A recent Younger Associates survey reports that clients and graduates of the INCubator (INC) inside the Hamilton County Business Development Center (BDC) generated approximately $73.4 million in economic impact for Hamilton County during calendar year 2022.
The full survey is available through the Chattanooga Chamber’s website, here.
“Hamilton County is known around the world, largely because of the entrepreneurs who called this home and built their enterprises here. The Business Development Center embodies our enduring commitment to small business and its essential role in the quality of life in our community,” said Weston Wamp, Mayor, Hamilton County.
Over the course of six weeks, the Chattanooga Chamber surveyed 41 companies (37 clients and four graduates). Typically, more than 50 companies find their home inside the INC at any given time. Data collected included employment, wages, type of operations, annual operating budget, recent capital investments and venture capital raised.
Survey results indicate the INC’s economic impact is felt directly and indirectly – whether through money spent by clients and graduates on goods, services and employees; or, through the spending of local businesses in the supply chain and household spending of people earning income from those businesses.
“The economic impact of our clients and graduates during 2022 is a testament to the long-standing partnership between Hamilton County and the Chattanooga Chamber in managing the INCubator program at the Hamilton County Business Development Center,” said Charles Wood, Interim President and CEO, Chattanooga Chamber. “The study shows the significant impact our clients are having on the community and we look forward to seeing them continue to grow and add jobs in Hamilton County.”
“Inside the INC, a diverse and multicultural community comes together to advance Chattanooga’s sustainable workforce. Our entrepreneurs come from many backgrounds and industries including tech, manufacturing, food and beverage, and more. These companies become integral parts of our economy, providing good jobs and continued investments in the region. To watch startups grow from early stages and reach new heights is so rewarding and its why we exist as a program of the Chattanooga Chamber,” said Bill Lupia, Director, Small Business & Entrepreneurship, Chattanooga Chamber.
Of the $73.4 million in total projected economic impact for 2022, approximately $53.3 million comes as projected impact of operations; $16.8 million is through projected impact of capital investment in real and personal property, and nearly $3.3 million in projected impact of venture capital investment.
One of many businesses, Cocoa Asante embodies the spirit on entrepreneurialism and growth found through INC’s ecosystem.
“The INCubator helped us reach a new level of growth by providing space for us to build a commercial kitchen. We went from a home kitchen operated by one person to an established business with three full-time employees, two part-time employees and over four contractors,” said Ella Livingston, Founder, CEO, Cocoa Asante who joined the INC in 2019. “One thing that has surprised me about the Hamilton County Business Development Center has been the amount of help and support I have as well as the collaboration. There are so many businesses here and they are always ready to lend a helping hand.”
The summary of businesses surveyed reveals INC clients and graduates supported 549 total jobs in 2022, garnering nearly $32.4 million in total wages paid to jobs supported – with surveyed clients earning an average wage of $62,992 and surveyed graduates earning an average wage of $51,446.
Fiscal impact from operations reveals INC clients and graduates garner more than $1 million in local taxes, with the majority of that sum coming through an estimated $329,741 in indirect property taxes for Hamilton County and $298,562 for Chattanooga. Impacts as result of spending by businesses and workers garner $427,170 in indirect local sales tax and $91,414 in other local indirect tax.
Capital investments for surveyed clients and graduates surpass $12 million with $1.2 million in real property investment, $8.9 million in personal property investment and more than $2 million in venture capital investment.
The economic impact calculations in this study were generated using a model of the Hamilton County economy based on regional input-output multipliers (RIMS II) from the U.S. Bureau of Economic Analysis (BEA). The BEA developed the RIMS II system based on historical economic activity at the county level for 372 industry sectors.
The RIMS II multipliers account for inter-industry relationships within regions comprised of one or more counties, in both the public and private sectors. To effectively use RIMS II multipliers for economic impact analyses, detailed geographical and operational information on the initial changes in output, earnings, or employment is utilized. The survey collected capital investment costs and operational data such as operational spending, jobs and wages. The model also uses local wage rates, local tax rates, historical local tax collection ratios, local property values, and historical regional consumer spending patterns.
Younger Associates collected secondary data for this analysis from the Tennessee Department of Revenue, the Tennessee Department of Labor and Workforce Development, the U.S. Department of Commerce, the U.S. Department of Labor – Bureau of Labor Statistics, and the Tennessee Department of Tourism. In addition, proprietary licensed data from Neilson Claritas and ESRI was used.
Located in downtown Chattanooga and housed inside the BDC, the Chattanooga Chamber’s INC is the largest business incubator in Tennessee and third largest in the United States. Serving as an integral part of Chattanooga’s entrepreneurial ecosystem for more than 30 years, the program provides 127,000 square feet of startup business support aimed at cultivating sustainable enterprises that create jobs for Hamilton County. Entrepreneurs who enroll in its three-year progressive development program have access to shared administrative services, manufacturing and office space, training and workshops and on-site business counseling from the Tennessee Small Business Development Center.
Continuing its mission of championing member businesses and promoting regional economic growth, the Chattanooga Chamber is greater Chattanooga’s leading business association and economic development organization. Founded in 1887, the Chattanooga Chamber is one of the first 40 chambers in the United States. Its membership consists of approximately 1,900 companies of all sizes which employ an estimated 100,000 people. The Chattanooga Chamber has won many national awards for recruitment, marketing and existing industry support and is accredited by the U.S. Chamber of Commerce with five stars.
The Chamber Foundation is a separate but related entity established in 1969 for the purpose of economic development, which it carries out through a public-private partnership called Chattanooga Climbs.