As President Obama and Congress work to turn around the struggling U.S. economy, Americans must not overlook business incubators, the foremost creator of jobs in our nation.
For 50 years, incubators like the Federal Way Chamber of Commerce's proposed New Business Incubator will help entrepreneurs turn their ideas into viable businesses, promoting innovation and creating jobs by providing emerging companies with business support services and resources tailored to young firms to increase their chances of success.
Business incubation is a business support process that accelerates the successful development of start-up and fledgling companies. It provides entrepreneurs with an array of targeted resources and services. These services are orchestrated by the incubator management and offered both in the business incubator and through its network of contacts. A business incubator's main goal is to produce (graduate) successful firms that will leave the program financially viable and freestanding. These incubator graduates create jobs, commercialize new technologies and grow the local economy.
Critical to the definition of an incubator is the provision of management guidance, technical assistance, and consulting tailored to young and new companies. Incubators also provide clients access to appropriate rental space and flexible leases, shared basic business services and equipment, technology support services, and assistance in obtaining the financing necessary for company growth.
In our community, this new project's primary goal is to produce successful businesses that are able to become financially viable and to operate independently. A business incubator answers many current needs: Creation of jobs, promotion of economic self-sufficiency, diversification of the local economy, transference of new technology from universities, community colleges and corporations, and of course, the desire for established corporations to share venture experiences and mentor successful entrepreneurs and investors.
Now, there is proof that business incubation programs like the Chamber's New Business Incubator are the best investment of federal, state and local dollars. A recent study conducted for the U.S. Department of Commerce's Economic Development Administration found that business incubators are more effective than roads and bridges, industrial parks, commercial buildings, and sewer and water projects at creating jobs. In fact, every $10,000 invested into an incubator creates 57 jobs — but the same investment into roads and transportation creates 6 jobs, says the Grant Thornton-produced report.
The economic stimulus package designed to create or save millions of jobs in our country focuses largely on alternative energy and public infrastructure projects. We need to focus those resources on projects that are designed entirely as job generators such as business incubators. Of course, no one would argue that we should not invest in updating the nation's crumbling infrastructure. But it is equally important that incubators — a critical component of the nation's entrepreneurial support infrastructure that have proven themselves to be significant generators of new jobs — be at the forefront of discussions about how to jumpstart the economy.
Across the country, government agencies, universities, foundations and the private sector have already invested in the nation's 1,000 incubators. And while paving roads and repairing bridges are important, we must leverage our existing investments in incubators to generate new jobs and innovations and to help individuals facing layoffs locally to start their own firms.
Now is not the time to cut back on the nation's foremost job creators. 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.
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