What is a “business incubator”?

Business incubators began forming on a large scale in the early 1980s. According to the NBIA, the industry trade organization, the U.S. now has over 1,400 incubators that have helped nearly 35,000 companies, which now employ more than 245,000 people.

Business incubators provide hands-on assistance and a variety of services for startup companies during their first 1 to 5 years. Typically, they accelerate development by providing management assistance, flexible space, leases in a multi-tenant facility, as well as secretarial, fax, and copying services and the use of equipment and laboratory assets on a pay-as-you-go basis. An on-site incubator manager typically serves as a resource for business advice, and an extensive support network of outside business and technical consultants provides accounting, marketing, engineering, legal, and other advice.

Sponsored by state and local governments, economic development agencies, universities, and/or private-sector firms, incubators have one main goal: to produce successful graduate businesses that create jobs. They can encourage industrial investment by serving as a cohesive force in the community, coordinating resources, and providing a user friendly interface to government and private sector services. They are also in a unique position to advise potential investors of promising new companies.