Potemkin Villages and finding value in the 2020s
The 2010s were a wild time, one where rhetoric championed by the President — “changing the world” through the collective force of “we” — was embraced and repackaged by startup entrepreneurs. The tech community took on a life of it’s own in the 2010s. Just one local tech company that found revenue, venture capital investment, and possible business sustainability found itself venerated by local lawmakers and a receptive press (many publications seemingly founded for this very purpose) in the 2010s.
Now it’s 2021.
It’s tough not to look back at that time period and wonder if it wasn’t all a charade. Nearly everything we’ve been told the last decade about tech entrepreneurs simply does not withstand scrutiny. Total factor productivity, often seen as a measure of technological advancement, in fact stagnated in the 2010s after decades of consistent growth. Rates of entrepreneurship continue to flatline after decades of decline. Techno-optimists spent much of the 2010s insisting that game changing technologies were the eve of widespread adoption; for many of these technologies, we’re still waiting.
Now many “visionary” 20-somethings in t-shirts, ones that by force of personality were going to upend markets and toss the Baby Boomers from power in the 2010s, are now in their 30s and 40s and probably a bit more humble (I’m an example).
Startup culture likely ended with the collapse of WeWork, but it wasn’t a waste. The visionaries we built up are now wiser and more capable leaders, and we collectively understand much more about how regions grow, having witnessed failed strategies during the 2010s. Now it’s time to reflect on what we’ve learned.
How change happens
Here is a person who has changed the world: Dr. Kati Kariko.
Kariko (with colleague Dr. Drew Weissman) is credited with discovering therapeutic use the messenger RNA (mRNA), the genetic code that instructs cells to produce proteins that trigger immune responses. She spent decades of her life researching mRNA at the University of Pennsylvania, hustling for every grant dollar she could find, never earning more than $60,000 a year, according to a New York Times profile. Said Dr. Anthony Fauci of Kariko, “She was…kind of obsessed with the concept of messenger RNA.”
Of course the Pfizer and Moderna COVID-19 vaccines both leverage mRNA technology. Dr. Kariko’s legacy will be measured in the millions of lives saved by her discoveries. And her legacy could grow. Trials on an mRNA HIV vaccine have now begun, and researchers have even explored a potential mRNA cancer vaccine.
Kariko reminds me of another “obsessed” researcher, Dr. George Crabtree, director of the Joint Center for Energy Storage Research at Argonne National Laboratory (JCESR). Since 2012 JCESR has researched new battery designs that may one day power renewable energy grids. Crabtree and his team work “atom by atom, molecule by molecule” as he once told me, looking for transformative materials that can dramatically enhance storage capacity of batteries.
I am not the first to suggest policymakers focus attention on researchers like Kariko and Crabtree and not tech entrepreneurs if we want to really change the world. I am also not the first to suggest that policymakers should invest in research and technology transfer before well-meaning but incomplete investments in entrepreneurial support organizations.
The Biden Administration will soon be issuing millions in “Build Back Better” grants, a $1 billion program that will support consortiums of state and local governments, economic development organizations, universities, and industry partners in 20–30 regions across the United States. Successful applicants will likely be required to show how they will engage local researchers and commercialize their inventions.
This program certainly appears to be inspired by the work of Simon Johnson (who served on Biden’s transition team) and Jonathan Gruber, authors of “Jump-Starting America,” a 2019 book that outlined how the federal government could fight economic agglomeration by dispersing support for R&D, then building nearby campuses to facilitate engagement with small businesses and catalyze localized technology transfer.
Villages, in other words.
Chicago’s Potemkin Village
The 2010s fed a lot of ambitions — mine was one. I deservedly got trounced in a congressional race I probably shouldn’t have run, and I built a nonprofit with aims of transforming the local economy of America’s third largest city. The latter venture didn’t end well either.
Invent2026 was a nonprofit economic development organization that we formed to catalyze Midwest economic growth by supporting startups commercializing technologies from research laboratories. This was a departure from other organizations in Chicago that instead focused attention on supporting entrepreneurs to develop business plans and attract venture capital investments.
We earned some initial support from the University of Illinois to get the organization started, operated it for a couple of years with a grant from the Department of Commerce (we were a subcontractor to another Chicago nonprofit on the grant), and hosted a showcase event for Chicago startups, and hosted another event where Dr. Crabtree discussed his work.
Invent2026 had some successes, but in the end, I was unable to raise enough philanthropic money to sustain it. I resigned last year and turned it over to my business partner (who later told me he had no intention of keeping the nonprofit going).
Invent2026 was an idea that failed. I failed. And like startup culture dictates, I took lessons from my failure and drove forward. The lessons I learned from Invent2026 inform the Harris School class I teach, and for that, I have no regrets.
Well, maybe one. I aggressively announced Invent2026’s presence in the Chicago entrepreneurial community by authoring several opinion pieces, one perhaps overly harsh in calling Chicago’s tech-focused open-floor working spaces “Chicago’s Potemkin Village.” Another piece I wrote in Crain’s Chicago Business warned Chicago’s leaders that the city’s economic development strategy — which relied heavily on the growth of several entrepreneurial support organizations — was clearly not working and that they were fooling themselves into thinking overwise. These opinion pieces were born out of a sense of frustration that no one was listening. They surely weren’t.
I still firmly believe the mission of the organization, to support growth through R&D and technology commercialization through startups, was the right one. I’m certain it was a better model than the then-incumbent model: building coworking spaces and business incubators, celebrating tech entrepreneurs and the very idea of tech entrepreneurship, providing counseling to young startup entrepreneurs, and rounding up venture capital to get these business up and running. The missing element was, and is, applied research.
-TD
— — —
“World War II’s Lesson for After the Pandemic” by Derek Thompson (The Atlantic).
“Why Studies of Insect Vision Will Change Your Life,” by Eric Haseltine (Psychology Today)
“The Geography of AI,” by Mark Muro and Sifan Liu (Brookings).
