business incubation in the yukon the numbers are in

This week, in my capacity as the executive director of the Yukon Entrepreneurship Centre, I took delivery on a survey I have been hungrily waiting for -- a market survey of potential clients for a business incubation centre in the Yukon.

This week, in my capacity as the executive director of the Yukon Entrepreneurship Centre, I took delivery on a survey I have been hungrily waiting for—a market survey of potential clients for a business incubation centre in the Yukon.

I have spoken before, in this space, (perhaps to the point of tedium) about my interest in such a centre.

Put very briefly, a business incubation centre is a building which serves as a kind of coop for fledgling businesses, providing them with space, physical services and business help and advice, until they are strong and mature enough to fly on their own.

Given my background, and my current professional stint at the Yukon Technology Innovation Centre, my primary interest in such a centre, naturally, is the help it could bring to local technology-based enterprises.

In a business market this small, though, we simply do not generate enough technology-based businesses to make a technology-industry-only incubation centre feasible.

If there is going to be such a centre, it is going to have to be a much more general-purpose effort, from which the technology sector can draw benefit as well.

I arrived at these conclusions anecdotally, but I wanted some numbers to either confirm or refute my assumptions, and some indicators about just how useful such a centre might actually be.

That is why, working through the Yukon Entrepreneurship Centre, I commissioned DataPath Systems to conduct a survey to answer some very basic, important questions:

How many new businesses are there in the Yukon at any given time? What would their attitude be toward a business incubator? How many of them would use it? Where would they want it located? What kinds of services would they be looking for?

Over the course of several weeks, working from data helpfully provided by the Yukon government’s Bureau of Statistics, the survey came up with a list of 463 “new” businesses—that is, businesses that came into existence in the past three years.

Of those 463, 95 agreed to be part of the telephone survey—a not-bad-at-all 21 per cent.

Overall, the results were very encouraging, though some of the findings are a little fuzzy.

On the positive note, 83 per cent of the responders thought a business incubator in the Yukon sounded like a good idea, though only 34 per cent of them thought they would be likely to use the service themselves.

Of the 34 per cent who said they would probably make use of an incubator, 42 per cent thought they would make use of shared services and business assistance, while only 37 per cent indicated they would be actually be interested in renting office space (at something close to going rental rates).

(Note that, in this case 24 per cent indicated they were unsure if they would either rent or just use services, but would use the centre in some way or other.)

When it came to location, fully 73 per cent of the respondents had downtown Whitehorse as their first choice, with Yukon College coming in second at 16 per cent, and the Marwell area a distant third at eight per cent (and Dawson, interestingly enough, coming in at two per cent).

When it came to nailing down the kinds of services client businesses would be most likely to use, however, the study came up short—probably because of the way we phrased the question.

Fully 68 per cent of the respondents indicated they were not likely to use any of the list of services we provided (ranging from everything from office space and high speed internet to indoor storage and retail space).

Of those who indicated they might make use of some of those listed services, their responses were distributed over such a wide array of headings, it is impossible to weigh them in terms of importance.

More helpful were the comments provided about “other options” for services, where an interesting 30 per cent said they would make use of marketing/advertising services, and another 20 per cent indicated an interest in a shared boardroom/meeting room.

So, with a single area of fogginess that probably needs another, better-worded survey question, I have my answers, and can draw some reasonably firm conclusions.

If there are an average of 463 new businesses starting up over a three year period in the Yukon (three years being the usual gestation period for a business in an incubator), and 34 per cent of them were interested in using incubation services, the centre would have a potential client base of 157 businesses each three years—52 new potential clients each year.

If 37 per cent of those 157 businesses were interested in renting office space in the centre, it would have 58 renters for a period of three years, with 19 new renters each year.

If these numbers are right—and they survey results look pretty sound—it looks quite possible to develop a business plan for a sustainable (I do not say profitable) business incubation centre, predicated on supplying “bricks and mortar” incubation to 58 businesses and fee-for-service “virtual” incubation services to a further 99 each year.

On the rather safe assumption that 10 per cent of those 157 companies would be technology-based ones, that would mean about 16 such companies would be being incubated each three years—again, very close to the numbers (five to six innovation companies per year) coming out of the Yukon Technology Innovation Centre.

So the numbers look right for such an effort.

Now, it is just a matter of finding out if there is enough will, and the right resources, to actually attempt it.

Rick Steele is a technology junkie

who lives in Whitehorse.