The following was written by Brent Willett, executive director of the Cultivation Corridor, and featured in the Business Record’s Business Professionals’ Blogs. Read the original article at iowabiz.com.
Central Iowa is a natural hub for one of agriculture’s most innovative sectors, but that’s no guarantee
Iowa’s agriculture innovation ecosystem received an important upgrade in May this year when Iowa State University and a group of investors announced the creation
of the Ag Startup Engine, a development program for agriculture technology companies. The Startup Engine will serve as a business acceleration resource for startups across the agricultural innovation spectrum, including biotechnology and ag technology (or what we used to call “precision agriculture”). The initiative will “provide mentoring services to agricultural entrepreneurs, as well as infrastructure for developing prototypes and products. It also will provide training in how to finance a business.”
Then, another upgrade. On Aug. 30, the Cultivation Corridor and the Greater Des Moines Partnership announced that John Deere, DuPont Pioneer, Farmers Mutual Hail and Peoples Company will invest in a new ag technology startup accelerator in Central Iowa that will further establish Central Iowa’s reputation as a global leader in cutting-edge agricultural technology. The accelerator is designed to build upon one of the state’s key industries of agriculture and the entrepreneurial activity that can advance technology in the industry. It is expected to welcome its first cohort of startups in Spring 2017 and continues to accept investors.
These two developments taken together represent a decisive announcement to the world that Iowa’s education, economic development and private sector leaders are committed in real monetary and organizational terms to establishing Central Iowa as a premier destination for capital and research in what is perhaps the fastest growing segment of an otherwise distressed ag sector. And it couldn’t have happened at a more important time.
Work in ag technology, broadly termed to be research and innovation resulting in hardware, software and platform improvements in the agriculture sector, has exploded in the second decade of the 21st century. According to AgFunder, in 2010 the broader agriculture technology sector saw roughly $400 million in venture financing activity. Just five years later, that figure had grown 11-fold to $4.6 billion in 2015. As low commodity prices put more and more pressure on the sector, AgFunder reports $1.8 billion in activity for the first half of 2016. Still, the trend is real and growing — exceptional volumes of venture and institutional capital are flowing toward the ag technology sector.
As agriculture’s role increases in addressing the global challenges we all face in the coming decades related to nutrition, energy and environmental sustainability, the prominence that rapid technological innovation is taking in today’s agricultural companies is intensifying. Natural to such a cycle is the emergence of a startup class of companies that is growing in sophistication and value. And that’s where Central Iowa comes in.
Iowa has been a home of agricultural innovation for more than a century. Farmers, in addition to being some of America’s longest-standing small business owners, are perhaps our most pure professional innovators. And Iowa boasts more of these farm innovators than anyone else. Humble beginnings for Iowa farm innovators have produced spectacular economic, social and cultural returns for our state for many years — be they seed breeding on the homestead (Harry Stine), solving equipment challenges on the farm (Gary Vermeer) or building a weed control empire from an Ankeny basement (Dennis Albaugh).
Despite Iowa’s remarkable farm innovation pedigree, we of course possess no guarantee that the next generation of ag innovators will look to Iowa as a destination for the incubation and acceleration of their ideas. In fact, AgFunder’s data on investment in ag technology companies lists the top 15 states by dollars invested in startups for 2015. Hawaii is on the list. Alabama is on the list. Iowa is not. We cannot take for granted our longstanding reputation as leading agriculture state to presume Iowa will naturally attract investment in perhaps the most important emerging field of agriculture. We cannot, and so we must invest in programming and institutions like the Ag Startup Engine and the Agricultural Technology Accelerator to enhance our competitiveness as a destination for the next generation of ag technology capital and talent.
Since January, at least three other ag technology accelerators have been announced in the U.S. – one at Research Triangle Park in North Carolina, one in rural Washington and another in Memphis. Does this suggest that Central Iowa is late to the party and playing catch-up with its recent Agricultural Technology Accelerator announcement? Not at all; the rapid-fire emergence of accelerators pursuing startups in the ag space, if nothing else, reinforces the argument that the time is now to establish our region as a place of innovation in an industry sector that is growing rapidly.
None of the people I am working with on the Agricultural Technology Accelerator would be surprised if four or five more ag-oriented accelerators are announced by year’s end. The market will saturate, but with the announcement of two startup support assets — supported by major players in agriculture including John Deere, DuPont Pioneer and Summit Group — to support startups in the space in the first half of 2016, Central Iowa has made clear that it intends to compete at the highest levels globally to attract agriculture startups to our state.
Contact Brent Willett: