Small Business Development/Entrepreneurial
Development | Incubators
Technology Transfer Programs | Product or
Process Innovation
Export/Trade Development | Site Location
Assistance/Relocation Assistance | Information Services
BUSINESS ASSISTANCE
The provision of subsidies and incentives has attracted the most attention in the field of economic development, but states and localities have also devoted a considerable amount of resources to establishing business assistance programs. Rather than granting subsidies or incentives to the private sector, business assistance programs reduce operating costs by using public resources to provide useful services to companies.
The nature of these programs varies considerably - some simply provide general information while others offer intensive technical assistance. Regardless of the program focus, there is a common goal - to foster business development. This may be achieved by promoting the area to start-up companies or companies considering relocation, or by providing services to existing companies with the objective of increasing their competitive advantage.
Small Business Development/Entrepreneurial Development
Small business development programs afford entrepreneurs the technical assistance needed to start, operate and grow businesses. These programs supplement capital provisions and networking opportunities with logistical information related to running a business.
Entrepreneurial training is geared toward facilitating a change in the culture of the regional labor force. Instead of trying to channel people into the mainstream economy, these programs teach those with an interest in and inclination for self-employment how to strengthen their entrepreneurial skills and start and stabilize their businesses. Entrepreneurial training programs come in several fashions, sometimes managed by nonprofit organizations, other times coordinated by governmental entities. The programs traditionally employ a mix of practical training and help in acquiring capital.
Examples:
- Colorado Small Business Development Network, Colorado statewide
The Colorado Small Business Development Center (SBDC) Network is dedicated to helping small businesses throughout the state achieve their goals of growth, expansion, innovation, increased productivity, management improvement and success. The SBDC combines information and resources from federal, state and local governments with those of the educational system and the private sector to meet the specialized and complex needs of the small business community.
Regulatory, management, financial and marketing experts work in partnership with entrepreneurs. This partnership includes the state of Colorado, the U.S. Small Business Administration, Colorado's institutions of higher education, local economic development organizations and local chambers of commerce. Twenty community-based SBDC service-centers provide free one-on-one counseling services in the areas of business research and marketing, new business feasibility analysis, business plan preparation, finance packaging and other small business topics. Colorado Office of Economic Development and International Trade, [online]. For more information: www.state.co.us/oed/sbdc/.
- The Northeast Entrepreneur Fund, Northeastern Minnesota
The Northeast Entrepreneur Fund, Inc. is a private nonprofit organization that helps people develop their ideas for starting or expanding a small business in Northeastern Minnesota. Technical assistance services include classroom training and individual consulting in the areas of business planning, targeting markets, determining financial feasibility, managing cash flow and setting personal and business goals. They have offices in Duluth, Grand Rapids and Virginia, Minnesota. The Northeast Entrepreneur Fund [online]. For more information: http://neefund.org/.
A business incubator is an organization of services designed to nurture
young businesses. A wide range of services can be offered within an incubator,
including management assistance, access to financing, business or technical
support services, and shared office services such as access to equipment,
flexible and affordable leases, and expandable space. Incubator tenants
benefit not only from business and technical assistance. They also benefit
from an official affiliation with the incubator; a supportive community
with an entrepreneurial atmosphere; direct access to entrepreneurs; group
rates for health and life insurance plans; and immediate networking and
commercial opportunities with other tenant firms.
Examples:
- Tennessee Valley Authority, Tennessee Valley Region
Tennessee Valley Authority (TVA) incubators provide management, marketing,
accounting and financial and legal assistance to its tenants. A manager
is available at most sites to help the tenants with their business planning.
Firms housed in TVA-assisted business incubators can apply for money from
TVA's Business Incubator Loan Fund, a revolving fund capitalized at $500,000
designed to help young businesses meet their short-term needs for cash
flow and operating capital. The largest loan amount available is $25,000
for a maximum one-year term.
On the basis of experience in developing small business incubators, TVA
considers the following factors necessary for success: a community consensus
supporting incubator development; local leaders with an understanding
of entrepreneurship; local support and financial backing; economic growth
factors that are conducive to start-ups; and availability of accountants,
attorneys and related professionals.
TVA typically requires a feasibility study before considering investment in an incubator. A feasibility study consists, in part, of a local business profile, including information on retail sales trends, banking assets, employment trends and educational opportunities. These factors are analyzed to determine if the community will make a good home for an incubator. Aside from the initial operating capital provided by funding sources, a business incubator should be financially self-sufficient within three to five years. Tennessee Valley Authority [online]. For more information: www.tva.com/econdev/smallbiz.htm.
Economic development specialists are giving greater attention to technology transfer as a means of ensuring the future competitiveness of a state or regional economy. Technology transfer programs are intended to facilitate the transfer of knowledge obtained through research activities (often in public universities) to the private sector.
