How SEAD Could Contribute to Experimental Economics in Action: A Case Study of Innovation and Entrepreneurship in Support of Rural Community Development
Coordinator: Joan Quintana and Jose Quintana, Advent GX Corp.
In seeking approaches to spur economic growth and job creation in America’s rural regions, Advent GX identified gaps, studied best practices and evaluated tools for their potential application to rural settings. By providing access to relevant tools and using approaches that foster innovation and spur entrepreneurship and small business enterprise, all the while benefiting the community, the Advent GX approach removes barriers and sets communities on a path to prosperity.
Relevance of tools is fundamental. Too often well-meaning rural leaders attempt to employ methods that have proven effective in urban settings. Vastly different local dynamics, engagement and funding levels mean many conventional tools are out of reach and inapplicable. By modifying proven systems to the rural situation, facilitating creative collaborations, and allowing both local vision and market dynamics to drive strategy formation and implementation, Advent GX is moving beyond traditional rural development strategies and realizing success in assisting rural communities through the growth process.
Cultural and Heritage Assets: Natural Attractants for Tourism and Innovation
Tourism development often is considered to have the best potential for attracting outside investment and generating sales tax revenue in rural communities. Experiential tourism– including heritage, cultural, nature tourism, to name a few–does in fact present a significant opportunity for rural places to expand the economic base and enhance quality of life. But tourism is just a beginning.
The natural attractants that bring visitors to local downtowns also serve to improve the quality of life. Establishing unique shopping experiences, live music venues, quality dining and the arts in a defined downtown district provides a venue for intellectual cultural engagement. The small setting and relatively low population creates a sense of community. Soon the creative class of artists and performers are mingling with engineers, lawyers and other professionals seeking respite after a long day of work.
This experiential lifestyle—typically only available in urban settings—is a key attractant for innovators and entrepreneurs seeking the rural quality of life. Advent GX established the Innovation Underground, a privately owned and operated business incubator, in the heart of the cultural community of Historic Downtown Bryan to leverage the natural tourism attractants and provide a catalyst for entrepreneurial initiatives.
Community-Based Entrepreneurship: Behavioral Economics, Market Analysis and Financial Engineering for Start-Ups
Location within the heart of the community is essential. So too is a deliberate focus on serving the needs of both entrepreneurs seeking to start a business and freelancers in search of a quiet place to work. Serving both populations creates an ecosystem whereby freelancers feed off start-ups’ need for affordable services. Start-ups have access to affordable services, low rent, shared meeting facilities and, importantly, Advent GX’s version of entrepreneurial support systems. Unlike traditional business incubators and small business innovation centers, Advent GX advocates for a more aggressive and experimental brand of start-up.
Where the traditional approach calls for would be entrepreneurs to spend $50 thousand dollars for fundraising, prototyping and business planning, Advent GX employs experimental economics. Entrepreneurs will spend roughly half the cost of a traditional business plan to create a pilot product/program, do business development and fund raising – in that order. Unlike traditional incubation strategies that result in a business plan and perhaps some interested investors, Advent GX’s reverse incubation approach yields a customer and initial product offering.
Advent GX works with incubated companies to capture the voice of the customer in order to define the functionality of products and services. Using a modified quality functional deployment process, and identifying opportunistic partnerships enables businesses to anticipate and meet customer needs and connect to a wider network of resources faster than the typical business planning processes. Cost effective market analysis tools and financial modeling provide valuable insight into best markets and revenue streams.
Opportunity for Replication and Suggested Actions
The Advent GX approach to community and economic development via heritage preservation, arts, tourism, and a strong entrepreneurial culture is working in Bryan, TX. Prior to official opening, the Innovation Underground is out of space for additional entrepreneurial start ups and has expanded to offer additional office space and virtual start-up assistance. The company’s flat organization, focus on providing support as needed (avoiding one-size-fits-all services), and leaderships’ inherent understanding of the entrepreneurial condition makes the operation viable from a practical perspective.
There is significant opportunity to extend the Innovation Underground to other communities and generate entrepreneurial activity in more rural places. While no two communities are alike, Advent GX systems for assessing local markets and potential ensure that entrepreneurial centers like the Innovation Underground are developed to fit with local culture. Business development tools can then be applied as needed to encourage entrepreneurship and development of vibrant rural communities.
The SEAD Network can play a significant role in enhancing the Innovation Underground experience for both entrepreneurs and communities. Likewise, the Innovation Underground can provide SEAD with a living laboratory, free from discipline-specific turfs and academic bureaucracy that can be barriers to interdisciplinary engagement.
The whitepaper will provide insight into the Advent GX approach and explore solutions to the following questions:
- How can governments provide financial support for the Innovation Underground without burdening the program with bureaucracy, thus compromising the agility required to meet the needs of private enterprise?
- How can the Innovation Underground best serve as a venue for the implementation of SEAD Network initiatives, creating value at the community level while advancing academic research and education?
- What incentives are needed to promote faculty participation in the Innovation Underground at the pilot location in Bryan, TX and in future locations throughout Texas and the US?
What research opportunities exist to document Innovation Underground methods and perpetuate best practices for the benefit of entrepreneurship, business incubation and economic development in general?