Birck says state holds back tech industry
The chairman of Tellabs said Thursday a poor primary and secondary educational system in Illinois along with an anti-business environment have caused the technology industry here to lag the nation.
Michael J. Birck, founder of the Naperville-based telecommunications equipment maker, said the tech industry has been undergoing a tough time and the governor and other elected officials aren't helping to nurture entrepreneurs.
"The tax climate here and the educational environment combined is depressing," Birck said.
Birck made the comments to the Executives Breakfast Club of Oak Brook, which includes top executives from Ace Hardware, McDonald's, other corporations, local mayors and church officials.
Birck said the universities in Illinois offer great educational opportunities for those specializing in science, math and technology. But primary and secondary schools, where most kids get inspired to enter these fields, sorely lack quality programs. That discrepancy reduces the number of next-generation talent, he said.
Jack Lavin, director of the Illinois Department of Commerce and Economic Opportunity, was not at the program but later disputed Birck's views. He said Gov. Rod Blagojevich has vowed not to raise sales and income taxes on businesses and last year passed legislation to increase math and science standards for young people seeking to earn their high school diplomas.
"We've also invested about $70 million in a job training program to help work-force development over the last four years that has helped train 300,000 workers at 6,000 companies," Lavin said.
Another obstacle to technology innovation, Birck said, is that Verizon Communications and AT&T are the major players in the telecom industry, along with several smaller companies. Such competition doesn't help to create an environment for innovation.
"This type of environment cuts our profit margins, when you no longer can afford to innovate," Birck said.
Tellabs has been streamlining due to reduced revenue from the telecoms. Birck said Tellabs will continue to cut costs, but no major layoffs are planned.
Another speaker, Savo Group Chief Marketing Officer Jeff Summers, said the area's technology industry's greatest need is finding and keeping talent.
"We also need an eco-system of vendors and suppliers who understand our industry," said Summers. This includes public relations and marketing firms that are tech-savvy, he said.
Summers also advised entrepreneurs to pursue venture capital funding by casting a wide net.
"We initially talked with 30 venture capital firms and were called back by 28, and that led to seven where we presented our business plan," Summers said of his company. "Don't restrict your search."
Illinois ranked 11th in venture capital investments, according to the Cyberstates 2007 report by the American Electronics Association.
The report said Illinois' total venture capital investments were $392.1 million in 2006, compared to $294.7 million in 2005, a 33 percent increase. However, from 2000 to 2006, total venture capital investments had declined 84 percent.
Lavin said the state has invested $1 million into the new Illinois Accelerator Fund, a private-public venture capital fund to help seed new companies and encourage more entrepreneurs.