Want a great template for an entrepreneurial incubator? Think like a Wolverine
New business incubators are a sure-fire way to nurture great entrepreneurial ventures; the data bears that out.
According to a new study from the U.S. Department of Commerce Economic Development Administration, business incubators are a better source of regional business growth than any type of government-sponsored public works initiative.
The EDA data reveals that incubators generate 20 times more jobs than community infrastructure projects, and at a bargain in the process. The study says that business incubators can produce such jobs at a rate of $144 or $216 per job, compared to $2,920 to $6,872 for public works projects like road and water projects.
Business leaders in the trenches know the power of incubators and want to see more of them. “We agree with investing in highways, bridges and other elements of our aging infrastructure,” says Dinah Adkins, president and CEO of the National Business Incubation Association. “However, business incubators are critical components of the nation’s entrepreneurial support infrastructure and the only public works projects that were designed entirely as job generators. It is vitally important that the nation leverage its existing investments in incubators to generate new jobs and innovations and to help individuals facing layoffs to start their own firms.”
One new business incubator that could serve as a real template for other models is the TechArb student business incubator from the University of Michigan. TechArb just announced that a record 19 new businesses launched by UM entrepreneurs will all run their operations inside the incubator for the next six years.
Among those fledgling companies are a company that makes medical devices for use in third-world countries, and a new firm that has developed a smartphone app that aids users in losing weight.
Altogether, TechArb, now in its third year, has fueled the growth of 80 University of Michigan student businesses. The best part? The incubator was formed by students, for students, and run by students.
"Today we have more student entrepreneurs than ever in TechArb pursuing their dreams to impact our world," said Moses Lee, the new assistant director of student ventures at the College of Engineering's Center for Entrepreneurship.
The collegiate incubator is all about growth – and getting those companies that are involved with the incubator all the resources a major university can provide for them. That’s a huge factor in any incubator’s growth.
“This year, we will be bringing in more partners (venture capitalists, alumni, local and national business leaders) to connect help support ventures to scale and grow,” said Lee, who is also an adjunct assistant professor at the Center for Entrepreneurship and TechArb, in an interview with the college newspaper, The Michigan Daily.
Lee said that there’s no reason that the University of Michigan can’t give Silicon Valley “a run for its money.” That’s exactly the type of attitude “new blood” incubators should have.
And now, 19 new UM companies will be able to take full advantage and set the standard for future incubators.