Maryland is the top state for innovation and entrepreneurship, according to recent rankings by the U.S. Chamber of Commerce, however, commercialization of these ideas is still lacking.
“Given the amount of research that occurs here … we haven’t been in the past living up to our full potential,” said Secretary of Business and Economic Development Christian S. Johansson.
The report, titled “Enterprising States,” gave Maryland the highest ranking overall in the category of innovation and entrepreneurship. But in the subcategories of entrepreneurial activity and business birth rate, the state ranked 21st and 19th in the nation, respectively.
Innovation came into play with Maryland’s victory in the academic research and development subcategory, where it was ranked No. 1.
“We are innovating, but it’s not being followed up with commercialization,” said economist Anirban Basu, chairman and CEO of Sage Policy Group Inc. “You’ve got to bridge the academic world with the world of the marketplace.”
Translating research into business ventures is beneficial to the state, because it not only brings money to the researchers, but it also creates opportunities for new jobs, said Robert A. Rosenbaum, president and executive director of Maryland Technology Development Corp., better known as TEDCO.
“Companies that are less than 5 years old are responsible for the majority of job growth within the country,” said Rosenbaum.
In order to get these companies started, Maryland has created programs such as Innovate Maryland and InvestMaryland, the latter of which was mentioned in the “Enterprising States” report. However, Basu also said programs like InvestMaryland look past the core of the technology transfer problem.
“I am less convinced by the argument that one of the major impediments in Maryland is a lack of venture capital,” said Basu, “Venture capital is not flowing in Maryland … because the venture capitalists can’t find deals in Maryland.”
Basu also said that struggles with commercialization also stem from “the nature of the people conducting the research and their objectives.”
Rosenbaum agreed, saying that the goals of researchers at many state institutions do not align with the goals of entrepreneurs.
“I think for researchers … the end for them is that publication or that next research grant,” he said. “What needs to be created is incentives for researchers to actually do that commercialize-able research.”
One such incentive that will soon be available within the University System of Maryland is the opportunity to gain formal credit for commercialization when applying for tenure, said Rosenbaum.
As for those with the venture capital, investing in innovation developed through research is not always an attractive option.
“It’s very hard to find investors who are interested in funding at that early stage,” said Elana Fine, associate director of the Dingman Center for Entrepreneurship at the University of Maryland’s Robert H. Smith School of Business. “The risk is high in doing something so, so early.”
This is where Innovate Maryland and TEDCO come in. The first, an initiative passed during the 2012 General Assembly session, will work to take ideas from the research stage to a level that can be commercialized.
TEDCO, a quasi-state agency, works to create connections as well. “We are out in the business community … and we just play matchmaker,” said Rosenbaum.
The Dingman Center has also made an effort to connect innovators with entrepreneurs by reaching out to students throughout the University of Maryland, regardless of major. Fine said that many of the students who come to Dingman events, such as the weekly Pitch Dingman session, are from other colleges within the university, such as the College of Agriculture and Natural Resources or the A. James Clark School of Engineering.
Developing student entrepreneurs, said Fine, is Dingman’s most significant way of fueling Maryland’s future.
“If you can get that sense of accomplishment … even if it’s starting a T-shirt company during school … that will make these graduates much more likely either to join that start-up company or to start up something of their own,” she said.