CEO Podcast: Stephen Forrest, University of Michigan

Paul Krutko: Welcome to Ann SPARK’s CEO podcast, Conversations on Economic Opportunity. My name is Paul Krutko and I’m the president and CEO of Ann Arbor SPARK.

In celebration of Ann SPARK’s 20th anniversary, we’re going to have a series of podcast episodes with our past chairpersons of the SPARK Board of Directors. Each will share their unique perspectives on SPARK’s impact over the past two decades, proud moments during their tenure, and their thoughts on the future of the Ann Arbor region.

Today we welcome Dr. Stephen Forrest. Stephen is the Peter A. Franken Distinguished University Professor at the University of Michigan. Renowned for inventing phosphorescent OLEDs and his work in organic LEDs and thin films, he has authored nearly 665 papers, holds 388 patents, and co-founded several companies. He is also actively involved in various advisory boards and committees for industry including Applied Materials and Universal Display Corporation.  He published his first book on organic electronics in 2020 and is working on a second.  

Steve was Ann Arbor SPARK’s board chair from 2009 to 2012, and at that time he was vice president of research at the University of Michigan, which was very important in our founding in 2004. And just as a little off-script personal note, Steve was the chair that brought me here to Ann Arbor for my time as CEO. That’s continued now for 13 years. So very important in terms of my career and I’m very pleased to have this opportunity to chat with him again. So Steve, thanks for joining us.

Stephen Forrest: Thank you, Paul.

Paul: So what we want to do is take you back on sort of memory lane here in terms of the origins of SPARK. What was your initial involvement with SPARK and what motivated that involvement?

Stephen: Well, I was a professor at Princeton and I decided to move to the University of Michigan and when I moved here I moved as vice president for research. This was a time when Mary Sue Coleman was president [of the University of Michigan and one of the reasons I was hired by Mary Sue and the rest of the team was because of my background in entrepreneurialism, starting companies, bringing innovation from the laboratory to the marketplace. And so it was very natural for Mary Sue to encourage me to work with SPARK, which was really a very important partnership that had developed between the university. We were one of the co-founders of this at the time, Rick Snyder was the CEO and when I first came to SPARK, Mike Finney was I guess sitting in your position at the time, and Mike always loved to tell the story that when I went to my first meeting at SPARK, our first board meeting with Rick chairing it, that I went to Mike afterwards and said, what is this SPARK thing all about?

Well, I quickly became a convert. It was really an exciting opportunity for me to learn about the community but also to really understand how deeply, particularly Mary Sue Coleman, felt about university partnerships, which aligned completely with my own feelings. So that was the first interaction I had with SPARK. Of course, I was on the board until Rick decided to go into politics and run for governor. So he stepped down and the board of director chairmanship turned over to me, which I was really excited about doing and I lived through some very exciting times during that period.

Paul: Well, that takes us maybe to the next question. Do you have particularly memorable SPARK experiences or projects or things that stand out to you both in your overall involvement, but maybe during the time when you were chair?

Stephen: Many, not the least of which was chairing a committee to find a new, I guess president of SPARK. Mike Finney was being drafted by now-governor Rick Snyder to be head of MEDC. And so we chaired a committee and of course that brought you in, Paul, which I am very pleased, was a terrific hire.

But there were other things that went on, too, that were extremely important. I think the biggest thing that hit was Pfizer abandoning its property, which is now known as the North Campus Research Complex. And I worked very closely, I think initially with Mike and then I think eventually with you Paul, I can’t quite remember all the details and the timeline, but we worked very, very closely trying to find a commercial buyer. We did not want to see that level of economic activity and industrial activity leave the state of Michigan.

It was a very, very tough time for us. It was really a body blow in many respects when Pfizer announced this departure. However, as the Chinese love to say, a crisis is also an opportunity. And after working very closely with SPARK, working with bringing in many different potential bidders on that property, we finally decided at the University that wasn’t going to happen. And so the University then went to Pfizer and purchased the property and that really was an opportunity. The 2200 employees who vacated the premises were quickly backfilled with many more University employees. We were able to use, from my office as vice president for research, we were able to use part of the Pfizer facility to establish our office of tech transfer over there, which became much more integrated with the medical school and with the engineering school. So everything just fell into alignment.

