National Business Incubation Association; Your source for knowledge and networks in business incubation

Founders keepers! Business incubation's history makers

August 1998

Business incubation now has a history. Officially, that is.

On May 31, at the opening reception of Conference '98, NBIA staged the inaugural Founders Awards. The ceremony honored 14 industry pioneers who now form the basis of an incubation hall of fame. Without these extraordinarily dedicated visionaries, business incubation would never have been an idea, at least not one with staying power and impact.

Almost none of the 14 had any connection to one another before they found themselves at the center of this nascent economic development strategy. For very different reasons, they had come to see the advantage of building new businesses at a time when entrepreneur was little more than a polite word for corporate misfit. Most economic developers were chasing smokestacks, as they say, not knocking on kitchen doors.

Smokestacks weren't doing it for business incubation's founders, though. People like Joe Mancuso saw the smokestacks in Batavia, N.Y., cease their belching and watched jobs fizzle. June Lavelle saw no smokestacks at all in her troubled Chicago neighborhood and countless others like it. As William Norris fired up the world's first manufactured computers, he recognized that the word "industry" would increasingly signify something very different than smokestacks in the global marketplace. These and 11 other founders got incubation up and running.

Many mark the beginning of incubation with Mancuso's Batavia Industrial Center, founded in 1957 by happenstance. When the local Massey-Ferguson plant shut down, Mancuso's family bought it but couldn't find a corporate tenant. So they split it up, rented to small companies and found themselves helping those companies locate business and financial resources. They "incubated" companies, and in fact coined the term (though Mancuso claims it came about because one of his clients was a poultry grower).

Not until about two decades later did incubation take hold, and then tenuously. The National Science Foundation funded a handful of technology incubators and innovation centers at major research universities in the late '70s, putting technology incubation on the radar. Around the same time, Control Data founder Norris thought it was good business and good citizenship to support new ventures. His company worked with communities to establish more than two dozen U.S. incubators beginning in St. Paul, Minn., in 1979. Today, leading programs like the Birmingham Business Assistance Network and the Louisiana Business & Technology Center owe their genesis to Control Data.

Lavelle opened her flagship incubator, the Fulton-Carroll Center for Industry, in an industrial neighborhood of Chicago in 1980 close by a notorious housing project. One of the first such projects funded by the Economic Development Administration, it grew to encompass an entire city block, housed up to 80 companies at a time and proved that no community is too blighted to benefit from incubation. Pleased with these early efforts, EDA continued to fund incubators, and it still does so today.

By 1982, the State of Pennsylvania, under the leadership of then Deputy Secretary of Commerce Walter Plosila, made incubation a centerpiece of its new Ben Franklin Partnership Programs. Plosila was first to recognize that incubation provided a platform for a significant new economic development strategy. Other states began to follow Pennsylvania's lead.

In the early 1980s, the U.S. Small Business Administration opened its Office of Private Sector Initiatives under the leadership of John Cox. Intrigued by articles he found on incubation, Cox put the resources of his office behind the concept. In 1984, Cox staged the first national conference on business incubation to a sold-out crowd of more than 500. That spurred a whole series of SBA-backed conferences and publications that resulted in explosive growth of the industry, from about 12-15 incubators in 1980 to several hundred by 1986. The SBA efforts also set the stage for the formation of NBIA, founded in 1985 by Carlos Morales.

Morales led NBIA for three years. During this time he helped bring together the top professionals in the industry. He enlisted Lavelle and Randall Whaley, president of Philadelphia's University City Science Center who became NBIA's first chairman, and significant corporate and academic supporters. These included Norris, researcher David Allen and Coopers & Lybrand (whose Peter Collins would go on to provide a decade of invaluable support to NBIA).

Research and publications helped legitimize and improve incubation, too. Four founders most responsible for that role were Candace Campbell, Allen, Raymond Smilor and Mark Rice. Beginning with Campbell's first study of incubators in 1984, each authored seminal research reports or books whose influence reached around the globe. All but Smilor, who also assisted in founding the Austin Technology Incubator, eventually served on NBIA's board as chairman or vice chairman. Rice, through his incubator directorship and academic roles at Rensselaer Polytechnic Institute in Troy, N.Y., helped create a model university-based technology incubator.

The early NBIA set about aggressively professionalizing the incubation industry. Allen, Mark Weinberg and Lavelle, a natural crusader, helped NBIA set up and deliver training, revised the organization's governance structure and shepherded it through years of tenuous resources. It is to Weinberg, director of an applied research and technical assistance institute at Ohio University, that NBIA owes its current home. With Morales leaving NBIA in 1988, Weinberg recognized the organization's need to identify new executive leadership and a strong institutional base. In response, he obtained the university's and NBIA's current executive director's assistance in incubating the association. In Ohio, the organization sunk deep roots.

As NBIA chairmen, Whaley, Lavelle, Rice, Campbell and Collins all provided critical leadership skills and worked to ensure that the organization remained inclusive of all types of business incubation efforts. Julius Morgan, a founder in 1986 of the Milwaukee Enterprise Center, also played a crucial role. Morgan became the conscience of NBIA, advocating for diverse perspectives, serving as the board's first minority representative and raising money hand over fist as host of two national conferences. With such support, and the assistance of many members and leaders, the membership swelled to more than 700 by 1996.

Today, as the cover story reveals, there are about 600 true incubators in North America. And thousands more incubation programs have opened around the globe. Looking at the companies and jobs they have created, it becomes clear that the founders of business incubation did their jobs well. Entrepreneurs all, they took a fragile concept and made it grow and flourish.—Sally Hayhow

From left to right: Mark Rice, Joe Mancuso, Candace Campbell, Joseph Whaley (accepting the award for his father, the late Randall M. Whaley), Peter Collins, NBIA Executive Director Dinah Adkins, David Allen, Carlos Morales, Mark Weinberg, June Lavelle and Julius Morgan. Not present were William Norris, John Cox and Raymond Smilor.

Keywords: history of business incubation, NBIA programs

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