Hi, I'm Jeff Rea, your host for Economic Outlook.

And I want to welcome you to our show.

Thanks for joining us.

Each week as we discuss the people, the companies and the projects driving the region's economic growth.

The University of Notre Dame has a long history of turning the research happening on campus into the commercialization of those discoveries.

And that work is driving new economic opportunities for our region.

We're diving deeper into that work, including some recent award winning success stories coming up on economic outlook, whether it be through the licensing of the technology to other companies or through the development of new startup companies.

Commercialization provides a new revenue generation and job creation opportunity locally, regionally and potentially across the globe.

Joining me today to talk more about commercialization at the University of Notre Dame and the Indiana University School of Medicine and why that's important to our region are Kelley Rich, the interim vice president and associate provost for innovation at the University of Notre Dame at the Idea Center.

And Chris Murphy, the chairman of 1st Source Bank and the chairman, president and CEO of the First Source Corporation.

Welcome.

Glad to have you guys here today.

Glad to be with you.

So we've been having this personalization conversation for a long time.

Thought our viewers would enjoy that.

You both have been leaders in this space, so we want to dive deeper into it.

Before we start, though, Chris, let me come your way.

So if people aren't familiar with first source, be surprised if they weren't familiar.

Tell us a little bit about first source.

The first source is a local community bank serving northern Indiana and southwestern Michigan in the traditional business areas.

And community areas, we're about an $8.6 billion company.

We have 70 branches in the local area.

We're the number one SBA lender here.

We this is our 160th year in South Bend.

We have then operations across the United States.

So we do business in the U.S., Latin America, South America, a little bit of Canada in our specialty finance businesses.

But we have been about helping businesses grow.

And when the family got involved in 1931, it was because Vincent Bendix and Ian Morris as the founder of the associates, wanted to make sure that it was a good business bank in the community serving the needs here and encouraging innovation and growth.

Great.

And Kelley, similar question to you.

You're you've been at the Idea Center for some time now.

Tell us if we don't know what the idea center is, tell us about it.

So the Idea Center is at the University of Notre Dame and our mission is to really maximize the impact of all commercialization and entrepreneurship activities going on around campus.

So we work with faculty, students, community startups and founders to make sure that we leverage their great ideas into the marketplace.

So our mission really at the Idea Center is to ignite an economic transformation in our region through entrepreneurship and startup creation.

Chris come make your way so.

So maybe some historical perspective just to kick things off.

So we're talking about commercialization and research and technology just happening today.

That's happened though, for a long time in our communities.

Give us a little bit of a snapshot of historically how that worked here.

Well, it's happened for a long time, then went dead for a long time.

Commercialization innovation happens where there's a home office where the center of the innovation of the company is or the creativity in the company that wants to grow it.

And we had that in spades here.

When you go all the way back to the Olivers and then the Bendixs is and the companies that are growing through growing here, and even Studebaker, I mean, innovative companies building things and building them here, and then applied for thousands and thousands, tens of thousands of patents that went right on through World War Two with the House machine missile program and a whole series of other things they were doing.

But as happens as things get larger and larger and the management or leadership goes elsewhere, all of a sudden that creativity, that innovation goes with them.

So it moved off to Detroit.

It moved off in the case of some things, in Elkhart to northern New Jersey or to New York.

And so all of a sudden, our creativity, our innovation stopped here.

So who's got the biggest home office here today?

Notre Dame.

But Notre Dame was not about commercialization.

It wasn't about innovation.

It was about teaching undergraduates.

And Notre Dame made a decision about 20 years ago now to become a research university, a great research university.

As they did that, they realized you have to be involved in the marketplace.

You have to have commercialization.

You have to have an economy that's growing.

So when you attract researchers here, when you attract faculty here, they've always got a spouse who wants to be doing something interesting and have to be businesses that can hire them.

So they became more and more engaged.

And when I was a student, it was almost a sin to go out and hire people and make money.

Notre Dame understands how important that is for serving people.

If you want to make if you want to do good in the world, you have to be engaged in it.

You have to do something with it.

You can't just study it and tell people what to do.

And I think Notre Dame I mean, Kelley's a good example of the enormous growth that Notre Dame has had and where they are today versus where they were.

And this has all happened in the last 15 years.

I mean, it's remarkable.

That's a really good point, Chris.

Like the Idea Center, we're kind of a startup ourselves, right?

So we were formed in 2017 for exactly that purpose.

