Recipe for success

Houston needs these 4 ingredients to be a world-class innovation hub

Houston has the potential to be a leader in innovation — we just need four things. Getty Images

Is Houston innovative? We put a man on the moon, are curing cancer, and are performing engineering miracles in the oilfield daily. But we don't have the Googles or Amazons of the world or a bustling startup or venture capital scene.

Painfully, Houston was the only one of the 10 largest U.S. metros not to be among the 20 final locations for Amazon's HQ2. By most measures of innovation leadership, Houston is hardly number one in Texas, let alone nationally.

This is a problem. Today, technology innovation is integral to success whether it be using artificial intelligence to improve oil production or patient care, and companies and entrepreneurs will go wherever they need to for the next growth opportunity. If we want the next man-on-the-moon success in Houston and to defend our leadership in energy, health care, etc., we need to be a leader and destination for driving innovation.

So, how does a city like Houston transform itself into a digital technology and innovation leader? That was the core question for a strategy that I led for Accenture working with the Greater Houston Partnership and the mayor's Technology and Innovation Taskforce in early 2017.

After analyzing successful innovation ecosystems around the world, we identified four critical components that make a city a world-class digital innovation location:


Courtesy of Accenture


Talent
You need talent with the right skillsets and mindsets. A modern digital ecosystem needs developers, designers, data scientists, and more. They must also have the right mindset and be able and willing to take risks and do difficult things.

Houston already has tremendous amounts of STEM talent but doesn't produce enough talent or retain enough of the locally-grown talent. To jumpstart, we are going to have to import it initially. The main focus is attracting a large digital company to Houston (e.g. Tesla, Google). This would simultaneously bolster our talent base and image, while also providing opportunities for Houston students to stay and pursue their careers in digital innovation.

Collisions
World-class cities manage to create collisions between talent that spark huge opportunities. Think Steve Wozniak meeting Steve Jobs and Bill Gates meeting Paul Allen. Importantly, they must also collide with customers, investors, other start-ups, academia, people of different backgrounds, and even lawyers (sigh).

In Houston, we've seen this same network effect with the Energy Corridor and Texas Medical Center, but we need a similar setup for digital innovation. That's why the planned Innovation District in Midtown, funded by Rice University, is a game-changer.

Resources
Houston has significant capital in corporations and high-net-worth individuals but is short on angel or venture capital, which would otherwise bring not only money, but also mentorship and connections for young companies.

Detroit had success overcoming this with a 'fund of funds' model, pioneered by Chris Rizik. Local corporations invest in the fund-of-funds which, in turn, invests in venture funds from outside of the state. Their primary motivation should be to earn a return for their investors, but they are asked to look at local companies and spend time in the ecosystem.

The Houston Exponential Venture Fund led by Guillermo Borda recently had its first close of $25 million, and I'm optimistic it'll double or triple in size in the near future.

Impact
Successful ecosystems know how to scale and turn a small company into an international Goliath in just years.

For Houston to be successful in scaling, we must align startups to our local industries, and they must stay and grow here. To solve this challenge, Houston is focusing on becoming famous in certain core themes, including robotics/autonomous systems, data science, industrial IoT, and cybersecurity. These are what our industries – and the world – need, have large inflows of venture capital, and are what Houston has unfair advantage in.

At the end of the day, all four ingredients are essential; none can go to zero or the multiplying effect won't happen. We have to get all of these areas right, all at once. No one company, institution, or sector of the economy can solve the challenge alone. That's why organizations like Houston Exponential and the plans for Houston's Innovation District have been popping up so solve this problem and create connections.

It's an incredibly exciting time for Houston with so much momentum, growth, and demand. We have made bold bets in the past, with our port, TMC, the Space Center, and many more. It'll be a mistake not to carry that legacy forward with a bold new bet for the twenty-first century.

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Brian Richards is Houston innovation hub director at Accenture and board member at Houston Exponential. Read more about him and his career here.

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Building Houston

 
 

Houston innovators podcast episode 140

What Houston can expect from its rising innovation district

Sam Dike of Rice Management Company joins the Houston Innovators Podcast to discuss the past, present, and future of Houston's rising Ion Innovation District. Photo via rice.edu

Last month, the Ion Houston welcomed in the greater Houston community to showcase the programs and companies operating within the Ion Innovation District — and the week-long Ion Activation Festival spotlighted just the beginning.

The rising district — anchored by the Ion — is a 16-acre project in Midtown Houston owned and operated by Rice Management Company, an organization focused on managing Rice University's $8.1 billion endowment.

"We're chiefly responsible for stewarding the university's endowment and generating returns to support the academic mission of the university," says Samuel Dike, manager of strategic initiatives at RMC, on this week's episode of the Houston Innovators Podcast. "Part of those returns go to support student scholarships and student success — as well as many of the other academic programs."

"The university sees a dual purpose behind the investing," Dike continues, in addition to focusing on generating returns, RMC's mission is "also to be a valuable partner in Houston's ecosystem and pushing Houston as a global 21st century city."

RMC saw an opportunity a few years back to make an investment in Houston's nascent innovation and tech ecosystem, and announced the plans for the Ion, a 266,000-square-foot innovation hub in an renovated and rehabilitated Sears.

"In some ways innovation is not necessarily about creating something completely new — it's oftentimes building upon something that exists and making it better," Dike says. "I think that's what we've done with the building itself.

"We took something that had really strong bones and a strong identity here in Houston," he continues, "and we did something that's often atypical in Houston and preserved and repurposed it — not an easy logistical or financial decision to make, but we believed it was the best for Houston and for the project."

Now, the Ion District includes the Ion as the anchor, as well as Greentown Houston, which moved into a 40,000-square-foot space in the former Fiesta Mart building, just down the street. While RMC has announced a few other initiatives, the next construction project to be delivered is a 1,500-space parking garage that will serve the district.

"It is not your typical parking garage," Dike says. "The garage will feature a vegetated facade with ground-floor retail and gallery space, as well as EV charging spaces and spaces to feature display spaces for future tech. It's going to be a nice addition to the district."

The new garage will free up surface parking lots that then will be freed up for future construction projects, Dike explains.

He shares more about the past, present, and future of the Ion and the district as a whole on the podcast. Listen to the interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.



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