It took time, it was painful, and SPARK was always there as a partner at every step of the road, encouraging us, supporting us. This is very important from a university perspective because you have a culture at a university which is sometimes immovable. And having SPARK now, not just as our partial spinoff, if I could say, but now really as somebody who came as the organization that came back and became an ally and a very powerful one for our making the necessary cultural changes at the university to make us more entrepreneurial, more accepting of working with industry, which after all is essentially our state mandate.

One other thing I’d like to talk about was we established — this was under Mike Finney’s leadership —the center that cited Esperion, too, with Roger Newton’s enterprise. And that was very risky from a financial perspective from SPARK, but Mike was, he was a risk taker and I was very pleased to be part of helping with that decision and pushing it forward. And it became quite a successful enterprise, which I think has now become public and everything else like that. But there were other companies that also existed in that facility.

Paul: Well, it was important— just to give you help the audience understand that a little bit and what you were describing that you were involved in — Pfizer had built a purpose-built facility for Roger Newton to do the research in. It was a fully blown laboratory to meet federal standards. And what you and Mike and the board did at that time was Pfizer basically was going to abandon that as well. We talked about North Campus— this is a building in Plymouth right across the border. The board stepped in and saved that facility. One of the things we talk a lot about is when Pfizer said to the people here, well, we’re decamping this operation, I think it was to Connecticut, I’m not sure, there were many people who said, we love Ann Arbor, we’re going to figure out how to do our career here. And what that facility did, it is now, as you described, we spun it out to the state of Michigan.It’s the Michigan Life Science Innovation Center, and it’s filled with early-stage companies, including Roger’s successor company, that created multiple life science kinds of early-stage and beyond early-stage companies here in Ann Arbor.

So it’s really the children of Pfizer, if you want to describe it that way. But it goes to speak to the people wanted to stay here, they wanted to have the kind of lifestyle here in Ann Arbor. And we, as you said, it was a crisis, but it turned into an opportunity. So it’s a real legacy.

So from your perch, because you were involved early on, how do you assess our impact, SPARK’s impact on the Ann Arbor region and the broader community? Because I think you’ve been here over an evolution as you described in entrepreneurial sensibilities at the university, but I think in the larger community.

Stephen: Well, I think SPARK has had a lot of impacts. Not all of them are terribly visible because they’re happening and SPARK does not necessarily get identified with all of the companies that it helps to site here. But there is no question that Ann Arbor has changed in this period from a, I would say, very modestly entrepreneurial environment to one that is very powerful for a city this size. Now, SPARK alone didn’t do that. The University played a large role. The Center for Entrepreneurship was very much part of this, but it was the sort of cultural momentum that was created in SPARK was definitely a center of that.

So now the University, which was not considered a very welcoming place for entrepreneurs, now, both of very many startups, probably one per month or even more at this point, some of them extremely successful, and all of them at some point or other cross paths and have, need, required help from SPARK to really establish themselves in the region. So I think SPARK is a very important citizen of our area. And I also like the fact that the SPARK brand of “Ann Arbor USA” sort of decouples thinking of Michigan, of being just the center of the auto industry, which it certainly is and which is extremely important, but that we have a wider vision of what this region can become. And I think SPARK has definitely been a catalyst.

Paul: Given all the things that you’ve done in your career, I guess I wanted to ask you, what are some key lessons that you would share with people in the community who may get active in the way that you did with an entity like SPARK or advancing community initiatives? What are some key lessons you’ve learned about that over your career?

