Penn State’s New Innovation Hub in State College Aims to Spur Entrepreneurial Success and Economic Development

Five years ago, Penn State opened Happy Valley LaunchBox in a leased building on South Allen Street in State College as part of a burgeoning economic development effort to drive business creation and innovation among university students and community members.

This week, the university cut the ribbon for the Innovation Hub, a $56.8 million new six-story building on South Burrowes Street that is a capstone of President Eric Barron’s Invent Penn State initiative. Located at the former site of the James Building, it provides a new home for the LaunchBox with a community makerspace and state-of-the-art entrepreneurial and innovation resources.

“Innovation is one of my favorite topics, and this building brings innovation to life,” Barron said during a ribbon-cutting ceremony with state and local officials on Friday. “Its design, functionality and organization are truly innovative, and will match the ambitions of all those who will work and create here.”

Penn State has developed 21 LaunchBoxes and Innovation Hubs across Pennsylvania since 2016, assisting nearly 5,000 entrepreneurs, graduating nearly 500 from its startup accelerator programs and helping to create hundreds of jobs and internships.

The gleaming new 85,000-square-foot glass and metal building is the cornerstone of the entrepreneurial ecosystem the university has developed.

James Delattre, Penn State associate vice president for research and director of the Office of Entrepreneurship & Commercialization, said during a tour of the new building on Thursday that the Innovation Hub and Invent Penn State represent an expansion of the university’s land-grant mission.

“Normally when people think about the land-grant mission, they think about agricultural extension… President Barron asked the question, can we expand on our history of extension through economic development extension?” Delattre said. “So if anyone who has a business idea looking to grow a company in Pennsylvania, drive our economy, they can come to a location and experts can help them work through their business idea, find out if they have a market, help them with product design. That’s the essence of what we’re trying to do, not just here but across the 21 LaunchBoxes and Innovation Hubs in the commonwealth.”

The Innovation Hub’s location in downtown State College is intentional, both practically and symbolically, providing a convenient and visible location for students, employees and community members. Its large glass windows signify it is open to all who want to get an idea off the ground.

“I think its downtown location is really important,” Delattre said. “Because it’s open to the community and surrounded by business services and the business community, we think that there’s going to be some great collisions of different expertise and know-how.”

It’s a building designed to inspire collaboration, formally and informally, among people with different ideas and skill-sets. The lobby level and mezzanine have open co-working space, free for anyone to use without scheduling.

“One thing we know is that success requires teamwork and it’s really important to create spaces that bring people together,” Delattre said “…What we found is that individuals would come together, they’d train each other, they’d form teams and eventually those teams would come together and either they’d form a company or someone would form a company and they’d end up hiring someone they met. So co-working, we think, is really important to make sure that intersection of people with different skills is happening all the time.”

Helping the ‘light-bulb-making happen quickly’

The first floor is also home to the new makerspace, a series of open high-ceiling bays that will feature equipment and expertise to develop and prototype products. With much of the interior viewable from outside, the space will have areas for woodworking and metalworking, along with a specially ventilated room for coating or painting and another for welding.

Users will be able to purchase materials on-site or bring their own. Storage space and carts for their projects will be provided on an upper level.

“One of the things we know in working with startup companies is that getting that first prototype is often a big lift,” Delattre said. “We find way too many companies will hire someone… to build first prototype for them. They spend a lot of money and then it turns out the prototype didn’t work.

“Helping develop their own prototype, get feedback and iterate to get to a spot a consumer wants is really important. We all know iteration is really important in invention. They say Thomas Edison made hundreds of light bulbs before he made one that worked. We want to make that light-bulb-making happen quickly here. We don’t need to rely on mailing it to someone or driving it to another city to iterate on your idea.”

The makerspace isn’t up and running just yet. Because of supply-chain issues, the first round of equipment shipments aren’t expected until the end of the calendar year. The Innovation Hub is also still building it training program — the safety protocols and “badging” process for approval to do things like welding and metal cutting.

Dellatre expects the makerspace to be fully operational by the summer.

From behind glass on the mezzanine level, a digital fabrication area overlooks the bays with equipment for 3D printing and microelectronics.

“We also envision this being where we do mobile app development,” Dellatre said. “As you can imagine there’s a huge demand for mobile applications. With 5G coming online we think that whole industry is going to change. We want to be that place where entrepreneurs or researchers can come and build the next generation of mobile applications that have no latency so you can real-time control something on the other side of the state. We want to be that test bed for people that are developing new technologies and give our entrepreneurs a leg up whenever they are trying to develop new apps.”

Building businesses ‘on a strong foundation’

The Happy Valley LaunchBox resides on the second floor, where it has about three times as much space as it did on Allen Street. For most of its programs and services, no Penn State affiliation is required.

An Idea TestLab is a four-week program for getting started with defining customers and solutions. A 15-week Fast Track Accelerator helps with launching a start-up by testing the market and developing a product or solution. The Summer Founders Program — which requires at least one Penn State student participant — provides teams $15,000 to work on developing their businesses full-time.

Fast Track and Summer Founders teams get dedicated space and 24-hour access to the building.

Lee Erickson, director of the Happy Valley LaunchBox, said with the increased space the number of participants in the programs will increase, and they will be adding an Idea TestLab in the spring that will be focused on business ideas with mission-based or social causes.

