The Greater Houston Partnership's Innovation Strategy Office is dedicated to supporting Houston’s innovation economy and boosting local startup activity. The launch of the Strategy Office represents the first step of a comprehensive strategic plan developed jointly by the Partnership and Accenture along with members of the startup community, academia, and venture capitalists, in conjunction with the City of Houston's Innovation and Technology Task Force (see Innovation in Houston plan below).
The primary objective of this strategic plan is to catalyze the formation of highly-innovative startups driven by new technologies and business models that will grow Houston's innovation economy. The strategic plan aims for Houston to be – and to be seen as – an innovation city at a world-class level.
According to the Startup Genome Project, trillions of dollars in economic value is created by the technology sector, with much of that driven by startups. Read more about how Houston fits in the global startup ecosystem below (see Startup Genome report).
As a region, we have always been on the leading edge of innovation, particularly at the corporate and institutional levels. Houston has been the energy industry’s innovation hub for many years and the Texas Medical Center has been at the forefront for decades. Think about NASA and the incredible work that has been done there since the 1960s. Houston is an innovative city, but we can take it to the next level particularly as it relates to technology, entrepreneurship and commercialization.
One of Houston’s biggest advantages is our large supply of young talent and strong university systems. Houston has more than 300,000 educated millennials and 240,000 STEM (science, technology, engineering and math) workers, along with five nationally-ranked universities and graduate schools.
Another advantage is the launch of co-working spaces and accelerators like Station Houston, TMCx, UH's RED Labs, Rice's OwlSpark and JLabs among others. They are creating momentum and building density for more startups. We know that with entrepreneurship comes risk, and these physical spaces offer support and momentum to startup employees to achieve success.
First and foremost, we believe that the development of our entire innovation economy, including a vibrant startup community focused on our core industries, is critical to our region's continued success and ability to attract companies, talent and capital to Houston.
Houston is the fourth largest city in the U.S. with a thriving innovation economy, yet the region has the 20th largest startup ecosystem.
Innovation and new technologies are the backbone of the rapid development of our key sectors including energy, life sciences, manufacturing, logistics and aerospace.
Our strategic plan is designed to leverage our community's strengths in our leading industries to build an environment that fosters innovation and collaborative partnerships that drive commercial success.
According to Accenture’s framework, there are four key drivers of an innovative economy:
Our plan for startup ecosystem development will focus on building critical mass in:
These areas have the most synergy across our key industry sectors including energy, life sciences, manufacturing, logistics and aerospace.
There's already a lot happening in these innovation areas. Bringing the right people and resources together with focus will help move our region forward.
The strategic plan is focused on building a robust startup ecosystem in our region and positioning Houston as an innovation city at a world-class level.
The plan has 10 initiatives to be driven by various players across the community. The initiatives include: defining themes and driving collaboration and consensus; assembling a fundraising and investment team; coordinating research focus; recruiting and matching startups with corporations; identifying target high-tech firms; and orchestrating a city image effort to position Houston as a world-class innovation city.
The Partnership's Innovation Strategy Office will drive this strategic plan forward.
This office will work to improve Houston's attractiveness to the startup community, including serial entrepreneurs, talent, and venture capitalists.
It will also help to establish a fund of funds to attract more venture capital activity in Houston. The intent of the fund of funds is to encourage investment from local corporations and foundations to finance venture capital funds that will cultivate local startups and eventually create viable companies.
It’s a fund investing in other types of funds. Essentially, it’s a fundraising endeavor that attracts investment from corporate and ultra-high net worth entities and individuals. Then there is a funding mechanism in place with resources that can be distributed to properly screened VC firms for placement of the funds. The fund of funds aims to achieve broad diversification and appropriate asset allocation with investments in a variety of fund categories that are all wrapped into one fund.
We looked at successes in Chicago, Cincinnati and St. Louis, as a few examples. Chicago has had some great success with their incubator, 1871, which is home to more than 400 early-stage, high growth digital startups. But as Mayor Turner said recently, "what Chicago can do, Houston can do better." Cincinnati saw a 74 percent rate of startup growth in 2016, measuring how much startups have grown five years after founding based on their number of employees, compared to negative 1.8 percent in 2015.
And St. Louis' Cortex West Redevelopment Corporation has also sparked 1.5 million square feet of office and research space, housing, infrastructure, and retail, leveraging $500 million in public, private, and civic capital and creating 2,850 direct jobs to date; over 10,000 jobs are projected upon completion of the $2 billion buildout.
The first phase of the Partnership’s effort is the establishment of our Innovation Strategy Office (announced May 15) and starting our work to establish champions for the fund of funds throughout the summer.
The Innovation Strategy Office will also work to improve Houston's attractiveness to the startup community, including serial entrepreneurs, talent, and venture capitalists.
An ecosystem of this magnitude will not be built overnight, but if you look at great programs that we’ve studied in Chicago, Cincinnati and St. Louis, you can drive a sea change over a 5 to 10-year period.
The strategy office will include an advisory board chaired by Blair Garrou of Mercury Fund and five other board members to include entrepreneurs and investors and those involved in other startup ecosystem development. Partnership Vice President of Innovation and Talent, Jon Norby, will manage the day-to-day operations of the office.
In the summer of 2016, the Partnership convened an Innovation Roundtable with members from Texas Medical Center, Houston Technology Center, NASA, Rice University, City of Houston, Accenture, McKinsey & Company, Chevron Technology Ventures, Shell Tech Ventures, Circular Board, Fannin Innovation Studio, Luna Strategies, Houston Angel Network, January Advisors, Mercury Fund, Station Houston, Unconventional Capital, and TMCx.