At Friday’s Ann Arbor SPARK annual meeting, the organization will release a new five-year strategic plan developed by its executive committee.
The plan, developed through a series of retreats and facilitated discussions, was designed to make sure that the focus of SPARK’s efforts aligns with the priorities of those who provide the organization’s funding and help spur further economic growth in the region.
Ann Arbor SPARK CEO Paul Krutko stands outside the organization's central startup incubator in downtown Ann Arbor.
Angela Cesere | AnnArbor.com file photo
“Thematically we’re focusing on connecting our region and looking at global opportunities. The strategic initiatives we’re going to use to get there are the development of leadership, planning and talent along with acceleration and growth in the region.”
Krutko said the new plan gives SPARK a guiding document as it continues its transformation from a nascent economic development organization into a major player in the region’s economy.
“We talk a lot here about SPARK 1.0 and 2.0. Much like software versions, we’re in 2.0 but we're quickly headed for 2.3 or 2.4,” he said.
“There are about 330,000 people in Washtenaw County and we have helped retain, create or attract almost 12,000 jobs in the six years that SPARK has been around. That’s a pretty big impact, and it’s something we’re very proud of but we need to continue to make sure that our efforts are effective.”
According to the organization’s annual report, its efforts have been very effective in 2012. Companies that SPARK worked with, including 63 innovative startups, created 628 new jobs in the county.
Krutko said that SPARK engages with extremely early-stage startups more than most other economic development organizations across the country. Through incubators at SPARK Central, SPARK East, and the Michigan Life Science and Innovation Center that housed 73 startup tenants in 2012.
“It’s a core part of what we do and it’s great that we have so many startups to work with here in Ann Arbor,” Krutko said.
“The University of Michigan is certainly a driver of innovation but a full two-thirds of the startups we work with do not come from U-M research. That’s an amazing amount of innovation happening here from serial entrepreneurs and other inventors.”
As part of its “growth and acceleration” initiative, SPARK is planning to turn some of its attention to companies that have passed the startup phase and are looking to continue to grow in Ann Arbor.
“We’re very interested in trying to figure out what our role is and what the community’s role should be in taking companies from the point they have customers and are making revenue, then how do we accelerate their growth,” Krutko said.
“ How do we flip a switch and have them be like a Menlo Innovations, or like a ForeSee, Online Tech or http://www.llamasoft.com/, where they continue growing and hiring so that the engine of company creation turns into an engine of job creation in the region.”
Companies like those listed by Krutko help fund SPARK along with local municipalities and universities. Since SPARK's founding in 2006, the city of Ann Arbor has been SPARK’s largest municipal funder in the county, putting a total of $480,000 into the organization. The Washtenaw County government has contributed $1.2 million to SPARK in the same time period.
According to the annual report, approximately 36 percent of SPARK’s $11.5 million budget comes from local funding, with the remainder made up of federal and state grants and foundations.
“Because the nature of the funding and support that we get is so broad and diverse, we have the opportunity to try to solve problems in creative ways, and if what we’re doing doesn’t work we can shift or pivot like a startup to another approach,” Krutko said.
“We want to keep not only talking the talk of entrepreneurship and innovation but really walking the walk as well.”
One recent pivot by the organization, evident in its marketing materials and the report handed out at the meeting today, is a renewed focus on developing Ann Arbor and Southeast Michigan as a global brand. Krutko said SPARK has already been gaining traction on bringing more foreign direct investments into the region in the form of research and development centers, plant acquisitions and new facilities from international companies.
“SPARK has focused on working with companies that will grow the region’s gross domestic product,” he said.
“If we do that, those companies will buy goods and services from local companies, their employees will shop in the local retail establishments, and more jobs are created because the top of the employment food chain is being successful.”
While the Ann Arbor area is SPARK’s primary area of economic development, one of the organization’s values that serves as a foundation for their strategic plan is “open source economic development.” In software, an open source program is one where the code is shared for free, allowing other developers to use and improve upon the original and then re-share it, allowing for everyone to benefit.
“For us, open source means something very similar, that we are open to sharing how we work and what our methodologies are,” Krutko said.
“We are in a belief that if there’s success in Livingston County, that’s a success for the entire Southeast Michigan region. It’s a strength of our region and leadership that we do not have intermural competitions that can be destructive.”
Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Reach out to Ben at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2.