White Paper on Business Incubation

The economic development community is increasingly looking at startups as an opportunity for growth, which we think is great. We have also seen an increase in the number of organizations considering business incubation as a strategy to promote entrepreneurship. This may be less great. Incubation can be a highly effective strategy, but one that requires a great deal of sustained commitment, financial support, and technical capacity. Too many incubators are created without these assets in place and are doomed to failure.

We have prepared a two-part white paper examining business incubation. Part One: What We Know (Is Incubation a Winning Strategy РPart 1) examines data on the practice of incubation and shares the insight we have gleaned from interviews with dozens of incubator operators in the U.S. and Canada. It offers an objective assessment of the impact of incubation on startup success. Part Two: Factors in Success (Is Incubation a Winning Strategy РPart 2) shares some of our observations and thoughts on the practices that can help to determine whether an incubator may be successful. It concludes with a brief mention of some of the emerging collaborative models that may serve more clients and be better matched to the capacity of typical economic development organizations.

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Business Incubator Feasibility Study

The City of River Falls and University of Wisconsin – River Falls raised the prospect of establishing a business incubator focused on agricultural and bio technologies. Place Dynamics was retained to examine the feasibility of the project and recommend the best process for moving forward.

Our analysis determined that there was too little activity in the targeted sectors to support the incubator as proposed. We instead recommended a broader focus on business, scientific, and related professional services, while retaining some capacity to incubate manufacturers serving bio industries.

We recommended a structure for the proposed incubator, including ownership, management, and client tiers. We also identified likely development costs and prepared cash flow projections helping the community to determine the level of subsidy the facility will require.

 

Assistance Levels

Targets

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