ACEnet Incubators Build on Sectoral Strategy
The Appalachian
Center for Economic Networks, a community economic development organization
created in 1985 in rural southeastern Ohio, is building the capacity of local
communities to network, innovate, and work together to create a strong, sustainable
regional economy that has opportunities for all. ACEnet uses a sectoral strategy,
focusing on the food and technology sectors of the economy. In each sector,
the ACEnet staff provides basic services that businesses need to start, expand,
and create quality jobs. The staff also encourages entrepreneurs to network
with each other, share information, and work jointly. ACEnet's Food Ventures
Incubator, started in 1991, is 11,800 square feet and has four graduates. ACEnet's
Tech Ventures Incubator, started in 1991, is 11,400 square feet in size and
has eight tenants and 31 graduates. Appalachian Sustainable Development: Supporting Small Business Marketing
Appalachian Sustainable
Development (ASD) supports entrepreneurs focusing on high value organic
and other sustainable agriculture products. ASD has held several outreach meetings
and technical assistance workshops to encourage farmer participation, leveraging
the support of Cooperative Extension and Virginia Tech. It has also developed
and marketed products under the Appalachian Harvest brand. To strengthen the
Appalachian Harvest identity, Tom Peterson, manager of ASD's sustainable agriculture
program, oversaw the redesign and expansion of the Appalachian Harvest image.
With the help of marketing students from nearby East Tennessee State University,
Peterson and his team developed a logo and created profiles of participating
farmers. They then made the materials available to the stores handling Appalachian
Harvest produce—about 60 of the 86 Food City stores in Virginia, Tennessee,
and Kentucky; approximately 22 Whole Foods Market stores in the greater Washington,
D.C., area; and about 20 of the 30 Ukrop's grocery stores in central Virginia,
as well as several other commercial outlets. Creating Jobs and Helping the Environment: Brownfields Development in Appalachian
Pennsylvania
Cooperative networks of government and community organizations are helping redevelop
three brownfields sites in Appalachian Pennsylvania. Such areas, previously
contaminated with industrial waste, often cannot be reclaimed without extensive
cooperation between local, state, and federal regulators and public and private
partners.
The North Central Pennsylvania Regional Planning and Development Commission
decided to purchase and redevelop old industrial sites, creating multi-tenant
complexes for new companies. This move met a locally identified need for low-cost
industrial space for start-up companies. As these companies grow they can relocate
in the area, continuing to provide local jobs while freeing space for new entrepreneurs.
The first site was acquired in 1985; the most recent in 2001.
Today the commission manages 87 acres of industrial park space, with over one
million square feet of useable space occupied by 30 companies. Over 650 new
jobs have been created. In addition to environmental regulatory agencies, partners
have included county and municipal governments, regional planning organizations,
chambers of commerce, utility companies, banks, realtors, and industrial organizations.
Developing New Markets for Entrepreneurs: Center for Economic Options
Christmas shoppers in Charleston, West Virginia, had new choices in 2000—the
products of nearly 60 small-scale entrepreneurs from throughout the West Virginia
mountains. A new retail store in the Charleston Town Center indoor mall—the
state's largest—was the latest effort of the Center for Economic Options, which
has been helping microbusinesses find new higher-end markets since 1990. Showcase
West Virginia now features the products of over 100 microbusinesses, and the
center is planning two more retail locations. Over 60 percent of gross revenues
go back to individual entrepreneurs.
Market access has been a formidable barrier for these small-scale crafts, forest,
or farm producers from isolated communities. By providing shoppers ready access
to entrepreneurs, Showcase West Virginia is creating new markets that will allow
self-reliance and sustainable business growth. The center partners with community
representatives and organizations across the state. Other successful efforts
have included the Appalachian Knitwear Project, spun off as a separate nonprofit
entity, and Appalachian by Design, Inc., which began with nearly 50 home knitters
producing products for the Esprit Corporation.
Showcase West Virginia grew out of preparations for a subsequently cancelled
West Virginia products expo. Now it helps entrepreneurs sell products while
also offering them invaluable experience in cash flow, inventory control, accounting,
pricing, marketing, and product development. Putting It All Together: Small Business Development Center Outreach Program
For many years, residents seeking to start or expand businesses in Greene County,
Pennsylvania, had little immediate access to local business information, counseling,
or assistance in planning and financing. However, with help from the University
of Pittsburgh, Greene County has implemented a key part of its strategic economic
development plan.
An outreach office of the University of Pittsburgh Small Business Development
Center, open one day a week, was launched in late 1996. Despite its limited
operation, the office assisted over 70 residents and helped six clients receive
almost $1.5 million in financing in its first year. The outreach office opened
on a full-time basis in 1998 and continues to provide one-on-one business management
counseling, as well as informational and educational programs of interest to
growing numbers of start-up or small business owners.
Community involvement makes the outreach effort more successful. The Small
Business Development Center is an active member of the local chamber of commerce.
Its local coordinator is involved with numerous area work groups and serves
as a county representative for several regional activities.
Shoals Business Incubator: Helping Businesses to Grow
Problem
Many rural Appalachian communities have high unemployment rates, often due to
declining industry, agriculture, or mining. For several decades, employment
in northwest Alabama—an area known as the Shoals—was tied to the health of a
few large industries. Little effort was made to cultivate small home-grown businesses,
which generate local wealth and reduce communities' dependence on branch plants
(plants belonging to large companies whose headquarters are outside of rural
Appalachia).
Solution
The Shoals Entrepreneurial Center (SEC) was established in 1992 as an all-purpose
business incubator that assists new or fledgling businesses to grow in a sheltered,
often shared, environment until they can sustain themselves within the business
community. Obstacles
At first, possible stakeholders were skeptical about the potential of a business
incubator. These supporters expected a consistent stream of viable businesses
to graduate from the incubator to provide the community's business support infrastructure
with new clients. SEC overcame this problem by graduating businesses after a
specified period, without allowing them to remain in the incubator long after
they are self-sustaining. Many start-up incubators also have a hard time finding
funding. However, SEC made good use of available funding from ARC, the Tennessee
Valley Authority, and others. To begin operating, SEC acquired two years of
operating income from outside sources.
Keys to Operational Success
- Stakeholder support
- Good location
- Adequate funding
- Quality staff
- Recruitment of potentially-viable tenant-clients
- Appropriate assistance to tenant-clients
Outcomes
Of 88 businesses passing through SEC's two locations (Shoals and Sheffield),
80 are still operating. Fifty-one clients have graduated to the Shoals-area
business community, creating 882 jobs. A 6,000 square foot kitchen incubator
opened in 2001, and a 43,000 square foot facility is scheduled to open in May
2003. Additional best practices:
Business Development
Sources of Funding
Best Practices
Examples of ARC Business Development Projects
Research and Data
News & Events
Education and Training
Spotlight on Business Development Themes
Building and Sustaining a Business
Attracting Financing Sources
State-level Resources
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