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Task force comes up with five-part plan to spur startups in Missouri

Task force comes up with five-part plan to spur startups in Missouri

September 7th, 2017 by Philip Joens in Local News
Gov. Eric Greitens, right, held a press conference Wednesday, Jan. 11, 2017 at DeLong's Steel in Jefferson City to announce his selection of Drew Erdmann, left, as the state's first chief operating officer. Greitens signed an executive order to create the COO position.

Gov. Eric Greitens, right, held a press conference...

Photo by Julie Smith /Fulton Sun.

A task force created to suggest new ways for startup activity to thrive and flourish in Missouri turned in its final report Tuesday to Gov. Eric Greitens.

The Governor's Innovation Task Force wants to create a better environment for startups by giving new businesses better access to funding, making the state more attractive to students pursuing degrees in engineering and science, and creating rural broadband and regulatory reform programs.

The state's chief operating officer said the goal of the plan was to start a conversation.

Greitens created the task force in late June to assess the state of innovation in Missouri. Business leaders from the nonprofit, private and government sectors made up the group and worked with the nonpartisan Hawthorn Foundation on the project. After Greitens gave the task force just 75 days to come up with suggestions, it held five meetings across the state seeking input.

State COO Drew Erdmann said Wednesday the plan is still in its early stages. The task force's goal was not to create legislation but rather to stimulate ideas and spark a conversation among the state's business and governmental leaders.

"There's a need for the state to take bold action to be one of the top innovators within the coasts over the next 10 years," Erdmann said in a conference call. "We have some great assets to build upon, but still the message is we're still the middle of the pack."

The report identified five goals to make the state better for startups and small businesses. The first wants to make Missouri a better place for startups by reforming the regulatory environment, coordinating incubator programs and expanding broadband access in rural communities.

Erdmann said later the state does not want to be a leader in every single sector there is, because that would be tough to achieve. Rather, the state should focus heavily on being a leader in sectors like agribusiness where it already is a strong player. Expanding access to broadband internet in rural communities could help with that, he noted.

The report also floated the idea of establishing a state office to focus on rural broadband issues.

"There's a huge amount of potential to unlock across many counties of the state," Erdmann said. "But it requires that critical broadband backbone to allow the connectivity to participate in the innovation economy."

The second goal of the report focuses on helping entrepreneurs brainstorm new ideas. One plan identified by the report suggests the opening of business incubators to help small business owners in rural areas.

"Rural communities often lack the expertise to support the development of technology businesses," the report said. "Creating a program where expertise in intellectual property, technology evaluation and product development is available to rural entrepreneurs is critical."

The third goal focuses on enrolling more students in science, technology, engineering and math majors at colleges statewide.

Erdmann said companies want to fill jobs in those fields but can't find employees with those backgrounds because the state is not producing enough graduates in STEM majors.

Part of the plan to fill that demand focuses on convincing college graduates to stay in Missouri after graduation. The report notes a recent study showed Missouri has the seventh highest percentage of college graduates leaving the state after college.

The fourth goal proposes creating online funding resources for startups. A 2017 report by the Kaufman Foundation said Missouri ranked 10th among 25 large states for startup activity. The amount of startups per 1,000 firms grew from 76.8 in 2012 to 95.5 in 2014, the last year for which data was available.

In a survey of 1,700 participants, the task force found 70 percent of participants said Missouri's climate for startups is improving. But only 24 percent thought startups statewide have enough access to capital.

The report also suggested providing resources to entrepreneurs to help them understand what types of funding they may need.

"Not all startups are appropriate for equity financing," the report said. "Midwestern businesses have greater familiarity and comfort with more traditional forms of debt financing. Many first-time entrepreneurs struggle to understand the various funding sources that are available to them."

The final part of the plan focuses on a statewide marketing campaign to promote Missouri as innovation friendly to entrepreneurs and investors. While Kansas City and St. Louis are emerging as technology hubs, the report notes, the state's image was hurt by 2014 protests in Ferguson and 2015 protests at the University of Missouri.

"For the most part, outside of Missouri, news about Missouri usually focuses on public safety and it tends to be negative," Erdmann said.

Though the plan is in its early stages, Erdmann said on the conference call it already helped connect parts of the business community.

"We engaged over 3,000 people," he said. "This helped forge statewide networks."