Ron Seide, a small business owner in Akron, recently told me about his efforts to connect with customers throughout the world. Summit Data Communications, based at the Akron Global Business Accelerator, now generates the bulk of its revenue through exporting its products around the world. This 21st century firm is just one of the innovative, high-tech small businesses that got its start at a business incubator.
Nearly two-thirds of new jobs are created by small businesses. However, entrepreneurs who are eager to transform a great idea into a good business often lack the resources to get started. To bolster job creation in Ohio and throughout the United States, business incubators are providing start-up companies with the support services needed to build a thriving business.
An incubator is an organization that helps new businesses get started, or accelerates the growth of existing ones, by providing entrepreneurs with resources, guidance, and services. Most incubators are non-profits that assist local businesses through grants, federal resources, and workshops. Some incubators are “brick and mortar”—actual buildings that house office space— while others provide so-called “soft services”, which includes business development assistance, marketing, market research, and management training services.
Business incubators equip entrepreneurs with the tools they need to thrive. According to the Ohio-based National Business Incubator Association, 87 percent of all firms that have completed business incubator training are still in business ten years later.
A 2008 independent report commissioned by the U.S. Department of Commerce Economic Development Administration (EDA) found that for every $10,000 in EDA funds invested in business incubators, between 47 and 69 local jobs are created. Incubators are proven to create jobs in a cost effective fashion. That is why access to business incubators should be expanded to all corners of our state.
Ohio is home to approximately 50 business incubators, which are helping to create new jobs and build new, regional industries. The Buckeye State is quickly becoming a national model when it comes to the successful development and launch of new small businesses and entrepreneurs.
I’ve authored the Business Incubator Promotion Act, which would help create business incubators and help existing incubators expand. The bill would do two things. First, it would provide resources to help regions introduce new business incubators and expand existing ones. Such incubator support has already created hundreds of thousands of jobs by providing start-up companies with support services that help turn innovative ideas into viable businesses.
Second, the bill would help ensure that economically-distressed communities have access to federal resources through the EDA. By targeting resources to areas suffering from severe economic hardship and high unemployment rates, we could help create higher-skill, higher-wage jobs that put new Ohio products and services into the global marketplace.
If we want to promote a 21st century economy based on innovation, we must better connect entrepreneurs with the resources they need to transform an idea in a lab into a product on the market.
Since being elected to the Senate, I have held more than 200 community roundtables throughout Ohio, holding at least one in each of Ohio’s 88 counties. I have had the chance to visit the Youngstown Business Incubator (YBI), which helped get the city of Youngstown recognized as one of the best cities in America to start a new business. The YBI helped launch Turning Technologies, a software company, by providing office space in downtown Youngstown. Turning Technologies has received national recognition as one of the fastest-growing privately held companies in the U.S.
In Hamilton County, Bad Girl Ventures – a micro-lending and business development organization primarily for majority-women owned businesses – has created more than 100 new jobs in the Greater Cincinnati area. The Muskingum County Business Incubator has helped more than 100 businesses get a good start. According to BizTech – a one-stop small business incubator in Butler County – some 40 companies have created 150 jobs generating approximately $3.8 million in revenue with an economic impact of about $5.6 million for the local economy.
Small business owners like Ron in Akron and emerging entrepreneurs throughout our state should have the resources needed to excel.
By sharing resources such as office space and overhead costs, business incubators reduce the risk of small business failures. The Business Incubator Promotion Act would invest in business incubators to promote innovation and entrepreneurship in Ohio and throughout the country. That is why we need to move forward on passing this important jobs legislation now – too many great ideas are waiting to become the next great Ohio business.