A business incubator is a building with an economic development mission.  It provides affordable industrial or commercial space with shared services, training, and business guidance that help people start and grow businesses to create local jobs. 

Almost any type of building can be adaptively reused for business incubator services. Redevelopment of former industrial and commercial facilities is most common.  New construction, can also be successful with careful planning. 

Business owners expect an economic development business incubator to deliver a supportive environment with low-risk space (small, flexible suites with short-term occupancy commitments) and an experienced team to provide customized guidance and connections.  Shared equipment and space, as well as training events and strategic rent incentives, are also commonly available.

In the beginning, almost all business incubators were focused on economic development. The label is now applied to programs with different priorities.  A brief summary of the concept’s evolution* looks like this: 

• Classic Business Incubator [First Generation - 1950s] - Local job-creating economic development focus, often in recycled industrial and commercial buildings 

• Innovation Priority [Second Generation – mid '80s] - Technology transfer and entrepreneurial training focus with primary support from university-based programs 

• Fast Scaling Ventures [Third Generation – mid '90s] - Emphasis on mature sectors with rapid return opportunities for equity investors.  This category originated accelerators, pitch contests, and the like 

*synthesized from works of Bruneel, Ratinho, Clarysse, Groen, (2012) and Lalkaka (2000) by Vasily Ryzhonkov in 2013 

The Batavia Industrial Center [BIC], founded in 1959 by the Mancuso Family in Batavia, NY, is the world’s first business incubator.  It was a private sector response to a community’s economic disaster when the small city lost its largest employer, and unemployment soared to over 18%.

Economic development business incubators come in all shapes and sizes, because every situation is different in terms of need, resources, and mission.  Because we believe business incubators should be financially independent and sustainable, we favor a range from 40,000 SF to over 100,000 SF.  These sizes allow the cost of operations and assistance programs to be distributed sufficiently to allow flexible, affordable pricing for startup clients.  When smaller programs are needed, there are a variety of ways to customize a solution for that unique situation.

For independent centers, there are three primary roles with a million ways to deliver them!  The sponsor’s mission, building size, market realities, financial resources, and more all need to be considered.  An impactful, job-creating, mixed-use business incubator needs to find a way to perform these three functions:

• Site Coordinator – to strategically balance delivering a value-creating program that encourages businesses [Mission] and operating a sustainable facility to house it [Margin] 

• Facility Operations - provides and operates shareable assets that enhance the survival and success of clients

• Administration – that addresses details, manages the finances, tracks performance, and juggles the various activities that create and maintain an impactful, nurturing business environment

Larger buildings and programs will fill these roles with full-time positions.  Smaller projects get creative and find a variety of combinations that include part-time positions, volunteers, ecosystem partners, and incubator graduates.

Yes.  It is our experience that it is vital to the long-term impact of economic development incubators to be financially independent and viable.  The realities of each situation and its available resources should be clarified to design an appropriate development and operating plan.

Faster, cheaper, & "already there".  Adaptive reuse of industrial and commercial buildings can save precious time and money.  Revenue can often start almost immediately if the project property includes any "ready-to-go" space.  Startup investments may be able to be "phased" over stages to reduce the initial capital stack by "renovating as you go".  Existing buildings are already part of the fabric of the community and its history.  Connecting current opportunities to the local history​​ is an invaluable aspect of adaptive reuse redevelopment projects.