The History of Business Incubation (Courtesy of NBIA)
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 had grown from approximately 40 members in its first year to approximately 1600 in 2006.