The History of Business Incubation
The Batavia Industrial Center, commonly known as the first U.S.
business incubator, opened in Batavia, N.Y., in 1959. But the concept
of providing business assistance services to early-stage companies
in shared facilities did not catch on with many communities until
at least the late 1970s. In 1980, approximately 12 business incubators
were operating in the United States – all of them in the
industrial Northeast, which had been hard-hit by plant closures
in the previous decade.
Throughout the 1980s, business incubation industry growth was
swift, as a few farsighted individuals saw the limitations of
common economic development strategies that focused solely on
industry attraction and large corporate expansions. As others
began to recognize the value of creating and expanding new businesses
to sustain local economies, more communities developed business
incubators to support these new ventures. Three major activities
drove industry growth during the period:
- In the mid-1980s, the U.S. Small Business Administration
(SBA) strongly promoted incubator development, holding a series
of regional conferences to disseminate information about incubation.
The SBA
also published a newsletter
and several incubator handbooks during the period. As a result
of these activities, incubator development grew from about 20
openings annually in 1984 to more than 70 in 1987.
-
In 1982, the Pennsylvania Legislature enacted Walter Plosila’s
design for the state’s Ben Franklin Partnership Program,
one of the country’s first comprehensive technology and
manufacturing agendas. This program, which included incubators
as a key component, became an early model for other states’ support
of business incubation.
-
Control Data Corporation, under the direction of company founder
William Norris, became one of the earliest supporters of the
business incubation industry. With a belief that large companies
should work with government and other sectors to address major
societal needs, Norris formed City Venture Corporation (CVC),
a Control Data division that developed business incubators in
several large and small cities. Several
successful incubators that were initially developed with assistance
from CVC – including the Entrepreneurial
Center in Birmingham, Ala., and the Pueblo Business & Technology
Center in Pueblo, Colo. – still exist today.
In more recent years, communities around the world have embraced
the business incubation concept. In Columbus, Ohio; Birmingham,
Ala.; Troy, N.Y.; Atlanta; San Jose, Calif.; Philadelphia; Canberra,
Australia; Shanghai, China; Coventry, England; and in many other
places, model incubation programs have become deeply respected
institutions.
Recognizing the need for information sharing within this new
growth industry, business incubation leaders formed the National
Business Incubation Association (NBIA) in 1985 to provide training
and tools for assisting start-up and fledgling firms and to serve
as a clearinghouse for information on incubator management and
development issues. The association’s membership has grown
from approximately 40 members in its first year to approximately
1600 in 2006. If you would like more information on becoming a
member of NBIA, go to Join
NBIA.
