based businesses. The university being here is the key asset for Columbia – it’s a talent magnet for researchers, particularly now that we have the endowed chairs program and Innovista.
What economic impact should we expect from these programs?
I am on the Board of the USC Research Campus Foundation and I have challenged the university to see if we can’t make a $1 Billion annual impact to the local economy through Innovista in the next 7 or 8 years. $1 Billion annually equates to roughly 3,500 high paying jobs with an average salary of $80,000 a year or more.
Breaking down the 3,500 a bit further, I see 4 key areas where we can be very competitive. The area that I am focusing on is information technology (IT) jobs, particularly in insurance where this region already has strong historical capability. There are probably 3,000-4,000 people in the Columbia area with insurance IT skills. That represents a serious concentration of talent and a great source of sustainable competitive advantage for the region. 1500 jobs will likely be created in this sector in Innovista.
And not just insurance. David Dunn is doing amazing work over at VC3. President Bush’s former chief of staff, Andrew Card’s son’s company just developed and sold a new game to Microsoft. And there are other stories of innovation and success in the IT sector.
What are the others?
I can see 1,000 jobs in health sciences centered on the USC School of Medicine and also the School of Public Health. Health sciences are increasingly becoming multi-disciplined, combining math, engineering, and computational sciences and USC is perfectly positioned to expand its role as a great center for doing medical research. With a new biomedical-engineering degree at the university USC is becoming a model of modern medical research.
We can also have 500 jobs in alternative fuels, particularly ones that are not carbon based. But great work also will be done that will make coal a cleaner source of energy. The electric cooperatives of SC just gave the USC School of Engineering a large grant to research clean coal technology. Alternative fuels are a huge strategic sector for this region. It may take awhile, but 20 years from now, it very well may be the largest employment base for Columbia.
And the 4th area is advanced materials – nanotechnology based and other advanced materials. I see around 500 jobs in this area. There will certainly be other areas, but I believe these will be the core.
When it comes to the development of new knowledge, one of the most positive developments for the state is that USC, Clemson, and MUSC are collaborating and focusing on each university’s strength. The endowed chairs program has really caused that to happen. The universities work together and bid on endowed chairs in areas where they have complimentary skills. It’s not uncommon to see jointly funded projects working simultaneously in all three locations.
What role should government play in promoting this knowledge-based economy?
The role of government really changes depending on the stage of the technology. Basic research is funded by the federal government through the National Institute of Health, National Science Foundation and other similar Federal agencies. We have to be able to position ourselves so we can get the grants from these national institutions as well as from the Department of Defense, Department of Agriculture, and the Department of Energy. We need to get more federal research dollars here. These funds pay for the basic research that discovers new knowledge. From that knowledge, we need to be able develop applications to solve real world problems; then we have to commercialize that knowledge.
That is where state and local governments can come in. State and local government can really step up to the plate at this point and prime the pump, so to speak, through incubator programs, innovation centers and demonstration projects. For example we need to build a hydrogen fueling station in Innovista. They can also help attract companies to locate here.
After that, the private sector needs to take over. Government simply needs to get out to the way and ensure that this is an easy place to do business.
What potential roadblocks do you see for the Midlands and our state?
Certainly education and in particular K-12 education. We have made tremendous progress in this area, but our drop out rate is still too high and the achievement gap between races is too large.
I can’t say enough about how the research institutions and the technical colleges have stepped up and started focusing on areas where they can be the best in the world. Midlands Technical College is doing a great job at improving workforce training.
We have to compete against the world, not just the neighboring Atlantic Coast states.
What business book are you reading right now?
Competing on Analytics: the New Science of Winning. Predictive Analytics are used in so many different fields now. The Oakland Athletics baseball club has used analytics to make informed decisions about who to put out on the baseball field. They have the lowest payroll in baseball yet are consistently able to field a pennant winning team.
My whole career has been based on using anecdotal information from the past and trying to synthesize all that information to make decisions. Now CEO’s can go beyond simple intuition and make more accurate decisions, with better insight into markets. Over the past 5 or 6 years, Wall Street has developed sophisticated trading strategies based on predictive analytics. So many sectors could benefit from this methodology. It will also have a huge impact on medicine. Rather than a doctor telling you what she thinks, wouldn’t it be better if she can put the data into a program and better predict likely outcomes.
What do you like most about this region?
I had a colleague here from Boston the other day and he was amazed at how total strangers would come up to him on the street and say hello.
The people. People in this region care about each other. They are friendly and approachable. We’ve got the mountains to the west, the ocean to the east – a great climate. But it’s the people and the business leadership that are our greatest asset. There’s no arrogance here. Business leaders genuinely want to do the right thing and they genuinely care about their customers and our community.