Headlines Reveal Incubators Remain Popular Tool for TBED

With the sustained depth of the recession, the IT crash, the rapid growth in unemployment and the speculative office construction craze of the late 1990s, one would expect office vacancies to climb and property lease rates to edge down in many cities. Following this thought further might suggest, with cheaper office space available, the need for publicly supported low-rent technology incubator space would decrease.

SSTI sifts through hundreds of publications each week, monitoring issues of importance to the tech-based economic development community. If the above logic holds true, then after nearly three years of recession we should be reading accounts of incubators across the country closing their doors for lack of tenants, right?

Well, we aren't and for good reason. Publicly supported technology incubators offer more than inexpensive office space. Nearly all incubators provide access to additional services and facilities that enhance the capabilities of their tenants, increasing the likelihood of sustained growth and expansion. Advanced telecommunications, entrepreneurial business assistance, intellectual property patenting and licensing services, linkages to seed capital and financing, access to graduate and university researchers, and specialized facilities such as wet labs — these are just a few examples.

The success rate and employment growth of technology incubator clients is better than companies struggling on their own – sales revenues and jobs being important ingredients for local economic development – so it is not too surprising that the headlines tell instead about announcements of more incubators being planned, under construction, opening or expanding. Here's a sampling taken from news accounts during just the week of July 10-July 17:

• Leesburg, Fla. is going to use a $215,000 USDA grant to create a 6,000-square-foot business and technology incubator out of the city's 1934-dated post office. (Orlando Sentinel, July 17)
• Conway's (N.H.) plan for a 25,000-square-foot facility to house a Technology Incubator and Resource Center and Technology Learning Center is closer to reality with a $1.5 million grant from the federal Economic Development Administration (EDA). An earlier grant of $650,000 helped purchase the incubator site. (The Union Leader, July 17)
• The University of Arizona, University of Arizona Science and Technology Park, and Campus Research Corporation announced the opening of the Arizona Center for Innovation in Tucson. The center is a new high tech business incubator promoting the development of high technology companies in Southern Arizona through a disciplined program of business development. (University of Arizona press release, July 17)
• Officials of Wayne County in Indiana have proposed using $500,000 in economic development income tax revenues to establish a community investment seed fund and mixed-use incubator. The incubator will share resources with the Uptown Innovation Center in Richmond, which opens this fall. (Palladium-Item, July 15)
• The Chesapeake Innovation Center, opened in June and owned by the Anne Arundel County (MD) economic development corporation, has already signed up more than $100,000 in corporate sponsorships to help support operations for the new 24,000-square-foot facility. (The Capital, July 13)
• City Council members of St. Paul, Minn., approved spending $7.1 million to begin converting 120,000 sq. ft. of a former Target Corp. warehouse into a biotechnology center and incubator. (Star-Tribune, July 10)

More general information on establishing and operating successful technology incubators is available through the National Business Incubation Association: http://www.nbia.org/