During the last month, our firm has been outlining what Indiana’s $1B investment in innovation means and our recommendations for how to most effectively use it in secondary and higher education. This week, we will be discussing the third area of focus on the Indiana Economic Development Corporation’s list and detailing our recommendation for what we believe would be most beneficial to future entrepreneurs. Here is how the State plans to foster growth among co-working spaces, incubators and innovation centers:
“Enhancing regional entrepreneurial culture and investment by supporting start-up costs and program development for co-working spaces, incubators and innovation centers, and providing matching funds for regional and community investments in start-up and scale-up companies.”
Co-working spaces, incubators, and innovation centers are great places to start a new business or continue to grow an existing small business. For a start-up, having the ability to meet up in a centralized location with your team at an extremely low cost is imperative. In addition, these types of spaces bring people from all different backgrounds and put them in one place. This allows individuals to pull on strengths from their multiple backgrounds and create new synergies, ultimately leading to continued business growth.
With the imminent capital infusion from the State, here are a few things I believe should be taken into consideration when distributing new funds towards co-working spaces, incubators and innovation centers.
- Should the funds be used to make additional co-working spaces?
According to the Indiana Small Business Development Center, there are 48 co-working spaces and incubators in the state of Indiana. Looking at a map of where these centers are located, it seems that certain areas are becoming over-saturated, while others are not. A large amount of these spaces are located in the more metropolitan areas of the state, but for the most part they are fairly spaced out. As such, it may not be the best allocation of additional funds to go towards the expansion of additional co-working spaces. Rather, the State could consider shifting those funds towards developing makerspaces and innovation centers - which brings me to my next point.
- Where are all of the makerspaces?
In order to make co-working spaces more relevant to a wider variety of companies, such as those in manufacturing, Indiana should be looking at opening more makerspaces or innovation labs. Giving entrepreneurs access to equipment for prototyping (i.e. 3D printers, machinery, tools), has the potential to increase their rate of success when they begin searching for funding.
- How do we get to the next step of innovation?
As the number of co-working spaces increases, there comes a point when pure space is no longer enough. The new model of co-working spaces and incubators should move toward a space + support model. At a local level, our firm has been involved in these initiatives by partnering with co-working spaces and incubators to provide office hours, allowing small business owners to connect with professionals they may not otherwise have access to. The problem is that a majority of these small businesses cannot afford the actual legal services they need and attempt to handle it on their own. One way this problem could be avoided is by the State taking on a percentage of the startup costs for professional services (such as lawyers, accountants, marketing/branding, or web design). This level of support gives startup companies a boost and allows them to direct funding at building up their product or service.
If done the right way, an investment of this size has the potential to make a lasting impact in the entrepreneurial culture in Indiana and developing regional trends of entrepreneurism. Stay tuned as we continue to dive into what this investment has in store for other parts of the entrepreneurial ecosystem.
ABOUT THE AUTHOR – corben lee
Corben Lee is an attorney at Gutwein Law. Prior to receiving his J.D. from the University of Notre Dame, he earned a BS in Management from Purdue University's Krannert School of Management. He focuses primarily on business law.