Governor might keep job by helping create them
July 10, 2006
BY MICHAEL KRAUSS
Gov. Blagojevich is
backing innovation and entrepreneurship. It might help him keep
his job. It might help you find a job. Last week, Blagojevich
announced a $500,000 investment in ARCH Development Partners,
which funds early stage ventures in partnership with universities
and public sector agencies. The money backs ARCH investments in
emerging companies including Northfield-based Akoya, a software
company spun out of technology from Peoria-based Caterpillar Inc.
The state funds augment a $450,000 investment ARCH made previously
makes cost management software and has 15 employees. That number
is expected to reach 70 employees in 18 months.
Says Blagojevich, "Many
of tomorrow's jobs will come from new technology spin-outs. We
need to provide entrepreneurs with the tools they need to turn
cutting-edge research into successful new companies."
Blagojevich wants to
close Illinois' early stage venture capital gap. He also wants
to win an election this fall.
more state investments
The governor also announced
grants of $445,000 for four companies focused on homeland security
and software. Cognitor received $120,000 to commercialize its
transportation security system. Information Development Consultants
received $125,000 to enhance its government soft-ware application.
Intellext got $100,000 to commercialize its Watson product for
intelligence analysis. TransLumen Technologies got $100,000 to
update its product for use by homeland security systems integrators.
Last week's announcements
come on the heels of the formation of a $1 million Innovative
Now! program financed with state funds.
Innovate Now! is led
by CDW CEO John Edwardson, Mesirow Financial CEO James Tyree,
University of Chicago President Robert Zimmer and Royal Group
President Robert McIlvaine. Innovate Now! aims to make Chicago
a globally recognized innovation center. The program focuses initially
on boosting innovation in the manufacturing sector.
innovation might be the ticket to push Blagojevich ahead of his
Republican opponent, Treasurer Judy Baar Topinka. The moves blunt
one of Topinka's successes as treasurer, the creation of the $50
million Technology Development Fund, which invests in Illinois
Regardless of the politics
involved, investment in innovation is a smart move by Illinois
politicians on both sides of the aisle, especially when the investments
are made through companies such as ARCH Development or the Northern
Trust, in the case of the Technology Development Fund. Direct
company grants are riskier and more controversial.
Jack Lavin, director
of the Illinois Department of Commerce and Economic Opportunity,
says, "There's a tremendous gap in early stage venture funding.
Illinois needs to get access to capital. This is a way to do it.
"Akoya has a new
innovative product. Innovation leads to investment, to jobs and
a better quality of life for the people in Illinois."
Lavin has the backing
of the Illinois Venture Capital Association on his ARCH investment.
IVCA Executive Director Maura O'Hara, says, "We're thrilled
the state is putting funding into early stage focused venture
funds like ARCH."
According to the IVCA,
in 2005 Illinois companies received only $245 million in venture
capital representing 1 percent of total U.S. venture investment.
Only 15 percent or $38 million of those funds were invested in
seed or early stage companies. Too little investment in early
stage companies could mean too few jobs in Illinois.
"The fact that
DCEO chose to invest this money with an experienced venture firm
rather than directly in early stage companies indicates a very
thoughtful approach to jump-starting early stage company growth,"
Cynics say it's a lot
of election-year noise. Free market advocates argue that government
should stay out of the commercial sector. Simply lower taxes.
Create a good environment for business. They could be right.
I think the competition
to worry about is from India and China; not between Republicans
and Democrats. Lavin's right when he says, "Tireless innovation
is the key to survival in the new global economy." If government
can catalyze innovation, entrepreneurship and investment in Illinois,
I say go for it.
I want the next Google,
Microsoft or Netscape founded here, not out west.
Krauss is a Chicago area tech writer and consultant.