Where business incubators started, and what's next
Many books and graduate papers have argued why the Industrial Revolution happened when and where it did. But more than anything else, over the 'long twentieth century,' as economics historian Bradford deLong calls it, science, policy and the market codeveloped the corporation and the research lab. Thomas Edison was as much an entrepreneur as a scientist.
Then, during the Second World War, more military spending went into research and development than ever before. A working paper revised in 2023 demonstrated that where R&D spending went in the 1940s influenced where patents, tech talent and high-growth entrepreneurship flourished over the next half-century.
As researchers in lab coats professionalized processes for identifying ideas, business people in suits developed systems for commercializing those ideas.
In upstate New York in the 1950s, the Batavia Industrial Center became the first business incubator — yes, the word 'incubator' was a reference to chickens from the beginning. Others followed, commonly in response to emptying manufacturing corridors and hope in squeezing the most out of homegrown inventors and entrepreneurs. By the 1960s, what became Philadelphia's University City Science Center was the first urban version, mixed in with messy urban renewal politics. The model mixing physical space with mentorship and basic business services began showing up across the country.
Enough examples were active by the 1980s that leaders wanted a place to convene. And so launched what is today the International Business Innovation Association (inBIA), which boasts 1200 members across 30 countries. Next week, inBIA hosts its 39th annual conference in Philadelphia.
'Entrepreneurship unlocks tremendous economic potential,' said Charles Ross, the group's President and CEO. 'Incubators help communities harness that power.'
Incubating tiny chickling businesses has always been different than chasing the already-fattened chickens of the corporate world. But the discipline was long seen as a fool's errand for policymakers and civic leaders: Why focus on ideas that might not go anywhere when you can hunt for those that have already become established businesses?
Well, for one, it's getting harder to move big business. Second, entrepreneurship is booming, so economic development is undergoing a renaissance in what is lovingly called ecosystem building. Around the world, when economic development leaders seek examples of where to find hometown startups, they often look to a member of Ross's association. Entrepreneur needs are different in their early days.
'Entrepreneurs consistently tell us community is the most valuable part of incubation programs,' Ross said. So those entrepreneurs go, and stay, where they can find community, which typically looks like programming, resources and identity — all of which is aided by storytelling, a topic that features at the inBIA conference.
'Entrepreneurship is a team sport,' Ross said, 'but it's also a lonely endeavor. Physical spaces foster community, trust, and sharing, essential for entrepreneurial success.'
His members range in size from big institutions to entrepreneurship centers that pop up at colleges and universities, like ones at Boie State and Coppin State. On average, members receive as much as 15% of their funding from federal sources, including the Department of Commerce and the National Science Foundation. That means current DOGE-powered budget battles aren't existential but threatening.
Business incubation started in the Eisenhower years, was formalized in the Reagan 80s and grew under Clinton and Obama. Entrepreneurship is bipartisan and incubators show up in places that tilt both Republican and Democratic, so Ross is confident their work will continue.
'Place-based entrepreneurial support enables community, trust, and sharing — all crucial for startup success,' Ross said. 'We need entrepreneurs now, as much as ever.'
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Technical.ly
10-08-2025
- Technical.ly
Universities are economic engines. Will they survive?
