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ARC-Supported Study Examines Best Practices, Economic Development Impact of Rural Business Incubators

May 2013


A comprehensive new study conducted by the National Business Incubation Association (NBIA), with support from the Appalachian Regional Commission and the Tennessee Valley Authority, identifies the best practices used by successful business incubation programs to grow companies and create jobs in rural areas.

Best Practices in Rural Business Incubation: Successful Programs in Small Communities presents case studies and data analysis identifying the most important practices, and combinations of practices, that benefit rural incubators. Underscoring the role business incubation can play in the economic development of rural areas, the study provides information on how accomplished programs achieve financial sustainability, fulfill their mission to graduate successful clients, and create community wealth.

The study's findings and implications were discussed by NBIA Vice President and COO Tracy Kitts and ARC Federal Co-Chair Earl Gohl at a May 14 event held at Shoals Entrepreneurial Center in Florence, Alabama. The center is a successful business incubator featured in the study.

Key findings include the following:

  • Best practices for rural and urban incubation programs do not differ. However, there are unique challenges to operating a rural incubation program, including fewer local resources and a smaller pool of potential clients.
  • The most successful incubation programs—regardless of location and demographics—have developed, or are collaborating within, regional networks. These networks increase staff efficiencies while expanding incubators' potential markets and resources.
  • Rural incubation program managers who are highly skilled in the business development process produce better outcomes.
  • Rural incubation programs that use client advisory boards—particularly boards that include at least one incubator graduate—have better outcomes.
  • Location in a rural or urban area does not determine the potential for incubator success. Rather, program policies and procedures influence program success the most.

The full study, including recommendations based on the findings, is available from the bookstore on the NBIA Web site.