Stephen: The biggest lesson I have learned through all of this, including working with SPARK, is you need to take chances. You need to take risks. When you have to do something like walk out on a limb and establish the Biosciences Center, just as one example, well, not all the i’s are dotted and the t’s crossed, and you have to do things on taking a chance of, we hope it’s going to work. So of course you have to be very calculating in this. You can’t take silly chances, but you have to believe in yourself. And I think that goes for all entrepreneurial activities and SPARK really embodies that. It knows how to take risks, calculated risks, and it’s only from those things do really big things happen. The Pfizer purchase was a really big risk. Looking in hindsight, it wasn’t a risk at all, but at the time, it gave you butterflies daily.

And so the thing that I learned throughout my own career of starting companies and actually in doing research in the laboratory, is you must step outside of your comfort zone. And I’m really pleased that SPARK is not the ordinary economic development organization, which sometimes they operate a bit like the Chamber of Commerce. SPARK has to go out there and actually take chances and make things happen. So they embody that entrepreneurial spirit, and I think that’s contagious to the community in general, and it encourages and provides some comfort, let’s say to budding entrepreneurs.

Paul: Yeah, I appreciate that. I think one of the things that you as an early founder setting the path forward with Governor Snyder was that we often say we walk our own talk. We believe in being entrepreneurial as an organization. And that means sometimes you do take risks, as you said, but also being an entrepreneur says, well, that’s something that we shouldn’t be doing anymore, right? Let’s move into fill a gap that the community needs. And I appreciate that was the course that was set for this organization those many years ago, and we’ve stuck to it to this point. We perceive ourselves as, despite the amount of government funding that we help manage, we perceive ourselves at a core, a private entrepreneurial kind of effort. And it’s reflective of the many companies that you were able to, and our past chairs have been able to, encourage to be funders of SPARK.

A lot of people don’t realize how much private sector support there is. But I do want to say and acknowledge with you because you were obviously involved in setting that beyond the LDFA, beyond the entrepreneurial funding, the top funder for SPARK is the University of Michigan. The University of Michigan put the money where its mouth was, and I thank you for setting that in place and that’s continued at this time.

So again, from your perspective, what do you think the region’s going to look like over the next 20 years? What do you see for the Ann Arbor region?

Stephen: That’s a very good question. I think that we’re certainly broadening out from when I started here. It was completely automotive-centric. There was really nothing else but that. There was of course Pfizer and the therapeutics, but they played a fairly secondary role to the importance of auto. And the importance of auto has not gone down. As a matter of fact, it’s gone up quite a bit because of the electrification of the vehicles and so on. And one of the things I was lucky enough to be involved in as vice president for research was to invest in our test track. Another very interesting collaboration with SPARK, and with you Paul, during that period, a test track at the University as well as at Willow Run that I believe was under Cynthia Wilbanks’ tenure. But in addition to that, electrification of vehicles really brings in all kinds of different technologies and they’re really ones that pitch to our strength: artificial intelligence, highly intricate wireless systems, and so on.

And I have seen the evolution of Ann Arbor of moving much more into the larger electronics realm, which is now with the CHIPS Act and everything else, just becomes more and more important to the national economy. And I would really like to see that grow and take hold.

I think one of the challenges we have in Ann Arbor that we talked about way back when I came in 2006 and we’re still talking about it today, is population. We always wanted to be, and I think we still do want to be like Austin, Texas. It’s just really hard. 2 million people versus 120,000 people. There’s no contest. So we have to understand that. Of course, we do have a lot of electronics companies moving in. I think one of the most important is KLA, but we have to, I hate to say, modulate our ambition based on our population, but I think we have to shape our ambitions by our population. It doesn’t mean we don’t have to be a global player, which I think we’re becoming, but we can’t necessarily compete with high-population centers. It just is one of those things about economic development that it’s not just having people in a large region, it’s having them clustered and effective. And those are hard barriers that we constantly have to think about as we go forward. But we shouldn’t, again, consider this to be an overriding disadvantage. It’s just one of the challenges that we face.

