Keynote for the 2022 MICHauto Summit, on startup innovation in Michigan
© 2022 Song FoundationIron ChefMichiganA Recipe forEconomicCompetition
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© 2022 Song FoundationFrom industrial to digital revolutionRank Metropolitan Statistical Area State Avg Earnings Metropolitan Statistical Area State Avg Earnings1 Bridgeport-Stamford-Norwalk CT $54,194 Bridgeport-Stamford-Norwalk CT $83,4702 Flint MI $53,463 San Jose-Sunnyvale-Santa Clara CA $81,5413 Detroit-Warren-Dearborn MI $53,290 San Francisco-Oakland-Hayward CA $76,6974 Midland MI $51,043 Washington-Arlington-Alexandria DC-VA $69,8905 Washington-Arlington-Alexandria DC-VA $50,093 Seattle-Tacoma-Bellevue WA $65,5806 Saginaw MI $49,469 Boston-Cambridge-Newton MA $65,1317 Midland TX $49,319 Trenton NJ $64,9398 Casper WY $49,310 New York-Newark-Jersey City NY-NJ $64,0559 Monroe MI $49,107 Boulder CO $61,16110 Bremerton-Silverdale WA $48,987 Baltimore-Columbia-Towson MD $60,418Source: Jonathan Gruber & Simon Johnson, Jump-Starting America1980 2016
© 2022 Song FoundationThe jobs we need to growSmall Main StBusinessesMedium Main StBusinessesEarly TechStartupsGrowth &Scale StartupsLargeEnterprisesTypical Employees < 10 10 – 50 3 – 50 50 – 1000 1000Typical Wages Annual:$10k – 30k$8 – $15 per hour,often only part-timeAnnual:$10k – $75kAnnual:$40k – $250k++ equity ownershipAnnual:$40k – $500k+ equity ownershipAnnual:$25k – $1mWidely varied,based on sectorWage Mobility Extremely limited Limited Strong Generally yesDepends on typeof companyOften yesDepends on typeof companyEmployee Benefits Rarely Sometimes Generally yes Generally yes Generally yesSource: Upsurge Baltimore 2022
© 2022 Song FoundationStartups create jobs at higher rates
© 2022 Song FoundationTop 20 global startup ecosystems: 2022Source: Startup Genome Global Startup Ecosystem Report 2022
© 2022 Song FoundationDetroit #1 emerging startup ecosystem: 2022Source: Startup Genome Advancing Greater Detroit’s Startup Ecosystem, 2022
© 2022 Song FoundationIngredients to startup ecosystemsSource: Jerome Engler, Global Clusters of Innovation
© 2022 Song FoundationPotential Tech HubsSource: Jonathan Gruber & Simon Johnson
© 2022 Song Foundation
© 2022 Song FoundationInnovation Hub StrategySSBCI 2.0: $10B via American Rescue Plan -Michigan allocated $236.9m, $75m going toMichigan Strategic Fund (toward VC, etc.)NSF Engines: $6.5B over 5 years:Up to $160m per hub to fund 10 years of R&D,translation, workforce developmentCHIPS and Science Act: $280B over 10 years:$11B in R&D, $39B in incentives, e.g.Intel $20-100b fab in OH,Micron $40-100b fab in Central NYAlso authorized $10 billion for regionalinnovation and technology hubsPlacemaking? Transit?Attracting / supporting / retaininghigh-growth founders?Build Back Better Regional Challenge:$1B via American Rescue Plan -Michigan awarded $52m for GlobalEpicenter of Mobility (GEM)
© 2022 Song FoundationSource: Vitaly Golomb, Ukraine Financial Forum 2018
© 2022 Song FoundationMICHIGAN (POP: 10M, GDP: $568B)CHALLENGESENTREPRENEURS: 165 VC-BACKED STARTUPS, ONLY +17% OVER 5 YEARSVENTURE CAPITAL: $3.7B UNDER MANAGEMENT, -31% OVER 5 YEARSEDUCATION: 18.2% RESIDENTS WITH BA DEGREES, VS. 20.3% NATIONALLYBRAIN DRAIN: 30% OF 2010-2018 GRADS LEFT, 60% AT UMSource: MVCA 2021 Annual Report, US Census 2019 American Community Survey, Detroit News Sept 2022
© 2022 Song FoundationMICHIGAN (POP: 10M, GDP: $568B)PRIORITIESENTREPRENEURS: FUND FOUNDER-LED PROGRAMS & ORGS, SMART ZONESVENTURE CAPITAL: REINVEST IN VC FUND-OF-FUNDS, SUPPORT ANGEL INVESTINGEDUCATION: MAKE COLLEGE AFFORDABLE, FUND EDUCATION (+$1B, 2000-LEVEL)BRAIN DRAIN: INVEST IN CITIES, PUBLIC INFRASTRUCTURE, REGIONAL TRANSIT
© 2022 Song Foundation2018
© 2022 Song FoundationTransitWalkable retail & entertainmentPublic safetyCultural amenitiesHousing optionsPublic spaces & infrastructurePlace Matters
© 2022 Song FoundationSilicon Valley works because there is such a highdensity of people working on startups and theyare inclined to help each other…One of the biggest misconceptions about us is thatyou need to have pre-existing connections to getvalue from the network.Remarkably, you don’t. Silicon Valley is a communityof outsiders that have come together.If you build something good, people will help you.– Sam Altman (YCombinator)Culture Matters