Economic and Fiscal Impacts of a Business Incubator

Abstract

Business incubators are one option communities have to support business survival and growth. Incubators are locally based institutions that provide shared physical space and business support services to new and young firms. Most incubator evaluations have not measured total employment and income impacts or the fiscal impacts generated by incubator firms. This article describes the economic and fiscal impacts of one business incubator to illustrate how an incubator can encourage jobs and income in a local community. Incubators generate jobs and income and create linkages with firms inside and outside the local economy over the long run. The cost of creating these jobs is competitive with those costs associated with attracting manufacturing investment into a local community. Incubators can have an impact on communities that are not well positioned to attract such external investments.