CEO Podcast: Dr. Santa Ono, President of the University of Michigan

Paul Krutko: Welcome to Ann Arbor SPARK’s CEO podcast, conversations on economic opportunity. My name is Paul Krutko and I’m the president and CEO of Ann Arbor SPARK. Welcome to a series of conversations with key leaders from key sectors.

Joining me today is Dr. Santa J. Ono, the newly appointed 15th president of the University of Michigan. President Ono has been a prominent leader in higher education in the United States and Canada as president of the University of Cincinnati and the University of British Columbia. He’s also a leading vision researcher known for his pioneering work in experimental medicine, specifically the areas of the immune system and eye disease. In addition to his duties as president, Dr. Ono holds a professorship in ophthalmology and visual sciences at the University of Michigan Medical School.

Thanks for taking time out of your busy schedule to talk with us today, President Ono, and welcome to Ann Arbor. So we’re just really pleased to welcome you and have you participate in this podcast. So, let’s get started!

We got some questions for you that we are really interested to hear your views. So one is: UofM’s status as one of the top public research universities in the United States, in terms of expenditures, has been a major driver of our economic success in the Ann Arbor region for the past two decades. Technology transfer and corporate research engagement, now embodied in your Innovation Partnerships team, have been vital components in creating, growing, and attracting technology-based companies for our region’s growth. What in your experience is important for our audience to understand about these processes, and what are the ways you’ve seen that occur in your career?

President Ono: Well, first of all, thank you so much for the question. And as you said, in the very kind introduction, I have been fortunate to have worked at other universities such as John Hopkins and Harvard University, and most recently, the University of British Columbia. In terms of the importance of universities and creating and growing tech-based companies. So thank you so much for that.

I’m the first thing I want to say is that collaboration with the private sector is a vital part of our research mission. Research partnerships with companies allow us to ensure that new innovations and technologies created on our campus are translated into new products and services. These corporate research collaborations provide experience and learning opportunities for our students and greatly enrich our ability to maintain world-class research facilities to address the pressing problems that we face as a civilization.

As a public university, we have an obligation to ensure that the new technologies and research discoveries created on our campuses are commercialized in ways that positively impact society, and, to be frank, those who invest and pay for the very existence of the University of Michigan to improve lives and create economic opportunity. And we’re very proud of the contributions that we have made in our history dating back to, for example, the first flu vaccine, to what’s happening today.

Currently, we spin out about fifteen to thirty startup companies a year based on university research discoveries. Most of these companies stay in the region creating new jobs and contributing to the diversification of Michigan’s economy. In my personal experience beyond working at the universities that I mentioned, I have experience in entrepreneurship. As you may know, I helped found a company that still exists today. It was funded by the Vancouver and Toronto stock exchanges, called iCo Therapeutics. I was also the lead of Ohio’s bio-pharmaceutical transport, as charged by Governor John Kasich, and served on the board of Ohio’s Third Frontier program, which really invests in startup companies and tries to scale them and have them stay in the State of Ohio.

Paul Krutko: Yeah, those are all tremendous insights into why this is important and we here at SPARK amplify that by working with those companies as they come out of the University of Michigan to help them grow to scale here.

So moving on, I wanted to ask you about a little bit as we’ve discussed the time when we met, the University under Mary Sue Coleman’s presidency was instrumental in founding Ann Arbor SPARK and has been active in funding and leading our regional academic private sector and local government regional partnership over the last 20 years.

And this has really helped nurture our unique combination of direct support for early-stage tech companies and traditional economic development that attracts new companies to the region who want to be close to the University of Michigan. In fact, and as I shared with you, the vice presidents of research in the past, and vice presidents of governmental relations have actually chaired our board, and currently, Kelly Sexton, who’s your associate vice president of research and leader of Innovation Partnerships, is our vice chair, and Chris Kolb, the vice president of government relations, is on our board of directors.

You mentioned your previous involvement with Third Frontier. Why is this engagement, in your view, so important for the University, and how have you seen this engagement be impactful in the places you’ve worked?

President Ono: Well, as I mentioned, this goes back to our very mission at the University to serve the people of Michigan and indeed the world, and that includes our local community here in Ann Arbor. We want to, I want to, contribute to the economic vitality of Ann Arbor, and our partnership with Ann Arbor SPARK is essential for us to reach that goal.

SPARK’s model, which includes support for start-up formation, among other things, is the perfect alignment with our commitment to this region. In terms of engagement, the University of Michigan is clearly a major stakeholder in this community and has been for generations. We’re physically located here, and our students and employees live here, work here, and go to school in this community.

It benefits us to have a vibrant, economically prosperous region. When we as a University can bring our assets and strengths to the table and collaborate with the business community towards mutually beneficial priorities, then that is time well spent. I’ve found this to be the case at each of the universities where I have worked.

Paul Krutko: So Ann Arbor specifically, Southeast Michigan, the State of Michigan, as you’ve just said, and the nation, has benefited from all that the University of Michigan represents. And we’re excited here in Ann Arbor, in terms of our support for the overall region, about the proposed investment in a physical presence in Detroit. What can you share about those plans and what is being envisioned?

