Business incubation is not a new concept. It focuses on growing new companies which will leave the business incubation programme when ready. It has evolved since the mid-'80s. What started as an experiment in the United States has over the course of three decades encompassed Europe and become a global trend. According to 2002 data, there were an estimated 5,000 business incubators globally. The concept found a solid founding in Asian economies accounting for about a fifth of that total. Again half of this figure is concentrated in the Chinese economy. Interestingly, China along with Australia and the US has incubators that have lasted more than fifteen years.
The idea of business incubators was born out of necessity. As any entrepreneur will agree, starting a business is no joke. Although most start-up companies and new entrepreneurs know their product or service they wish to launch, a great many lack all requisite skills and resources to turn their ideas into success stories. Incubators step into fill these voids. A 2008 study by Grant Thorton conducted on behalf of the US Department of Commerce Economic Development Administration found that business incubators produce new jobs at a low cost for the government. As stated in the report Construction Grants Program Impact Assessment Report: for every $10,000 in Economic Development Administration (EDA) funds invested in business incubation programmes, an estimated 47 to 69 local jobs are generated. Hence, these incubators are creating jobs at a much more cost effective manner than EDA and their application is in areas such as roads and bridges, industrial parks, commercial buildings, sewer and water projects. It was further found that incubators provide up to 20 times more jobs than community infrastructure projects at a federal cost per job of $126 - $144, compared with $744 - $6,972 for other infrastructure projects.
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