Increase Funding, Support Missouri Entrepreneurs
Missouri should increase investment in entrepreneurs and start-ups while expanding accessibility for business owners and job seekers, according to a new state report.
“Catalysing Innovation: Strategies for Missouri to Drive Innovation and Entrepreneurship” was released by the Missouri Technology Corporation (MTC) this week.
The study, which compiled data from entrepreneurs and start-ups from 2010 to 2020 and input from 500 stakeholders across the state, included several MTC recommendations for improving Missouri’s entrepreneurial footprint.
MTC offered matching investments in entrepreneurs from various funding sources across the state, as well as an angel investment tax credit in conjunction with the DED. It also recommended undertaking a feasibility study on the establishment of Missouri Rural Vitality Funds to provide loan guarantee assistance to rural businesses.
The group also hoped to launch a short-term educational program, work with local partners to support start-ups with high growth potential, and connect companies and institutions to boost recruitment and growth.
MTC, a collaboration between the Department of Economic Development (DED) and private companies to spur innovation and high-tech jobs in Missouri, has pledged to partially fund many of the recommendations.
“Entrepreneurs play a critical role in the growth and vitality of Missouri’s economy,” said DED Acting Director Maggie Kost. “I appreciate the Missouri Technology Corporation and its efforts to tell this story through this report, and I look forward to working together to better support our state’s entrepreneurial community.”
The report recommended at least $100 million in angel and pre-seed funds and $25 million each in venture capital programs and innovation financing options, totaling $150 million in investments at a minimum. over the next decade to sustain economic growth. An additional $4 million was suggested for entrepreneurial service needs such as networks and mentoring centres.
An additional $30 million was recommended for an internship program, while $5 million would go to sharing entrepreneurial stories to inspire new innovation.
The analysis was undertaken by TEConomy Partners, LLC, an economic research firm. The group was charged with identifying strategies for economic growth through entrepreneurship and innovation over the next decade.
The report found that businesses serving customers and markets beyond their communities make up a large part of the state’s economy, accounting for 61% of new jobs in Missouri from 2010 to 2020. Despite the increase of new positions, the report found that employment generally stagnated once it reached a certain point.
The authors attributed the halt in growth to challenges that impede entrepreneurial growth, including a decline in the number of venture capital offers from investors, the accessibility of support services among minority communities and in rural areas, and a lack of research from Missouri universities compared to those in other states. .
Other challenges include difficulty recruiting for IT and specialist positions and the lack of statewide broadband coverage and service. The report identified broadband as an essential part of its plan, although it left its exact role in rolling out the infrastructure to the legislature when considering best practices.
Broadband has been a top concern for the state government, especially amid the COVID-19 pandemic and increased reliance on the internet for work. Gov. Mike Parson announced plans for $400 million in American Rescue Plan Act funds to go toward broadband infrastructure, while the House Special Interim Committee on Broadband Development passed months collecting testimonials from companies, advocacy groups and Internet Service Providers. The committee recommended state tax assistance for broadband projects, which MTC said it could participate in.
While an exact amount for broadband infrastructure was not specified in MTC’s report, it recommended an investment of $5 million to connect Missouri’s business ecosystem through software and other means as well.
Another goal would be to reinvigorate the Research Alliance of Missouri (RAM), which acts as an advisory group to the MTC board. About $2.5 million was the cost estimate to increase RAM’s workforce over the next decade.
A robust innovation and entrepreneurial environment is a critical tool for the state’s economic growth over the next 10 years, as technology and new ideas take center stage in the business landscape, an opportunity to which the governor said he hopes to see Missouri participate.
“Our state is a hub for high-tech entrepreneurship, with a growing number of leading companies investing right here in Missouri,” Parson said. “Supporting innovation is essential to spurring economic growth across the state. Investments made through Missouri Technology Corporation do just that, and we salute these efforts as securing our future success.”
Jefferson City Regional Economic Partnership, a group created by the Jefferson City Area Chamber of Commerce to manage the region’s economic development tasks in 2020, was one of the groups participating in the report.
Lincoln University has also been noted for its partnership with Missouri S&T in the latter’s participation in the Great Lakes Hub, a collection of development program partner universities across the Midwest. MTC said similar partnerships between Missouri institutions could also bolster economic development across the state.
MTC is a public-private partnership within DED that focuses on entrepreneurship and technological innovation. It has invested more than $75 million since 2014, driving an economic impact of more than $6 billion, according to MTC data.