National Business Incubation Association (NBIA)

The National Business Incubation Association (NBIA), founded in 1985, is a nonprofit organization comprised of business incubator developers and managers, corporate joint venture partners, venture capital investors, and economic development professionals. The association seeks to promote the growth of new business and educate the business and investor community about the benefits of incubators. NBIA offers information and training on how to form and manage incubators; conducts statistical research; provides a referral service; and publishes a newsletter, membership directory, various reports and monographs, and a state of the industry analysis. The NBIA also hosts an annual convention where it bestows a number of industry awards.

Business incubators are facilities that provide shared resources for young businesses, such as office space, consultants, and personnel. They may also provide access to financing and technical support. For new businesses, these services provide a more protected environment in which to grow before they becomes self-sustaining. The ultimate goal of any business incubator is to produce viable businesses, called "graduates" of the incubator. Today, there are an estimated 900 NBIA-affiliated business incubators in operation across the United States as well as affiliates in 40 countries.

A business qualifying for incubator assistance must meet certain criteria, in much the same way it would for a venture capital firm. Some incubators have diversified interests, accepting different types of start-ups into the fold, whereas others concentrate in one particular area or industry. For instance, some special interest incubators exclusively support women and minority-owned businesses and others choose to focus on innovative software or medical applications.

A variety of sponsors support incubators. Some incubators are supported by government and nonprofit bodies. These incubators' main goals are job creation, tax base expansion, and economic diversification. Other incubators are affiliated with universities and provide faculty, alumni, and related groups with research and business opportunities. In addition, a number of incubators are hybrids combining resources from both government and the private sector. For-profit incubators, meanwhile, surged in popularity during the 1990s. This growth was fed in general by the decade's explosive economic expansion, and specifically by the advent of e-commerce. These incubators are operated by various types of investment groups and maintained to provide returns on funds invested by the group. Their main focus is usually on innovative applications for new technology and the development of commercial real estate. But many for-profit incubators can provide only limited leadership, guidance, and financing. Indeed, the NBIA estimates that the majority of for-profit incubators fail within two years of opening. For this reason, the NBIA encourages entrepreneurs to carefully research incubators before committing to membership. The remainder of incubators are sponsored by a variety of non-traditional organizations, such as Indian tribes, chambers of commerce, church groups, and others.

Membership

Membership in the NBIA conveys a variety of benefits. They include a subscription to the NBIA Review, the association's newsletter; access to BatorLink, the NBIA's Internet discussion group; research, documentation, and dissemination services; support from NBIA staff for information and referrals; legislative and government program updates; and discounts on publications, educational materials, Microsoft products, insurance products from Biddle Insurance Services, and Paychex payroll services. Contact the organization by mail or phone for information on how to apply for membership. The National Business Incubator Association's headquarters are at 20 East Circle Drive, Suite 37198, Athens, OH 45701; 740-593-4331. It also maintains a Web site at www.nbia.org/index.php.

BIBLIOGRAPHY

"Due Diligence Advised in Picking Business Incubator." Business First-Columbus, 1 September 2000.

Hayhow, Sally. Business Incubation: Building Companies, Jobs and Wealth. National Business Incubation Association, 1997.

Hayhow, Sally. A Comprehensive Guide to Business Incubation. National Business Incubation Association, 1996.

"Incubators Lay an Egg." Business Week. 9 October 2000.

Krizner, Ken. "Incubators: Help Startup Companies Get Off the Ground." Expansion Management. July 2005.

Rice, Mark P., and Jana Matthews. Growing New Ventures, Creating New Jobs: Principles and Practices of Successful Business Incubation. Quorum Books, 1995.

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                                  updated by Magee, ECDI