The university's mission is to be a force for good in the world, and it does nobody any good have the next cure for cancer is in a research lab on campus.

Right.

So we have a huge, huge responsibility to make sure that we are successfully translating those inventions from the research lab on campus out into the marketplace successfully.

So that's that's why the Idea Center was set up.

Well, if you go back, we started innovation park started talking about it in 1999, 2000, 2003.

I had the first paper written on it, and then we started putting together a group and it was Tom Berrish and and John Jenkins was a favor We were bringing the medical school together, building the new medical school, raising the money for that, and then saying, okay, where do we go with this?

And you know, the Project Future was heavily involved in that.

Pat McMahon And then it was then it became the Provost University was Nathan Hatch along with John, John Wesley Graves.

And that's when we sat down actually in my kitchen and talked about where can we do this?

And at that point, the mayor, Steve Lueckie, joined and we were going to do it as a community project.

And lease it to Notre Dame, well our prayers were answered and Notre Dame took it over and helped make it just great today.

And that the other thing we did is we realized there is not an ecosystem for commercialization, which is why at first source we created the first source commercialization award to recognize faculty and other not Notre Dame or Indiana University, South Bend at Notre Dame for what they do to innovate and commercialize product.

And it has to be given by the president or the provost.

So it's in balance with the academic pressure they have to publish your parish or teach, etc.

Kelley stay your way.

So so as this is evolving and you're having some success stories, just just give us a give us a maybe a snapshot from the beginning to now, sort of how it's going some different things that are happening there that we should know more about.

Sure.

So as I mentioned, the Idea Center was formed in 2017 and prior to its creation, all entrepreneurship and commercialization activities were kind of scattered throughout campus.

So there wasn't a centralized resource for that like there is today at the Idea Center.

And since then, we've put all kinds of processes and programs in place to support faculty on their entrepreneurship journey, to de-risk inventions coming out of the university, to make sure that we maximize the success for startups created with those technologies.

We help undergraduate graduate students along their entrepreneurship journey as well.

And we're we're starting to see, even though it's only been five years, we're starting to see huge impact coming from that effort.

I looked at our recent impact report and over $85 million as investment dollars have gone into startups coming out of the ideas and or over the last five or six years.

Additionally, I mentioned the economic transformation and development and tons of jobs have been created.

We have over 500 jobs created by our start ups and obviously these are these are high paying jobs that can really spur economic growth.

You know, we're looking at job with an average salary over $100,000.

So this this fulfills the mission of the university, which is also really focused on the development of South Bend, because you you know, you raise up our region, all boats rise.

Chris come back your way.

So think about this commercialization.

You've mentioned the commercialization dinner.

We've had about 12 of those, I think, or so over the years.

Give us just sort of your perspective sort of from the start to where it's at now, maybe some some nuggets of things that have impressed you through the years, I guess even as we've celebrated 12 years of of commercialization?

You know, I think if you go back, it's interesting, we had innovation before.

We had an innovation park or the idea center, but it was hard to bring it out.

Presteigne is a good example of that.

We had another company we invested in through our venture capital subsidiary years ago where we were negotiating the next investment and we were saying it's got to be worth 20 million.

And the West Coast Company came along and bought it for 90 million.

You know, those were in the days that was in 1999.

Then the crash happened and was back to worth about 15 million in any case.

And so, you know, what's happened is in the beginning it was just getting people to talk about innovation, to talk about creativity, about what could be commercialized from anywhere in the university.

And, you know, we had a small dinner and a few people show up.

Well, now we're recognizing literally dozens and dozens and dozens of faculty members who have gotten patents or disclosures that are then going to lead to product or lead to research.

It goes to the marketplace and we've got entrepreneurs who are winning and going into the marketplace.

So whether it was at Press Ganey or on Linux, which we helped fund to start or a dozen other companies in that space, it now on Linux has kind of merged kinetic I.T, a number of others like that.

We're building this ecosystem in the community and there are people are willing to say if you hire somebody from outside the community and they look and say, I'm going to come to this startup and it doesn't work, where do I go?

You got to have other energy.

The idea center has helped do that.

The de-risking is really important part of that.

We didn't have a venture entrepreneurial ecosystem to take care of people.

That doesn't mean we can replace their passion.

They better be passionate.

They better not be wannabes who just want a high salary into a startup.

They better they better know something and bring something to the table that they want to then grow and go out and make happen and be willing to pivot.

When the market says that's not quite right, you've got to go this way.

That's what you all do.