American higher education faces several intersecting challenges, including declining enrollment, reduced job prospects for graduates, demographic shifts and political funding pressures. International competition, particularly from China, is eroding the US's long-held research dominance, with experts pointing to immigration policy, lack of coordinated innovation strategy and underinvestment in science as key factors. Emerging reforms suggest paths forward for universities to adapt, re-engage with their communities and sustain their role as essential 'anchor institutions' for local economies. Victor Hwang's immigrant parents started a small business to help pay for his shot at an elite university that changed the course of his life. Brian Brackeen dropped out of a state school to start a tech career that led him to launch one of the country's few Black-led venture capital firms. Both represent how American higher education has changed over the last 50 years. Each can tell us something about where this country's colleges and universities might go in the future. No question it's a moment of peril. For centuries, universities have intended to do two things: create new scholarship, and train students in it. In the American style, this meant colleges and universities have been powerful economic engines, most notably through breakthrough invention. The world's first supercomputer and the mRNA research that powered the historically-fast deployment of the COVID-19 vaccine happened at the University of Pennsylvania. Johns Hopkins University researchers isolated the first human embryonic stem cells and landed the first spacecraft on an asteroid. Modern robotics and artificial intelligence were pioneered at Carnegie Mellon University. Examples like this come from across the country. Big breakthroughs are historic. More practically though, higher education commanded social currency in the United States by driving economic mobility for individuals. After the Second World War, elite universities established a merit-based admissions system. For a time, standardized tests gave kids from different backgrounds a better shot at prestigious schools. As the American economy changed, the so-called college wage premium grew. By 2012, a college-degree holder could expect nearly double the earnings of a peer with only a high school diploma. The relatively big generation of millennials stormed college campuses throughout that decade — reshaping cities along the way. The peak had already passed. College enrollment in the United States hit its zenith in 2010 and has declined since. Worse still, 2018 marked a reversal: For the first time on record, the unemployment rate for recent college graduates (those aged 22-27) was higher than the national average, and it has accelerated since the pandemic. Whether that's because of encroaching artificial intelligence or an over-supply of degree holders is for another story. The point is that existential threats are growing for US higher education. Alongside the so-called enrollment cliff, due in part to continuing demographic changes, American research universities are losing status abroad, and entangled in a political battle domestically. Where do we go from here? Hwang, founder of entrepreneurship advocacy group Right to Start, told me during a recent Builders Live podcast recording that universities are overdue for an overhaul, from their century-old curricula to how they handle innovation and research. 'The way our current university curricula are designed, they were created over a hundred years ago,' Hwang said. 'If I were running a university now, I would shift the focus toward how you apply knowledge to actually make stuff happen in the world — make people into builders, makers and doers.' Brackeen, a managing partner at Cincinnati-based venture firm Lightship Capital, agrees institutions must adapt. He advocates making higher education more flexible and accessible, reshaping the very structure of how universities deliver learning. 'This idea that you all have to start as one class and finish in a specific amount of time — why does it matter?' Brackeen said. 'Decoupling line-by-line matriculation would allow more people to participate.' American higher education is at a crossroads These shifts are not merely hypothetical. The data shows that American higher education is at a crossroads. Controversially, the Trump administration has withheld federal funding from a growing list of universities on cultural issues. University of Virginia's president resigned amid the pressure. The administration's anti-immigrant rhetoric is suppressing international students, long prized by college admissions for high tuition fees. Already cash-strapped community colleges are enacting budget cuts. Close to 100 colleges and universities are expected to close in he coming years, according to a Federal Reserve Bank analysis. Dozens have already shut down, of the close to 6,000 that exist. No question some consolidation and closures are an inevitable response to a changing landscape. Even higher ed insiders have acknowledged that colleges and universities let a liberal bias grow, leaving the trade politically vulnerable. Meanwhile, higher ed has suffered 'administrative bloat,' in which an arms race of services has propelled spiraling professional staff that do not contribute to core learning. So higher ed has problems, yes, but its importance is unrivaled. The Federal Reserve Bank's 'anchor institutions' initiative has quantified the economic impact