Business Success in Incubators
- Over 85% of businesses succeed when started in an incubator
- Only about 20% of businesses succeed when started independently
How do incubators contribute to local and regional economies?
Incubator graduates create jobs, revitalize neighborhoods, and commercialize new technologies, thus strengthening local, regional, and even national economies.
NBIA estimates that North American incubator client and graduate§ companies have created about half a million jobs since 1980. That is enough jobs to employ every person living in Denver.
Every 50 jobs created by an incubator client generate approximately 25 more jobs in the same community.
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.
Business incubators reduce the risk of small business failures. Historically, NBIA member incubators have reported that 87 percent of all firms that have graduated from their incubators are still in business.
Why are business incubators worthy of government subsidies?
Government subsidies for well-managed business incubation programs represent strong investments in local and regional economies. Consider these returns:
Research has shown that, for every $1 of estimated public investment provided the incubator, clients and graduates of NBIA member incubators generate approximately $30 in local tax revenue alone.
NBIA members have reported that 84 percent of incubator graduates stay in their communities and continue to provide a return to their investors.
Publicly supported incubators create jobs at a cost of about $1,100 each, whereas other publicly supported job creation mechanisms commonly cost more than $10,000 per job created.