President Ono: Well, as you know, this had been referred to as the Detroit Center for Innovation, and it’s been, I think, almost two years in the planning. And we’re very excited about enhancing this engagement with the commitment to the City of Detroit and its residents through what we now call the University of Michigan Center for Innovation.

The programming is being developed as we speak, and it’s much more expansive than initially envisioned. We envision that the University of Michigan Center for Innovation (UMCI) will be a state-of-the-art hub of education and innovation that engages the business entrepreneurial and residential communities.

We’ve just named an advisory committee to assist in the search for our inaugural director of UMCI. And just keep posted – we’ll be informing the public of our progress as we move forward. The University of Michigan and Detroit have always had a strong connection, going back to when the University was founded actually in Detroit in 1817.

Today, members of the University community are actively involved in several programs, hundreds, really, throughout the city, partnering with residents, businesses, neighborhoods, schools, city government, the mayor, and nonprofit organizations. And we are committed to working and learning alongside Detroit residents as it strives to fulfill its mission of serving communities in advancing the public good.

Paul Krutko: Well, it’s really exciting news. And as there are so many initiatives that we’re working on between the City of Detroit, Wayne County, and the surrounding region, and Ann Arbor. So this leadership role that the University is taking is really, really critical and exciting.

When we talked earlier, I also shared SPARK’s long-held view that, specifically the Ann Arbor region itself, needed a technology park to be developed close to the main campus as a location for our growing companies and a place for national and international companies to locate facilities to take advantage of the University’s assets. Recently, KLA, Wacker Chemical, and Sartorius have all developed R&D facilities on sites around Ann Arbor, but there are advantages that we’ve seen in other university towns to have a dedicated science technology park to facilitate the university-private sector connectivity. In fact, I would suspect that if we had such a tech park, all three would have located there. I was interested to hear if you thought this idea was worthy of exploration. Any thoughts that you would share about that?

President Ono: Well, we are, as you said, actively considering how we might build such a presence here in Ann Arbor. And we know that many, if not most, top research universities have some form of corporate research districts or tech parks on or adjacent to their campus. As you know, I worked on that at the University of Cincinnati where we cobbled together about 44 acres of land to create such an R&D park.

And so we’ll be working with key stakeholders from industry as well as the entrepreneurial and economic development communities, locally and within the State, to understand better the opportunity for creating this kind of resource for Ann Arbor. And we know that having companies with startups in close proximity to our university can lead to stronger research partnerships, great job opportunities for our students, and create the kind of living, learning, and laboratory atmosphere that Ann Arbor is known for.

Paul Krutko: Well, I’m looking forward to working with you and your team on that idea, and it’s an exciting possibility. One of things that I know in my conversations with you is you’ve been active in promoting economic development in your prior posts. And as you mentioned, particularly in Ohio when you were at the University of Cincinnati. Are there any experiences that were very memorable about playing that kind of active role in promoting economic development for the community that you were serving as President?

President Ono: Well, it was really a wonderful engagement that I had at the University of Cincinnati. I’ll always be proud of what we accomplished as an institution there, but we couldn’t have accomplished any of it without partnerships. I can tell you, if you don’t know much about Cincinnati, that it is also a city on the rebound. It does benefit from having between seven and eight Fortune 500 companies, of which Proctor & Gamble is the best known, but there are others. So it has a diverse and thriving business environment that was prime at the time for strategic collaboration between companies, higher education, and other public entities.

At that time, which is now about seven years ago, we needed to do a better job as a region of commercializing some of the research that was being done at the University of Cincinnati, but also the Academic Health Center, University of Cincinnati Medical Center, and the Cincinnati Children’s Hospital. We had a consortium called Uptown Consortium that came together where we met on a regular basis to plan out the research and development park that we wanted to create. And I was the chair of that during that time.

There wasn’t a culture for knowing how to do it, and there wasn’t, at that time yet, an established ecosystem for working with the business community, but the CEOs of the large companies and the university presidents and the hospital presidents did get together and actually looked at the entire ecosystem and identified gaps, and we were committed to actually filling those gaps. I was very grateful that the Governor of Ohio at the time, John Kasich, asked me to serve in a variety of capacities as an advisor to the Third Frontier initiative, which focuses on scaling up start-up companies that were born in Ohio and in the entire state but also benefiting companies that were being created in Cincinnati. And it was created to support the transition of ideas in the lab to the marketplace and to scale them to large numbers of employees. And I was on that advisory board and helped make public policy by choosing which companies, which research projects and schools in Ohio will receive state funding to benefit the economy.

At the University, we transformed the city’s very first Sears department store, which was dilapidated, into a research accelerator and space for startup companies. We called it the 1819 building because that’s when the University was founded, and we launched many UC-developed technologies there, and it’s really buzzing today. It’s the nerve center of what is now called the Cincinnati Innovation District, which was our brainchild back then, when we did the 44-acre land assembly.

