A few years ago, there seemed to be a continental divide between the “old economy” and the “new economy,” and the state in which I live, Michigan, appeared to much of the world as the poster child for the former. Never mind that Michigan had been in the top 5 nationally for such important innovation bellwethers as university research, patents issued, and engineering workforce; to much of the U.S., we were still the “rust belt.”
Some of that reputation was earned, as the state was best known for a few very large auto companies whose success over the 20th century attracted a preponderance of our talent, sapping much of our entrepreneurial spirit and leaving Michigan’s economy subject to the wild swings of a single industry. Consequently, while we were advanced technologically, we were a region that lagged in the creation of innovative new companies and rarely strayed from the middle of the pack in terms of attraction of venture capital dollars.
Most of the nation began its recession in 2008, but we in Michigan had a five year head start, with our citizens experiencing the most economically brutal stretch in two generations. And as our largest employers—particularly those in the automotive industry—faced hard times and began shedding workers, our underperforming entrepreneurial community couldn’t pick up the slack, leaving the state in a nearly decade-long slide.
There was a need to reinvent Michigan and to take advantage of the state’s great scientific, engineering, and infrastructure resources to create a new generation of innovative companies. And in 2007, a group came together to spearhead a creative effort to do just that. Ironically, that group consisted of the CEOs of many of the state’s largest and most established companies. Business Leaders for Michigan, an impressive non-profit organization consisting of the leaders of 80 of Michigan’s most important corporations and universities, established a blueprint for transforming the innovation community in Michigan, with the goal of encouraging and supporting a better environment for startups in the state. The centerpiece was a unique venture capital fund-of-funds, called the Renaissance Venture Capital Fund.