< PreviousCu ing Edge N O W ME A NS‘Really Robust Amenities’ How the University of Maryland’s Discovery District convinced private investors to take a second look. RESEARCH P ARKSUniversity of Maryland’s A. James Clark HallPhoto by John T. Consoli courtesy of University of Maryland88 JULY 2018 SI T E S E L E C T IO Nby MARK ARENDmar k .ar end@ site s ele c tion.c omClose proximity to a host research university — check. Sustainably designed and preferably LEED-certifi ed buildings — check. A state-of-the-art telecom infrastructure — check. An offi ce of commercialization — check. ese used to defi ne a cutting-edge and competitive research park. Not anymore. Today’s “A list” parks, or districts, look more like towns, complete with transit, lodging, residential and retail. Besides those, the University of Maryland’s Discovery District in College Park will soon have coworking space, thanks to a recent partnership among the university, global coworking provider WeWork and Chesapeake Realty Partners. It will be WeWork’s fi rst college campus location. WeWork University of Maryland will off er coworking and offi ce space, including more than desks, conference rooms and communal areas. e space will include standard WeWork off erings, such as private offi ces, dedicated desks and hot desks with unlimited access to any available workspace.“We’ve always had a great location, our research park partners have always had a great relationship with the University of Maryland, we have a stop on the Washington Metro and proximity to a ,-student campus with , faculty and staff ,” says Ken Ullman, UMD’s chief strategy offi cer for economic development. “But we were missing really robust amenities.”Why do those matter?“If you’re a private-sector company and you’re competing for talent, that talent is being recruited to Seattle and Boston and Austin,” says Ullman. “ is region needed to show people a location where you can ride your bike to work, where’s there’s light rail and cool coff eeshops and restaurants. When your customers and investors come in from out of town, we have an amazing hotel and conference center that can host their meetings and conferences. We were missing that.”‘A Cool Place to Work’More than impressing customers and investors, it’s about attracting talent, Ullman stresses.“When I started talking three and a half years ago to well known companies in Silicon Valley about what it would take to get them to open a presence at the University of Maryland, I was told, ‘Great university, great location, we love the Washington, D.C., region. Most of us have a presence there now. But the kind of employees we’re attracting want to go to work in a cool place.’ at did have an impact on our thinking about attracting a coworking space provider like WeWork. When folks in that world hear you say ‘WeWork,’ their eyebrows perk up and they want to hear more.”And they’ll fi nd more at UMD’s Discovery District, which is hosting the International Conference of the Association of University Research Parks in October. It’s long been a location for federal-agency-sourced research. Tenants include the Intelligence Advanced Research Projects Activity (IARPA), an agency of the Offi ce of the Director of National Intelligence; the National Oceanic and Atmospheric Administration’s climate prediction center; and the FDA’s food safety division and nutrition headquarters among others. “We’ve also had a strong relationship with the private sector, but we believe we’re just scratching the surface where those partnerships are concerned,” says Ullman. “We knew we had to create a more dynamic ecosystem before we could have those conversations with private-sector leaders.” e conversations include true location amenities, he explains, like a four-star hotel that recently opened. Or Maryland Transit’s Purple Line light rail that runs through the campus and connects to Amtrak in New Carrollton and an existing Washington Metro station. New restaurants and coff eeshops.“We feel we’ve put into place a number of successful real estate developments that make us an even more compelling place for the private sector,” he says.Ken Ullman, UMD’s chief strategy of cer for economic developmentPhoto courtesy of University of Maryland92 JULY 2018 SI T E S E L E C T IO NWhere Capital One Capital Is GoingIt’s working. Recently inked leases for digs in the Discovery District include space for Capital One’s new innovation lab, which the university says is designed to give UMD students the opportunity to apply what they are learning in the classroom — in topics like data science, technology and automation — to real-world problems and experiences.Capital One has also invested $ million through an endowment gift to help advance machine learning leadership at the university. e gift’s impact includes $. million used to endow a faculty chair in the Department of Computer Science — in FinTech machine learning specifi cally — and $, to help support research and educational initiatives in machine learning, data analytics and cybersecurity. In addition, the university will collaborate with Capital One to develop academic courses off ered through its First-Year Innovation & Research Experience (FIRE) program. Better yet, Maryland will match cents on the dollar any gift that endows faculty chairs or faculty members in areas of economic need. at resulted in $. million more for the endowment.