of 'eds and meds,' or the preponderance of universities and health systems at the center of local economies. Weak regions rely on them, and strong regions are powered by them. What can be done about it? One key point from the Fed research is that colleges and universities ought not be seen as solely coastal phenomena. According to a analysis of federal data, every US state has at least one university that is among the 200 largest R&D spenders in the country, and most rank in the top 150 (South Dakota State University is a laggard). Each contributes meaningful inventions to our lives, and effective graduates to our communities. That story is lost on a growing number of Americans. University communication strategies matter. Elite schools like Harvard and Yale, with endowments in the tens of billions, attract particular criticism: that they're hedge funds with mascots hoarding resources rather than investing in broader economic growth. Competing for lower acceptance rates is an unjust — and politically tenuous — strategy for nonprofit institutions, Brackeen notes. Brackeen advocates for redistributing some of these financial resources across the higher education system, particularly to historically underfunded institutions. 'I would love to see the larger universities democratize their access to financial resources,' Brackeen said. 'Their immense war chests could provide critical support to smaller state institutions and HBCUs.' One analysis in the United Kingdom, which itself faces a high cost higher education system, advocated for a two-tier system: national institutions that should be evaluated on selective admissions and scientific breakthroughs, and local ones that should be evaluated on producing more in-demand graduates at ever lower costs. A 'lifelong-learning entitlement' is being piloted there, reflecting that though there may be fewer younger people now, a growing share of the population is older. Continuing education, both for career changing, upskilling and fulfillment, seem obvious priorities. The 'university retirement community' seems like a bet on that the international reputation of American research universities — long an undisputed advantage — is under pressure. According to Nature's latest global university rankings, only two US institutions remain in the top 10 (Harvard and MIT), while Chinese universities dominate. This marks a profound shift from two decades ago, when American institutions filled most top slots. Victor Hwang points to outdated federal immigration policies and a lack of strategic thinking about global competitiveness as partly responsible for this decline. 'We trained up the best minds in the world and sent them back home again,' Hwang said. 'We haven't fundamentally redesigned our scientific-industrial complex since World War II. We need to intentionally focus on innovation and entrepreneurial activity.' Whether the Trump administration's attacks allow that to happen, or not, remains unclear. One analysis is tracking more than $3.5 billion of federal funding to colleges and universities that is in question. But amid the gloom, signs of change are emerging, particularly from regions and institutions experiencing a renaissance. The Midwest, notably, is experimenting with solutions. Ohio, for instance, implemented the 'Ohio IP Promise,' which streamlined intellectual property rules across all state universities to accelerate innovation. Marshall University in West Virginia, under former Intuit CEO Brad Smith, now mandates design thinkin g as part of its freshman experience — a practical move to foster problem-solving and resilience in first-generation college students. These examples may offer a blueprint for broader reforms. 'There is not a vibrant ecosystem in our country that is not situated in some form or way to a university. They're vital,' Brackeen said. 'But they need to get off the sidelines and actively invest in communities again.'
Technical.ly
12-06-2025
- Technical.ly
Philly is now one of the top 15 places in the world to launch a startup
Philadelphia jumped 12 spots in a national ranking of startup ecosystems, placing the city among the top 15 places in the world to found a company. The region is now ranked No. 13 in the 2025 Global Startup Ecosystem Report from trade association and research group Startup Genome and the Global Entrepreneurship Network. Over the last five years, Philly has climbed 35 spots, the report states — a sign that collaboration in the innovation scene is working, said Tiffany Wilson, president and CEO of the University City Science Center, a Startup Genome member. 'We've been laying groundwork … over the last few years, and starting to see some early indications of companies seeing success as a result,' Wilson told 'It's the right activity at the right time.' Last year, Philly broke the top 25, an improvement over the previous year when the city ranked No. 27. The latest ranking can be partially attributed to the billions of dollars flowing into the scene. Philadelphia's ecosystem value from 2022 to 2024 is $76 billion, while the global average is $20.4 billion. Startup Genome also credits Philly's sector-specific niches for helping it top the charts. Life sciences was cited as a top industry in the region. Startup Genome called out the $30 million dedicated to the sector in the Pennsylvania governor's proposed 2025 to 2026 budget, plus huge raises, like gene therapy company Latus Bio's $54 million round, as reasons for its top performance. As the home of the first FDA-approved