Ken McLeod is a professor at Binghamton University, specializing in bioengineering. The Innovation Trail's Matt Richmond interviewed Mcleod about startup economies and what makes Binghamton, or any city, a good place for them to flourish.
After the jump, an edited version of that interview.
IT: Let’s start with the idea of a startup economy. Why is that a viable option for Binghamton? And how could that possibly replace the large industries that have left?
KM: So if you’re an entrepreneur, you create a job for yourself, but you can create a job for a bunch of your friends as well and that’s how we grow the economy.
It’s particularly important in areas such as Upstate New York where we had a huge number of extremely successful companies, I mean it’s like the who’s who of the Fortune 500. You have the GEs, the Westinghouse, the Cornings, the Kodak, the Bausch and Lomb’s, the Xerox, the Link Simulator, it just goes on and on and on.
And they’re all basically gone now, they’re a shell of themselves now, they’re very small. They start out as a startup, they ramp up, they kind of peak and then they ramp back down.
We have a huge number of companies in Upstate New York that are at the end of their life cycle, rather than the beginning, but we had so many of those large companies that the pipeline for some reason stopped. There wasn’t this pipeline of hundreds of small companies, ramping up, which would become mid-sized companies, which would become large companies.
So for every 100 companies you start, maybe one of them will become a large company, or maybe it will take a thousand to create one large company. But you have to have that pipeline. That pipeline stopped. We have to restart it.
IT: And what exactly do you mean by a startup company?
KM: We’re not necessarily talking about a 7-11 on the corner, a fast food franchise. Small businesses are important to a region, but they don’t grow a region economically.
You start a restaurant, a franchise, say a McDonalds here in town, people go there, they buy breakfast, they buy lunch, they buy dinner, and some of that goes to people who work in this region as salary. But a chunk of it disappears and goes off to McDonalds headquarters.
Ok, so you’re siphoning money out of the region, you’re not growing the region. If we start a Wal-Mart here in Binghamton, ok, there’s Wal-Marts all over the country, all over the world, people go to Wal-Mart and then a fraction of those dollars comes back to Binghamton and so that investment is leveraged.
IT: It seems like every small city talks about becoming the next Silicon Valley. Do you think Binghamton needs to create a unique identity that would work here?
KM: It’s a fascinating question that gets a lot of debate and there’s been a fair amount of research. The essence seems to be – you can’t do that. You can’t create a cluster.
So entrepreneurs create clusters, clusters don’t create entrepreneurs. So the thing to do is create as many entrepreneurs as you can and they will probably self-organize and certain clusters will develop.
But if you say, here’s where we’re going to be strong and you’re trying to push that area, what you’re doing is you’re taking money away from the area that was most likely going to develop and become strong. And we’re not smart enough to guess the answer and so it’s usually not a wise investment to try and pick the winners.
IT: Do you see any advantages in the Binghamton area?
KM: We do certainly have infrastructure left over from when we did things like electronic packaging. We have remnants of the simulator industry which was started here and was quite large here. So there are useful bits and pieces.
I would say that the huge advantage that Binghamton has, a couple of them. One is our geographic location – you can draw a 300-mile circle around Binghamton and that’s 25 percent of the population of the US and more than half the population of Canada within 300 miles of Binghamton.
And we have five whatever interstates you know pouring into here. So we’re kind of this little, very small, rural area, that is really very well positioned.
We’re 100 miles or so from the center of finance, the world’s center of finance.
Up here a hundred square feet, you’ll probably get for free. So young people are going to be making no money on this startup. The salaries are close to zero.
So you have to be in a place where you can space for free, you have a lot of young people who have essentially no living costs, who have no commitments because it’s hard to commit to something that is probably going to fail if you have, if you’re married, you have a house, you have mortgage, you have kids, if you have any of those things, it’s pretty hard to commit to something that’s probably going to fail.
A student right out of college, why not? Especially right now, where most college students are unemployed or underemployed, why not take a fly around something like this?
So you’ve got this wonderful population, you’ve got 4000 students a year pouring out into the community here locally, so it’s a wonderful resource from the point of view of potential partners, inexpensive housing, inexpensive cost of living, pretty darn close to money. I think we have a lot going for us.
IT: During you're career, you've developed twelve products that have been taken to market, specializing in what’s known as translational research. Would you describe this specialty?
KM: I pick research questions that I do believe can be commercialized rather than, we have a category of research for example called blue sky – I want to know this because the world will be a better place if I know how this works.
A classic example of blue sky research would be, why is the sky blue? In fact a famous physicist came up with a wonderful solution at the end of the 20th century on why the sky is blue.
What do you do with that information? It’s cool to know that you can explain why the sky is blue, except for in Binghamton, where the sky is usually gray.
But in the rest of the world, the sky is often blue in midday. So that’s basic research. We take research from around the world and recombine these, so translational research is learning the process of recombining extant ideas or extant technologies, putting them together in new ways.
IT: It seems like the university is the only place where that ‘blue sky’ research can take place. Why do you focus on translational research?
KM: It’s just [a fundamentally], in my mind, a fundamentally different process and both are equally important. It’s, I think Aristotle said it, if we’re all philosophers, who’s going to fix our plumbing? If all we know is how to do blue sky research, who’s going to create the next generation of products?
And I think that’s really in a way what’s happened here. As academia has taken over more and more of the basic research and corporate America has shut down its basic research labs.
You know, GM doesn’t run a very big research lab, I think Microsoft does, they’re one of the exceptions, but most of the big companies – the GMs, the AT&Ts – have shutdown their research labs. They say you know if we want basic research done, we’ll go to academia.
And so we have been doing more and more basic research and the application stuff has been pushed to the side. So these young PhDs, Masters, get out there and they don’t know how to do translational research, they can’t create the products of the future because no one has taught them how to do it.
IT: Your career path has taken you a long way from where you started in 1970s. What is your academic background and how did you come to develop products used in the health care industry?
KM: My background is in engineering, specifically electrical engineering. And I entered the workforce working in the auto industry, I actually designed machinery to make automobiles, they call it production engineering.
There was a lot of interest in the auto industry which was struggling to automate. Unlike startups, most jobs in the country are created by startups, obviously, there’s nobody working, you create a startup and there’s more people working now. So if we have lots and lots of startups, we have lots and lots of people working.
Big industry is kind of the opposite of that. The whole trick in big industry is maximize shareholder value and so you want to reduce employment as much as possible.
So the question is can we replace the job this person is doing with a machine? And that’s what I was doing at the time, we were trying to do a lot of things by creating smart machinery, what we call machine vision, machine intelligence.
So I was working in production engineering, we were moving into the realm of machine intelligence and so I went off to graduate school to study machine intelligence and at least in the '70s, the idea was, well, if you’re going to make an intelligent machine, you kind of have to understand what intelligence is, you have to understand what makes people intelligent, what gives people the ability to see patterns, do pattern recognition, that kind of a thing.
So I started studying physiology. And then I just drifted and drifted and drifted. I never went back to machine intelligence. I’m focused on human intelligence, human vision, moved on into adaptation and repair of tissue. I never went back, so the last 30+ years I’ve been working in just human injury repair, response, adaptation, human physiology.
