Michael St. Amant
FOR BRANT NEWS

Recently, the economic development advisory committee submitted a proposal to Brantford city council requesting financial support to carry out a study to determine the feasibility of establishing an incubation program as a follow-up to the economic development strategy approved in 2010.

The request was turned down for budgetary purposes. Notwithstanding the decision to not support the project, the concept of an incubation or innovation centre for Brantford and the region remains viable.

The challenge facing economic development is not only how to create jobs and wealth, but also how to create them in a sustainable manner. It is no secret that future job creation will be generated from within. In order to be effective at generating entrepreneurial jobs, one effective tool is the incubation centre concept, which supports new enterprises through the early stages of development, reduces the risk of costly mistakes, allows entrepreneurs to remain focused and creates an environment of collaboration.

Recently, representatives of the South Central Ontario Region (SCOR) were told by Ed Hobbs, chairman of the Canadian Association of Business Incubation (CABI), that business incubation centres help communities create and retain businesses that generate jobs, wealth, taxes and economic development. According to Hobbs, Incubation Centres are not about “bricks and mortar” or real estate. They are about a process that mentors and guides entrepreneurial businesses to success.

Hobbs told the Business Incubation Summit that there are more than 150 incubation centres across Canada and over 7,000 worldwide. Countries such as Brazil, China and Mexico are creating centres because they understand the importance of entrepreneurial development. Statistics show that 87 per cent of companies that were part of an incubation program are still in business after five years, compared to 25 per cent for those that were not. Hobbs also stated that 90 per cent of these companies stay in the community.

Hobbs argued that the issue facing incubation centres is sustainability.

“It doesn’t matter if they are in urban or rural communities, or if they have buildings or are virtual in operation,” he said. “What matters is the process you put in place to support the entrepreneurs. In addition to providing business support, you need a rigorous entrance policy to ensure viability. You also need to establish milestones and a clear graduation and exit policy. Most of all, you need entrepreneurs committed to participating in the learning and experience sharing programs.”

Michael Donahue of the Toronto Business Development Centre added that Incubation Centres are excellent tools to deal with recession and layoffs. Often, employees who are laid-off have a small pool of capital and good ideas, but lack the business experience to establish a company. Working with other entrepreneurs, sharing ideas and having some support in addressing the mechanics of business helps them overcome their fears. There is no need to make entrepreneurialism a lonely venture.

Citing examples of communities like Leduc, Penticton and Saskatoon, Donahue said that they had created “hubs” in which successful companies can be created. Other creative examples he discussed included nGen Centre in St. Catharines, where they focus on digital technologies, and the Haliburton Creative Business Incubation Centre, which focuses on artists.

Donahue also pointed out that “entrepreneurs tend to buy local and establish collaborative roots in the community. This is good for everyone.”

John Regan, general manager of the Elgin Business Resource Centre, spoke about the experience of developing the Innovation Centre for Entrepreneurs (ICE) in St. Thomas. He said collaboration between the Community Futures Development Corporation, the Sand Plains Community Development Fund and Elgin County provided the foundation for opening the centre in June 2010. The 7,100-square-foot facility is currently 66 per cent occupied. Regan stated that their experience suggested that the Incubation Centre be co-located with other services offered by the community.

“What was equally important was getting the buy-in of the private sector and attracting good people to sit on our board and to mentor our entrepreneurs,” Regan said. “We decided on a mixed use approach and we currently have six businesses using our facilities,”

Regan stated that ICE has a strict entrance and occupancy criteria.

“We are not in the real estate business,” he said. “We are there to help entrepreneurs manage a business and develop effective marketing programs. We also provide assistance in accessing investment and banking. We want them to get the fundamentals right so that they can focus on building their businesses and selling the products and services.”

Critics of incubation centres say that many fail or that they create few jobs. In Brantford, one councillor suggested that proponents only talk about the few that succeed. Incubation centres have gone through a learning process, like any business, since they were first established in 1959. I would suggest that critics take a look at what MaRS (Toronto), the Accelerator Centre (Waterloo) and the Innovation Factory (Hamilton) are doing to support entrepreneurial business and job creation.

Many business people locally have indicated that they are willing to help as mentors, investors and advisors. Some have suggested that they would be prepared to provide facilities. The Chamber of Commerce has indicated that it supports the project in principle.

Enterprise Brant and the Business Resource Centre are two important resources already in place to help entrepreneurs, but they do not have the mandate or resources to provide the full range of services that an incubation program would provide. If council is unable or unwilling to help define the role an incubation centre could play in Brantford, then perhaps it is time for those of us in the private sector to step forward and make it happen.