President-Elect Barack Obama plans to invest $250 million in government funds into business incubators every year as president, totaling $1 billion over four years. The move, which he says will encourage entrepreneurship by faciliating networking, business mentorships, and the free flow of innovative ideas, is part of an overarching strategy to help stop the bleeding the current economy.
Obama’s website states:
Barack Obama and Joe Biden will support entrepreneurship and spur job growth by creating a national network of public-private business incubators. Business incubators facilitate the critical work of entrepreneurs in creating start-up companies. Obama and Biden will invest $250 million per year to increase the number and size of incubators in disadvantaged communities throughout the country.
Usually listed with his other economic plans, this business incubator plan has not received as much media attention as his income tax cuts and plan to come to the best possible resolution to the the automobile industry solvency question.
If implemented correctly (i.e. tailored to local communities and focused on technology and other high-growth companies), this could have a major impact on the economy if it generates and helps along companies that would have otherwise never existed or survived.
A recent study in the Journal of Business Research found that business incubators can have a significant positive effect on the success of a venture because they often provide more abundant human and intangible resources than ventures than if a company is not incubated. Human and intangible resources are beneficial for companies because they can shorten the length of commercialization for companies, allowing them to generate sustaining revenue ore quickly. Incubators are shown to facilitate the development of new products and allow the products to be promoted more quickly.
Stay tuned to the National Spending Journal for coverage of Obama’s policies affecting small businesses.