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The Rochester region produces more patents per capita than most of its peer cities and wins tens of millions in competitive federal research grant dollars each year. But a new NextCorps report says that innovation has not translated into a surge of high-growth startups, venture capital investments, or new jobs.<\/p>\n
Jim Senall, president of NextCorps, shared that message last week at a quarterly meeting of the Finger Lakes Regional Economic Development Council. Attendees took the information better than he expected, he says, and the conversation continued after the meeting. (FLREDC has representatives from nine counties, including economic development officials.)<\/p>\n
\u201cHistorically, we have talked about ourselves as this innovation place forever,\u201d Senall says. \u201cHas anyone looked lately?\u201d<\/p>\n
In asking that question, Senall means to focus on the fact that, while there are plenty of startups being formed (NextCorps helps roughly 100 businesses a year), the Rochester area hasn\u2019t seen these fledgling ventures scale for growth. Nor has venture capital poured into the region\u2014a longstanding challenge.<\/p>\n
To bring change, Senall believes that entrepreneurship and innovation need to become an explicit part of the region\u2019s economic strategy. Buffalo\u2019s regional economic development strategy, by contrast, has entrepreneurship as a core pillar<\/a>.<\/p>\n \u201cThe two institutions in this town that really drive high-tech startup growth are NextCorps and Excell (Partners),\u201d says Theresa Mazzullo. A NextCorps director and CEO emeritus of Excell Partners, she also is a member of the regional council. \u201cAs a region, we really need to fortify those two entities and make sure that they have the necessary resources and the bandwidth to really take on this task of realizing the potential that exists in our region with all the talent that we have.\u201d<\/p>\n Hub of activity<\/p>\n The State of Innovation report found that the region is a leader in research and development and intellectual property. Rochester-area inventors are granted 700 to 800 patents annually. Ranked by the total number of patents, Rochester outperforms most peers, including some larger metros. The report compares the area with Buffalo, Syracuse, Cleveland, Columbus and Pittsburgh.<\/p>\n During the 2021-2025 period, Xerox received the most patents (569), followed by the University of Rochester (150). Businesses like LSI Solutions, Kyocera, Taiwan Semiconductor Manufacturing Co., Sony Semiconductor are also on the list of patents granted to local inventors.\u00a0<\/p>\n The report also cites census data showing that 1,100 to 1,200 new businesses with at least one employee are formed each year in the Rochester region. On a per-capita basis, Rochester outperforms all peer metro areas in new business formation. (The data does not identify the markets in which these businesses operate.)<\/p>\n The region also stands out when it comes to Small Business Innovation Research and Small Business Technology Transfer grants. Both federal programs are highly competitive, and the report suggests that they validate the quality of research. These grants are often sources of early-stage technology funding.<\/p>\n Rochester-area startups and small businesses win 35 to 45 SBIR\/STTR grants each year, totaling $20 million to $25 million annually for early-stage technology commercialization, the report states. It is an outperformer in this category as well.<\/p>\n \u201cEvery time you look at the stats, you\u2019re blown away by them,\u201d says Mazzullo. \u201cWe should be (the) Silicon Valley of the East. We really should.\u201d<\/p>\n Excell and NextCorps have been successful at incubating, grooming and providing seed capital to companies. According to the NextCorps Impact Report,<\/a> released a month ago, the nonprofit helped 992 companies in the 2018-2025 period.\u00a0<\/p>\n Excell Technology Ventures, an offshoot of Excell Partners, at year-end 2024 (the latest data<\/a> publicly available) had more than $80 million under management with individual investments ranging from $250,000 to $1.5 million. That is just one aspect of the efforts to help young firms. Luminate NY, an accelerator administered by NextCorps, has been successful with businesses in the optics, photonics and imaging industries; and Excell has nurtured life science companies in addition to several other sectors. URochester and Rochester Institute of Technology have also helped commercialize ideas.<\/p>\n In 2019, Jonathan Gruber, Ford Professor of Economics at the Massachusetts Institute of Technology, and Simon Johnson, the Kurtz Professor of Entrepreneurship at Massachusetts Institute of Technology and a former chief economist at the International Monetary Fund, brought attention to Rochester.\u00a0<\/p>\n The co-authors of \u201cJump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream<\/a>,\u201d placed Rochester at the top of a list of potential tech hubs. It was followed by Pittsburgh and the Syracuse\/Utica area. Buffalo ranked No. 15. (The book, heralded by community and business leaders as a blueprint for the future, targeted cities other than obvious growth hubs. The authors identified 102 cities in 36 states that could be next-generation tech hubs.)\u00a0<\/p>\n During his presentation last week, Senall reminded attendees of the book.<\/p>\n \u201cI wanted to kind of anchor it back to that to say, \u2018Look, it\u2019s not us telling it, because I know no one believes anyone locally that says anything. It\u2019s got to be an expert from outside,\u2019\u201d he notes.<\/p>\n Gruber visited Rochester in 2019 to participate in a panel discussion. When he spoke with the Beacon<\/a> at the time, Gruber noted that while the conditions for growth were favorable, the area still had a tough time competing with cities like Boston and San Francisco.