Business incubators are key to recovery

As President Obama and Congress debate the best way 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 Youngstown Business Incubator have been helping 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.

In the past few years alone, the Youngstown Business Incubator has created over 280 high paying jobs, demolished seven unsalvageable and unsightly buildings, leveraged over $10 million in new construction and renovation, and brought the exciting news of Youngstown’s renaissance to over 15 million listeners and readers across the country. We are a building which has revitalized a block that will transform our city.

A recent study by the prestigious accounting firm Grant Thornton conducted for the U.S. Department of Commerce 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 incubators provide up to 20 times more jobs than community infrastructure projects like water and sewer projects at a cost of $144 to $216 per job compared with $2,920 to $6,872, according to the report.

Stimulus package

Congress has passed a $787 billion economic stimulus package filled with tax cuts and funds for alternative energy and public infrastructure projects, but business incubators are being overlooked. Of course, no one would argue that we shouldn’t invest in updating the nation’s crumbling infrastructure. But it’s 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 jump start 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 to start their own firms.

President Obama’s economic platform included plans for developing a network of public-private incubators by investing $250 million annually to develop new incubators in distressed communities. And while that proposal is certainly worthwhile, the process of developing new incubation programs can take two to three years or more. The nation’s existing network of nearly 1,000 incubators — including many best-practice programs with excellent track records — already is in place and prepared to expand services to new populations and geographic areas. New investments in these programs can garner results immediately.

X Jim Cossler is CEO of the Youngstown Business Incubator.