cell and gene therapies, Philadelphia is already well-known for its life sciences wins. However, the past six months have challenged that reputation, as the city's gene therapy darling, Spark Therapeutics, recently faced restructuring and layoffs. Analysts at the time agreed, though, that one company-specific setback doesn't undermine what the scene has accomplished (or the millions that continue to be raised). Startup Genome also mentioned AI and big data and robotics and advanced manufacturing as strong sub-sectors in Philly. The report specifically cited big deals like Sojo Industries' $10 million Series A raise last summer and Ghost Robotics' $240 million acquisition by South Korean defense tech company LIG Nex 1. Diverse talent, support from entrepreneurship-focused organizations and collaboration are all reasons startups should consider settling down in the city, according to the report. Startup Genome also highlighted key stakeholders like 1Philadelphia, Comcast NBCUniversal LIFT Labs, Philadelphia Alliance for Capital and Technologies, Philly Startup Leaders (which recently rebranded to Startup Leaders) and Independence Health Group. A tough time for VC, but billions still flow into Philly Philadelphia is also beating out other regions in cash flow. Total VC funding for the city over the last five years is $24 billion, while the global average over the same time period is $5.2 billion. 2024 saw $3.3 billion in venture capital invested over 444 deals, a 37.5% increase from the previous year, the report said. One of the area's strengths is funding for early-stage companies, which aligns with the report's findings of $3.4 billion in early-stage funding from 2022 to 2024. 'At the end of the day, the money will follow the best companies,' Wilson said. 'It's just about getting them ready and plugged in to prepare for that.' Philadelphia faced a hard quarter for venture capital deal flow in Q1 of this year. Local organizations like the ones Startup Genome shouted out are trying to build connections to keep up the momentum. Ben Franklin Technology Partners' GO PA Fund is providing capital to local companies, including $2 million into medtech company Rimsys' $5 million round, per the report. Plus, the Science Center's Capital Readiness Program helps startups prepare to raise capital and brings companies from outside the region in. The Science Center facilitates introductions to potential partners and clients, while also showing off what Philly has to offer with the goal of getting companies to stay, Wilson said. Investments at the state level are also shining a light on Pennsylvania as a whole. Earlier this week, Amazon announced a $20 billion investment in AI across the state, including plans to build a data center in Bucks County. A sign of 'legitimacy, momentum and opportunity' Startup Genome's rankings don't define a startup environment forever; rather, they are a tool for future strategy and decision making, according to Stephan Kuester, managing partner at Startup Genome. Philly's recent jump can provide it with insights on how to sustain the upward trajectory. Higher rankings are often a sign of 'legitimacy, momentum and opportunity,' creating more attention for the market and leading to more opportunities, Kuester said. A low ranking can be a sign to leaders to take action and address gaps. 'Whether an ecosystem rises or falls, the ranking is most valuable when used not as a scoreboard, but as a diagnostic tool,' Kuester said. 'Movement in the rankings should spur collaborative analysis across the ecosystem to understand root causes and adjust course accordingly.' Philadelphia's high ranking will hopefully draw more startup leaders into the scene, Wilson said. Being No. 13 in the world presents an opportunity to connect the dots between investment, job creation and actual human impact happening in the region. 'It's been exciting to bring people into the ecosystem and see them experience that,' Wilson said. 'If we can do that, and we can really demonstrate how we help innovation move from an idea to impact.'
Technical.ly
15-05-2025
- Technical.ly
Ecosystem builders are choosing community over capital
For organizations looking to support entrepreneurs, leaders in the space say it's time to stop obsessing over scale and the venture capital financing route. Instead, focus on deep impact through trusted referral networks, sharing leadership and being creative about getting capital to those who need it, panelists at the 39th International Conference on Business Incubation (InBIA) said last month in Philadelphia. Growth — sustainable and manageable — will follow. 'I don't know that what [entrepreneurs] need is a single place they can go to get all the help they need,' Heidi Knoblauch, a professor at the University at Albany, SUNY, said at the event hosted by the International Business Innovation Association. 'What they need is key people in their lives who will help propel them.' As federal funding for innovation becomes increasingly uncertain and living costs steadily rise, economic developers and entrepreneur support programs represented on the panel say they are pushed to reconsider how they work with their respective communities. Build referral networks, not (just) one-stop shops Many ecosystems are designed to have a single point of entry or a hub that can support every founder at every step of the way. But panelists, including Knoblauch, pushed back against this 'one-stop shop' model – and instead advocated for a distributed network of place-based support, where relationships matter more than standardized forms. A well-tended and trusted referral network, she said, is foundational to long-term partnership with, and within, communities of entrepreneurs. She also shared that entrepreneurs are likely to stop asking for help, and even quit, if they are referred to the wrong resource three times. Other ecosystem participants will be the connective tissue, bringing it all together, David Ponraj, CEO and founder of Economic Impact Catalyst (EIC) said. 