Entrepreneurs rule!

Wednesday, January 28, 2009, 2:23pm CST

Report: Entrepreneurs are the key

Dallas Business Journal

The $850 billion stimulus package floating around Washington D.C. may be missing a critical strategy in terms of creating new jobs, a report from accounting and business advisory firm Grant Thornton says.

While the stimulus package includes a proposal to create new jobs through public works and projects, Grant Thornton in a study released to the U.S. Department of Commerce Economic Development Administration found that backing business incubators that support entrepreneurs and fledgling, young companies is a more effective strategy in creating jobs. More specifically, incubators create 46.3 to 69.4 local jobs per every $10,000 investment, the report says.

The National Business Incubation Association reported the results of the study this week, stressing that the government’s focus on construction and infrastructure may be missing the point in terms of maximum jobs creation.

“We agree with investing in highways, bridges and other elements of our aging infrastructure,” said Dinah Adkins, president and chief executive officer of the NBIA. “However, business incubators are critical components of the nation’s entrepreneurial support infrastructure and the only public works projects that were designed entirely as job generators. It is vitally important that the nation leverage its existing investments in incubators to generate new jobs and innovations and to help individuals facing layoffs to start their own firms.”

The study stressed the fact that business incubators create more jobs at a lower expense to the federal government. According to the research, the federal government spends $144 to $216 per job to create activity in the incubator sector.

In comparasion, roads and transportation projects generally cost more than $1,200 per job, with 4.4 to 7.8 jobs created for every $10,000 invested, the report says.

Investments in commercial structures cost between $744 to $1,008 per job and create 9.6 to 13.4 jobs for every $10,000 investment.

Grant Thornton, based in Chicago, also has offices in Dallas.