February 7, 2008
Report: Start-up Companies Supported by Maryland's Technology Incubators Increased Gross State Product by $1.2 Billion in 2006
RESEARCH TRIANGLE PARK, N.C. -- Start-up companies supported by Maryland's technology incubators increased the gross state product by $1.2 billion in 2006, and there's room for growth, according to a report by researchers at RTI International.
RTI International conducted an economic impact analysis and evaluation of Maryland's technology incubators for the Maryland Technology Development Corporation (TEDCO) to help the state determine if there is capacity for four new proposed incubators.
"Maryland has a strong technology economy, a wealth of research centers, a concentration of high-tech employment and exceptional political support for incubation," said Sara Lawrence, senior economic development analyst at RTI. "These provide a strong foundation on which additional technology incubators could be built. On the demand side, incubator clients and managers made it clear that additional incubator services could be very valuable for small technology businesses."
Business incubation is a business support process that accelerates the successful development of start-up companies by providing entrepreneurs with an array of targeted resources and services.
The researchers found that current and graduate companies of the state's 18 incubators generated $104 million in additional state and local tax revenue during 2006.
These companies directly employed more than 5,300 people and indirectly supported more than 8,600 jobs throughout Maryland. The average annual pay for technology jobs is $75,000, or more than 60 percent higher than the statewide average annual wage of $46,000.
"We appreciate the thorough research conducted by RTI International and are pleased with the positive findings of the impact analysis," said Renée Winsky, president and executive director of TEDCO. "We are proud of TEDCO's role in facilitating the continued success of Maryland's incubator network."
The analysis also found that helping the companies find space once they graduate, especially those in the life sciences, is the most pressing concern among the entrepreneurs.
The researchers suggest that the state can assist incubator graduates by creating business accelerators and establishing loan programs to assist companies in customizing their own post-incubator space.
RTI surveyed 359 companies between April and September 2007, and analyzed the data using economic models that measured the impact these companies' activities have on the state's economy as a whole.
This project extends RTI's work in analyzing innovation-based economic development programs and advanced technology initiatives. RTI combines its technical and economics skill sets to provide comprehensive technology-based economic development services -- evaluating state and regional technology-based economic development organizations, business incubators, and federal technology development programs.
The Maryland Technology Development Corporation (TEDCO), an independent entity, was established by the Maryland General Assembly in 1998 to facilitate the creation of businesses and foster their growth in all regions of the State. TEDCO's role is to be Maryland's leading source of funding for seed capital and entrepreneurial business assistance for the development, transfer and commercialization of technology. TEDCO connects emerging technology companies with federal laboratories, research universities, business incubators and specialized technical assistance. For the fourth consecutive year, TEDCO was recognized as the most active early/seed stage investor in the nation in the July 2007 issue of Entrepreneur Magazine. For more information on TEDCO and its programs and resources, visit www.MarylandTEDCO.org.