The term can than be stretched to apply to business development. The NBIA is the National Business Incubation Association. Business incubators nurture the development of entrepreneurial companies, helping them to survive and grow during the vulnerable start-up period. Incubation goals include creating local jobs, enhancing a community’s business climate, retaining businesses in a region, accelerating growth in a particular industry, and diversifying local economies. Incubators offer their clients business support services and resources that are tailored to their needs.
Incubation is not a new concept. The first U.S. business incubator, the Batavia Industrial Center, opened in 1959. Incubation really took off in the late 1970s and throughout the 1980s, as communities recognized the value of building and expanding new businesses to sustain their local economies. Today, there are some 5,000 incubators worldwide. The National Business Incubation Association, headquartered in Athens, Ohio, has more than 1,500 members across the globe.
Incubators offer many different services to their clients. Nearly all offer help with business basics – such as writing business plans – as well as one-on-one business counseling and mentoring, networking opportunities, marketing assistance and shared facilities, equipment, and services such as reception and high-speed Internet access. Most offer some way to help their clients fund their enterprises, from links to venture capitalists and angel investors to in-house loan funds. These are just a few of the most common incubator services.
The majority of business incubators are sponsored by some kind of organization that provides a physical space for the incubator and/or some amount of financial backing. Academic institutions, government agencies and economic development organizations are the most common incubator sponsors. Nearly one-fifth of all incubators, however, do not have a sponsor or host organization.
Most North American business incubators are nonprofit organizations devoted to economic development. About half of all incubators are mixed-use, assisting a wide range of start-up companies. A third focus on technology businesses. Other incubators attract manufacturing firms, service businesses, or niche markets such as arts and crafts or specialty foods. About 44 percent of North American incubators are located in urban areas and 31 percent are in rural areas.
About half of all North American incubators are mixed-use facilities; that is, they aid clients from a variety of sectors, including service, light manufacturing and information technology companies. The Entrepreneurial Center in Birmingham, Alabama, is one of the best. The center offers its clients business advice and counseling. Partnerships with outside agencies give clients help with human resources issues and entrepreneurial training. A Through a contract with the city, the center offers assistance to up to 100 aspiring entrepreneurs each year.
Technology incubators, on the other hand, offer the specialized space and equipment needed to nurture a science-based company. Some, like the Quebec Biotechnology Innovation Center, specialize in helping biotechnology companies create pharmaceuticals, medical devices or other biological goods or services. These specialized amenities are valuable to small companies that are testing and refining products and cannot yet afford specialized equipment and lab space. QBIC offers wet labs, chemical storage space and access to a wide range of scientific equipment, as well as business counseling and other assistance.
Some incubators focus on a specific industry niche. The Chesapeake Innovation Center, for example, is the nation’s first incubator dedicated to homeland security. The center partners with defense agencies and contractors to determine what technologies they would like to have for counterterrorism and defense purposes. The center then finds and fosters start-up companies that can meet those needs. Other specialty incubators are devoted to gourmet or regional foods and the arts.
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