Not only that, it has research centers, not only for the University, but also the University of Cincinnati Medical Center and Cincinnati Children’s Hospital. So we were also able to attract anchor laboratories from NIOSH to move to that research and development park. So you know that idea of ‘build it and they will come’ actually did happen in Cincinnati, and it’s just an example of how people coming together across sectors and developing an intentional strategy involving university, private industry, public leaders working together — it can really have an impact on regional economic development.

Paul Krutko: Yeah, you’re absolutely correct, and then, and I know, as I shared with you, I have a very warm spot in my heart for Cincinnati — that’s where I went to university. And I actually – you mentioned that store, I probably was one of the last customers in that store, when I was a student in Cincinnati. So it’s good to hear that it’s been put into this new and very appropriate type of use.

So you talked about Third Frontier, and you’ve talked about sort of, we have this ongoing dialogue between the State of Michigan and the State of Ohio relative to competitiveness. But I know that Third Frontier is a very successful initiative in regards to trying to provide capital to early-stage companies, and one of the concerns at SPARK is that we do have that need for early-stage investment capital here for the great startups coming out of the University and the Ann Arbor ecosystem, as well as Series A and beyond venture capital when the company is ready. The University is really making a positive impact in this space through efforts such as Innovation Partnerships’ Accelerate Blue Fund, which we have worked with through our SPARK capital seed funds and angel funds.

But we remain at a distinct advantage to the coast. What are your thoughts in that regard and what lessons can we take from sort of the approach that you’ve seen in the other communities that you’ve worked?

President Ono: Well, it’s an incredibly important topic and that’s why SPARK is so important and the SPARK capital seed fund and angel fund are so important. We are at a disadvantage because of the relative size of those pools of money. And we know that new startup companies being launched out of the University’s research environment are some of the best in the world.

This is one of the largest research universities in the world. And while the local venture community has made tremendous strides in the past decade, we continue to see that it takes a startup in Michigan longer to raise their first round of financing as compared to startups on the coast. And nearly two years longer from companies starting up on the coast according to PitchBook, as you know.

So right now more than 90% of the investment capital raised by University of Michigan startup companies is coming from out-of-state investors. I think this is a mismatch between the intellectual capital being created here in the State of Michigan and the venture capital that’s available in our state. At the same time, it is inspired by the collaborative mindset of the Michigan venture community and the work that MEDC is doing to put more dollars to work in this ecosystem through their innovation and entrepreneurial teams.

As you mentioned, the University is also playing the role in helping to grow our entrepreneurial ecosystem by creating what we call the Accelerate Blue Fund, sort of an internal fund to invest in promising UM startup companies. But there’s so much more to be done and the University of Michigan has stepped up and will probably enhance our investments in startup companies. And I look forward to partnering with MEDC, Ann Arbor SPARK, entrepreneurial leaders, and the Governor to help develop these solutions to really elevate us to the next level.

Paul Krutko: That’s fantastic to hear. Well, so my last question is more on the personal note. So I’ve enjoyed watching how you’ve enthusiastically embraced your role as president and sharing with all of us through social media the things you’re encountering and the great things that are happening with the university and our community. As we close out our conversation today, what are some of your initial impressions of Ann Arbor and the region, and what if anything surprised you?

President Ono: Well, I absolutely love Ann Arbor. I love the university community. I love Detroit and Michigan. I’m incredibly happy to be here. I feel very honored to be the president of the University of Michigan. I think it’s a very special place. I’ve only been here for four months but Ann Arbor already feels like home. You know, I love the restaurants here. I love Huron River. I love biking around and everything is still kind of like being a kid in the candy store for me right now. I’m still exploring and there are so many more things to do. Some of you may know I’ve played a cello and I’ve already been able to perform at Hill Auditorium a number of times.

And I guess the biggest surprise has been just the energy and enthusiasm at the Big House with their football games here on Saturdays. And I’ve also been incredibly overwhelmed with the reception I’ve enjoyed here, the community, not only the university community, but folks in Detroit and Ann Arbor and Lansing have been incredibly welcoming to me and to my family. I feel very embraced and supported. I’m grateful for the support of the faculty staff, students and alumni and regents of the university.

So, you know, the University of Michigan is a place where excellence is effective and I’m going to do everything I can to serve not only the University, but also Ann Arbor and the State of Michigan.

Paul Krutko: Well, that’s fantastic. And I’ve really enjoyed my time talking with you and I’m really looking forward to being able to work with you to advance all those goals. Because this is a great place. I mean, one of the things that some of these ratings of places, you could take them with a grain of salt, but what we learned in the most recent iteration was we’re top on all of this. So when you combine the lists, this is just a tremendous place to live. And I found that myself since I’ve been here for the last decade moving from Silicon Valley.

So again, welcome. Thank you for taking the time to speak with me today, President Ono, and good luck. And I look forward to all that we’re going to do together over the next few years.

President Ono: Thank you very much. I’m looking forward to it as well. All the best.

Paul Krutko: And I want to thank our audience for listening and learning more about those leaders and organizations working hard to create the Ann Arbor regions’ 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 Ann ArborUSA.org, and also on Facebook, Twitter, Instagram, and LinkedIn.