Brown Outlines Bill to Help Launch Small Business by Establishing "Business Incubators" in Hard-Hit Regions of Ohio

Brown Releases County-by-County List of Existing “Business Incubators” and Other Enterprises that Could Stand to Benefit Under Legislation

“Business Incubators” Often Provide Initial Office Space, Training, and Other Resources to Fledgling Enterprises


Ohio is Home to the National Business Incubation Association; Report Shows Every $10,000 in EDA Funds Invested in Business Incubators Generates an Estimated 47-69 Local Jobs

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) announced new legislation today that would create “business incubators” in hard-hit regions of Ohio to help create high-skill, high-wage jobs. The Business Incubator Promotion Act would make more communities in Ohio eligible to receive funds that support business incubators through the U.S. Economic Development Administration (EDA). Business incubators provide support to existing and start-up companies, helping them to grow and create jobs.

“In Ohio, we’re seeing how business incubators foster regional economic development and spur small business expansion. Our state is on the cutting edge when it comes to the successful development of new small businesses,” Brown said. “The Business Incubator Promotion Act would provide grants, through a competitive process, to help regions introduce new businesses and expand existing ones. Such incubator support has already created hundreds of thousands of jobs by providing start-up companies with support services to help turn innovative ideas into viable businesses.

“This legislation is aimed at helping these regions create higher-skill, higher-wage jobs—meaning that more Ohio communities could support homegrown entrepreneurship. If we want to promote an economy fueled by innovation, we must better connect our entrepreneurs with the resources they need to turn an idea in a lab into a product on the market—and that’s what the Business Incubator Promotion Act would do,” Brown added.

Brown was joined by Linda Knopp, director of policy analysis and research at the National Business Incubation Association (NBIA), based in Athens. Ron Seide, president of Summit Data Communications in Akron, also joined the call. Summit Data Communications is a client of the Akron Global Business Accelerator and was named Outstanding Incubator Client, Technology Category by the NBIA in 2011. Both Knopp and Seide discussed the importance of business incubators and how Sen. Brown’s bill will help more entrepreneurs across Ohio launch their small businesses.

“For more than 50 years, business incubation programs have been helping entrepreneurs turn their ideas into viable businesses by providing them with business support services and resources tailored to young firms to increase their chances of success,” Knopp said. “As communities across the state look for new ways to spark economic growth, the Business Incubator Promotion Act would allow incubation programs to assist even more entrepreneurs, promoting innovation and creating jobs throughout Ohio and across the nation.”

“Business incubators are an outstanding example of how government can invest in infrastructure to aid in the development of businesses that will make America competitive in the 21st-century global economy,” said Ron Seide, president of Summit Data Communications. “The assistance of the Akron Global Business Accelerator was critical to our early development and contributed directly to the high-tech jobs we’ve created for our region.”

“I have been involved in business incubation since 1983 and have watched this industry grow from its infancy.  Incubators, today, are one of the most effective tools leading to company formation, technology commercialization, and job creation. The very fact that Sen. Brown recognizes and supports incubators heightens the level of importance incubators play in economic development,” said Mike LeHere, CEO of the Akron Global Business Incubator. “Sen. Brown has been a consistent supporter of the Akron Global Business Accelerator. I support this legislation and applaud Sen. Brown’s efforts to bring additional resources to the table for Small Business Incubators across the country.”

On the call, Brown also released a county-by-county list of existing and proposed “business incubators,” which provide support to existing and start-up companies, helping them to grow and create jobs. Support can include providing office space, training, advice, and other resources to fledgling business enterprises.

According to an independent report commissioned by the EDA, every $10,000 in EDA funds invested in business incubators generates an estimated 47 to 69 local jobs. In rural areas, business incubator projects are the most effective type of EDA projects. The NBIA estimates that in 2005, business incubators supported more than 27,000 start-up companies providing full-time employment to more than 100,000 workers—generating more than $17 billion in annual revenue. NBIA also points to research showing that every dollar of federal funds devoted to an incubator generates approximately $30 in local tax revenue.

“With the support of our great funding partners we were able to open our incubator in April 2011 because we were tired of turning away companies and entrepreneurs looking for professional help and resources,” said Peter Zaehringer, executive director of the Erie County Economic Development Corporation. “R.I.S.E – our Regional Incubator for Sustainability and Entrepreneurship, located at Bowling Green State University’s Firelands Campus, is a partnership with the Great Lakes Innovation and Development Enterprise (GLIDE, Lorain, Ohio) and already councils 14 existing and 14 start-up companies for a total of approximately 127 employees in Erie County.”

“This collaboration is great because it shows how multiple community stakeholders can come together to achieve a common goal,” Zaehringer continued. “We are realigning and consolidating resources within our region, through relationships with education, government, commerce, and a network of providers, to enhance the sustainability of our community.”

 The Business Incubator Promotion Act ensures that areas that are the most economically distressed and in need of EDA funds have opportunities to receive those funds. It also promotes business incubators by both constructing new incubators and expanding and supporting existing incubators.

The federal share for EDA funding generally is up to 50 percent.  In cases of higher unemployment, that percentage can increase up to 80 percent. The legislation would also give the EDA authority to award grants for the development of business incubator feasibility studies and plans for the construction of new or expansion of existing business incubators, as well as the implementation of those studies and plans.  It would also give the EDA the ability to award grants to support existing and new operations of business incubators to assist them in becoming self-sustainable.