What Works in Business Incubation?

<p>Jonathan Morgan is a School of Government faculty member.</p> <p>This is the first in a series of blog posts focused on the topic of “What Works in Economic Development.”[1] Upcoming posts will discuss the latest information regarding what we know about the effectiveness of various economic development strategies.  This initial post in the series examines the efficacy of business incubation as a way to create jobs and support entrepreneurs, and highlights a new research study that identifies some of the best practices associated with this particular strategy.</p> <p>Many communities utilize business incubators as a core component of providing support for fledgling entrepreneurs and start-up firms.  Business incubation programs typically consist of a physical space[2] that houses budding firms and will provide a range of support services such as managerial and technical assistance, bookkeeping and accounting, financial capital access, networking opportunities, and linkages to external resources and strategic partners.  While a traditional incubator requires a building, the emphasis is placed on the business support services rather than on the physical space itself.  The idea is to enable young start-up companies to co-locate and share core services, technologies, and equipment, and to gain access to the financing and technical assistance needed to grow.</p> <p>Business incubation programs seek to promote economic development by graduating firms that are equipped to create jobs and boost local economies.   There is some case study research and anecdotal evidence that business incubators can be useful in creating jobs and improving business survival and growth rates.[3] However, concerns about how business incubators can achieve long-term financial self-sustainability [...]</p>