Chicago-based UI Labs gaining backing

CHICAGO — City and state officials are endorsing the University of Illinois' plans for a multimillion-dollar research institute that backers say has the potential to drive economic growth in the region.

The idea for UI Labs — an institute with an anticipated $100 million research portfolio and hundreds of researchers and students in its early years — has been percolating over the last year.

The News-Gazette first reported in October the university's plans for the institute, and members of the UI Board of Trustees and faculty leaders have been briefed on the concept in recent months, but Thursday will be the first time trustees will hear about it as a group in public. The occasion will mark an unofficial launch for the project.

The university will soon file incorporation papers and UI Labs supporters, among them Chicago venture capitalist Bruce Rauner, said they will start raising money. Initial startup operations are estimated to cost about $20 million. Organizers have pledged not to rely on state money or drain campus resources for the project.

In five years, it's envisioned to have five major research programs with about 1,000 employees, including researchers, post-doctorate fellows, graduate students and staff.

Locations in Chicago, such as the River North neighborhood, are also being scouted, though organizers insist the institute is still a long way from signing a lease or buying property.

"I'm a believer in the University of Illinois and the economic impact the university can have," Rauner told The News-Gazette. "By creating a joint venture between the University of Illinois and the city of Chicago, we can create a structure that will attract even more venture-capital firms to the University of Illinois and Champaign-Urbana and Chicago, and we can attract more Fortune 1000 firms like IBM, Microsoft, YouTube to Illinois."

Led by the university, UI Labs is proposed to be an independent, nonprofit 501(c)(3) organization, a public-private institution that also could partner with other Chicago universities such as Northwestern.

UI Vice President for Research Larry Schook said it will capitalize on core strengths of the Urbana campus, such as computer science and engineering, as well as those from the Chicago campus, such as biotechnology.

Its scientists will compete for big federal research dollars in areas such as advanced manufacturing or energy. And its scientists will reach out to private industry to conduct proprietary research.

James Duderstadt, a scholar with the Brookings Institution and former president of University of Michigan and adviser of sorts on the project, has for years studied the economy of the Great Lakes region. He said Chicago is critical to the region's economic future.

The city is home to manufacturing, corporate headquarters and other industries, "but what it lacks right now is the high-tech area, particularly information technology and engineering. ... And that's a great strength of (the UI at) Urbana-Champaign," Duderstadt said.

The problem is the campus is 150 miles from Chicago, and it needs to be more engaged with Chicago industry, Chicago alumni and donors, and the Chicago campus, he said.

You need a new paradigm, Duderstadt said. And UI Labs could be it.

"Anybody who has responsibility for growing their local economy is trying to figure out how to take advantage of their available assets," said UI President Bob Easter.

The UI is an asset to the state in terms of producing graduates, ground-breaking research and startups, he pointed out: "The challenge presented to us is how we do we bring truly great science from the University of Illinois to the broader world, ... to solving problems the world has."

Gov. Pat Quinn has endorsed the project as well. In a written statement to The News-Gazette, he said the project "is bringing together the university, the state, the city and the business community in a way that will best position Illinois for growth in the 21st century economy."

However, at a time when the UI's resources are constrained, the question is "how to create this opportunity without drawing on university resources," Easter said.

State money to the UI for benefits and pensions has increased, but direct appropriations have been on a steady decline. The UI's direct state appropriation is now at the same level as 1997 in nominal dollars, and when adjusted for inflation, it's below its level in 1966.

Enter the venture capitalist.

Rauner, who described himself as a major donor to the university, said he is in the early stages of talking with possible investors and philanthropists about UI Labs and its potential for the state.

"It's not going to happen overnight," he said. The economy is still recovering from a "brutal recession" and the business community is "still a little shell-shocked. And there is a loss of confidence about the financial condition of the state.

"But this project is so compelling, and the potential impact for the University of Illinois, the city, the state," he said.

"We're a partner in making this happen," said Chicago Deputy Mayor Steve Koch, who said Mayor Rahm Emanuel has been talking with people to help raise capital "and make it a reality."

Koch called the UI Labs concept "fundamentally different" from Cornell University's Cornell NYC Tech campus, an engineering school and tech park being developed on Roosevelt Island in New York City.

"This is a very unique idea, to create an independent research training organization modeled after some of the great research labs — Bell Labs or SRI," he said of the lab founded by Stanford University but that is now an independent institute.

There will be a student-training element to the institute, he said, such as possible internships for students in their junior years. But the main idea is to attract great, world-class scientists and engineers.

Koch said ideally the institute would be housed in an urban setting attractive to faculty, post-doctorate fellows and other researchers and students.

Henry Bienen, former president of Northwestern University, called it "one of the more really exiting and innovative things I've heard about for a long time."

At the end of the day, he said, it could work if the right leadership is in place, private philanthropy gets behind it, and a good location is found.

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