Overview of US incubators and the case of the Austin Technology Incubator

International Journal of Entrepreneurship and Innovation Management

Volumn 3, Issue 1-2, 2003, Pages 56-66

  Wiggins, Joel ^a   Gibson, David V ^a  

^a UNIVERSITY OF TEXAS AT AUSTIN   (United States)

Author keywords

accelerator; Austin; business; Incubator; technology

Indexed keywords

EID: 22544458703     PISSN: 1368275X     EISSN: 17415098     Source Type: Journal    
DOI: 10.1504/ijeim.2003.002218     Document Type: Article

References (11)

1. Hansen, M.T. et al. (2000) ‘Networked incubators: hothouses for the new economy’, Harvard Business Review, Sept-Oct.
2. 2 Report.
3. Rice, M. and Matthews, J. (1995) Growing New Ventures-Creating New Jobs: Principles and Practices of Successful Business Incubation, Quorum Books.
4. Smilor, R., Gibson, D. and Kozmetsky, G. (1988) ‘Creating the technopolis: high-technology development in Austin, TX’, Journal of Business Venturing.
5. Tornatzky, L. et al. (1996) The Art and Craft of Technology Business Incubation, National Business Incubation Association (NBIA).
6. The authors are indebted to various NBIA publications and website, www.nbia.org, for many of these introductory details.
7. Dr. George Kozmetsky was the champion for ATI and it was a natural extension of his educational and business background. Kozmetsky had emigrated to the USA as a young boy in the 1930’s. He grew up in Seattle and pursued his education at The University of Washington and a PhD at Harvard. After teaching economics a few years at Carnegie Mellon University, Kozmetsky moved to California to begin his business career first at Hughes Aircraft and then Litton Industries. In 1958 he co-founded Teledyne Corporation and in six short years became a multi-millionaire. In 1966 he left the business world to become Dean of The College and Graduate School of Business, University of Texas at Austin. During his 16-year tenure as Dean he transformed the college into a program of excellence and set it on the path to become one of the elite public business schools in the nation. In 1977 he founded the IC2 (Innovation, Creativity, Capital) Institute at the University, a centre of action research on entrepreneurship, technology commercialisation, and constructive forms of capitalism.
8. MCC was the first for-profit R&D Consortium formed in the USA and it focused on software R&D. SEMATECH was another major consortium that targeted R&D in the semiconductor industry. Both these consortia recruited some of the best research and technical talent in the USA to Austin.
9. ATI helped found The Capital Network and the Austin Software Council. It also spurred increased local demand for venture capital firms, high tech banks, accounting firms, law firms, and other entrepreneurial support groups. For example, when ATI started in 1989 only a handful of venture capital organisations serviced the community and none serviced early stage companies seeking seed financing. Today more than 30 firms have a presence in Austin. Similar development has occurred in the accounting, law, banking, high tech associations and so forth.
10. The average high tech wage in Texas is about $60,000 – approximately 75% higher than the average per capita job. ATI companies have created about 2,850 jobs yielding a year 2000 total of $171,000,000 in wages. The 1% city tax on consumable spending would net the city $1,700,000 if a person spent all his or her income on consumable goods. Since only about 60% is so spent, the net to the City is approximately $1,200,500 this past year alone. Another measure of the economic contribution is through property taxes. The average price of a home in Austin is about $150,000; assuming an average 3% property tax and that half the employees are homeowners, this computes to an additional $5,912,500 of annual tax to the City.
11. 2 in Austin. This computes to almost $11 million in real estate expenditures by ATI graduates.