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Enabling Entrepreneurship in College Towns

August 28, 2014

As a wave of new freshmen begins to enter the halls of college campuses, a new trend is emerging – students staying. While the idea of students staying an extra year or two might make some parents cringe, in reality, college towns have proven to be an ideal environment not just for young people, but for young companies as well. Student entrepreneurs are becoming a critical component of regional innovation ecosystems, and as a result, universities and their respective cities throughout the country are focusing not only on growing and cultivating their companies, but also on retaining them.

In an article earlier this month, SSTI focused on the role that universities play in technology-based economic development within their respective college town’s innovation ecosystem.  Although universities have long sought to commercialize technologies stemming from faculty research, supporting student or young alumni ventures is a more recent phenomenon. College towns have consistently been recognized as an exporter of talented workers, yet in order to prosper, more attention is being paid to their ability to retain them. As young entrepreneurs continue to flock to startup havens such as Silicon Valley or New York City, their retention is of particular importance to the sustained economic growth of college towns. 

More resources than ever before are made available by universities and college towns to assist young entrepreneurs. Incubators and accelerators have become a particularly popular strategy. In 2012, The New York Times covered this extensively, noting a shift in focus away from exclusively targeting graduate student or faculty ideas, and instead focusing on the role of the undergraduate entrepreneur. According to data from the National Business Incubation Association, as cited in the article, in 2012 about one-third of the 1,250 business incubators in the United States were at universities, up from one-fifth in 2006. Oftentimes, these university sponsored incubators operate in conjunction with other incubators in the city. For example, in Ann Arbor, MI, a city with just over 100,000 people, the city’s economic development organization sponsors the Ann Arbor Spark accelerator, the University of Michigan sponsors the TechArb incubator, while another shared workspace, Tech Brewery, is privately sponsored. Although the city is known more as a college town above all else, community leaders in both the public, private, and academic sector are actively working to retain and attract potential entrepreneurs. 

Incubators and accelerators play multiple roles as a key resource for emerging entrepreneurs in college towns. As an essential component of the region’s entrepreneurial ecosystem, they provide tangible benefits such as funding support and physical amenities like offices or labs larger than a dorm room. Furthermore, they also offer “soft” amenities including business plan assistance, connections to capital, and networking. Because college towns are oftentimes a much smaller, more contained economic ecosystem, networking can prove to be even more valuable – communities are more intimate, resources may be more readily available, and it’s easier for young companies with high growth potential to stand out.  According to Stacey Keefe, executive director at RvD Idea at Syracuse University, by staying close to the college town where the business was formed, “you get your feet off the ground with the people who have been supporting you and know you and are always looking out for you.”

Examples of innovative “town and gown” incubators and accelerators – or those where both the city and the university have an active stake – are plentiful.  The USC/Columbia Technology Incubator, sponsored by the University of South Carolina, the City of Columbia, and other area governments, is home to nearly 50 companies, produces successful, financially viable, and freestanding businesses, and has helped to create hundreds of jobs in the state’s Midlands region. Launch Chapel Hill, a business accelerator founded by the town of Chapel Hill, the Chapel Hill Downtown Partnership, North Carolina’s Orange County, and the University of North Carolina at Chapel Hill, offers a bi-annual program for entrepreneurs hoping to grow and stay in the city, with access to experts, office space and support, and connections to business resources and investment capital. The Hatch, sponsored by Michigan State University and the city of East Lansing, likewise focuses on enabling student entrepreneurs through connections, collaboration, and access to capital, in addition to the resources offered by the university’s Technology Innovation Center located just next door.

Perhaps no city has made as concerted an effort to retain college graduates quite like Philadelphia. Although considered an unconventional college town due to its size and diverse economy, the city is also home to more than 80 colleges and has the second-largest student concentration on the East Coast – granting nearly 90,000 degrees in 2012. Central to the city’s retention of recent graduates is the coordinated approach of Campus Philly, a nonprofit organization that partners with regional colleges and universities to attract engage and retain college students in Greater Philadelphia. One notable example of how Campus Philly has worked to foster entrepreneurship is by partnering to establish PHL: Start Stay Grow, an initiative that forges direct relationships between students and Philadelphia’s startup community.  The first event, held in October 2013, attracted over 100 young entrepreneurs from nearby colleges and universities and informed them of the region’s innovation ecosystem, including incubators and accelerators, university resources for entrepreneurial assistance, and ways to access early stage capital, among others. The city is also home to the nation’s oldest and largest urban research park, the University City Science Center, supported by dozens of public, private, and university partners. In late 2012, First Round Capital established the Dorm Room Fund, a seed fund run by students to invest in student-run startups. The fund originated in Philadelphia and has since expanded to New York City, Boston, and Silicon Valley.  Philadelphia doesn’t just expect its recent graduates to join the workforce; it wants them to directly contribute to the region’s entrepreneurial ecosystem.

Many young entrepreneurs will still end up flocking to places like Silicon Valley or New York – both of which have renowned innovation ecosystems where universities also play a vital role. Despite this, the emerging trend of the retained student entrepreneur is worthy of attention. More resources are available to student entrepreneurs and recent graduates than ever before, especially in college towns. These cities all have their own innovation ecosystem that young entrepreneurs feel innately connected to, and as additional resources are made available to them, their retention will inevitably continue.


entrepreneurship, metros, higher ed