Why Bother Tracking?

Do you know the magnitude of the impact your incubation program has on the local economy? Not just in terms of clients served, but the real meat of the matter: jobs created, salaries paid, revenues earned and other economic gains?

If you don’t have these figures handy, you might be missing opportunities to convince potential funders, champions, and the public in general of your program’s importance. Additionally, if you aren’t tracking this information, you might be unwittingly contributing to feelings of doubt about the industry’s effectiveness.

Those of you who know your program’s impact understand the many good reasons for tracking outcomes. Of major importance to most incubator managers is that impact data is essential ammunition for fundraising. Secondly, it’s critical to have this data to prove your program’s contribution to the local economy. Finally, individual programs’ impacts contribute to building industry credibility.

Unfortunately, many business incubators do not track outcome data about their client and graduate firms. And the problem doesn’t appear to be endemic to the incubation industry alone. A 2004 survey by the International City/County Management Association* found that 66 percent of 726 responding local governments did not use performance measures to assess the effectiveness of their economic development efforts. The survey also found that 38 percent of responding local governments operated business incubation programs.

Previous research conducted by NBIA provided persuasive evidence for the impact of incubation on companies and local economies. NBIA’s Impact of Incubator Investments Study – the results of which were published in 1997 – found that among incubation programs responding, 87 percent of graduate firms were still in business.** However, that same research also uncovered a wide variance in evaluation capacities and efforts of individual programs. That variance still exists. Some programs conduct fairly sophisticated process and outcome data collection; others use rudimentary systems. Many use nothing at all. One thing is certain: if the incubation industry is to effectively demonstrate the value of its services, individual programs must come to terms with the practice of program evaluation.

That’s where this toolkit can help. Whether you’re already collecting data about your client and graduate firms or you haven’t yet begun, you’ll find suggestions and tried-and-true tips from other incubator managers. Why not put their collective wisdom and lessons learned to work for your incubator?

* Lyons, Thomas S. and Steven G. Koven, “Economic Development and Public Policy at the Local Government Level,” The Municipal Year Book 2006. Washington, D.C.: International City/County Management Association, 2006.

** Molnar, Lawrence A., Donald R. Grimes, Jack Edelstein, Rocco De Pietro, Hugh Sherman, Dinah Adkins and Lou Tornatzky, Business Incubation Works. Athens, Ohio: NBIA Publications, 1997.