NBIA Report Reveals Incubation Programs, Services on the Rise

The business incubation industry has grown dramatically since 1998, both in the number of programs in operation and the depth and breadth of services they offer, according to 2002 State of the Business Incubation Industry, a recent report by the National Business Incubation Association (NBIA).

NBIA regularly surveys business incubators throughout North America to identify trends in the industry. The organization's 2002 report highlights survey data collected in 2001.

“In 2001 alone, North American incubators assisted more than 35,000 start-up companies that provided full-time employment for nearly 82,000 workers and generated annual earnings of more than $7 billion,” JoAnn Rollins, NBIA director of membership, said in a press statement.

The survey data show 950 business incubation programs were operating in North America in 2001, up from 587 in 1998. Nearly half of these programs were mixed-use incubators that accepted a variety of clients, while more than one-third focused on assisting technology companies. Academic institutions were the most common incubation program sponsor. The report also offers some additional findings:

• "The average number of client companies per incubation program, 22, reached an all-time high."
• "A higher percentage of programs were for-profit than a decade ago, 16 percent compared to 10 percent." And,
• "Creating jobs in the local community was the most common purpose for an incubation program."

Business incubators traditionally have provided entrepreneurs with basic business support services, but the variety of assistance programs offered by incubators has increased substantially in recent years, NBIA observes. Some incubators now offer entrepreneurs access to in-house investment funds, assistance with product design and development, and loaned executives to manage their companies.

Despite the rise and fall of several high-profile Internet incubators in recent years, the data suggest the most successful incubators continue to be nonprofit programs that provide entrepreneurs with a rich mix of business assistance services, incubate companies for several years and set graduation requirements for moving start-ups out of the incubator.

Copies of 2002 State of the Business Incubation Industry are available for purchase from NBIA’s online bookstore at http://www.nbia.org/bookstore.