According to a research study conducted for the U.S. Department of Commerce Economic Development Administration, business incubators provide communities with significantly greater results at less cost than do any other type of public works infrastructure project. This is a government report by a government agency responsible for economic development.
Researchers found that business incubators are the most effective means of creating jobs – more effective than roads and bridges, industrial parks, commercial buildings, and sewer and water projects. Incubators provide up to 20 times more jobs than community infrastructure projects at a cost of $144 to $216 per job.
Compare that to what is reported by recovery.gov for the state of California:
-- cost per job via grants: $154,000
-- cost per job via contracts: $508,000
-- cost per job via loans: $4,100,000
[Ref: http://www.recovery.gov/transparency/pages/home.aspx?State=CA]
Business incubators also increase the likelihood of success on a new business by 5X [nbia.org].
At a time when I believe California has a unemployment rate close to 20%, should we be spending federal dollars on "job creation" or should we incentivize businesses to do the same?
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