THE BLOG
04/21/2016 06:13 pm ET Updated Apr 22, 2017

Infusing Support Behind Place-based Innovation Initiatives

Place-based innovation has become a national buzzword in recent years, but the federal government has had an agency devoted to it for half a century. Matt Erskine is COO of that agency, the U.S. Economic Development Administration (EDA), a bureau of the U.S. Department of Commerce. Erskine says the EDA's initiatives have always been focused on the specific economic development needs of the many communities it works with, but the way it carries out that work has changed over time.

"Where we were 50 years ago, 40 years, 30, 20, even 10 years ago, in terms of the economic forces affecting our communities, the opportunities are very different," Erskine says. "We have really tried to reinvent and do economic development differently...It's a different world we live in."

The EDA focuses on building capacity in American communities through competitive, merit-based investment programs. Particularly in the underserved and distressed areas that the EDA prioritizes, Erskine says the administration is providing what he describes as "gap capital."

"We know that private capital is risk-averse, and often the kinds of public-good projects we're investing in just aren't ready for the private-sector investment," he says. "We're able to come in with the patient capital, that gap financing, which in turn de-risks the project, gets the project going and then, because of the imprimatur of our investment, that in turn leverages the additional private and public and other capital."

For example, Erskine references the recent $300,000 grant the EDA awarded to Propeller, a New Orleans social and environmental business incubator. The funds are aimed specifically at supporting the creation of 10-20 new businesses through Propeller's water accelerator program, which nurtures businesses aimed at water quality improvement and wetland restoration. Erskine visited New Orleans last year to announce the Propeller grant, as well as several other EDA investments in New Orleans-related initiatives, on the 10th anniversary of Hurricane Katrina.

"There's a lot of passion in the entrepreneurial community, but a lot of the entrepreneurs don't know where to turn to turn their ideas into businesses," Erskine says. "Being there and meeting the entrepreneurs and seeing the space in what was the hardest-hit part of the city from Katrina, to see the resurgence and the energy there was really inspiring."

The EDA is currently gearing up for its 2016 Regional Innovative Strategies (RIS) program, which promotes innovation with two distinct competitive grant sub-programs. The first of those is the i6 Challenge, launched separately in 2010, which focuses on spurring technology commercialization. The second RIS sub-program takes the unique approach of supporting the establishment of seed capital funds, providing funding for administration, marketing and feasibility studies.

Details on the 2016 RIS program will be announced soon. In 2015 RIS awarded $10 million through the two program areas, funding 17 commercialization centers and eight seed funds. Since he was appointed to his EDA post in 2011, Erskine says he's taken great pleasure in watching those projects and countless others like them take off.

"When I get to travel across the country to these communities and meet the people and see the progress they're making where we've provided help, it's very rewarding," he says. "It makes me very optimistic about this country, in terms of the spirit and the energy and the passion that these communities bring to these projects."