What role can the federal government play in enabling local innovation and entrepreneurship? In this month’s newsletter we shine a light on some of the important work that the U.S. Commerce Department is doing through the U.S. Economic Development Administration (EDA). In a conversation with it’s COO, Matt Erskine, several programs are highlighted that infuse public dollars into local efforts to stimulate enterprise creation including the 2016 Regional Innovative Strategies Program.
By highlighting the work of the EDA and including links to other government funding streams for local entrepreneurs and entrepreneurial support organizations in our resource section, it is our hope that we can build awareness of these opportunities and, ultimately, increase funding streams to support inclusive innovation in forward thinking cities.
Another such opportunity is the Small Business Innovation Research Program (SBIR) that is designed to help get emerging enterprises off the ground. Designed in three phases the first is a “proof of concept” phase. Capped at $150,000 companies can apply very early in their start-up. The second phase is focused on research and development and goes up to $1 million. Going into the third phase, companies need to seek outside funding or receive funding from other government sources with the idea that the companies should be driving toward revenue and able to compete in the private market place. All told, approximately $2.5 billion are awarded through SBIR grants every year.
It is also important to note that one of the four original objectives of the SBIR program when it was established in 1982 is to “foster and encourage participation by minority and disadvantaged persons in technological innovation.”
To help launch more companies out of universities, the SBIR also has a sister program called the Small Business Technology Transfer Program (STTR) that takes a similar grants-based approach to seeding promising technologies.
This past August, President Obama convened the first ever White House Demo Day focused on inclusive entrepreneurship. Included in the announcements were the recipients of the Growth Accelerator Fund – a competitive grants process for accelerators, incubators, and entrepreneurial ecosystem development. A priority was placed on communities that don’t have traditional strongholds of venture capital investing and entrepreneurial development (e.g. Silicon Valley, NYC, Boston, etc.). Within the Forward Cities, awardees included: Propeller, Power Moves NOLA, and Idea Village from New Orleans; VictoryStart in Cleveland; First Flight Ventures in the Triangle; and NextEnergy in Detroit.
In addition to the Growth Accelerator Fund, President Obama also promoted cities to adopt the Startup in A Day Pledge, in which cities commit to making it easier for local entrepreneurs to interact with city government through streamlined permitting processes. Of the Forward Cities, only Detroit has signed on so far. One incentive is that cities can receive $50,000 to help in this effort.
As cities look to build their local entrepreneurial ecosystems and entrepreneurs strive to build their businesses, it is often difficult to identify relevant federal funding opportunities to advance the work. But there are ample opportunities out there if you just know where to look.
You can follow the unfolding conversation @forwardcities
Christopher Gergen, co-founder of Forward Cities
Denise Byrne, co-founder of Forward Cities