Paul: And there’s lessons to be learned from a community like Austin. I mean, in my past career in other cities that I had the responsibility for economic development in, we would take study groups to Austin and they would tell you their population has doubled every 10 years back since it was just a bunch of ranches. That kind of growth then creates all kinds of sustainability challenges. And I think one of the advantages we have here is the scale allows us to grow in a way that doesn’t potentially create all the negative aspects of high growth, whether it be housing cost or transportation, those kinds of issues. So I think we’re at a size that we can be really dynamic, as you said, on a global scale, but we can kind of keep the things that make this a very attractive place that we all want to live for sure.

Stephen: Well, no question that this is an attractive place to live, and I think that is a big, that’s why, as you mentioned earlier, a lot of the Pfizer employees just didn’t want to move, and that created enormous opportunities for us here.

Paul: I think the other thing that’s a real important piece that we’ve been emphasizing recently, which would be very dear to your heart, is that we’ve seen that our sweet spot is to help companies locate R&D facilities here who want to be close to the resources, the university and the talents here. So we potentially aren’t the place where people are going to make things, but we’re the place where they’re going to design them, create them based on the research here. So KLA, you mentioned, Wacker Chemical recently, Sartorius, they’re all in different technology spaces, but the commonality is they’re attracted to this as a place and they’re attracted to the adjacency to the University. So I think that’s a really important piece of what we’ve been working on recently.

But you talked about this a little bit as we close out here. You talked a little bit about one of the things you learned is the importance of risk-taking. Do you have any other thoughts, advice for aspiring folks and future leaders here at SPARK or in the community beyond the notion of it’s important to understand that sometimes when we take risks, we might fail, but if we don’t try, we won’t succeed. So any other thoughts in that regard?

Stephen: Well, the other thing that I have learned through all of this before I came here as an independent entrepreneur and then when I came to Michigan working with SPARK and so on, is that entrepreneurialism and company building is a team sport. It’s not an individual thing. And we have a lot of elements in our region that are ready to join your team. And of course, SPARK is foremost among them. So one should not feel lonely in this activity. One should feel that they’re part of a family and SPARK, the University, the other companies, the depth of experience, the Center for Entrepreneurship, you name it, there are so many pieces that one can rely upon and put together to build an activity, a company. And actually, my most fundamental experience with that was with my partner in my first company, which was Sensors Unlimited. It wasn’t quite my first company, but we’ll stick with that for now. And Greg Olsson was my partner in this, and he felt that if he could get something done by somebody else, that’s the way he should go. And of course, that somebody else was me, but we made a bridge between the company and the University with people moving seamlessly across the boundaries every day, sited at both locations. It was a first for Princeton, it turned out it was pretty much a first for Michigan, too, in that sense of working.

So I think that if you’re an entrepreneur and in this area, you just have to recognize that there are many ways that you can reach out and get a lot of assistance, which reduces the risk dramatically from doing it all on your own. And SPARK is really there and has always been there to help.

Paul: Well, Steve, thank you so much for spending time with us. Are there any final thoughts that you have before we close out our conversation?

Stephen: Well, I would congratulate SPARK on its 20th anniversary. I have to admit that after leaving my position as vice president for research, that I have lost a little bit of contact and I’m looking forward to the upcoming events and year and see if those could be reestablished in some way.

Paul: Well, that would be great. We know, though, that you have a great deal of research interests and things you’re involved in and boards and book writing and all that. So any time we can get with you is precious, and we appreciate you taking time today.

Stephen: Thank you, Paul. It’s been a pleasure.

Paul: Well, again, we want to make sure that we do acknowledge Steve’s dedication and tireless efforts that have been crucial to SPARK’s growth and prosperity, and we do thank him for everything he’s done to support the region’s economic success.

I want to thank our audience for listening and learning more about those leaders and organizations working hard to create the Ann Arbor region’s economic future. These conversations are brought to you by Ann Arbor SPARK. For more information about Ann Arbor SPARK, you can find us on the web at annarborusa.org and also on Facebook, Instagram, and LinkedIn.