Nebraska has lagged behind many states in nurturing innovative startup companies. Such businesses, in high-value economic sectors such as advanced technology, agribusiness and manufacturing, create important long-term growth opportunities for their host states.
Fortunately, Nebraska has begun making progress on this score. An initiative called Invest Nebraska, working with the private sector, the university community and the state Department of Economic Development, is helping homegrown high-value startups get off the ground.
The companies are pursuing innovation in fields such as software, advanced agriculture, bioscience and manufacturing — key economic niches that can give Nebraska’s economy a major long-term boost.
Invest Nebraska provides early-stage investment, accompanied by required private matches, for projects that qualify after detailed vetting. The overall economic impact from those startups is a hefty $284.3 million a year, a University of Nebraska-Lincoln study concluded last year. That’s a significant return on the $19.9 million the state has invested in the program since 2012.
“The multiplier effects demonstrate that the businesses receiving (Invest Nebraska) support are driving significant economic and employment activity in the State of Nebraska,” the UNL study said.
The private sector has contributed more than $90 million in early-stage funding to help kick-start 54 companies through the Invest Nebraska process. That’s in addition to the state’s $19.9 million. Private investors, in other words, have provided more than $4.50 in startup funding for every $1 from the state.
As the companies have grown, investors have followed up with additional funding totaling $142 million. The firms so far have created 1,436 jobs with an average salary of $53,690, and received 130 patents, with 318 still in process.
In addition to early-stage funding, Invest Nebraska provides support and services to help the startups’ research and business operations move forward. The program helps entrepreneurs apply for federal grants for innovative startups.
Invest Nebraska and its partners connect startups with business accelerators in Lincoln and Omaha, to provide the fledgling firms with office and lab space, technical support and networking with fellow businesspeople and researchers.
Other Midwest states have begun ambitious incubator projects to boost homegrown agribusiness, and Nebraska has rightly responded by creating the Combine, a food- and ag-focused incubator at the University of Nebraska’s Innovation Campus in Lincoln. Innovation Campus provides lab space, and the Combine’s partner organizations — including the Nebraska Farm Bureau and a range of food and ag businesses — provide mentoring, commercialization support and networking with Nebraska farmers and ranchers.
Invest Nebraska was launched in 2012 after Nebraska business and political leaders concluded that the state was failing to live up to its potential in nurturing innovative, high-value businesses pegged to the state’s strengths, says Richard Baier, president and CEO of the Nebraska Bankers Association.
The question became, “How do we solidify the entrepreneurial environment for Nebraska?” said Baier, who was director of the Department of Economic Development under then-Gov. Dave Heineman.
Nebraska ranked distressingly low on the venture capital front, for example — 50th in 2011, with zero deals. Thanks to Invest Nebraska and a concerted focus on early-stage investment support, Baier said, Nebraska stepped up to 31st in the ranking in 2017.
Nebraska can make vital long-term gains from innovation in its areas of strength, Baier notes: “We need to be planting seeds for the future and figuring out how to leverage that wonderful agricultural base we have” to nurture high-value ag startups. In regard to finance and insurance, “we have a huge presence of people who understand those sectors, and we want to be on the front end of helping them grow and expand.”
Nebraska faces tremendous economic competition, and the state needs to be nimble and innovative. The many partners who contribute to Invest Nebraska are providing vital help toward that goal.