YOUNGSTOWN, OHIO – U.S. Sen. Sherrod Brown (D-OH) visited the Youngstown Business Incubator on Friday to announce a new legislative proposal that would increase federal funds for business incubators and expand the number of communities eligible to receive funds.
“This legislation is about extending the success of the Youngstown Business Incubator to other parts of the state and the country,” Brown said. “We need to focus on both economic recovery and building new businesses. Incubators generate both jobs and community revitalization.”
Brown was joined by Mayor Jay Williams, Youngstown Business Incubator “Chief Evangelist” Jim Cossler, and Development Officer Julie Michael Smith. They discussed how the Youngstown Business Incubator fosters economic development in the region and highlighted two companies based in Youngstown at different stages of development. Jennifer Wexler, who co-founded ERIS Medical Technologies in 2007 discussed the incubator's formative role in the growth of her start-up, which provides health care facilities with specialized software to identify, correct, and manage revenue. In addition, Mike Broderick, CEO of Turning Technologies, one of the fastest growing companies in the country, also outlined how his business’ participation in the incubator has lent to its rapid rise.
"Business incubators" provide support to existing and start-up companies, helping them to grow and create jobs. According to an independent report commissioned by the Economic Development Administration (EDA), for every $10,000 in EDA funds invested in business incubators, an estimated 47-69 local jobs are generated. In rural areas, business incubators projects are the most effective type of EDA project.
The National Business Incubation Association (NBIA), based in Athens, Ohio, 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.
Brown discussed legislation he plans on introducing when the Senate reconvenes in September. Brown’s Business Incubator Promotion Act would make more communities in Ohio eligible to receive funds that support business incubators through the EDA. This bill would encourage the formation of business incubators in distressed communities to promote innovation and entrepreneurship, helping regions to create high-skill, high-wage jobs. It would give EDA authority to award grants for the construction of new or expansion of existing business incubators. The bill would also give EDA authority, in cases of severe economic distress, to reduce the non-federal share (match) to 20 percent of the cost of a project or to waive the local share if the unemployment rate of the area exceeds 12 percent.
On July 21, Brown delivered a speech on the U.S. Senate floor to honor Youngstown’s designation in the August 2009 issue of Entrepreneur Magazine as one of the top ten cities in which to start a new business. In his speech, Brown pointed to the role of the Youngstown Business Incubator in generating a favorable environment for entrepreneurialism.
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