Government, Small Business & Startups, and Technology

Ottawa eyes ag-tech business incubator

The steering committee is not recommending a facility at this time.

October 4, 2013
| By Pete Daly |
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Ottawa County commissioners this week will get a report from their steering committee that has been studying the possibility of a county-sponsored agricultural technology incubator to bolster the local economy by leveraging the county’s strength in agriculture and manufacturing technology.

According to the U.S. Department of Agriculture, Ottawa ranks second in total farm receipts in the state with $391 million annually, slightly behind Allegan County’s $398 million and ahead of Ionia County’s $201 million.

The steering committee, which has been working closely with the county Planning and Performance Improvement Department, endorses a fully operational ag-tech incubator to assist agricultural-based entrepreneurs and related startup businesses. At this point, however, it is recommending a “virtual” incubator, as opposed to an actual facility that would cost about $812,000 to lease or $2.2 million to buy, according to a consultant hired by the county.

Unlike other ag-related incubators, the focus by Ottawa County is not on development of new types of food products; it is on development of new equipment and processes, according to PPID director Mark Knudsen.

Farmers have long been recognized as innovators when it comes to designing and building machinery they need, and they often share that knowledge with other farmers. However, they seldom try to patent their ideas and market them, noted Knudsen.

The Ottawa County group has been running a pilot project involving informational support for three small startups in the county: GrassRoots Energy, Fodder Efficiency and an innovative freezer racking system.

GrassRoots Energy, located in Marne, has developed and patented a technology that extracts ethanol from agricultural waste products, using less than half the energy needed for conventional, high-temperature distillation methods. The units enable a farmer to produce an enriched livestock feed, with ethanol being a byproduct that can be sold for further refinement or used as fuel.

Knudsen said the PPID staff helped the three pilot clients with research and connected them with other businesses in the private sector that can provide technical advice and ideas. For example, GrassRoots was put in touch with JR Automation Technologies in Holland, which designs and builds specialized machinery. JR Automation helped GrassRoots find a source for the stainless steel it needs at about half the cost it had been paying.

Ron Reimink of GrassRoots told the Ottawa County Economic Development Department that the help his startup received in the past was “pale in comparison to the assistance you have given us so far” in the incubator pilot project.

The entrepreneur with the new freezer racking system was given help in determining if his idea could be patented and how to go about that.

Thomas M. Cooley Law School also has partnered with Ottawa County to provide pro bono legal services to startups and entrepreneurs that would use the incubator.

Another supporting partner with Ottawa County is Extol Inc. in Zeeland, which produces plastics joining and welding products.

Michigan State University has agreed to serve as a matching researcher to help the county with the proposed incubator in areas regarding feed value, energy use, livestock growth and microbial control.

Business incubators provide essential basic services, starting with business planning and continuing with marketing, finance, intellectual property protection, regulatory compliance and more.

Knudsen said there would be several stages of incubator development required — all of them commercially successful — before Ottawa County would consider investment in a building.

Knudsen said the virtual or in-house incubator being recommended would entail a dedicated staff person or persons at the county to work with the entrepreneurs in getting started. Although the hired consultant is recommending county investment in a facility, Knudsen said the steering committee does not believe that is viable at this time.

“We’re hearing a lot of incubators in this area are really struggling,” he said.

Very few business incubators are specifically for agricultural technology. Knudsen said their research revealed there are an estimated 4,888 incubators throughout the world and only about 25 are specifically ag technology. Most of those are related to crop production and food development. The group found only one ag-tech incubator, which is in Illinois.

The group also distributed a survey to 4,600 people — farmers, entrepreneurs and business owners — and received 227 completed surveys. There were 174 responses to the question: “Do you think a business incubator is a good idea for Ottawa County?” One hundred and sixty-six said yes, and only eight said no.

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