CUNY Business Incubator Network Launched with $7.5M State Grant
The National Business Incubation Association, which has been in existence since 1985, offers some remarkable statistics that suggest why incubation is increasingly the mantra of forward-looking workforce development planners and creators of new companies. For example, 87% of companies that are graduates of incubators are in business five years later, while the average survival rate for all new businesses is 20% to 30%. Studies also show that 84% of incubated companies remain in their communities, creating jobs, diversifying the local economy, and continuing to provide a return to their investors.
Such stellar performance rates help to explain why New York State Assembly Speaker Sheldon Silver, several members of the Queens Assembly delegation, Chancellor Matthew Goldstein, Executive Vice Chancellor Louise Mirrer, and other CUNY leaders gathered on October 16 to announce funding for a network of high-tech incubator facilities on University campuses throughout New York City.
Speaker Silver convened a press conference in his New York City office to announce a $7.5 million State Assembly grant to begin the initial phase of the incubator network. Public-private partnerships provide the type of innovative economic development opportunities needed to revitalize our state, Silver said on the occasion. He indicated that $5 million was being set aside for the expansion of the first incubator at LaGuardia Community College in Long Island City, and that $2.5 million would be devoted to planning for two Borough of Manhattan Community College incubators and another at Hostos Community College.
Welcoming the start-up funding, Chancellor Goldstein said the incubator network exemplified a hallmark of my administration, which is the belief that the University must not only create learning environments that allow our students and faculty to do their best work. We must also go out and work in the community to create a vibrant climate for increased employment and economic growth in this great city.
For many reasons, LaGuardia is well poised to become CUNYs pioneering incubator. The Speaker observed that it will tap into a growing arts and design cluster in Queens, and will draw upon LaGuardias strengths in new media and web and graphic design.
With MOMAs recent move to Long Island City, the boroughs remarkable Art Loop is now drawing much attention. The new incubator, which will be known as East River Studios, will turn the community surrounding LaGuardias campus into a more vibrant Business Loop as well. The East River Studios mission will be to exploit New York Citys identity as an international hub of art and design.
Jack Rainey, the director of the incubator program at the College, also points to LaGuardias three decades worth of expertise in the economic development field, notably with its Small Business Development Center and Urban Center for Economic Development (LUCED). Since 1991 LUCED has provided business training and economic assistance to
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Other LUCED initiatives have developed LaGuardias talent for incubation.
LUCED has a contract with the Department of Defense to encourage bids from Queens-based contractors, for example, and it has also collaborated with the MTA in nurturing minority- owned suppliers called the Preparing for Profit program. The PREP programs $1 Million Clubfirms with that much in annual salesis steadily growing, Rainey says.
The incubator network is the product of three years planning by the University and the New York City Partnership, which produced a feasibility study of the concept. The network will be led by the CUNY Economic Development Corporation, a non-profit, special-purpose entity that was created early this year with a $400,000 grant from the Alfred P. Sloan Foundation.
The EDCs Board of Directors will include Chancellor Goldstein, Executive Vice Chancellor Louise Mirrer (who will also be the EDC President), Vice Chancellor for Legal Affairs Frederick Schaffer, New York City Partnership CEO Kathryn Wylde, and Dr. Alvin Puryear, Director of Baruch Colleges Lawrence Field Center for Entrepreneurship and Small Business.
The demonstration phase of East River Studios, slated for opening in the coming months, is being funded by CUNYs Workforce Development Program and LaGuardia. This will consist of 3,500 sq. ft. of production space serving from 3-5 resident and 5-10 non-resident clients. These will be, in Raineys phrase, juried in, which is to say tested preliminarily for the soundness of the business proposal, promise of profitability, and the prospective clients willingness to participate in the synergies of the incubation process.
According to Raineywho holds a Hunter College M.S. in Urban Affairs and has 20 years experience in economic developmentEast River Studios will have two primary goals. First, we hope to produce financially successful businesses that will remain in the local community. Second, we will provide our students and faculty with opportunities to participate in the commercialization of intellectual property developed on CUNY campuses.
Two clients are already on board. Krypton Neon, led by Kenny Greenberg, is a Long Island City design company whose most notable recent gig was the creation of stage-filling neon dragons for the production of Flower Drum Song that recently opened on Broadway.
Greenberg, who holds a Masters in Education, says East River Studios will provide the critical space and technical resources I will require to develop sophisticated new architectural lighting systems and lighting-control techniques.
Another is Siena Designs, run by Dino Valaoritis, which specializes in high-end interior architectural fixtures. Valaoritis is particularly looking forward to East River Studios Idea Factory: We are planning a product-development center with cutting-edge equipment for creating and testing prototypes and for small-batch production. Valaoritis adds, the lab will also serve as a gathering point for entrepreneurs and designers and as a fabrication facility for artisans.
The full-implementation phase of East River Studios, which now carries a $5.5 million price tag, will bring a nearly ten-fold increase in technologically smart client production space, offices, art studios, a product fulfillment center, a product exhibition gallery, a packaging center, and a designer office complexall of which will exist in LaGuardias C Building, the 800,000 sq. ft. former home of the Sunshine Bisquit Company,
at 2910 Thomson Avenue.
East River Studio resources, it is hoped, will poise its design clients to take advantage of what is predicted to be a rapidly growing industry in the long term. The estimated market for high-end products in glass, ceramics, wood, metal, and fiber/fabric will grow 11 to 13% between now and 2015.
Clients will enjoy an impressive array of support services at East River Studios. Among them are:
Management and Technical Assistance
An on-site manager and a network of mentors to provide counseling.
Training and Workshops
Practical classes on business growth and the employment of appropriate design and production techniques.
Comprehensive administrative support designed to minimize overhead.
Space and Equipment
Individual and shared production space, and mail, reproduction, and conferencing support.
The LaGuardia Small Business Devel-opment Center, funded by the Small Business Administration, will assist in identifying sources of capital for growth.
Marketing and Sales
Introduction to website, print media, and e-commerce modes of development and sales, as well as assistance in bringing products to market.
East River Studios will host product forums and events to encourage new applications of cutting-edge fashions and technologies.
These resources, says Rainey, will support an industry cluster that produces high-design and technologically advanced products for the gift, home furnishings, and architectural markets worldwide. Our graduates will seek a high degree of specialization, technological refinement, and application of design.
With the local, state, and national economies experiencing worrisome down-turns, the creation of an incubator initiative is particularly timely, according to Dinah Adkins, Executive Director of the National Business Incubation Association. When the market is down and new jobs arent being created by the economy, incubators are more important than ever.
There are many reasons that colleges and universities are now investing resources in incubators, Adkins adds. They provide students and faculty new fields of investigation; they create career placement opportunities for graduates; they nurture research partnerships between campus and industry; and, of course, they create income from equity ownership in spin-off firms.
The income can be quite substantial. Columbia University, for example, which moved aggressively into the incubation arena, has granted roughly 1,000 technology licenses over the past several years, which generate about $95 million a year. And Columbia spins off roughly five to ten companies annually.
CUNY will be reaping similar rewards in the future as East River Studios reaches full operational strength. And similar rewards are expected when BMCC revives its New York Telemedia Accelerator, which was destroyed on 9/11, at its Lower Manhattan campus. BMCC also expects to open a Harlem incubator aimed at specializing in video gaming, interactive sports, and web-related entertainment companies. The fourth of the initial incubator programs being planned will be devoted to health care industry-related ventures and operate under the auspices of Hostos Community College in the Bronx.