“We’re continually trying to figure out how we get more people through here,” she said.

The LaunchBox offers resources from across the university and commonwealth. The Penn State Small Business Development Center has a satellite office in the building. Two Penn State Law clinics offer services for the legal aspects of starting a business and for patent, trademark and copyright issues.

For university-based entrepreneurs, Penn State’s Office of Technology Management (its patent office) and Office of Entrepreneurship and Commercialization will be housed on the building’s third floor.

A wide range of partners and collaborators across the university and in the private sector offer resources and referrals, and the LaunchBox refers clients to them.

“We partner with people in this ecosystem,” Erickson said.

Each of the LaunchBoxes and Innovation Hubs stay connected and if one finds something that is “transformational in that community,” it can get adopted elsewhere, Delattre said.

“We also have an adviser network so that anyone in the commonwealth can basically say ‘I need someone that understands wind turbines’ or ‘I need someone that understands dog food.’ We can send that out to our adviser network and connect entrepreneurs with experts that want to help them,” Erickson said.

The work of the LaunchBox has helped to establish businesses that are getting noticed. Last year alone, amid the COVID-19 pandemic, business founders that have been through the Happy Valley LaunchBox programs raised $20 million in venture capital funding.

“We don’t expect every company that comes through here to get venture capital funding but it is kind of a signal that teams are coming through and creating something viable,” Erickson said. “That tells us that something is sticking and we are doing something to help accelerate them.

“Two [founders who raised venture capital last year] have very different ideas from when they first started. We find that if we can get young people in here early to learn the process of entrepreneurship and how to de-risk their business, when they have their next idea and their next idea, they do it faster.”

Royce D’Souza is one LaunchBox program graduate who has found success. As a gaggle of reporters came through the second-floor co-working space, he was on the phone with a client for his company, Lessly. The business provides a platform for local restaurants to integrate all of their online orders that come through DoorDash, Uber Eats and Grub Hub and dispatch drivers.

D’Souza graduated from the Summer Founders program and then received assistance from the Ben Franklin Technology Partners, a state-funded technology-based economic development program with four regional headquarters, including at Penn State. His company started with local restaurants in State College and is now expanding to Washington, D.C.

“As a business it can be hard to find your footing, but the LaunchBox and resources locally really help you make sure that you’re not building on sand, that you’re building on a strong foundation,” D’Souza said.

‘A beacon for innovation’

The fourth and fifth floors of the Innovation Hub house the deans suites for the College of Earth and Mineral Sciences and the College of Information Sciences and Technology.

On the sixth floor is event space which offers spectacular 360-degree views of campus and town, with one side overlooking a green roof that helped with the building’s LEED certification.

Having appealing and flexible event areas is integral to the entrepreneurial mission of the Innovation Hub, Delattre said.

“Events are important, in all walks of life, and especially in entrepreneurship where creating networks is essential to bringing in team members, understanding your customer, investors,” he said.

A main multipurpose room can hold up to 120 people and can be configured for a variety of settings. A conference room is built to have flexible uses and configurations and both areas have built-in technology. The floor also has a catering kitchen.

At one corner on the Burrowes Street side of the building is an area specifically dedicated for student organizations.

“We talked about this building when it was just an idea as a beacon for innovation and a place where anyone in the community can look at it and say ‘this is where I need to go to make my crazy idea real,'” Delattre said. “If you want to be a beacon, the light has to be on at night and it needs to be on the top floor. So what better way to make sure this building is lit up and active all the time than to have student clubs that usually meet at night have access to this floor that has an unbelievable view.”

The sixth floor also will be used for the university’s flagship entrepreneurship programs like Startup Week, Venture Night and Global Entrepreneurship Week.

“All of those are event-based and are designed to bring people together, either subject matter experts and new entrepreneurs or people from different disciplines that want to work on a project together,” Delattre said. “This is where we envision a lot of those events occurring in the future.”

Community members and university students and employees can get involved and utilize the Innovation Hub’s services in multiple ways, Delattre said. They can make contact through invent.psu.edu, or they can just stop in and visit the LaunchBox.

“The beauty of being downtown and open from 8 in the morning to 5 at night is people can walk in, and go up, say ‘Hey I’m thinking about a business’ and if someone is on site and ready they’ll sit with you right away. If not they’ll take names and make sure that an appointment occurs,” he said.

The building also will host numerous activities, such as a lunchtime speaker series and training programs at the makerspace, that will begin ramping up in 2022 and can provide an entrepreneurial spark.

“There’s going to be a lot of activity that people can come and be a part of, and then if they don’t have their idea initially, being in that environment hopefully they’re inspired to do something innovative and create their own company,” Delattre added.

Between businesses based on university technology, the LaunchBox’s programs and the dozens of clients at the SBDC satellite office, Delattre expects the Innovation Hub to be supporting around a hundred entrepreneurs and businesses at any given time.

It all adds up to something “pretty substantial” in driving career success and boosting the region’s economy, he said.

“It’s been really inspiring to see some of the young founders and experienced individuals come together and do some wonderful things for the local business community and grow the local economy,” Delattre said. “We want to see that happen 10 [times] over [in] the next five years. We really want to see the business community grow. We want to see State College and the Centre Region be vibrant and we think we can be a major contributor to that.”