26 April 2005

Incubators get $2.75 million shot in the arm

The business incubator sector has today been given a combined $2.75 million funding boost says Associate Minister for Industry and Regional Development Pete Hodgson.

This is in addition to the $2 million for the development of the new Manawatu Bio Commerce Centre in Palmerston North opened last month MP for Palmerston North and Minister for Research, Science and Technology, Steve Maharey.

Pete Hodgson said the Incubator Support Programme, launched in 2001, was proving to be extremely successful.

“The 39 companies that have successfully graduated from the incubator network to date recorded an average annual turnover growth rate of 135 per cent during incubation. Employee number growth in these companies has averaged 375 per cent, and they have been successful in raising $9.2 million in investment capital," said Pete Hodgson.

“The money announced today will help continue to build on the growth and survival rates of even more companies. It is pleasing to see the government’s partnership approach is continuing to encourage innovation and real job growth.”

Incubators typically provide workspace, support services an intensive mentoring programme and access to capital for entrepreneurs and businesses at the start-up and early stages of development. The money will be used to cover operating costs.

In 2001 NZTE set up an Incubator Development Unit to drive the establishment of a business incubator network in New Zealand. International experience shows that incubators can be a very effective economic growth tool by helping entrepreneurs commercialise their inventions and intellectual property, creating new jobs and improving the survival rate of start-up companies.

ENDS

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