“ e opportunities that this partnership will bring to UMD will have a tremendous impact on our students’ ability to meet urgent workforce needs,” said UMD Senior Vice President and Provost Mary Ann Rankin at the December announcement. “ is partnership will not only help attract and retain top faculty and students, but it will also propel UMD to national prominence and excellence in these critically important fi elds.”Adam Wenchel, Capital One’s vice president of AI and data innovation, put it this way: “We are thrilled to extend our long-standing partnership with the University of Maryland to this important initiative, which will further position the University as one of the leading academic institutions and talent hubs for machine learning, data analytics, and cybersecurity not only in the region, but in the nation.” e partnership is part of the university’s Greater College Park initiative, a $-billion public-private investment to rapidly revitalize the Baltimore Avenue corridor and academic campus, which includes creating a dynamic public-private research hub. Capital One is the fi rst, major private-sector anchor to join UMD’s Discovery District, leasing , sq. ft. in the “Diamondback Garage” — a mixed-use development located behind e Hotel at UMD. Capital One will occupy the space in August, adjacent to UMD’s new computer science building.“ at proximity, that back and forth with faculty members, with student interns working collaboratively on challenges for them, is a model we are fi nding signifi cant interest in from other corporate partners as well,” notes Ullman. Such as? At press time, Adobe was fi nalizing arrangements for a software research lab in the Discovery District. Already in place are quantum computing company IonQ; Immuta, an AI data management software provider with about employees in College Park; and BlueVoyant, a cybersecurity company that is establishing its security operation center in the District.“It’s not just a place for federal agencies anymore,” says Ullman. “It’s a place for dynamic startups and existing companies that want access to talent.” The Vigilante Coffee Company is an award winning roastery with a café in UMD’s Discovery District.Photo by Stephanie S. Cordle courtesy of University of Maryland S I T E S E L E C T I O N JULY 2018 93REGIONAL ST ARTUP ECOSYSTEMSThe Next Tech Startup Hub Is EverywhereEveryone wants to run a startup — even the big boys and girls.The KPMG U.S. CEO Outlook 2018 report, based on a survey of 400 CEOs, reports that 77 percent are “very confident” in growth prospects over the next three years (up from just 46 percent a year ago), and the entrepreneurial mindset is a key confidence booster: 46 percent plan to set up accelerator or incubator programs for startups.In June, London Tech Week was highlighted by Prime Minister Theresa May’s announcement of a new £2.5-billion ($3.3-billion) British Patient Capital program to help UK companies with high growth potential to access the long-term investment they need to grow and go global; and a new Start-Up Visa for entrepreneurs.“The measures we are announcing today will allow innovative British start-ups to invest in their future – and in the UK – by hiring more skilled people, expanding their business and exporting their expertise across the world,” said May.Across the pond, Campbell Soup Company’s reorganization includes a new “Accelerator unit” to speed innovation, incubate small brands and startups and cultivate external partnerships. Walmart opened its first technology incubator in December 2017 in an old, open warehouse in downtown Austin, Texas, because of the area’s attractiveness to millennials and its leadership as a tech hub — real estate consultancy Savills in 2017 ranked it No. 1 among 22 global tech cities. The center “features a startup-like working environment.”Microsoft just invested $50 million in a 150-employee technology center in the increasingly robust Cortex Innovation Community in the Central West End neighborhood in St. Louis, citing the city’s “booming technology scene” and the opportunity by ADAM BRUNSadam.br uns @ site s ele c tion.c om94 JULY 2018 SI T E S E L E C T IO Nto work with startups. Brandywine Realty Trust and LiquidSpace in May announced a partnership to “meet the growing demand for flexible office from startups and enterprises in Philadelphia and beyond.” And AOL founder Steve Case’s Revolution organization — known for its Rise of the Rest tours highlighting innovation hubs beyond the U.S. coastlines — continues its barnstorming ways, most recently making a road trip that hit Dallas; Memphis, Birmingham, Chattanooga and Louisville with a combination of entrepreneurial cheerleading backed by their very real cash investments in those areas’ startups.It’s In the GenomeGiven all of these converging strands, the experts at the Global Entrepreneurship Network (GEN) and Bay Area consultancy Startup Genome are onto something. This spring they released their second annual Global Startup Ecosystem Report, ranking metro-area clusters or hubs within 12 sub-sectors with the help of data from Crunchbase, Tech Nation, Orb Intelligence and Dealroom.