Rural Communities Rising to the (i6) Challenge

The American innovative and entrepreneurial spirit has long provided a foundation for our strong economy. This is no less true in rural regions.

In its new form as part of EDA’s Regional Innovation Strategies (RIS) Program, the 2014 i6 Challenge aimed to make targeted, strategic investments in a broader range of communities.

Of the more than 240 applications that EDA received for RIS Program funds, rural and other non-metropolitan communities represented a substantial subset of both the i6 Challenge and the Cluster Grants for Seed Capital Funds competition.

EDA recently announced the 2014 grantees for these competitions, and a number of rural applicants submitted compelling proposals to catalyze innovation-based economic development in their communities. In light of President Obama’s recent announcement of the i6 Rural Challenge, we want to highlight some of the 2014 RIS Program’s rural grantees.

These grantees stand out not only for having identified underutilized or unconnected resources but also for developing promising programs to help utilize those resources, to connect them to rural innovators and entrepreneurs, and ultimately to stimulate the creation and growth, from the ground up, of sustainable, job-creating companies.

Creating centers to aid commercialization

The i6 Challenge helps regions build capacity for turning ideas into products and ultimately into viable companies. The program was launched in 2010 as part of the White House’s Startup America Initiative and is now in its fourth iteration. It is a national competition that previously made $1 million investments in each of the 6 EDA regions, but was retooled to make smaller, targeted, and high-impact investments in a broader set of communities. The i6 specifically supports programs focused on technology commercialization, a capability that is not often found in rural communities.

For the RIS Program, the i6 Challenge was broadened beyond its focus on the creation of Proof-of-Concept Centers to include investments in the growth or expansion of existing Centers or programs and in later-stage Commercialization Centers, which help innovators fine tune and scale their innovations in order to bring new products and services to the market. By broadening the scope of the i6 Challenge and by focusing on a larger quantity of smaller investments, EDA was able to invest in these programs that build rural capacity for innovation and entrepreneurship.

Louisiana Tech University (LaTech) (Ruston, LA)

LaTech’s I-20 Corridor Makers Innovation Network will leverage LaTech’s technology commercialization expertise to spur entrepreneurial economic development in 25 northern Louisiana parishes. EDA’s $500k investment, matched by $1.3m in funds from LaTech and private entities, is designed to build capacity for innovative product development and small-scale advanced manufacturing and to provide entrepreneurial training and business development support for rural entrepreneurs throughout the I-20 Corridor.

Montana Economic Revitalization and Development Institute (MERDI) (Butte, MT)

The Manufacturing Consortium of Montana has determined that gaps in outreach and mentoring programs and in prototyping capabilities prevent Montana’s manufacturing sector from flourishing. MERDI, with EDA’s $148k investment matched 1:1 with non-Federal funds, will create programs to address these gaps at the Mansfield Prototyping Center (housed at the Mike Mansfield Advanced Technology Center). With this approach, which addresses both business and technology gaps in Montana’s rural economic ecosystem, MERDI’s programs aim to foster an entrepreneurial culture that will allow small businesses—the lifeblood of rural communities—to develop and grow.

Ohio Energy and Advanced Manufacturing Center, Inc. (OEAMC) (Lima, OH)

OEAMC, an industry-government-university consortium, has identified a rural regional ecosystem with the resources to develop and expand an advanced manufacturing cluster around high strain rate metal forming technologies. With EDA’s $450k investment and approximately $825k in non-Federal matching funds, OEAMC will foster rural entrepreneurial economic development by breaking down barriers to communication among stakeholders in the region. The program will also make specialized software available to innovators and facilitate the assembly of a cluster-specific supply chain.

University of Alaska Fairbanks (UAF) (Fairbanks, AK)

Alaska’s rural geography has historically presented the state with significant energy challenges. To overcome these challenges, the state has invested heavily in microgrid and renewable energy technologies. UAF will use EDA’s approximately $500k investment matched 1:1 with non-Federal funds to leverage the state’s energy challenges as a catalyst for the development of a rural entrepreneurial ecosystem by providing technical and business assistance to microgrid innovators and entrepreneurs.

Helping get early-stage capital to promising entrepreneurs

Access to capital is crucial for early-stage ventures. This can be challenging in the most sophisticated regions and even more so outside the urban areas that historically have been hubs for successful startups. The Cluster Grants for Seed Capital Funds competition is a new program that provides technical assistance funding to support the feasibility, planning, formation, or launch of cluster-based seed capital funds. This new program allowed EDA to invest in programs that help fill the crucial funding gap in these rural communities as well as in regions all across the U.S.

University of North Dakota (UND) (Grand Forks, ND)

North Dakota has a rural geography and a small population; entrepreneurs here historically have had few options for equity capital. However, as the state’s economy has begun to transition to innovative technology sectors such as Unmanned Aircraft Systems (UAS), bioscience, and data warehousing, UND has focused on developing seed capital funds to support those sectors. In order to support entrepreneurs in these developing technology clusters, UND will use EDA’s $250k investment, matched 1:1 with non-Federal funds, to establish new angel funds that will bridge the gaps in these entrepreneurs’ access to early stage funds

Regional Development Corporation (RDC) (Española, NM)

Northern New Mexico has wellsprings of innovation in Los Alamos National Laboratory (LANL) and in the new media, film, and design sectors in Santa Fe and Taos. RDC will use EDA’s approximately $250k investment, matched by $300k in non-Federal funds, to improve the performance and impact of their existing seed fund by providing technical assistance to existing portfolio companies and better connecting the ecosystem’s stakeholders. In addition, they will be conducting a feasibility study for a larger regional seed capital fund.

Doug O’Brien is Senior Policy Advisor for Rural Affairs with the White House Domestic Policy Council.