A business and technology accelerator grant program and a small business innovative research matching grant program are part of the Arkansas Economic Development Commission's agenda for the current legislative session.
Two bills, designed to help entrepreneurs and small businesses, have already been filed, as well as the commission's appropriations bill.
The commission wanted a few targeted bills for the legislative session instead of a package with many bills, said Mike Preston, executive director of the commission.
The primary bill, Senate Bill 250, would create a $2 million Arkansas business and technology accelerator grant program targeting startup companies, said David Sanders, R-Little Rock, the lead sponsor of three of the bills. Grants in the proposed program can be as much as $250,000 and are designed to attract the knowledge-based businesses that the commission would like to see in Arkansas, Sanders said.
The accelerator grant program is an outgrowth of last year's FinTech accelerator program in Little Rock that was sponsored by FIS Global and the Venture Center. Ten companies from throughout the country spent 12 weeks in Little Rock. One company decided to move to Little Rock and another opened an office in Little Rock.
The commission saw the opportunity for growth and high-wage jobs in the financial technology area, Preston said.
"We see that as an opportunity to be replicated all over the state and in multiple industries," Preston said.
The program that SB 250 would create is a signal that Arkansas supports the startup community, Sanders said. "We want to be players in the startup community, that's where we see growth."
The other major bill, Senate Bill 249, would provide state funds to match up to 50 percent of federal grant funds for qualifying companies.
To qualify for the state funds, a new company must be based in Arkansas and already have received a federal grant. The company must remain in Arkansas throughout the matching grant project. It must be engaged in any of six areas -- advanced materials and manufacturing systems; agriculture, food and environmental sciences; biotechnology, bioengineering and life sciences; information technology; transportation logistics; and biobased products.
The matching grant could be for as much as $100,000.
Thirty-six other states have programs with state matching funds, Preston said.
The agency is not asking for an appropriation for the SB249 program, Preston said. The Arkansas Economic Development Commission will use savings generated by the agency in the first two years of the program.
"What we're doing is creating the small business innovation research program that mirrors the federal program," Sanders said.
Current economic research shows that government should focus on promoting the growth of new innovative small businesses, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.
"It's where job growth really comes in our economy," Pakko said.
It's not the big projects that create the bulk of jobs in a state but home-grown, innovative firms that do, Pakko said.
"Now there's a lot of turnover in those and a lot of risk involved when the state gets involved in putting taxpayer money on the line," Pakko said. "That's a question to be considered, how that process should be managed. But I think the emphasis on young, new, innovative firms is good."
SundayMonday Business on 02/05/2017