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Friday, November 3, 2000

Business incubator plan is meant to create jobs

Sales tax increase is seen as a method of drawing high-tech industries and high-paying employment

By Jason Ma
Caller-Times

Just like incubators that nurture and strengthen babies, there are incubators that nurture and strengthen start-up businesses.
   The economic development fund proposal that voters will decide on next week could contribute to the development of such a business incubator. And a private, non-profit corporation, Incubating-Technology Enterprise of Corpus Christi, is trying to put one together that could benefit from the fund.
   A one-eighth-cent sales tax increase would support the economic development fund, which could provide money for office space and clerical support for an incubator as long as the money goes toward job creation, said Deputy City Manager Skip Noe.
   It is up to entrepreneurs to come up with business ideas. The incubator will offer professional expertise and possibly start-up capital.
   Plans for a business incubator are in their infancy, said Tom Niskala, chief executive officer for the Corpus Christi Chamber of Commerce. He is on the corporation's board of directors.
   "We're pretty early in the process," he said. "There are more questions than answers."
   Start-ups would pay the incubator for operational expenses, and after a few years, would separate from the incubator.
   He said he envisions an office where multiple high-tech enterprises operate and work together, sharing technological expertise.
   "It creates a critical mass where you have the ability to support each other and the success rate is greater," Niskala said.
   Right now, Incubating-Technology Enterprise is searching for funding sources, such as federal grants, Niskala said.
   But he hopes that their incubator project would also benefit from the proposed economic development fund if it passes on Tuesday.
   But plans for the incubator would go on regardless of the election results, he said.
   Among the benefits of incubators are that they allow start-ups low overhead expenses and access to professional expertise, says Anne Matula, dean of Del Mar College's business division. They also help introduce a new industry to an area, which can encourage other companies to follow.
   But by sharing some resources, one business failure can also affect the other businesses in the incubator.
   And an incubator that doesn't diversify its industries enough can miss out on other growth opportunities.
   Matula points out that these potential drawbacks are more operational than inherent to an incubator and says Incubating-Technology Enterprise can avoid those problems.
   "It's not a panacea," she said. "It's one element of an overall solution."
   While an economic development fund could provide physical infrastructure, the intangible service of networking with the right people is the key to having a good business incubator, says Janet Tillinger, a professor at the A&M-Corpus Christi's business school who has studied incubators, but is not involved in this project.
   The right networking, she says, can help entrepreneurs find suppliers and buyers, or even experts in initial public offerings. There are experts who specialize in areas who most people don't know to seek out, she says.
   "The ability to connect people who are in the know, who can get them access to the best this and the best that," she says. "Those are services that allow a business to succeed."
  
  




Staff writer Jason Ma can be reached at 886-3778 or by e-mail at maj@caller.com

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