Well, exactly.

And you kind of touched on this, Chris, the importance of building innovation ecosystem in an innovation hub in our region, and that's only done by a collaboration.

And with all of us here and many more of the local organizations in the South Bend region.

And it's it's critical for the success of this initial.

I think it's interesting you look at some of the winners of the award over the years, whether you go take a brace, which was done by somebody in the athletics area, which a local doctor Fred Ferlic's involved with.

And and it's a brace that goes up on your shoe, not inside of it.

So it's easier to use and it's really a good product and they're naturally marketing that you take analytics which is now you know couple of major data centers doing a lot of deep data analysis, offering that to major companies and to companies like ours where we I mean, look, I and deep data analysis is critical for our future.

So we want to have businesses here that compete in the world.

We need to have access to data that the people who can help us analyze it understand what to do with it.

More recently, you've seen the winner this year doing some wonderful stuff in cancer.

I mean, just the medical device area.

Yeah.

So there's it's been a broad spectrum of winners.

Some have gone on and doing very well and some just don't make it.

But they do pivot and then find new ways to go.

And then Vanlee was one of them we thought had great hope for it hasn't quite turned out.

But you know, you got to take shots and go and you have take a lot of them to make it work.

So we want this to be a broader innovation market, a broader creativity market where we're encouraging people to take risk and build things.

Great, guys.

We'll take a quick break here in the studio.

We're going out to the field, George Lepeniotis My co-host is out to dive deeper into this.

George, let me toss it to you.

Thanks, Jeff.

I'm at Notre Dame, Indiana, and I'm joined today by Professor Tom O'Sullivan.

Professor, thanks for being with us.

Thank you.

Professor, before we get to the cool device I'm holding in my hands, I don't know that I'm going to give it back, but I want to talk a little bit about you and how you came to be here in Indiana.

Yeah.

Didn't start here right?

There's not start here.

Yeah, So I well, my research started when I was studying for my Ph.D. at Stanford University.

And then after that, I joined the lab in Southern California, University of California, Irvine, where I was studying the use of light for medical purposes, in particular using light to diagnose and monitor breast cancer.

Well, and that explains why electrical engineering professor is talking to us from a room that looks like my doctor's office but isn't really my doctors.

That's correct.

So let's get to Near Wave.

Near Wave is I affectionately referred to it before we went on air as a tricorder from Star Trek, but it is in fact a medical grade scanning device that can be used to detect and diagnose breast cancer patients.

Yes, that's a that's our intent.

Yeah.

Okay.

Tell us a little bit about how this came to be and what differentiates it from what's on the market already.

Right.

So you're probably familiar with other imaging modalities, MRI, X-ray mammography, CT scans, and those are excellent modalities.

And we're not going to replace any of those even in breast cancer.

But they have their limitations.

So they they can cost a lot of money.

They can require an injection of an agent that has some side effects associated with it.

And for those reasons, you can't do that imaging very often.

So one of the things we would like to do is monitor a woman's response to chemotherapy in breast cancer and in order to do that, you want to be able to make frequent measurements and something you can't do with those modalities.

And you were describing it to me earlier.

And for the viewers, A can see or maybe we'll get some B-roll of the of the examples in the back.

It produces a very detailed color image of a of the anatomy and can show with some training and detect how a woman might be responding to the treatment.

Is that right?

Exactly.

Yes.

Can it be used to diagnose the disease at an early stage?

So looking at diagnosis is one of the areas we're actively researching right now.

So we're still working out.

Exactly.

Yeah.

Let's talk a little bit about how in your way that actually leads me to that point.

You're we've came about in a very unique way here at Notre Dame.

Yep.

You brought some of your research with you and you were hired on as an associate professor, but then some students got involved.

That's right.

Tell me a little bit about that.

Yeah.

So it was actually back in 2016 when I was teaching my my first class as a professor, I task the students with writing a paper to propose a research project.

And two of the students actually kind of worked together on this paper to propose the idea that eventually became reality right here, which you're holding.

And that was the idea taking the technology that I'd been working on for about five years and putting it into something that was easy to use in your hand, battery powered wireless.

And fast forward, they did that.

They got an A on the paper, but then we continued to work on it in the lab and then worked together with the Idea center here at Notre Dame to commercialize that technology and spun out the company.

And in fact, the idea center invested in it.

There was maybe a student grant that these particular students achieved.

So not only in addition to receiving their PhDs, they also came away from school with the company.

Absolutely.

