After years of primarily looking to large corporations and the global marketplace to fuel growth, AdvantageWest, the region’s biggest economic-development organization, is now focusing on growing businesses closer to home. The goal is to foster local networks that can build a more sustainable, recession-resistent economy.
Chartered by the N.C. General Assembly in 1994, the public/private partnership works to cultivate economic growth across Western North Carolina. Birthed at a time when free-trade agreements and globalization were upending the nation’s economy, the nonprofit spent its formative years trying to recruit and support companies with international reach.
In the years that followed, however, AdvantageWest saw WNC’s traditional manufacturing sector decimated as companies moved textile, furniture and other plants abroad, seeking cheaper labor. Then, in 2004, Congress ended the federal tobacco program, dealing a significant blow to an industry that had dominated the region’s agricultural sector for much of the previous century. And a few years later, the local economy joined the rest of the nation in the Great Recession, caused in part by the near-collapse of some of the country’s biggest financial institutions.
Matt Raker, AdvantageWest’s vice president of entrepreneurship, says those “learning events” have helped spur a sea change in the economic-development community.
“During the whole arc of globalization, everyone was focused on just being global players, being globally competitive, recruiting businesses that are exporting around the world, these major brands,” he observes. “I think the local economy was probably neglected for a long time. It just wasn’t part of the dialogue.”
Now, however, AdvantageWest is putting more energy into fostering local businesses and closed-loop economies that might prove to be more resilient in the face of macroeconomic changes or turmoil.
“There was pushback against it. People said, ‘We care about our places; we care about having strong, vibrant communities. We want to support the good things about globalization, but we also want thriving local economies, local culture,’” Raker explains.
Closing the loop
To that end, AdvantageWest is holding its second annual Venture Local summit (see box, “Getting There…”). The all-day event will applaud recent progress, unveil new projects and help local entrepreneurs learn successful business strategies and connect with investors, says Raker.
“There’s so much enthusiasm in this area for local foods, Beer City — all these different what we call ‘value-added’ agricultural and natural-resource sectors,” he adds. “And there’s not been a real mechanism for bringing those sectors together and addressing some of those shared issues of access to capital, access to talent, access to markets, and having those conversations.”
A who’s who of local development organizations is on board, including Blue Ridge Food Ventures, Mountain BizWorks, HandMade in America and the Appalachian Sustainable Agriculture Project.
Meanwhile, an ambitious partnership that hopes to kick-start the local biofuels industry typifies the kind of work that’s being done to build a more sustainable local economy, says Kathi Petersen, AdvantageWest’s senior vice president of corporate and public relations.
Due to be unveiled at this year’s Venture Local conference, the “Field to Fryer to Fuel” initiative envisions a mutually beneficial loop of local businesses and other institutions.
In the pilot project, Biltmore Estate will raise 50 acres of canola seed that will be pressed, refined and processed by Blue Ridge Biofuels. AdvantageWest and Blue Ridge Food Ventures will provide guidance on federal and other food-processing regulations, while Appalachian State University will test the refined oil to make sure it meets all requirements.
Next summer, roughly 7,000 gallons of food-grade oil will be distributed to local restaurants. The resulting “waste oil” will then be returned to Blue Ridge Biofuels for conversion into an estimated 5,000 gallons of usable fuel for sale to owners of biofuel-ready vehicles, says Petersen.
The experiment is funded by a $130,000 grant from the Biofuels Center of North Carolina, which is charged by the state Legislature with helping ensure that biofuels produced in-state replace 10 percent of the state’s imported oil by 2017.
The hope is that the initial project will show enough economic potential to attract private investors and businesses willing to take over and grow the operation, with a goal of eventually producing 300,000 gallons of local biofuel per year, Petersen explains.
WNC is already home to a higher concentration of clean-energy companies than any other region in the state, and most are located in Asheville, notes Raker, who also directs his organization’s AdvantageGreen program.
“Our objective with this collaboration is to develop and expand Western North Carolina’s hub of clean-energy industries,” says Raker. “So we’ve got this connectivity between local foods, food products and local energy, and we’re seeing all kinds of those opportunities. That’s a big part of what Venture Local is trying to achieve.”
Funding the next big thing
The canola project, of course, has the luxury of state startup funds that aren’t available to most local entrepreneurs. And for people aiming to establish or expand a small business, raising the requisite capital can prove to be a major hurdle.
Banks have tightened their belts in recent years, and private investors tend to look for businesses that could make them 10 times the amount they invest — which is usually possible only with companies having national or international ambitions, says Raker.
That, however, leaves folks looking to launch a small farm or other locally focused business in a tough spot, he notes. But the growing field of “social venture investing” provides new opportunities.
“There’s a whole new type of capital that’s emerged called impact investing: people who want to invest in things that are in line with their values, businesses that do things in their community that they want to support,” Raker reports. “This conference,” he promises, “will be the largest gathering of those investors that we’ve ever had in our region.”
Venture Local organizers hope to pair them with at least 100 local entrepreneurs in need of funds. Those who register ahead of time will be able to pitch their business ideas in the conference’s official printed program. In addition, up to six entrepreneurs selected in advance will be able to pitch their business ideas to Venture Local attendees and a panel of funders.
There’ll also be opportunities for less formal networking during the reception.
During the day, the schedule will be packed with local speakers and headlined by a pair of national experts on alternative funding strategies and community economics.
Martin Eakes co-founded Self-Help, a Durham-based community-development lender whose programs include the Self-Help Credit Union, which has an Asheville office. All told, the organization says it’s provided more than $6 billion in financing to over 74,000 homebuyers, small businesses and nonprofits in North Carolina and California.
Economist and author Michael Shuman will discuss ideas he raises in his most recent book, Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity.
“I think we’ve started finding more of a balance of opportunity,” says Raker. “Where there’s opportunities for a company like Sierra Nevada to invest in Western North Carolina, then absolutely we want to facilitate that. But we also need a strong base of entrepreneurial, locally owned, successful ventures here.”
This year’s Venture Local conference is slated for Friday, Dec. 7, at the Renaissance Asheville Hotel downtown. The event will run from 8 a.m. to 5 p.m., followed by a Farm-to-Table Networking Reception until 6:30. Tickets ($70, including food and the reception) are available at www.venturelocalwnc.com.