...Fueling the Entrepreneurial Flame

A business incubator provides the fundamental structure, process, and support organization and services to new start-up businesses.  Business incubation enhances success significantly by streamlining many ancillary functions and by giving the entrepreneur a wealth of proven experience and expertise from which to draw.  Business incubation is a proven concept that creates wealth, provides valuable services to the community and creates meaningful employment opportunities for formerly incarcerated individuals as well as local citizens.

Overall, statistics indicate that the number of business closures each year is on average 94.7% of the number of new firms started the previous year.  National Business Incubation Association (NBIA) member incubators report that 87% of all firms that graduated from their incubators are still in business.  The contrast is stunning.

[Business] Incubators are responsible for nearly 19,000 companies that are still in business, and more than 245,000 jobs.

Annually, North American incubators assist more than 35,000 start-up companies that provide full-time employment for nearly 82,000 workers and generate annual earnings of more than $7 billion.

The Economics

recidivism prisoners reentry

Based upon statistical data, the total cost of crime hovers in the one trillion dollar a year range.  Dividing this by the total prison population would render an average cost per individual of $434,782 per year.  Given current recidivism rates that range from 35 – 60 percent, and even taking the low end suggests that recidivism costs society $350 billion each year.  

If Self Reinvention reduces recidivism to its goal of below ten percent, the savings to society is $250 billion each year after the goal is achieved and maintained.

Maintaining the goal for only four years yields a savings of one trillion dollars in recidivism costs alone.

Going to the other extreme, simply taking the cost to house an inmate of $31,000 per year, releases of approximately fifty percent of the 2.3 million population each year, and a recidivism of between 35 – 59 percent yields a net savings from $12 to over $20 billion annually.  This is only the annual cost to quarantine.  

The average length of stay in prison until expected release of parole violators that are recommitted with a new felony conviction is 36.71 months.  Based upon this figure, the cost to re-incarcerate is $94,834 per recidivist in this demographic.  The total incarceration cost alone for these recidivists is between $35.8 and $58.7 billion.

Additional calculations can be made that indicate the additional jobs that will be created by reducing recidivism and the resultant economic impact, the tax revenue generated and the value of the services to the community.  However, absent another study, there is a good argument for a program that genuinely prepares individuals for a successful community reintegration and investing only a small fraction of the amount society would bear if an individual recidivates – even when only considering the cost of quarantine.  

The cost for business development, a wardrobe, a few deposits, transportation, some furniture (all as loans to the individual) and an investment in an economic development project pales in comparison to the cost of recidivism.  

Please contact us for more detailed information regarding the economic impact of the Self Reinvention program.

The Economics

reducing recidivism

Business incubators create successful companies and reduce the risk of investment.

• Business incubators reduce the risk of

The business incubation industry continues to grow.

incubators in North America, up from 587 in 1998 and just 12 in 1980.

small business failures. NBIA member incubators report that 87 percent of all firms that graduated from their incubators are still in business.

member incubators annually increased sales by $240,000 each and added an average of 3.7 full- and part-time jobs per firm.

• Startup firms served by NBIA

• Today there are over 950 business

either self sufficient or could be self sufficient if subsidies ceased. In 1997, only 13 percent believed they could continue at current levels without subsidies.

• 60 percent of business incubators are

Business incubation is an economic development best value.

• For every $1 of estimated annual

public investment provided to the incubator, clients and graduates of NBIA member incubators generate approximately $30 in local tax revenue alone.

• NBIA members report that 84 percent of

incubator graduates stay in their communities and continue to provide a return to their investors.

• Publicly supported incubators create

jobs at a cost of about $1,100 each, whereas other publicly supported job creation mechanisms commonly cost more than $10,000 per job created.

• NBIA estimates that North American

incubator clients and graduates have created over a half a million jobs since 1980.

• Every 50 jobs created by an incubator

client generate another 25 jobs in the community.

Business incubators serve a variety of communities and markets.

• 47 percent of incubators are mixed use,

accepting a wide variety of clients; 37 percent focus on technology firms; 7 percent serve manufacturing firms; 6 percent focus on service businesses, and the remainder concentrate on community revitalization projects or serve niche markets.

• 84 percent of incubators are nonprofit

and 16 percent are for profit.

• 44 percent of incubators draw their

from urban areas, 31 percent from rural areas and 16 percent from suburban areas. Nearly a tenth (9 percent) of all programs draw clients from outside their region or from outside the United States.

• The most common sponsors of

incubators are academic institutions (25 percent), government (16 percent), economic development organizations (15 percent) and for-profit entities (10 percent). However, 19 percent of incubators have no sponsoring entity.

• The most common goals of incubation

programs are creating jobs in a community, enhancing a community’s entrepreneurial climate, retaining businesses in a community, building or accelerating growth in a local industry, and diversifying local economies.

The Self Reinvention incubator environment

Sponsorship in a business incubator provides a multitude of benefits.  In particular with this demographic and buy-in to the cultural mission, it creates an extensive and positive synergy.  The selection process and the Self Reinvention program lends substantial credibility to each sponsored business. The mentoring, community liaison, concierge services, consulting services, administrative services, advisors, a network of peers and support structures provides the environment to cultivate the missing and paramount achievement based culture for this demographic.  The incubator maintains a professional atmosphere, private facilities and high-quality shared facilities that assist a new business with creating a professional image and confidence with customers, partners, employees and investors.

Empowering the people with the problem to become their own solution.