Why Incubate? Improve Your Odds for Success!

A business incubator is a program designed to accelerate the successful development of entrepreneurial companies through access to an array of business support resources and services. Incubation is not a new concept. The first U.S. business incubator opened in 1959 and the model grew quickly as forward-thinking economic developers realized the limitations of traditional business-attraction strategies. Today, the National Business Incubation Association estimates that there are over 7,000 incubators worldwide.

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, commercializing technologies, accelerating growth in a particular industry, and diversifying local economies.

Business incubation is an important tool in economic development. Incubators create jobs in a community, but they also can help attract and retain outside companies. According to a 2008 study conducted by Grant Thornton for the U.S. Department of Commerce Economic Development Administration, investments in business incubators created up to 46 times as many jobs as any other infrastructure project. What’s more, those jobs cost at least three and a half times less per job than those created by other projects. EDA’s strategic focus on innovation and entrepreneurship makes sense, in that investments in business incubators generate significantly greater impacts in the communities in which they are made than do other project types.