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Proposed Business and Technology Incubator
Missouri S&T proposes to build a business and technology incubator on the planned Innovation Park campus. According to the National Business Incubation Association (NBIA), a business incubator comprises a comprehensive program that provides assistance to businesses to improve their chances of becoming sustainable, profitable companies. The focus tends to be start-up and early stage businesses although incubators may accept established small businesses as clients. As such, an incubation program includes staff that delivers and coordinates business assistance to client companies. However, the program must guide client companies to self-sufficiency which means that client companies must leave the incubator program within a finite period of time. Although a physical facility is not a requirement for a business incubator, most successful incubators do have a dedicated facility.
How Incubators Work
Client companies take up residence in the incubator and are nurtured for a period of three to five years. During this time, they have access to specialized resources and receive comprehensive business assistance from incubator staff and partners. This helps the client companies to grow, hire employees, and attract capital. Once the client companies have developed to a certain point, they graduate and establish their own facilities. According to the NBIA, approximately 84 percent of incubator graduate companies remain in the regions where they received incubator assistance. Moreover, approximately 87 percent of incubator graduate companies remain in business after three years, compared to just half of non-incubator start-up companies.
Importance to Regional Success
A business and technology incubator would have a significant economic impact on the city of Rolla, Phelps County, and the entire region. According to NBIA statistics, for every 2 jobs created by incubator client companies, approximately 1 additional job is created in the same community. Moreover, for every $1 of public investment provided to an incubator, approximately $30 in local tax revenue is generated by the incubator’s clients and graduate companies.
Based on the analysis by TTED, the proposed business and technology incubator will likely generate economic impact in three ways. There will be a onetime economic impact of roughly $16.7 million and about 146 jobs from the construction of the incubator facility. Clients of the incubator will generate an economic impact of approximately $1.2 million to $2 million and between 14 and 30 jobs each year for as long as the incubator operates. Over the first ten years this would represent an economic impact of $10.8 million to $18 million and between 126 and 270 jobs. Finally, the ongoing economic impact of the incubator program itself will be between $139,550 to $315,680 and approximately 2 to 4 jobs within the community.
The plan is to construct a 30,000 square foot facility that will include office space, wet laboratories, engineering laboratories, and high bays. Constructing such a facility will cost an estimated $6 million to $9 million. To be successful, funding for the incubator will have to come not only from federal and state resources but also from the Missouri S&T alumni community.
For additional information contact:
Mr. Keith Strassner, Director
Mr. Malcolm Townes, Associate Director