<\/p>\n \u201cTo compete with these cities, Rochester needs to demonstrate an enormous commitment to scientific advance that will bring the best scientists and an influx of capital to finance new businesses,\u201d he said. \u201cAnd that means a dedicated, enormous financial commitment to science in the city.\u201d<\/p>\n Matt Hurlbutt, president and CEO of Greater Rochester Enterprise, says innovation is especially important to next-generation companies across industries. URochester and Luminate NY\u2019s success play an important role in positioning the region.<\/p>\n \u201cThat\u2019s really one of our key talk tracks, as we talk about companies that are not just considering the region for an investment today, but also how they work with our colleges, universities, and the outstanding people that we have here, the PhDs, the technicians, and the engineers to continue to advance technologies that will lead to more growth,\u201d Hurlbutt says.<\/p>\n Big gaps<\/p>\n Entrepreneurship advocates agree that it will take a commitment to raise the region\u2019s profile. The report identifies two gaps. One is the failure to move startups through the growth and scale-up stages to generate wealth and significant jobs. The second is a perception gap. \u201cInnovation & Entrepreneurship is not yet viewed as a core pillar by community leaders, despite national data and local anecdotal evidence that shows it\u2019s the #1 driver of growth,\u201d the report states.<\/p>\n According to the report, startups in the Rochester region are closing only approximately 15 to 25 venture capital deals annually, totaling $40 million to $100 million.<\/p>\n Rochester lags nearly all peer metros studied in total annual venture capital investments. On a per-capita basis, it is dead last. From 2021 to 2025, Columbus had $3.9 billion in venture capital investment and Pittsburgh had $3 billion. Rochester had $394 million.\u00a0<\/p>\n Senall says the gap between Rochester and other cities is not new.<\/p>\n \u201cThe surprising part to me was when you do it on a per-capita basis for venture capital that we\u2019re actually less than Buffalo and Syracuse,\u201d Senall says. \u201cThat was the shocking number to me\u2014like, holy cow, it\u2019s not good. They\u2019re not good either, but we\u2019re even worse than them.\u201d<\/p>\n Adds Senall: \u201cYou don\u2019t know where you\u2019re going to catch the next big win. So, we just have to ramp up the amount of activity that\u2019s happening here, get these things funded. Get them scaled up quickly.\u201d<\/p>\n The report identifies three factors for lagging growth and scale-up beyond capital: lack of experienced startup founders and senior staff; limited access to industry experts; and difficulties in securing first customers for proof of market or product.<\/p>\n \u201c(The report) just solidifies very, very effectively (that) the data to support the research is there, but we are weak in scaling and in commercializing,\u201d Mazzullo says. \u201cWe get (startups) to a certain point, and then we don\u2019t have the dollars for them to really go to that next level that is going to take them or take us as well to the promised land.<\/p>\n \u201cIt\u2019s a combination of, you know, not having enough access to capital and venture capital in the region\u2014that is huge\u2014and then you also need mentorship,\u201d she adds. \u201cWe need more serial entrepreneurs who have been there, done that, and who come back and keep that cycle going, and at the same time are mentors to the other people.\u201d<\/p>\n The report is pointed in its assessment of how Rochester views innovation and entrepreneurship.<\/p>\n \u201cRochester community and business leaders don\u2019t all rally around innovation and entrepreneurship as a North Star. The general community lacks a culture of entrepreneurship,\u201d it states.<\/p>\n \u201cWe need to have sort of a little reality check,\u201d says Mazzullo. \u201cI think too, too many people are tied to the legacy that we\u2019ve had here in our town.\u201d<\/p>\n While Rochester\u2019s traditional Big Three were important, she believes the region needs to look ahead.<\/p>\n \u201cThey were awesome, and they really put Rochester on the map, but it\u2019s going to be new companies and the high-tech companies that are really going to be the future of our region,\u201d Mazzullo says. \u201cWe really need to just sort of look forward and not look backward.\u201d<\/p>\n Ryne Raffaelle, vice president of research at Rochester Institute of Technology, like Senall and Mazzullo points to the region\u2019s many strengths as an innovation hub. Rochester has \u201ca strong startup culture, (an) entrepreneurial community,\u201d he says, \u201cIt\u2019s not just patents, but it\u2019s how many patents are getting licensed and are getting used in small, medium, and large companies. We\u2019ve got that in spades. In many ways, we\u2019re doing very well.\u201d<\/p>\n He agrees, however, that \u201cwe probably don\u2019t value (entrepreneurship) as highly as we should as a community.\u201d<\/p>\n \u201cBecause it is one of those things \u2026 it\u2019s like a hidden driver of the economy,\u201d says Raffaelle, who also is a NextCorps board member. \u201cPeople look at Micron, and \u2018Oh, there\u2019s a driver of the economy.\u2019 But you look at some programs like Luminate, for example, all these small businesses from all these corners of the globe, all coming and setting up shop in Rochester, and that\u2019s bringing a lot of intellectual and technological talent to our region. You never know how that\u2019s going to play out over time.\u201d<\/p>\n Action plan<\/p>\n NextCorps has seen increased demand for its services over the last several years, Senall says. The organization is expanding <\/a>to meet that demand.