Orange County is at the heart of what entrepreneur-turned-philanthropist Paul Merage calls the new innovation economy.
To stay there, the county needs to train students to be innovators, Merage said in a speech at the University of California, Irvine, last week.
Merage, a native of Iran, invented Hot Pockets frozen sandwiches with his brother. They sold their company to Nestl & #233; SA in 2002 for $2.6 billion.
Now Merage is giving $30 million to UC Irvine’s business school. The gift is largest yet for the university and will see the business school renamed as the Paul Merage School of Business.
Here is the text of Merage’s speech from last week’s UCI ceremony.
Today is a very special day for my wife Lilly and me, as it is for our entire family. We are all honored and proud to become a part of this wonderful new family that is UCI.
The University of California has played an important role in my life. I was only 17 years old and new to America when I joined UC Berkeley. I liked it so much that I even did my graduate work there.
That’s also where I met my wife Elisabeth, we call her Lilly for short. Meeting her was a big occasion for me.
My son Richard and my daughter Lauren have both been educated at UCLA. My daughter Michelle did not attend a UC campus. She attended USC instead. But we still love her very much.
I received an important gift from the University of California. It was the enduring gift of an excellent education. But I feel that I also received something quite valuable from the people I met in California. They reached out to me with open arms and a generous spirit. They gave me the opportunity to be my best.
So I can honestly say that the people of this state and the University of California have played a major role in whatever success I have achieved.
But why give a gift to UCI’s business school?
I believe UCI is a young, scrappy and wonderfully vigorous university. It is not encumbered by many decades of bureaucratic tradition. It is willing to embrace change. It seeks new horizons in a constant attempt to reach higher levels of excellence. And I feel, as many of you do, that it is possible to make a real difference here.
It is because of the immense respect I have developed for the leaders of this university and this community. I greatly value my friendship with Chancellor Ralph Cicerone. And I am indebted to my friends Mike Gottfredson, Ted Smith, Doug Freeman, Tom Mitchell, Jone Pearce, Andy Policano, Chuck Martin and Marshall Kaplan, all of whom worked tirelessly to get us here today.
And finally, it is because this school of business has totally transformed itself in just one year. That is blinding speed by academic standards.
The faculty now has adopted a new and unique vision for the school. This vision is about how to achieve sustainable, profitable growth in the new innovation economy. Simply stated, its mission is to develop future business leaders who will be the best equipped in the nation to grow American corporations in tomorrow’s complex new world.
Dean Policano has asked me to spend a few minutes to share with you how this vision came about, and what it will mean to our faculty and students.
How It All Started
It all started in a conversation with Chancellor Cicerone. I was intrigued by the chancellor’s determination to bring UCI to the ranks of the top 25 business schools in the country.
But I felt that unless the school had a unique vision, and a unique positioning, it could not make the quantum jump needed to reach the top 5% ranking. Importantly, this unique vision could only be meaningful if it addressed real problems facing the business community and the nation.
So, I reached back to my own experience as a CEO and the exchanges I have had over the years with other CEOs. I have found that one of the biggest challenges in any business is to achieve sustained profitable growth. The penalties for failure are great. Our economic system richly rewards growing companies, and severely punishes those that don’t deliver.
So a real need exists for training leaders who can effectively grow companies.
Why is it that some companies can grow their bottom line effectively every year, when others cannot? I believe that, first and foremost, growing companies embrace change. They thrive on changes in the market.
We are all witnessing a barrage of changes in our daily lives. Important social changes are taking place. For example, there are shifts in the family structure due to the pressures of work and time. Our population is rapidly aging. Manufacturing jobs and even white-collar jobs are moving overseas. These will all impact our economy and our businesses.
We are also experiencing changes due to constant technological innovation. These open the door to a host of life-changing new products and services never before possible.
Finally, there are significant geopolitical shifts, such as the developments in China, India and Eastern Europe. Or the U.S. government’s policy shifts towards the dollar and corporate governance. These developments will challenge us for years to come.
Companies that have the vision for growth through strategic innovation carefully monitor these changes and respond to them proactively. They are the first to launch products or services that take advantage of these new market forces.
This is especially important right now, because something big is happening.
I believe we are at the initial stages of a historic economic shift in the world. A shift that will test and challenge, as never before, the way we conduct business.
Two important global forces have combined to create a new reality.
First, the creeping of capitalism into China, India and Eastern Europe has brought us face-to-face with new competing economies. These countries have a great advantage in their low labor cost and are rapidly acquiring new technologies.
Secondly, advances in information systems have made it possible to instantly transfer information to these faraway countries. So a plant in China can act as fast as a plant next door.
As a result, whether we like it or not, many manufacturing or service jobs and facilities will be transferred abroad within the next 10 years. How is America to maintain its economic superiority and its standard of living? I believe we have no choice but to transform our businesses to operate in a new type of economy. I call this the new innovation economy.
New Business Model
To succeed in this new world, we must shape a new model for our businesses and our business schools.
Our businesses must become constant innovators, global facilitators and global marketers.
Our business schools must pass on to our students the vision of growth through strategic innovation. They must immerse them in a culture of growth based on rapid information exchange and teamwork. Finally, they must give our students the tools to manage growth responsibly and ethically.
The quest to transform our businesses into this new age must start with us right here at UCI. What is at stake is no less than the future vitality of our economy.
What’s more, Orange County just happens to be at the heart of this new innovation economy. Already companies such as Broadcom are at the forefront of this movement.
Will UCI’s business school succeed with these ambitious goals? I believe the answer is yes, and here’s why.
The school is starting with an excellent base of faculty and students, who have quickly embraced the new vision.
It is backed by a university which is totally committed to this program.
It is situated among some of the most innovative companies in the nation, whose executives are involved, and supportive of the school.
Most importantly this UCI school has a secret weapon: Andy Policano.
Within a short time, Policano has proven himself to be an intelligent and resourceful dean with vision, passion and persistence that are truly impressive. With the help of his faculty he has already brought great life and substance to this vision. I feel honored to be at his side to offer whatever help I can on our way to success.
Andy, I believe this will be the beginning of a beautiful friendship. Thank you.
