August Business Brief


Technology Start-ups in Rural Missouri

In June Governor Eric Greitens announced the launch of the Governor’s Innovation Task Force. The Governor charged the Task Force with assessing the current state of innovation in Missouri, analyzing best practices from other states, and developing specific recommendations for what Missouri can do to promote innovation and new technology start-ups. I was honored to be asked to sit on the Steering Committee for the Task Force. 

In my first meeting with the Governor, 18 of us sat around his conference table, while he charged us with finding innovative ways to grow technology companies in the state. His goal is to make Missouri one of the top five places to locate tech companies. With our central location, low cost of operation, and a stable workforce, the Governor feels Missouri is well positioned to grow this sector of our economy. The challenge is how to get there. 

While St. Louis and Kansas City were well represented at the meeting, I was the only one from a rural community. The other “small towns” represented were Joplin, Rolla and Springfield. During our meetings I have heard the challenges that much larger communities have faced in developing and supporting tech companies, including lack of funding (the burn rate for tech businesses is high, as programmers and patents are expensive and with nothing to secure it, traditional financers are often leery), lack of talent and a stigma to locating in Missouri. 

So how does a small community like ours nurture and support the start-up of tech businesses? Is this even a sector that we need to pursue? Fortunately, we have the experience another largely rural state to study—South Carolina. Karl Kelly is Director of Operations for the Center for Human Genetics at Clemson University. In conjunction with South Carolina nonprofit, Stirius, and Clemson University he has developed an innovative model called the Technology Villages. The Technology Villages program is a hybrid internet-consultant program designed to support new technology company formation and development in rural and non-metropolitan areas. It establishes small store-front incubators supported by a Regional Entrepreneurial Development Center that blends real-time distance entrepreneurial learning with hands-on support from the incubator director and mentors. 

According to Kelly, “In general economic terms, retail, wholesale, transportation and service companies thrive on revenue generated from local sources while technology companies, marketing products and services globally bring new money into the economy. Support to all companies is important but technology companies are largely responsible for the expansion of the economy and for the generation of new wealth...the focus on incubating technology companies has the greatest local economic impact.” He found what technology start-ups need most is training and support to evaluate their concept and scale their startup.  The Technology Villages program links communities to expertise in intellectual property, technology evaluation, product development services, seed financing, business mentorship, corporate relationships and recruiting. 

One of the biggest challenges Kelly encountered was the cultural impediment of individuals not accepting their natural abilities or skills to become entrepreneurs. To overcome these barriers the Technology Village focuses its technology incubation program on building the capacity of the entrepreneur, not on the technology itself.  Kelly goes even further by focusing on developing serial entrepreneurs, individuals with the acumen to start multiple companies. This is the secret sauce that has made the Technology Villages model so prolific in tech start-ups.    

Since launching the Clemson University Technology Villages in 2010, the five-year pilot established five centers in communities of 10,000 to 25,000. Successful centers have averaged the creation of 12 to 14 companies in the first 18 months and approximately $2.8 million in annual payroll.  Four companies in the original pilot now exceed $10 million in annual revenue.

What can we in the Ozarks learn from this model? We can start by building our technology community locally. OzSBI is organizing meetups of techies, who plan to organize a Tech Start-up Weekend in early 2018. I am also sharing the Technology Villages model with the Governor’s Task Force on Innovation--maybe West Plains can be the pilot for this program in Missouri. For now, we can start by networking people and building an entrepreneurial community to support tech businesses, indeed for all businesses, in our state.



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