\u00a0<\/p>\n The State of Innovation report says that the region needs to increase the rate of high-growth startups by 10x and translate patents into commercial enterprises. Proposed solutions in this category include launching a venture studio that pairs innovations with founders and funding from the start, and a regional innovation alliance to coordinate among key players, including NextCorps and Excell, and share connections.<\/p>\n Hurlbutt points to GRE\u2019s annual report where the organization highlights innovation, including patents and the area\u2019s STEM prowess.<\/p>\n \u201cSometimes I think we need to, to a degree, slow down and help people understand how those things connect,\u201d he says. \u201cThe patents, the innovation are important, and that helps us create more companies, more investment, and also lead to next-generation capabilities that play out across the world, and we see that, but I think we need to be a little bit more vocal on that point.\u201d<\/p>\n The other area of focus is addressing the scale-up bottleneck related to talent and connections. The suggestion here is to create a network of experienced executives and bring industry experts back to the region. A business ambassador network could provide mentorship and industry connections, and could even serve as pilot customers while building a group of student venture fellows, increasing access to a talent pipeline.<\/p>\n Fixing the funding bottleneck, according to the report, requires relationship building. Hosting venture capital conferences, connecting with more than 100 out-of-market funders, and expanding angel investor groups are just some ways to improve deal flow.<\/p>\n Raffaelle notes that alumni from Ivy League schools such as Harvard University and MIT invest <\/a>in spinoffs from their alma mater. While URochester and RIT invest in securing patents, they don\u2019t have similar alumni investing funds.<\/p>\n \u201cWe do not have the alumni investing funds that you\u2019re going to see associated with the schools in Boston or that are in Silicon Valley,\u201d Raffaelle says. \u201cWe don\u2019t have quite that heritage yet.\u201d<\/p>\n To augment a culture of entrepreneurship, the report advocates embedding innovation and entrepreneurship as a core element of all regional economic growth efforts, driving more private-sector dollars toward both, and publicizing startup wins broadly.\u00a0<\/p>\n Finally, the report says that to create jobs and wealth efficiently, the ecosystem needs a way to measure growth and track pipeline performance. An AI-driven startup database could help build a tracking system to monitor local tech startup metrics and key performance indicators.<\/p>\n Ultimately, it will take more than one agency to increase momentum. Senall views it as a community-driven, collective effort.\u00a0<\/p>\n \u201cIt could be the regional council, the business leadership of our community. If they all bought in and said, \u2018Yeah, let\u2019s focus on fixing this,\u2019 that would be huge,\u201d he says. \u201cAnd then, even broader than that, the general business community, beyond the 20 people around that table, that would be even better.\u201d<\/p>\n Neighboring Buffalo has been successful at making entrepreneurship part of its economic development strategy. In its 2023 strategic plan, for instance, the Western New York Regional Economic Development Council listed innovation as one of four strategic pillars. The other three are placemaking, workforce and tradable sectors. FLREDC\u2019s core focus areas<\/a> are workforce development, quality of life, industry growth and built environment.<\/p>\n \u201cI don\u2019t like complaining about what Buffalo has, or what somebody else has, and that we don\u2019t have, (but) obviously they\u2019ve had the Buffalo Billion<\/a>, and the Buffalo Billion Two, and then 43North<\/a> has been funded at twice as much as the Luminates of the world,\u201d Senall says.\u00a0<\/p>\n The difference, he believes, is the explicit focus on regrowing Buffalo. Excitement around new companies and jobs is evident.<\/p>\n \u201cI\u2019m ready for us to start being more explicit about Rochester,\u201d Senall says.<\/p>\n Raffaelle echoes Senall.<\/p>\n \u201cWe always get criticized that we don\u2019t tell our story well enough,\u201d he says. \u201cWe get people from Arizona, they come here, and they\u2019re like, \u2018We had no idea.\u2019 We get people from all over the country. It is, unfortunately, (a) best-kept secret.\u201d<\/p>\n Smriti Jacob<\/a>\u00a0is Rochester Beacon managing editor.<\/p>\n The Beacon welcomes comments and letters from readers who adhere to our\u00a0comment policy<\/a>\u00a0including use of their full, real name.\u00a0See \u201cLeave a Reply\u201d below to discuss on this post. Comments of a general nature may be submitted to the Letters page by emailing\u00a0[email\u00a0protected]<\/a>.<\/p>\n \n\tRelated<\/p>\n","protected":false},"excerpt":{"rendered":"The Rochester region produces more patents per capita than most of its peer cities and wins tens of…\n","protected":false},"author":2,"featured_media":733272,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[45,49,48,137],"class_list":["post-733271","post","type-post","status-publish","format-standard","has-post-thumbnail","category-entrepreneurship","tag-business","tag-ca","tag-canada","tag-entrepreneurship"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/733271","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=733271"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/733271\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/733272"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=733271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=733271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=733271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"chart](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/06\/thumbnail.jpeg\")
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Western New York Regional Economic Development Council\u2019s strategic pillars<\/p>\n