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December 9, 2014

Business Incubation in Watertown: Supporting Innovation

Guest post written by Kim John Erdmann, Executive Director, Watertown Economic Development Organization

Watertown is a great place to launch a business, thanks in large part to the Watertown Economic Development Organization's (WEDO) efforts to help businesses start in the city. One of the many ways the organization supports start-ups is through the WEDO Business Incubator.

Business incubators are facilities designed to accelerate the growth and success of entrepreneurs and start-up companies by providing an array of business support resources and services, including physical space, capital, coaching and mentoring, common services and networking connections. A company will typically spend about two years in an incubator setting – during a company’s start-up phase, when a new business is most vulnerable. Incubators provide business support services, where companies can often share telephone, office and production equipment expenses with other start-up companies in an effort to reduce costs.

The primary goal of business incubation is to graduate successful, financially stable companies that continue to grow. These companies will create jobs, revitalize communities, commercialize new technologies and strengthen local economies.

Business Incubation Works

Business incubators reduce the risk of failure for early-stage companies. According to the National Business Incubator Association, 70% of small startup businesses outside incubators fail in the first three years while 87% of incubator graduates succeed and flourish.

By providing affordable space, support and business development services, incubators can play a key role in helping young businesses survive and grow during the early stages, when they are the most financially vulnerable.

Business Incubators in Watertown

According to the Wisconsin Business Incubation Association, there are currently 35 operating incubators in the state, more than 1,400 incubators in North America and 5,000 worldwide. One such incubator is the WEDO Business Incubator, operated by the Watertown Economic Development Organization. Built in 1993, the Incubator has seen an array of businesses successfully transition to their own facilities and continue to grow, including:
Current tenants include Idle Free Systems, whose story of innovation in the manufacturing industry demonstrates how successful business incubation can be. The payback to the City of Watertown has been great. Collectively, the five businesses that have graduated from the WEDO Business Incubator have paid millions of dollars in property taxes to the City. This does not include income taxes paid by the employees.

Business Incubation Benefits the Community

Nationwide, business incubators are strong community assets. Eighty-four percent of business incubator graduates stay in their communities. Many incubators receive public funding, the return on which is great. In fact, research has shown that for every $1 of estimated public operating subsidy provided the incubator, clients and graduates of incubators generate approximately $30 in local tax revenue alone.  Without a doubt, business incubation works – both in Watertown and across the country.