We know that incubators are a successful and cost effective program for creating companies and jobs. According to a 2008 analysis of EDA programs, “investments in business incubators generate significantly greater impacts in the communities in which they are made than do other project types.” For a long time I have advocated the expansion of EDA funds for incubators to cover more than bricks and mortar (see previous posting). Support programs — including assistance with intangible asset management — are a key element of successful incubation. Government funding for incubators need to recognize this reality.
A couple of weeks ago, Florida Congresswoman Suzanne Kosmas has introduced HR 5411, the Early-Stage Business Investment and Incubation Act of 2010 that would allow EDA to make grants to incubators, up to $5 million. The funds could be used for the following purposes:
(A) Making an investment in an early-stage business in a targeted industry.
(B) Providing training, counseling, and other assistance to an early-stage business in a targeted industry to support the development of the business.
(C) Providing purchased services to an early-stage business in a targeted industry.
(D) Conducting due diligence activities.
(E) Meeting operational expenses.
See also the Congresswoman’s press release on the bill.
The Congresswoman, who represents the Orlando and Florida “Space Coast” area, sits on the House S&T Committee and the Financial Services Committee. The bill, however, was referred to the House Committee on Transportation and Infrastructure Committee – which oversees EDA, with sequential referral to Financial Services. I understand that the Financial Services Committee is somewhat busy right now on another matter. But I hope the Congress and the Administration will look carefully at this proposal. There is a lot of merit in idea.