Business incubators have been helping start-up companies across the nation gain access to information, resources, and professional networking opportunities to foster growth and entrepreneurship. But the incubator-tenant relationship isn’t all one-sided. Businesses currently or previously housed within incubators provide benefits to their local economy as well.
According to the National Business Incubation Association (NBIA), 87% of incubator graduates are still in business. This statistic, coupled with the estimate that 84% of those grads stay in their communities after graduation, can mean big benefits for areas that choose to aid these companies during the most vulnerable time in their business cycle. For instance, NBIA highlights that in 2005 alone, incubators in North America assisted over 27,000 start-ups that provided full-time positions to more than 100,000 workers and created over $17 billion in annual revenue. NBIA also states that for every $1 of subsidy granted to an incubator, its current tenants and graduates generate approximately $30 in tax revenue. Through job creation and sales generation, these local and regional economies are strengthened.
Further, incubator firms launch new technologies and services and may even introduce a new industry cluster to your area, which could attract other firms and talent to your community. Also, upon graduating, these businesses will need to locate to new facilities, which could occupy local vacant buildings and revitalize neighborhoods. From the aspects of business, real estate, and economic development, there seem to be many advantages to supporting these firms.
One success story comes from the Sid Martin Biotechnology Incubation Program, based in Gainesville, Alachua County, Florida. Established in 1990, the incubator has since been offering support to start-up biotech companies. Their partnership with the University of Florida has enabled them to provide firms with world-class research and lab space and assist in acquiring talent and funding. Due to the resources of the University and the success of the incubator program, Alachua County has become known as a biotech hot spot in the Southeastern U.S. As of 2007, 44 biotech companies employing 1700 workers resided in Alachua County, 75% of those stemming from the incubator. As the biotech sector gains momentum, the Gainesville region is poised for growth and prosperity as other biotech pioneers and start-ups will want to locate near an area that caters to their forte.
What specialty does your area have that can be marketable for attracting businesses? Does your community possess the resources to host an incubator program? Learn more about how companies and communities benefit from incubators at www.nbia.org.