The Significance of Baseline Data

When incubator managers toot their horns about their programs’ impacts, they typically use one of two approaches:

  • Provide a snapshot of program impacts at a specific point in time
  • Demonstrate accumulated program impacts over a period of time
Either of the above approaches can paint a powerful picture of the value of incubation. For example:
  • Snapshot example: In 2004, clients of the William M. Factory Small Business Incubator in Tacoma, Washington, employed 260 individuals at an average wage rate of $22.21 per hour.
  • Accumulated impacts example: Between 2001 and 2005, clients of the Business Technology Center in Columbus, Ohio, created 240 jobs at an average salary of $69,500.
At first glance these bits of information appear quite similar. In fact, they are two very different looks at incubation impacts.

In the first example, the data reflects the current employment of current clients. It does not discern whether those clients collectively employed a portion of those 260 jobs when they became incubator clients. Therefore, the incubator is not claiming a role in job creation; it is simply announcing how much local employment its clients are responsible for.

In the second example, the data reflects net new jobs created. The figure was arrived at by taking total current client employment and subtracting the number of employees those firms had before 2001.

As you can see, both approaches are useful. However, the second approach requires that the incubator begin collecting statistics about firms at a certain point in time to record a beginning employment level. If you ever intend to report out on accumulated economic impact, be sure to collect data from companies – both in-house and affiliate – when they enter the program (or at the beginning of a set time period that you wish to measure, as in the case of the Business Technology Center, above).