Creating An Entrepreneurial Culture In An Engineering University

This paper describes the process followed at Michigan Technological University (MTU) over the past dozen years to develop an entrepreneurial culture, not only at the university but in the surrounding rural area as well. Michigan Tech offers programs primarily in the areas of engineering, the sciences, and business administration. The process of developing an entrepreneurial culture was gradual, and many obstacles had to be overcome, ranging from patent and licensing practices that discouraged innovation to faculty attitudes that were skeptical of “nontraditional” course content. Perhaps the greatest obstacle was a pervasive culture in the Upper Peninsula of Michigan that conditioned people to wait for somebody else to do something. The process started with a course in creative problem solving for freshmen taught as an overload by volunteer faculty. Later, a grant from the National Collegiate Inventors and Innovators Alliance (NCIIA) made possible the development of a course for senior students that focused on developing products for commercialization. Subsequent grants from the National Science Foundation (NSF), NCIIA, the Michigan Entrepreneurship Education Network, and industrial firms and donors facilitated courses and programs related to entrepreneurship. The Michigan Tech Enterprise SmartZone was eventually established as an entrepreneurial incubator for technology-based businesses, with the first of these businesses “graduating” in the fall of 2007 to a freestanding business with its own facilities. Dozens of faculty members are investigating the prospects of commercializing technologies that they have developed, and students are becoming involved in the process. Michigan Tech now has one of the highest percentages of undergraduate students named on invention disclosures in the nation. Also, many local inventors are approaching the SmartZone and Michigan Tech for advice and assistance in starting and developing businesses. 1. Context: Historical Background and Location Michigan Tech is an emerging research institution with over two-thirds of approximately 5,800 undergraduates majoring in science and engineering. It produces 40 to 50 engineering and science Ph.D.s per year from approximately 900 graduate students enrolled in MS and PhD programs. As shown in the map on the next page, it is located 420 miles north of Chicago in Michigan’s Upper Peninsula near Lake Superior. Authorized in 1862 as a Morrill Act land grant university, it did not really get started until 1885 as the Michigan School of Mines, offering the “engineer of mines” degree. Its Board of Control consisted of executives from the various copper and iron mines in the region, which were at the time America’s most important sources of these metals. The institution broadened during the twentieth century to offer degrees in most areas of engineering and eventually added programs in forestry, business administration, and more recently in a variety of non-technical fields. Directly influenced by local conditions today, “industrial archeology” is available as a course of study. Geographic isolation contributes to the culture of the region, known as the Copper Country. About eighty percent of the land area in the Upper Peninsula is forest, and almost all of the P ge 13341.2 communities in the region are small. Michigan Tech and the SmartZone incubators are located in Houghton and Hancock. These sister cities with about 5,000 residents each face each other across the Portage Waterway and are connected with a unique lift bridge. The nearest larger city from the University is Green Bay, Wisconsin. It is roughly 260 miles from the Mackinac Bridge which connects the Upper Peninsula to Lower Michigan, and 550 miles from the metropolitan Detroit area where many of Michigan Tech’s students come from. This geographic isolation contributed to a sense of intellectual isolation among the indigenous population from contemporary problems and opportunities which exist in the rest of the nation. The geographic isolation also facilitated geographic monopoly. Most retail stores prior to the late 1970s faced little competition. This permitted an attitude by merchants—often thirdor fourthgeneration descendants of nineteenth century founders—that when you are "the only game in town" customers have to conform to your hours and prices. Customers would have to take time off from work in order to shop for clothes or furniture because stores were not open after 5 p.m. or on weekends. The culture of serving the customer was foreign to the area. Another factor which affects the culture of the area is the role a monopolistic industry played there in social and political activities up through the 1960s. Starting in the 1840s, the copper firms dominated the region. They were paternalistic in good ways and bad ways, providing housing, clean drinking water, hospitals, infrastructure, and land for churches and recreational facilities, as well as demanding compliance with their rules. Immigrant laborers, recruited by the these firms, were reluctant to get out of line. Arrogant industry captains and violent antiunion measures conditioned the population to be passive and to wait for somebody else to do something—whatever the situation. The land ownership structure was also a factor. The monopolistic mining companies owned almost all of the non-forest land, while a few paper firms such as Mead and International Paper owned most of the forest land in private hands. Into the 1980s, it was nearly impossible to buy land outside of the small towns for development. Even discount chain stores and fast food restaurants did not make an appearance until the late 1970s. A final factor was out-migration. The copper mines in the region peaked during World War I and underwent a continuous decline until 1968 when the last copper mining firm, Calumet & Hecla, Inc., shut down its operations. The only other industry of any size in the region was logging, and this type of work was seasonal. The population of the region has slowly declined for almost a century, and over the same period, many of the educated and ambitious younger people left the area for job opportunities in America's industrial centers far away. The remaining population, by default, was older and less ambitious. P ge 13341.3 For these reasons, the area was not characterized by much entrepreneurial activity. This is illustrated by an experience that one of the authors (Paul Nelson) had upon arriving at Michigan Tech as a faculty member in 1972. He loved to fish, and the surrounding area has outstanding lakes and rivers with almost every species of freshwater fish available in the nation from huge pike and walleye to lake trout, steelhead, and salmon. When he visited the local Chamber of Commerce office to inquire about where to rent a boat to go fishing, the staff replied that there were no boats to rent—in the entire region! Also, in spite of a rising student population in the 1960, the private sector did not construct modern apartment buildings until the 1970s, forcing the university to construct a 350-unit married student apartment complex. 2. Initial Focus on Entrepreneurship After World War II, as enrollment grew with returning servicemen, a few faculty members at Michigan Technological University sensed that some engineers would benefit from an understanding of business and the marketplace. Michigan Tech had not yet established a business school, so the only courses in the engineering curriculum related even remotely to entrepreneurship were a course in economic principles and a course in engineering economy. Accordingly, in 1948 a Department of Engineering Administration was established and a B.S. in Engineering Administration degree was offered as a second undergraduate degree for persons obtaining engineering degrees. This fifth-year degree covered accounting, finance, marketing, management, and industrial relations, but its focus was on career responsibilities for engineers working in large firms, not on entrepreneurship. The Department of Engineering Administration grew into a business school in the 1950s, but Michigan Tech did not offer a single course with the word "Entrepreneurship" in the title until the spring of 1973. However, the word was followed by a further descriptor: "BA481 Entrepreneurship: Managing the Small Business." The course, at that time, had little to do with development of novel business models, and nothing at all to do with technology-based businesses. It was not until the spring semester of 2001 that the School of Business and Economics offered a course in entrepreneurship that focused on technology ventures. The process of developing an entrepreneurial culture at Michigan Tech began in 1993 when one of the authors arrived at the university as dean of engineering. The search committee that recruited the dean recognized that Michigan Tech needed a sharper focus on entrepreneurship and chose Edward Lumsdaine because of his prior work in creativity and entrepreneurship. Over the next few years—in a difficult climate—he started several initiatives. Creative Problem Solving: One of the first innovations of the new engineering dean was the development of a course open to all freshmen: "GN150 Creative Problem Solving." This 3-credit course on a quarter system was to be taught by volunteers from the faculty and staff. The dean held seminars to prepare people to teach the course. Each section of the course was designed for 25 students who were divided into teams of five students each based on an assessment of their thinking styles using the Herrmann Brain Dominance Instrument (HBDI), with the goal of having a wide diversity of thinking preferences present in each team. Students first learned how to function effectively in teams and how to overcome barriers to creative thinking. The teams then chose a product of interest that would have a price under $300, examined current offerings, and suggested several P ge 133