Examples:
- Technology Transfer Incentive Program, New York statewide
The Technology Transfer Incentive Program, administered by the New York State Office of Science, Technology and Academic Research, is designed to help business transfer new ideas and new technology from the research lab to the marketplace. The program supports the efforts of the state's colleges and universities to commercialize high-tech innovations and funds projects at public and private research institutions. The Technology Transfer Incentive Program supports activities that bring new technologies to the marketplace, such as creation of business and marketing plans, obtaining venture capital, filing patent applications and product evaluation and assistance. New York State Office of Science, Technology and Academic Research [online]. For more information: www.nystar.state.ny.us/techtrans.htm.
A key to maintaining competitive advantage in established industries is to continually seek product and process innovation. Industries evolve and companies will be unable to sustain themselves without keeping pace or staying at the forefront of industry trends. Many programs have been developed with the purpose of assisting businesses in reaching this goal.
Examples:
- CAMP Inc., Cleveland, Ohio
CAMP Inc. is one of several Edison Technology Centers established throughout Ohio to define and address needs of manufacturing and technology-based businesses. CAMP offers hands-on, technical, business and training services to help manufacturing and emerging technology-based companies excel and grow through understanding, adopting and implementing innovative methods and technologies.
Their specific consulting services include product design and development, lean manufacturing techniques, e-business strategies, quality improvement, advanced manufacturing technology, innovation and commercialization, and work force and organizational development. Camp Inc. [online]. For more information: www.camp.org.
- Industrial Resource Center Program, Pennsylvania statewide
Pennsylvania's Industrial Resource Center (IRC) program was developed
to help small and medium-sized companies identify, learn about and adopt
modern manufacturing techniques, technologies and philosophies. The program
goals are to help clients increase their profitability, actualize their
growth opportunities and enhance their economic value. Seven IRC centers
are located throughout the state.
The IRC program provides manufacturers with customized, on-site assistance to improve manufacturing systems, processes, inventory planning, inventory turnover, cost control and quality management processes. In addition, IRC's innovative ideas regarding manufacturing systems and processes allow significant opportunities to improve customer service with improved product delivery and quality. Pennsylvania Industrial Resource Centers [online]. For more information: www.gallagher-gallagher.com/pairc/.
Export/trade development and promotion enables firms to expand their market area and possibly extend the life cycle of products or services that have exhausted their existing markets. Typically, firms do not have the resources to explore or develop an export-marketing plan. Exporting can contribute to a firm's sales volume and create new jobs for the local economy.
Businesses often need information about the export process, potential opportunities such as agents and distributors, patent copyright and intellectual property right regulations, technical assistance and financing programs, and country-specific information related to exporting.
Examples:
- Delaware Exporter Assistance Program, statewide
In 1986, the Delaware Exporter Assistance Program was initiated by the Delaware Department of Development to assist small- and medium-sized businesses with counseling and educational programs focused on international trade. The program consists of many different services, including one-on-one counseling; exporter education; identification of overseas distributors and representatives; international marketing support; trade leads; export trade financing, and a state-sponsored export trading company. The Department of Development also started an Exporter Visitation Program. A program trade specialist assisted exporters in developing export sales. Users view multiple services packaged and offered through a single contact point as an important element of the program. Wilson, C.D. (1990). Delaware Exporter Assistance Program for Small and Medium Sized Companies. Economic Development Review, 8(3), 54-56.
Site Location Assistance/Relocation Assistance
Many states and localities offer site location assistance to start-up companies or companies considering relocation or expansion. By marketing their available business sites and the potential advantages of each site, state and local governments hope to gain an edge in the competition for new business.
Examples:
- Empire State Development, New York statewide
New York has developed several site location assistance programs to aid start-up companies or established companies interested in relocating to the state. The Build Now-NY program identifies sites that are ready for immediate development. Sites are designated for different types of industries and meet detailed specifications with regard to acreage and infrastructure. The state also has an online database that allows users to enter very specific criteria to search for buildings or developable sites for their businesses. Empire State Development [online]. For more information: www.empire.state.ny.us/text/services/location/servpercent5Flocationpercent5Fbuild.html.
The provision of more basic information services has been recognized
as an important part of a broader economic development strategy. Given
the vast array of programs offered at all levels of government, it can
be difficult for businesses to understand what advantages one location
has over another. By making this information readily available, state
and local governments hope to highlight what their region has to offer.
Economic development strategies may also include helping companies sort
through the red tape associated with applying for government programs
or obtaining permits or licenses in an effort to provide a friendlier
environment for business.
Examples:
- Economic Development Financing Packet, Georgia statewide
Georgia has compiled an information packet on various federal, state and local financing programs that directly or indirectly benefit Georgia businesses or those businesses interested in locating in the state. The packet also includes information for those who are considering starting a new business or who need information on where to obtain licensing and permits. The packet can be downloaded directly from the state's website. Georgia Department of Community Affairs [online]. For more information: www.dca.state.ga.us/economic/ecodevpak.html.