Arizona’s Business Incubation Concept and its Businesses Rapidly Grows

Business incubation in Arizona is growing as 
fast as the businesses it helps take wing

Over the past few decades, the proliferation of small business startups in Arizona has occurred at a startling pace. In fact, just a few years ago, CNN’s Money magazine called Arizona “a sizzling spot for startups,” and listed it among the top 10 most entrepreneurial states.

Part of Arizona’s success in fostering new business has to do with a slew of business incubators that have sprung up throughout the state, with the express purpose of helping grow startups in a variety of ways.

As a metaphor for what they do, the term “incubator” couldn’t be more appropriate. Like a climate-controlled environment designed to nurture and protect newly-hatched chicks, business incubators have created facilities that take fledgling businesses under their protective wing, supporting them in their early growth stages. The incubation takes many forms, among them subsidized rental space, business and management counseling, shared office space and even access to capital.

“When incubators succeed, the results can be spectacular,” notes Steven G. Zylstra, president and CEO of the Arizona Technology Council. “Arizona has many innovation programs that have served as strong catalysts for our local startups, and two of the most successful ones come out of our universities.”

As Zylstra explains, the Arizona Center for Innovation from the University of Arizona has helped emerging companies such as DemeteRx Pharmaceuticals develop novel therapeutics to sensitize tumors. And Arizona State University’s Venture Catalyst incubator has been ranked as one of the best university incubators in the world, having launched and other notable companies.

“The really good news is that there’s a lot of collaboration in Arizona’s innovation ecosystem as a whole,” Zylstra adds. “Collectively, they have set a clear mandate to be on the forefront of creating new wealth in our state and building a sustainable economy with high paying jobs.”

A few years ago, as the incubators’ success rate accelerated, the state created an association to help balance and support the services they provide. The Arizona Business Incubation Association (AzBIA) was founded in 2011 as a way to help share information and services among the growing crop of Arizona incubators. The association currently boasts more than 20 members all over the state, from NACET, the Northern Arizona Center for Entrepreneurship and Technology in Flagstaff, to the Arizona Center for Innovation in Tucson.

While AzBIA members all share one overarching goal, they’re widely diverse in their particular missions. Phoenix-based TechBA Arizona, for instance, is a business accelerator program designed to support technology-focused Mexican businesses as they attempt to enter global markets.

Another member, Seed Spot, is a nonprofit incubator located in downtown Phoenix focused on helping local entrepreneurs turn their ideas into successful ventures—a format like many incubators, but with a twist.

“Seed Spot is focused exclusively on social entrepreneurs: those launching products or technologies that improve people’s lives or communities,” says co-founder and CEO Courtney Klein. “We do not take equity in the ventures we work with—entrepreneurs leave owning the same percentage they came with.”

As for what the incubator explosion means for Arizona, Klein says the creativity and innovation is just what our economy needs.

“We need more innovation, creativity, art, dreams, design and impact to really put [Arizona] on the map,” she says. “Entrepreneurs gather around other entrepreneurs, creatives go where creativity breeds, and investors flock in that direction.”

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