June 2006
Now Open for Business – The Center for Innovation and Growth
B-W gets a start-up investment with speech by a global leader in venture capital
The “dean of venture capital” helped launch the Center for Innovation and Growth (CIG) in March when he spoke as part of Kamm Lecture Series on Baldwin-Wallace College's campus. David Morgenthaler, founder of Morgenthaler Ventures which was started in Cleveland 36 years ago and has $2.5 billion under management,was the keynote speaker at a dinner and awards ceremony that launched CIG and established its role in Northeast Ohio's economy. He also was one of three initial recipients of the Baldwin-Wallace, Center for Innovation and Growth's Innovator of the Year Award. This is an annual award that is given to community leaders from corporate, private and public sectors who demonstrate the qualities of innovators. 
The Center's mission is to inspire innovation and growth by providing the regional community with access to student, faculty and corporate leader talent. By doing so, B-W's leadership is encouraging area business, government and community leaders to actively become involved in shaping talented workers for the region who are grounded in both business and science.
Current efforts include:
• B-W's Business Clinic, where students work with executive volunteers when reviewing more than 100 business plans annually
• a partnership with Glengary LLC to help grow innovative businesses in our region
• work with local communities on a regional approach to fire and emergency services
B-W Prof. Eric Fingerhut is providing leadership for the Center for Innovation and Growth. “We have to meet the challenge of globalization through building innovative companies that are able to develop products and services that are the best in the world,” said Fingerhut. “This requires that our region's leaders be exposed to the best thinking in science, technology and business. That's what they'll find at the Center for Innovation and Growth.”
Morgenthaler's speech shed light on the role CIG can play when helping leaders in business, government and non-profit organizations to embrace an entrepreneurial spirit and, consequently, define a role for the region in the global economy.
“I understand your Center has to do with business, science, and ethics; those are critical elements of the venture capital world I live in,”said Morgenthaler, who reminded the audience of students, faculty and business and community leaders of a time when the regional economy acted like one. “The factors that came together to drive Northeastern Ohio were cheap water transportation, ready availability of the raw materials for metal-making,and the immigration of some people who knew the technology of metal,” he said. “These factors enabled everything that happened in the region. These gave cause to work here and to work together as a region to achieve common ends.
“We must think regionally again – not municipality against municipality. We must realize the enemy is not the next suburb or Akron, but rather it is Boston, San Francisco, Baltimore and the newer cities. We must unite to fight them for the research dollars that come out of Washington. And, we must quit fragmenting into so many small organizations that never get to critical mass, and unite into larger effectively run organizations.”
Morgenthaler is not alone in these views. At the dinner before the Kamm lecture, B-W President Mark Collier reminded students, faculty and community leaders that, “Innovation is the key to prosperity in the global economy of the 21st century. As an institution with deep roots in Northeast Ohio, Baldwin-Wallace College understands that the future success of our region requires the development of innovative organizations in the private and public sector that integrate world-class science, mathematics and technology with effective, ethical and visionary management.”
B-W Professor Natalie Barratt, who teaches botany, biology and plant physiology, later echoed: “The B-W science faculty sees the Center as a window for increasing interactions and collaborations with groups on and off campus and across the region.
The expansion and renovation of our teaching facilities for math and science in combination with the Center will provide our students with greater access to the facilities, equipment, projects, and people that prepare them to excel in their careers or in graduate or professional school as the majority of our students remain in the region to pursue careers.”
What about science, Morgenthaler asked? “It teaches us to understand how the universe works,” he said. “It enables technology– which is the application of science to provide something mankind wants. We'd better all pay more attention to science and technology – it's our hope to maintain our leadership in living standards, and China and India have started to train a frightening number of engineers and scientists.”
Morgenthaler offered some insights into ethics: “What advice should we give to college students about ethics?” Morgenthaler Ventures has “picked ethical people to manage our companies about 97 percent of the time.
We must be good judges of character. That's a pretty high grade – an A in any course. But, and it's a big but, the ethic lapses of those managements have cost our firm over $100 million in profits attained but not yet cashed in. I may be a slow learner, but losing $100 million will teach even me something about the value of ethics.
“After the last stock market crash, many venture firms were asked to give back large parts of the funds they had raised, reducing their fees by many millions. We were merely asked whether we honestly believed we could still find opportunities to invest that much money profitably. When we told our investors we believed we could, no one asked for his money back. That's about as practical a demonstration of the value of honesty and being trusted as I have ever seen.”
Peter Rea, chair of B-W's Business Division, concluded the evening of events that launched CIG and announced, “B-W's Center for Innovation and Growth is now open for business, and David Morgenthaler just cut the ribbon.”
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