On March 25th and 26th, the University of Virginia hosted its second annual Venture Summit, bringing together U.Va. researchers and some of the nation's leading venture capitalists – several of whom graduated from U.Va. – representing roughly $20 billion in capital.
This year's summit focused on the burgeoning revolution in energy technologies, a transformation that some estimate will involve 10 times the amount of money generated by rise of the Internet.
"Innovation is the key to the creative economy, and venture investment is critical to fuel innovation," Thomas Skalak, U.Va.'s vice president for research, said. "Innovation can be hard to recognize until it suddenly bursts into view." The goal of the summit, he added, was to enable innovative ideas spawned on Grounds to be seen by investors who can help those ideas break into the market and impact the world.
U.S. Rep. Tom Perriello opened the summit with a vision of how Virginia's Fifth Congressional District, which stretches from Charlottesville to Southside, is well-positioned to be a leader in the coming era of energy innovation, thanks to its mix of former industrial towns, abundant farmlands, great universities like U.Va. complementing a strong community college system, investment funds available from the Virginia Tobacco Commission, and a workforce ready for a mix of high-tech and low-tech jobs in the energy industry.
America is missing a huge opportunity by being slow to recognize that energy will be the greatest job and wealth creator in the world over the next 25 years, said U.S. Sen. Mark Warner, a former governor of Virginia and an investor in tech companies in the 1980s and '90s, including one that eventually became Nextel.
In the energy sector, the U.S. is "getting our lunch eaten" by Europe and China, both of which have strategically promoted emerging energy technologies like next-generation nuclear plants, solar and wind power, he said.
To catch up, America needs to increase tax credits for corporate research and development spending and dramatically reduce business taxes, which can be offset by adding a value-added consumption tax, as much of Europe has, Warner suggested.
Several panel discussions at the summit wrestled with the question of how the U.S. can better support and stimulate business innovation, and what role the government and higher education should play.
At the Darden School of Business, more students than ever before are going into entrepreneurship rather than working in finance and investment banking, Darden Dean Robert Bruner noted. Just a week earlier, Darden launched a new i.Lab
as part of efforts to teach students innovation and how to bring ideas to market.
Darden Professor Greg Fairchild, director of Darden's Tayloe Murphy Center, explained how Community Development Financial Institutions
– tax-advantaged, public-private quasi-banks – have funneled about $23 billion into "emerging domestic markets" like Southside Virginia. Bank loans, primarily from small community banks, remain the largest source of funding for American small businesses, especially in rural areas, he added.
When a panel of five venture capitalists was asked about what can be done to better foster student interest and readiness to start companies or become venture capitalists, the panelists noted their own varied educational paths at U.Va. – having majored in astronomy, architecture, biomedical engineering, drama and economics.
A public-private partnership model created by Israel in the 1990s propelled the tiny country to having the world's second-largest venture capital industry, behind the United States.
Founded in 1954, the University of Virginia Darden School of Business improves society by developing principled leaders in the world of practical affairs.
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