Business incubators uniquely positioned to spark job creation

By Steve Bazinet

As local, state and national government agencies examine ways to create jobs and turn around the struggling economy, business incubation features prominently in the discussion. For 13 years, the Maine Center for Enterprise Development (MCED), a private, not-for-profit and Maine’s first business incubator, has been helping entrepreneurs turn their ideas into viable businesses, promoting innovation and creating jobs. Some of MCEDs’ better known recent graduates include:

As any entrepreneur can attest, starting a new business is not an easy task. Most business owners know every detail of their product or service, but many lack all of the skills necessary to turn their ideas into successful ventures. MCED is uniquely positioned to help entrepreneur’s access resources through the incubator, business community, local colleges and universities, and other business assistance programs to help them develop the skills they need to grow successful, innovative ventures.

 There is significant interest within the state for people to connect. All they need is a reason to connect and a group to provide context for connecting. Like many others, I have faith in the ability of entrepreneurs to jump-start our sagging economy by generating revenue and creating new jobs. Many times, however, they need a guiding hand to help them turn their ideas into viable businesses, particularly during times of economic turmoil. By focusing on developing a new generation of entrepreneurs – most of whom have ties to the state – MCED is helping to build companies that will create jobs and spark economic growth in the region for years to come.

There has been a renewed energy around the program, beginning last year, by the Top Gun mentorship effort, which attracted over 80 different individuals and organizations that gave back to the program in some meaningful manner. We are trying, in a difficult economic environment, to sustain an organization, which encourages and supports entrepreneurialism. We have expanded the scope of our offering, and we are aggressively trying to encourage business growth in Maine by getting the private sector more involved in mentoring innovative start-ups. Since we operate on a small budget and our strategic plan for this year expanded the scope of the organization, we therefore are going to need more support, in terms of leadership and finances.

A 2008 study conducted by consulting firm Grant Thornton for the U.S. Department of Commerce Economic Development Administration found that business incubators produce new jobs at a low cost to the government. The report, Construction Grants Program Impact Assessment Report, found that for every $10,000 in EDA funds invested in business incubation programs, an estimated 47 to 69 local jobs are generated. As a result, business incubators create jobs at far less cost than do other EDA investments, such as roads and bridges, industrial parks, commercial buildings, and sewer and water projects. In fact, the study found that incubators provide up to 20 times more jobs than community infrastructure projects at a federal cost per job of between $126 and $144, compared with between $744 and $6,972 for other infrastructure projects. Although business incubation is still a relatively new industry, programs around the world have racked up impressive results that demonstrate the important role incubators play in stimulating economic growth and creating jobs. Like many others, I have faith in the ability of entrepreneurs to jump-start our sagging economy by generating revenue and creating new jobs.

But many times, they need a guiding hand to help them turn their ideas into viable businesses, particularly during times of economic crises. The world’s existing network of business incubation programs – and the many new incubators under development – can assist entrepreneurs in growing new businesses that can help put many people back to work.

Now is not the time to cut back on one of our foremost job creators. Thankfully, our private sector partners recognize that. As government agencies at all levels continue to debate how to revive the economy, it’s important that incubators – a critical component of the entrepreneurial support infrastructure that have proven themselves to be significant generators of new jobs – be at the forefront of these discussions. Clearly, we need to target our investments to those projects that will have the greatest return and create the greatest number of jobs: business incubators.

We hope you will join the effort in whatever way you can. Please blog, email, tweet and generally help spread the word.