Yeah.

So as you talked about miniaturization, I think that's probably the word, right, because there was some of this technology you had already been working on.

Right.

But you would describe it as cumbersome.

Exactly.

This new device isn't that way, is it?

That's right.

And that's you know, that was the main goal for this work, is we had the principles behind this technology existed, but it required, you know, up to a couple of hours for a scan.

It required physicists and PhDs to process and interpret the data.

And what we wanted to do was to make this something that your doctor, your nurse could use in the office in the matter of minutes.

Yeah.

I mean, and it just you push the button and scan and that's right.

There are three lasers.

We did talk.

Tell us a little bit about, you know, the laser light is different from what we normally associate with.

You're going to say the phrase for me because I don't I'm not great at my science phrases, but what we've traditionally called x rays, Right?

Yeah.

This is different, right?

That's right.

So this uses visible and near-infrared light.

So if we turned it on, you'd see red light and the near-infrared is kind of colors you can't see.

It's what your TV remote control uses to talk to your TV.

And we use those wavelengths because the molecules inside your body absorb that light very strongly.

And based on that absorption, we can measure, essentially quantify, count the number of molecules that are underneath the skin.

And we know tumors look different than normal tissue.

And based on how those tumors change during treatment, we can basically tell, are they are they going away or are they continuing to progress?

So with this, our doctors are able to customize treatment that that's the absolute goal for the company is, you know, we've got the technology and we're beginning our clinical studies shortly to to validate what we kind of already known from doing this before with prior versions of the technology that we can predict with about 80 to 90% certainty whether a woman is responding and benefiting from that treatment, all because of the tricorder.

Thank you, Professor.

Jeff, back to you.

This has been an amazing afternoon looking at how one of our great resources here in Michiana, the University of Notre Dame, is commercializing some of the great ideas and genius that are located right here.

George, thank you.

Appreciate the inside look, there it is.

Good to see you, Kelley.

Let me come back your way.

So we were talking right before we broke for the field trip.

Just about some success stories.

Dive a little deeper into that for us.

Okay.

So it seems like the winners of the first source commercialization award, many of them go on to awards, great successes, kind of like some of them.

It's a predictor.

Like you said, some fail, but a lot of them have had a lot of success.

So specifically symiging symiging is a technology that came out of the university blockchain technology, which is really cutting edge.

Think of a kind of like stripe for blockchain that allows people without technical capabilities to develop blockchain applications for supply chain logistics, etc..

They have been super successful a couple of years ago, raised $25 million round of capital and then most recently was awarded a government contract for $30 million.

So very, very successful company.

And you know, they're they're still startup, right?

And but we have very high hopes for them.

And hopefully, you know, one of these startups that we're launching into our ecosystem will become a unicorn at some point.

Over $1,000,000,000 of valuation.

So I want to hit on that for a second, Chris, because because I think everybody wants to be the unicorn.

We want all that, right?

We want all of the the latest iPhone or whatever to be invented out there.

But but we have to temper expectations a little bit.

Just will that be worth $1,000,000,000, Right.

Yeah.

The first course is worth $1,000,000,000 now.

So I'm really we're a unicorn.

Not quite after having 60 years to get there.

Right.

And that with technology, you know it's it everybody wants to see this happen fast.

Yeah.

This is a this is a slog, right?

This is a long slog.

You've got to be committed to it.

You've got to want to stay at it.

You're going to lose money at it.

You've got to take the risks.

You've got to keep moving along.

I mean, we can't bet the bank on the whole thing, but we've got to make sure the bank is there to make things happen so that so that we can make it happen in the whole community and things do happen.

And they come along.

You get, you know, companies like Integrated Indiana, Integrated Circuits, which has been a long run for a long time, but doing some really good things.

It could be a breakout in the next year or two.

You've got IMU now called Lakota is, I think, the name today Technology that is absolutely blow away, unbelievably could be successful.

But it's hard to get into the marketplace.

It's hard to capture, and it takes a lot of capital to get there.

It's like we all have the hopes for the the the molecular or the biomolecular or the nano area.

Those are tough areas to break into and take a lot of costs.

We're going to have now battery plants in the area.

We're going to be looking at things that we weren't looking at before.

Those those you see because there's somebody putting a lot of money into it from outside.

But for us to grow from inside, we need to we need to keep growing our intellectual base and then be creative and innovating and getting into the marketplace with it.

And it will happen where we are today versus where we were ten years ago or 20 years ago is night and day.