“We looked at about 1 million companies globally,” says Arnobio Morelix, Startup Genome’s director of research. That data was supplemented by an annual survey of around Startup Sub-Sector LifecycleA lifecycle look at the fastest and slowest growing startup sub-sectorsDeclineMatureAdvanced Mfg. & RoboticsBiotechCleantechDigital MediaAdtechGamingBlockchainAI, Big Data & AnalyticsHealth & Life SciencesFintechEdtech200%150%100%50%0%-50%100% 150% 200% 250%Early Stage Growth (5 years)Exits Growth (5 years)Source: Startup Genome Los AngelesBeijingNew York CityTel AvivSydneyLondonTorontoSingaporeEntrepreneur Connections and Global Market ReachBubble size indicates the percentage of inbound Entrepreneur ConnectionsSilicon Valley40%35%30%25%20%15%10%5%00 2 4 6 8 10 12Global Market Reach(% of out of Continent Users)Global Connectedness (number of quality relationships with founders from top ecosystems)DeclineGrowthBiotechCleantechHealth & Life SciencesFintechEdtechDigital MediaAdtechGamingAIAgtech & New Food S I T E S E L E C T I O N JULY 2018 9710,000 startup founders, and dozens of interviews with experts on the report’s 12 sectors and approximately 100 ecosystems. “This is the largest startup ecosystem study ever done,” says Morelix.Here, with Startup Genome’s permission, we present an adapted section of the 252-pp. report’s findings and rankings. To access the entire report, visit startupgenome.com:The global startup revolution continues to grow. Global venture capital investments in startups hit a decade high in 2017, with over $140 billion invested. Total value creation of the global startup economy from 2015 to 2017 reached $2.3 trillion — a 25.6-percent increase from the 2014 to 2016 period.Underneath this continued growth, fundamental shifts are occurring. The types of companies that fueled the first and second generation of global startup ecosystems — social media apps, digital media, and other pure internet companies — are declining.Top startup hubs like Silicon Valley, London, and New York continue to dominate top-level activity and maintain their status as the top performers for most sub-sectors. But we see strong up-and-coming ecosystems in specific sectors like Fintech (Frankfurt, Germany), Cybersecurity (Tel Aviv, Prague, Toronto) and Blockchain (Vancouver, London, Phoenix). The shifts in the startup map, both geographic and economic, are signals that we are heading into a new era of tech.In this new era, successful startups will do one of two things: 1) Tackle specific Third Wave verticals — think Uber for mobility or Airbnb for hospitality — or 2) Rely on Deep Tech — i.e. build businesses through technological breakthroughs, e.g. distributed ledgers, AI, or Life Sciences. We see this rise of Third Wave and Deep Tech clearly in the data for sub-sector growth (see graph, p. 94).East vs. West: The Rise of ChinaA major way we see the map of entrepreneurship changing globally with new hubs of excellence is the increase of activity in Asia. For the past six years, the share of funding going to Asia-Pacific countries grew, while the U.S. share declined. In 2017, VC funding for startups in the United States and in the Asia-Pacific region was even, with each accounting for 42 percent of investment value. China is the primary growth driver in this shift. In 2014, only 13.9 percent of current unicorns were from China. In 2017 and 2018 so far, that number has grown to 35 percent, while for the United States it has decreased from 61.1 percent to 41.3 percent. The U.S. still dominates in unicorn exits, however: In 2016-2017, 65 percent were from the United States.To build the entrepreneurship ecosystems of the future, the key takeaway in this new era of tech is that ecosystem builders need to not only look at tech as a whole, but pay attention to and invest in specific startup sub-sectors. A new World Bank Group report from members of the Global Entrepreneurship Research Network (GERN) surveyed 423 entrepreneurs in the West Bank and Gaza in order to map the ecosystem in this startlingly life-like image. The GERN Ecosystem Connections Mapping project also is mapping ecosystems in Cairo, Bogota, Beirut, Dar Es Salaam, Singapore, Santiago, Medellin, Palestine and New York City.Image courtesy of World Bank GroupConnections in the West Bank and Gaza EcosystemNext >