Catalyst Magazine Summer 2014 : Page 38

Business incubation: Turning innovative research into commercial success By Lesley Kistner he nation’s nearly 23 million small businesses represent 99 percent of all employers, create two-thirds of new jobs and generate nearly half of private sector output. They are clearly the backbone of the economy. For all the established small businesses that are creating jobs and helping to fuel the economy, however, a significant number fail. According to the Small Business Administration, 7 of 10 small businesses will survive at least two years; but just 51 percent will survive five years. Despite the best efforts of many would-be entrepreneurs, the hard work, commitment and comfort with risk necessary to turn a great idea into a viable business doesn’t always guarantee success. Insufficient experience and lack of capital are often cited as the top reasons many businesses don’t succeed. This is where incubation programs can play a key role. Incubation programs help start-up companies through the high-risk phase of development within a business friendly environment, thereby reducing the risk of failure. T A PA Chamber local chamber partner, the CBICC has operated its business incubator for 30 years. What started in a former elementary school building in 1983 now operates out of the Technology Center at Penn State University’s 38 CATALYST SUMMER 2014 • www.pachamber.org The incubation model meets a variety of needs, from increasing employment in economically distressed communities to serving as investment vehicles to fostering commercialization of university technologies. The latter model embodies the focus of the Chamber of Business & Industry of Centre County’s business incubator companies, many of which are research-driven bio/life sciences and high-tech start-ups. In fact, a 2012 National Business Incubation Association study found that 87 percent of graduating firms from NBIA member incubators are still in business. Novasentis employees manufacture electromechanical polymer actuators that deform, vibrate, create sound and sense pressure. The core technology was developed at Penn State University and has been optimized to point of winning the Consumer Electronic Show Best of Innovation Award in 2014. [Novasentis is a CBICC incubator company.] Innovation Park, a facility co-owned by the university and the CBICC that also houses a full complement of Penn State Technology Development programs and services. The Technology Center is home as well to Ben Franklin Technology Partners, Penn State’s Office of Technology Management (which facilitates the capture and licensing of intellectual property,) the regional Small Business Development Center and the Innovation Park Office. Incubation provides a broad range of services specifically tailored to entrepreneurs and their start-up companies. These services include business mentorship; access to financing and technical assistance; common support services, including mailing and office machines; access to financial and technical resources; and as is the case with CBICC’s incubator, an outstanding address at Innovation Park located within a Keystone Innovation Zone and first-class space, including all utilities, at a reasonable cost.

Business Incubation: Turning Innovative Research Into Commercial Success

Lesley Kistner

The nation’s nearly 23 million small businesses represent 99 percent of all employers, create two-thirds of new jobs and generate nearly half of private sector output. They are clearly the backbone of the economy.

For all the established small businesses that are creating jobs and helping to fuel the economy, however, a significant number fail. According to the Small Business Administration, 7 of 10 small businesses will survive at least two years; but just 51 percent will survive five years. Despite the best efforts of many would-be entrepreneurs, the hard work, commitment and comfort with risk necessary to turn a great idea into a viable business doesn’t always guarantee success.

Insufficient experience and lack of capital are often cited as the top reasons many businesses don’t succeed. This is where incubation programs can play a key role. Incubation programs help start-up companies through the high-risk phase of development within a business friendly environment, thereby reducing the risk of failure.

In fact, a 2012 National Business Incubation Association study found that 87 percent of graduating firms from NBIA member incubators are still in business.

The incubation model meets a variety of needs, from increasing employment in economically distressed communities to serving as investment vehicles to fostering commercialization of university technologies. The latter model embodies the focus of the Chamber of Business & Industry of Centre County’s business incubator companies, many of which are research-driven bio/life sciences and high-tech start-ups.

A PA Chamber local chamber partner, the CBICC has operated its business incubator for 30 years. What started in a former elementary school building in 1983 now operates out of the Technology Center at Penn State University’s Innovation Park, a facility co-owned by the university and the CBICC that also houses a full complement of Penn State Technology Development programs and services. The Technology Center is home as well to Ben Franklin Technology Partners, Penn State’s Office of Technology Management (which facilitates the capture and licensing of intellectual property,) the regional Small Business Development Center and the Innovation Park Office.

Incubation provides a broad range of services specifically tailored to entrepreneurs and their start-up companies. These services include business mentorship; access to financing and technical assistance; common support services, including mailing and office machines; access to financial and technical resources; and as is the case with CBICC’s incubator, an outstanding address at Innovation Park located within a Keystone Innovation Zone and first-class space, including all utilities, at a reasonable cost.

Access to technical assistance and business mentorship is particularly beneficial to entrepreneurs that may excel at cutting-edge research but lack practical business experience that is needed to take their innovative discoveries to the next level of commercial success.

A number of established and growing Centre County companies got their start in CBICC incubators. Early success stories from grade school classrooms of the original incubator include Restek Corporation and Sound Technology—both now staples of Centre County’s economy.

Another State College-based company, Schoolwires, Inc., is a graduate of the Technology Center incubator. Schoolwires helps school districts build stronger school communities, more effective schools and more successful students. Currently, more than one out of 10 U.S. public schools and about 12 million individuals in the United States and China rely on the company’s website management, mobile application and safe collaborative learning solutions.

Schoolwires founder Edward Marflak said the CBICC’s incubator program played a critical role in the company’s development—freeing his team to focus its energy on helping school districts build stronger school communities and helping Schoolwires become a great international business.

Marflak said the incubator program provided access and personal introductions to a network of advisors, mentors and business experts. In addition, incubator staff shared a wealth of helpful information—from business insights to firsthand knowledge regarding relevant funding programs. The incubator program also helped Schoolwires meet practical needs by providing affordable turn-key office space and shared business support services.

Today, there are 23 companies operating out of CBICC’s Technology Center incubator, with more waiting—many of them graduates of the TechCelerator@State College Boot Camp Program, a collaborative of the CBICC and other partners in the Technology Center to assist entrepreneurs at the earliest stages of business development.

One current incubator company is Chromatan Corporation, which specializes in liquid chromatography.

Founder Oleg Shinkazh said while support, services and affordable space are valuable benefits of the program, he appreciates the intangible advantages of the incubator environment itself.

“Being in an incubator environment can be very inspiring and result in unexpected and very productive collaborations,” he said, noting that after meeting with Solid Dynamics—a neighbor in the incubator—Chromatan is taking the next step and seeking investment from industry partners to create product prototypes and access The potential of actually manufacturing its single-use products using 3D printing technology.

Lasers for Innovative Solutions is another cutting-edge start up that is developing a new scientific imaging method that allows researchers to study their subject in full 3D and color using a novel laser-based tomography technique developed at Penn State.

Ben Hall, founder of Lasers for Innovative Solutions, LLC, credits the CBICC incubator and Ben Franklin Technology Partners for supporting the company’s growth throughout the start-up phase and for continuing to provide robust support.

This supportive environment was recently on display for state officials from the Department of Community and Economic Development. Incubator company Novasentis—winner of the 2014 Best of Innovations Award at the Consumer Electronics Show—and Innovation Park itself were among the stops on the Corbett administration’s “JOBS1st On the Road” tour in April. Novasentis is developing new electro-active polymer (EAP) materials and device technologies for use in energy storage, energy generation and medical therapeutics.

CBICC President and CEO Vern Squier said he was pleased that state officials got to see first-hand the efforts taking place to foster the successful commercialization of Penn State technology and research, which he stressed holds tremendous economic potential for the region, and in turn, the entire state.

He said the chamber’s business incubation program represents a long-standing commitment to enhancing Centre County’s already strong support system for high-tech and life sciences entrepreneurs.

“Many current and former incubator companies are making their mark on the national and world stage,” Squier said. “An important part of the chamber’s economic development mission has been to make sure these emerging companies grow and prosper in Pennsylvania.”

Lesley Kistner is communications director for the Chamber of Business & Industry of Centre County

Read the full article at http://digital.graphcompubs.com/article/Business+Incubation%3A+Turning+Innovative+Research+Into+Commercial+Success+/1754054/215990/article.html.

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