And I'll add one other thing to that.

Notre Dame has always been great about social justice and being involved in the community and social justice.

It's economics department was not a good economics department like the 115th in the country.

They made a major commitment to change it.

So so it's built on data, built on analytical background, not feel good stuff.

And as a result of that, they are making a major contribution, as has the finance department and the people in those departments to the ecosystem, to this community.

That's really important for us.

But you don't see that unless it's like watching your child grow.

You watch your child grow, there's nothing different.

Then you go back and look at a picture of them five years later, my God, look what he was like.

That look, she was like, I mean, I look at my kids now when they were little, I got they were so cute.

Why was I so mad?

Yeah.

Yeah.

Kelley So just give some university perspective.

So we're this is unique.

There aren't, there aren't.

There's not a university in every town in Indiana that's doing this, but there are a lot of universities across the country doing this.

So my guess is Notre Dame's it's just still scratching the surface.

And when it gets to where it want to be, where it wants to be, it'll be competing with everybody else in the country.

Yeah.

And actually, I would argue that our commercialization model is very unique compared to some other universities in a lot of other universities have tech transfer licensing professionals that are organized by industry, somebody for a life science, somebody for deep tech, but they have to have expertise all the way through from invention, disclosure through market risky to technology, de-risking to company creation to funding strategies to CEO recruiting board formation.

That is very difficult task to have.

One person could be an expert in all those phases.

So what will you do at the idea center as we flip that model on its head?

And we are organized by processes experts.

So somebody just focus on working with the faculty to get the best and brightest invention disclosures next to somebody focused purely on de-risking.

And then another whole team focus on company creation and acceleration in the marketplace.

So I would argue this sets us up for maybe even greater success than some of our peers.

Now they have a head start, right?

So we we only started five years ago.

Stanford's been at it for a little bit longer, but I am very confident that we're going to be able to get there.

I think the model had to change.

I mean, you've got an environment at Stanford that was created there just because of the intellectual capacity of the place and things started happening and they were nearby each other.

And then the university put together programing to even enhance it, primarily other engineering school.

Same thing about North Carolina State and a number of others we would compare ourselves to.

Purdue is really good at it in the state and there are a couple others that are kind of getting there.

But Notre Dame has done a lot to move this much faster, making mistakes.

Sure, we're all going to make mistakes.

You learn from them, Pivot and go on.

Yeah.

So so let's start in the last 3 minutes or so.

But so my guess is this becomes a little bit of a talent attraction tool for the region of it, right.

As you're providing these this level of services or people are thinking about where I want to go do my research or do those new discoveries.

This puts Notre Dame on the radars that they weren't on otherwise.

I think so.

You know, we talked before about the synergistic effect of, you know, raising up our region, making a very, very attractive place to relocate to.

I think the more successful we are with these commercialization efforts, the easier it is to attract talent to our region, both for the university, for first source and everybody else out there.

So it's it's really an exciting time for us.

We we view that, you know, Notre Dame is making a big investment into South Bend.

The Idea Center is committed to this region.

Not only are we looking to attract the best and brightest, but we're looking to retain talent as well.

You know, we need top technology talent to work in these tech startups.

And so keeping graduates from the business school, from engineering and data science around in our region is is a really, really good strategy.

You know, there are parallel things going on here.

Notre Dame is being accepted into the AAU that's going to have a major, major impact on the kind of research, what attracts people here.

The other thing, there's a vibrancy in this community that we haven't seen for years.

It just gets better and better and better, whether it's downtown or it's in the in the environs around here.

A lot of younger people staying a lot of good investment downtown, Best Civic Theater in the country.

Great.

What's happening with the Morris, some of the things going on in the campus.

I mean, that's what attracts people.

It's a sense of place.

What's going on in Mishawaka with a development around the river that all makes this work.

It makes it an easy place to come and move to great guys.

Thank you.

And Fritz, we're out of time.

Appreciate the conversations today and thanks for your good work.

We look forward to next year's commercial.

Two things we have to say.

Number one, you want to contribute to Notre Dame for things like this.

And we need deposits to be able to keep full funding of this.

Thanks, guys.

That's it for our show today on behalf of the entire team here at PBS Michiana WNIT thanks for watching or listening to our podcast to watch this episode again, in any of our past episodes, you can find economic outlook at wnit.org or find our podcast on most major podcast platforms.

Let's encourage you to like us on Facebook or follow us on X. I'm Jeff Rea.

I'll see you next time.

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