NASHVILLE, Tenn. — Tennessee just may become the matchmaker of the agricultural-technical business world, pairing innovative ideas with viable businesses, if things work out the way the state believes it will.
In August, officials from USDA Rural Development and the Tennessee Department of Agriculture (TDA) announced the creation of AgLaunch, an effort to attract 200 entrepreneurs and establish 100 successful and investable agricultural-sector companies in Tennessee by 2020.
Memphis Bioworks Foundation will lead the program that also includes participation from the Tennessee Department of Economic and Community Development and the University of Tennessee Institute of Agriculture, according to officials from TDA.
Rural Development and TDA have committed $220,000 in seed money over two years for the initiative, along with other agencies contributing toward a goal of $10 million to be reached by the end of five years. Tennessee’s contribution is $75,000 a year for two years. "The money will be used to pursue venture capital funds from various companies and organizations across the United States to invest. That’s how they will build the $10 million to sustain the program long-term," explained state Commissioner of Agriculture Julius Johnson.
The initiative will find entrepreneurs with innovative agricultural products and train them on how to bring their ideas and products to the marketplace. Officials said this pairing of people with businesses will help create agricultural innovation and ultimately increase profitability for farmers, while reducing the impact of agriculture production.
Plus, Tennesseans won’t be the only ones to benefit – it also will provide for the needs of a growing world population, officials said.
"We’ve got to be a player if we’re going to fully participate in the growing world demand for food, fuel and fiber," said Johnson. "With this funding, we expect to incentivize private investment while making Tennessee a center for agricultural advancement."
Johnson added AgLaunch is a sub group of LaunchTennessee, a program of Gov. Bill Haslam’s that acts as an incubator for various types of entrepreneurship across the state, not just those focused on agriculture.
Memphis Bioworks, a nonprofit funded through contributions, corporate support and grants, will coach entrepreneurs on the various steps necessary to develop and produce their products and court potential investors. The organization was created in 2001 as part of a citywide effort to foster Memphis’ economic growth by building on its bioscience potential in the medical, agricultural and logistics fields. According to its website, it has "a well-established record of sparking new levels of economic vitality by investing in entrepreneurs, building state-of-the-art labs and facilities and training the next generation of workers."
"We teamed up with Memphis Bioworks to focus on agricultural technology and to try to create opportunities for Tennesseans to take ideas to the marketplace," Johnson explained. "We’ve already had many good ideas out there in drone technology and various things that have potential to go to market.
"Ag innovation and business creation have the potential to transform our rural economy more than anything else. We think it’s an opportunity for us to surface some new businesses in rural communities in Tennessee and create jobs, which is the No. 1 goal of our governor since he came into office."
The state is confident there is enough interest and venture capital to make the initiative successful. "Memphis Bioworks is already meeting with potential investors to look at this model. We feel there’s a lot of strong interest in this area," said Tennessee Assistant Commissioner of Public Affairs Tom Womack.
One aspect of the program is its importance for the state in developing entrepreneur businesses for the foreseeable future.
"We’re not talking about a short-term gain in job creation, but (a long-term gain) 10 to 15 years down the road," Womack noted.
Another aspect is bringing to Tennessee new ways of thinking about business. The state is going to invest $5,000 annually in 4-H and FFA to fund a competition for young people, modeled after the popular ABC television program "Shark Tank," in which people pitch their business ideas to investors.
"Other countries are doing these kind of things. We need to be more creative with our young people. We’ve got to grow our own next generation of entrepreneurs with innovative ideas," Johnson said.
While other states have programs similar to AgLaunch, Tennessee has some distinct advantages, he added. "Everyone’s not doing it, but we’re trying to lead a little bit in Tennessee. Because Memphis Bioworks is located here, because Memphis is an agricultural kind of town, and (with) the University of Tennessee being on the other end of the state, we have a unique opportunity to bring some technology to the marketplace."
Additionally, Womack mentioned that of a handful of rural business investment companies in the United States, two of them are based in Tennessee.
"Those are for more developed companies that are ready to go to market. We think that gives us a distinct advantage, with those funds being located here. It provides us a tie-in with early development, with what Bioworks will be doing," he said.
