The New York State Innovation Hot Spot Support Program was enacted as part of the 2014-15 State Budget to provide financial support for business incubators in the state. This Program underscores the importance of business incubation to the state’s overall economic-development strategy. Business incubation is a key component in accelerating the successful development of entrepreneurial companies, through an array of business support resources and services targeted to start-up companies. A business incubator is the entity responsible for organizing and managing these support services and resources. Business incubation was one of the strategies laid out by Governor Cuomo in his 2014 State of the State Address to more effectively harness New York’s innovation assets and better serve the state’s network of inventors and entrepreneurs. Empire State Development (ESD) is administering the competitive process for the designation of New York State Innovation Hot Spots. Applications will be received and reviewed through the Consolidated Funding Application (CFA) process.
Designated Innovation Hot Spots will be eligible for operating grants from ESD. Designation as an Innovation Hot Spot brings a number of benefits for the start-up companies within the Hot Spot, such as state income and sales tax benefits for a period of five years. Specifically, companies located within a Hot Spot can receive the following benefits:
- Companies will be subject only to a fixed dollar minimum tax, or companies will be able to deduct income attributable to their operations;
- Companies will receive a credit or refund for sales tax on related goods and services.
Importantly, this program will also enable ESD to learn more about companies entering the state’s “Innovation Pipeline”, and connect these companies with other state programs, such as the NY Innovation Venture Capital Fund. The goal of the program is to improve the quantity and quality of incubator services provided to young companies, thereby enabling these businesses to successfully transition from their start-up phase to larger scale commercialization of their products and services.
ESD will seek to fund those Innovation Hot Spots whose operations are most closely aligned with the Regional Council’s Strategic Plan, have demonstrated a commitment to best practices within the incubator community, and seek to expand their programs and services so as to benefit more start-up firms. Applicants are encouraged to consider partnerships with other incubators in the region so as to leverage regional economic development assets.
Innovation Hot Spot Applications will be reviewed against nationally recognized best practices of the incubator community. “Best Practice” incubators are those that provide a majority of the following programs and services: