Business support vital in uncertain economy

With the business community still very cautious because of economic conditions both within Australia and internationally, getting the right support, particularly for start-up businesses, has never been more important.

Innovation Centre Sunshine Coast CEO Colin Graham said while interest rates had now been on hold for nine consecutive months, uncertainty resulting from natural disasters around the world and debt levels in the US and parts of Europe was reverberating around the world.

“Business in many sectors in Australia has been subdued with many entrepreneurs taking a cautious approach to commercialising new ideas, but with the right advice and support there can be some very good opportunities for them,” Mr Graham said.

“In fact, getting the kind of expertise and support an incubator like the Innovation Centre can provide can effectively flip the statistics on business success rates.”

The Australian Bureau of Statistics reports that of the new businesses registered during 2007-08, more than 28% did not survive past one year, while worldwide governments were recognising the importance of quality business incubators in improving long term success, jobs creation and economic development. In contrast, the Innovation Centre has achieved an 84% survival rate for all companies supported since its establishment in 2002.

“Entrepreneurs are often experts in their own field but starting a new business is not an easy task at any time, so it is vital that they get the right advice and support to boost their chances of success,” Mr Graham said.

In fact, a new report – The Importance of Startups in Job Creation and Job Destruction – by the Kauffman Foundation in the US offered further evidence of the importance of startup businesses to the economy.

The Kauffman Foundation has found that start-up companies generate an average of 3 million jobs in their first year, while older, established larger companies and corporations lose around 1 million jobs annually as a result of rationalisation and downsizing.

As a results of this and other factors, both the US and UK are heavily investing in supporting new business development with technology focused business incubation a key component. The UK Prime Minister, David Cameron, recently announced a funding commitment of over $300m to establish a network of 6 – 8 world leading technology and innovation centres.

Mr Graham said back in Australia, with many economic forecasters predicting that conditions would remain flat for the remainder of 2011 before a slow recovery in 2012, now was the perfect time to start taking ideas from the drawing board to the market.

“Companies who are geared up and ready for an upswing in the economy can do better than those who launch once the recovery is underway,” he said.

Mr Graham said while the Innovation Centre worked primarily with start-up businesses in ICT, clean technology, health technology and creative industries, the evidence from around the world that regardless of industry, best practice incubation support including mentoring and advice, access to a network of professionals including in the areas of finance, research and service providers as well as flexible office space helped minimise the risks faced by new businesses.

The Innovation Centre is a long-term member of the US based National Business Incubation Association. The NBIA estimates that there are about 7000 business incubators worldwide, servicing different industries and communities.

The NBIA estimates that in 2005 alone, North American incubators assisted more than 27,000 start-up companies that provided full-time employment for more than 100,000 workers and generated annual revenue of more than $17 billion. (Source: 2006 State of the Business Incubation Industry) Business incubators reduce the risk of small business failures. Historically, NBIA member incubators have reported that 87 percent of all firms that have graduated from their incubators are still in business. (Source: Business Incubation Works)

Mr Graham said since its establishment in 2002, the Innovation Centre had supported over 82 businesses, creating around 350 jobs and helping client companies raise over $23.8million.

“The centre is currently home to over 30 private companies in the ICT, clean technology, health technology and creative industries and offers world-class support that is making a real difference for business success.”

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