'Once the entrepreneur raises their hand, it's the ecosystem's job to get them to the right place,' he said. In practice, that looks like using tools like EIC's network navigator to more effectively and efficiently provide referrals for entrepreneurs, Naila Jackson, program director at Network Navigator, said. But referrals are often seen as encroaching on the role of ESOs, so unsurprisingly, many local organizations found this new tool to be threatening. 'We are starting to see the difference and changes in making good referrals,' she said, 'and in good referrals, you build trust, and you are able to actually realize… the gaps that we have.' When funding tensions arise, share the leadership. Those who work in economic development or entrepreneurship support are familiar with the presence of 'silos' in our ecosystems. Baltimore readers will recognize the term 'Smalltimore' — the notion that any two strangers in the city are likely separated by a single degree of connection or two. And yet, for all its intimacy, Baltimore remains a city of siloes. Major breakthroughs, bold experiments and generational work unfold quietly in different corners and labs of the city, often unheard by those who might benefit the most from knowing. The instinctual response to this fragmentation is to 'break down these siloes' — gathering builders, funders, creatives and caretakers across communities and sectors, and seek for consensus on strategy and direction, according to Tarsha Hearns, formerly the vice president of entrepreneurship at Small Business Majority. This coalition-building is helpful and can bring about real change, but when one organization gets the funding to distribute to other organizations, tensions inevitably arise. The increased funding and services are great for the community, but they bring a new power dynamic into the fold, which can undermine trust and the relational capital. Informal leaders may be excluded and grassroots relationships can become transactional, while ecosystem players may feel pressure to take sides and join funder-driven agendas rather than community-rooted priorities. 'The two currencies at the table are funding and egos,' Rhonda Ladig, formerly the vice president at Northeast Indiana Innovation Center, said. So how do we overcome this dynamic? Hearns recommends shared leadership. 'Even though one organization might be getting all the money and … recognition, if you find that there is distrust or hesitation, or that money and leadership are the big elephants in the room,' Ladig said, 'then be willing to step back a bit, elevate the other organizations and share that leadership.' Help businesses get customers, not just raise VC Instead of looking for the next big check, panelists encouraged the audience to think creatively, and, as the community-generated wealth increases, to consider locally managed capital pools that reflect the communities they serve. Ladig and Knoblauch both pointed to the need for more creative innovation capital structures, rather than relying on the venture capital and investment firms, which are known to not always be accessible or inclusive. 'The system of capital is not built for the people who really need them,' Ladig said, highlighting how financial models too often exclude the very entrepreneurs that ecosystems claim to support. Knoblauch emphasized that the most effective way for an entrepreneur to secure money for their business isn't through chasing funding—it's by gaining customers. She challenged ecosystem support organizations (ESOs) to rethink their role: instead of focusing solely on fundraising, how can they directly help entrepreneurs find and retain customers? In her view, that's where ESOs can have the greatest impact, functioning more like community organizers than gatekeepers of capital. 'It's not [about] how we get funders to fund one on one,' Knoblauch said. 'That thinking about this wrong. [The better question is] how do we not need the funders? If you get businesses to have customers, to create jobs, to create wealth in your community, to do things like creating capital structures…to further generate wealth for people by aggregating small amounts of capital.' Knoblauch proposed smaller, community-driven funding mechanisms, not just dilutive investments that require giving up ownership of the company. This makes for friendlier deal terms that do not prey on first-time entrepreneurs or those who are unaware of financing options. Knoblauch briefly mentioned loan-loss reserves and seller equity as other creative financing levers to reach audiences that otherwise might not receive funding. If economic developers, ecosystem builders and civic leaders are serious about community transformation, they must consider how support is structured, shared and sustained, panelists said. The future of entrepreneurship support and ESOs, they said, will be rooted in relational currency. And the emerging leaders will be those willing to redesign the system, one relationship at a time.
