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Studies Quantify Incubator's Impact, image
YOUNGSTOWN, Ohio – “The future re-booted.” That’s the tagline resulting from a study of the Youngstown Business Incubator to determine how it is perceived by its stakeholders, one of two studies YBI commissioned that were detailed Thursday.
“Because of the increasing scrutiny and diminishing funding that organizations are seeing across the country, nonprofits need to be able to quantify and demonstrate the value in their communities if they want to continue to seek support from the public sector, corporations or nonprofits,” said Barb Ewing, YBI’s chief operating officer.
YBI commissioned Kleinhenz & Associates, a Cleveland consulting firm, to put hard numbers to YBI’s value in the three-county region of Mahoning, Trumbull and Columbiana counties. Kleinhenz sought information from YBI’s 70 portfolio companies, of which 40 provided responses. Jack Kleinhenz, the consulting firm’s CEO, said the responding firms represented 88% of YBI’s total portfolio employment and 98% of total portfolio sales.
Some of YBI’s firms are “still in the embryonic stage,” he noted. His firm did not use the data from the 40 firms that submitted information to extrapolate results for the nonrespondent firms, he said.
According to the study, YBI’s portfolio companies in fiscal 2012 created or supported 610 jobs in the three-county region, generated outside sales of $76.39 million and provided wages or labor income of totaling $23.14 million. In Ohio, the total impact was 692 jobs, $26.32 million in wages and $80.46 million in sales. Expenditures by the companies totaled $41.38 million, a large portion of which were in the tri-county region or the state.
Ewing said she is pleased, although not surprised, to see the economic impact. “I thought it would be a big number. I didn’t know how big it would be,” she remarked.
The “nuts and bolts, dollars and cents” impact only represented one piece of the study, Ewing continued. And so the incubator engaged the Prodigal Co., a Boardman marketing firm, to conduct determine YBI’s hidden strengths and attributes as an organization.
Prodigal's study, which the agency calls its proprietary Brand MRI, determined the incubator's No. 1 benefit is shifting the community's mindset through its work to build a base of technology companies that will ensure jobs in the future. This mindshift is creating the vision that the Mahoning Valley is a place where people can grow companies, move companies to, and create jobs for the future, said Jeff Hedrich, president of Prodigal.
Its position in the marketplace is that YBI is “the leading change agent for the region’s future,” Hedrich observed. “This is why people value” the incubator, beyond its specific role as being a developer of business-to-business software companies. YBI is “re-booting the future in what can no longer be called the Rust Belt,” he said.
Prodigal’s study “was to evaluate the softer side of this organization,” Ewing said. While YBI recognizes the international recognition and media attention it has received, and “the sense of change in the community from a very traditional manufacturing economy to a higher-tech economy .. we didn’t know what that value was and how to calculate that,” she said.
For the Brand MRI, Prodigal formed an internal focus group comprised of YBI board members, portfolio companies and “interested parties who understand how the incubator works,” Hedrich explained. Information from the focus group was used to create a digital survey distributed to members of the Youngstown/Warren Regional Chamber as well as to a list of people involved regionally and nationally in technology-based economic development organizations. About 300 recipients provided responses.
During Thursday's press event, Ewing thanked the Community Foundation of the Mahoning Valley, which funded both studies.
“Donors are savvy right now. They know what they want, and they want to make sure their money is being spent in ways that have results,” said Julie Scarsella, director of marketing and development at the Community Foundation.
The information from the studies will be used to justify YBI’s use of funds to its existing donors and stakeholders and to present to potential new contributors, Ewing said. The information will also be featured in advertising for YBI.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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