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Join the club: California computer company joins business incubator at UA-Fayetteville.

LESS THAN A DECADE AGO, there were only about 50 business incubators in the country.

Today, there are more than 500.

Of those, Arkansas is home to the No. 1 business incubator in the country. Genesis Technology Incubator at the University of Arkansas at Fayetteville was named the nation's best last year by the National Business Incubators Association and the business and accounting firm of Coopers & Lybrand.

Some may call that a dubious distinction. Business incubators have been criticized as an example of wasteful government spending. Their success as a whole has been questioned.

However, the track record of Genesis has been good. And it just got better.

Recently, Tangent Computer Inc. of Burlingame, Calif., announced a new research and development unit at Genesis, located south of the UA campus. The company also may open a manufacturing plant in Arkansas by the end of 1993.

Tangent has clients such as American Express Co. and AT&T Bell Telephone Laboratories Inc.

In the last year and a half, the university has spent $2 million with Tangent for a new computer system.

Then, Genesis approached the company about establishing an R&D arm at the university.

"We're not in the game of going out and trying to steal industry to bring it to Arkansas," says Sam Pruett, director of Genesis. "But if we can identify areas where we excel, it's a natural match."

Mazen Zabaneh, the regional operation director for Tangent at Genesis, says, "There were probably plenty of business incubators we could use in California."

But the university is one of the company's biggest accounts and its No. 1 status attracted the company.

In addition to research projects Tangent will conduct through Genesis, the company hopes to open a plant that eventually would employ about 60 people.

It would aim for sales of $10 million-$20 million in its first full year.

"Tangent is really committed to benefiting Arkansas by being here," Zabaneh says. "We're looking to put back into the community what we get out of the community.

"That's why we haven't brought anyone from California besides me."

Creating Jobs

Genesis helps minimize failure in a new business' first tenuous years of growth, particularly by reducing start-up costs.

In addition to providing below-market space rentals and shared services, such as computers and copy machines, Genesis also gives technical support from university laboratories and professors.

"Our goal is to create jobs in the science and technology areas," Pruett says.

The university has not provided funding to the 27 companies and it expects no royalties.

"We just ask that the companies locate in Arkansas," Pruett says.

In 1985, Gov. Bill Clinton proposed Arkansas' first incubators. Genesis was started a year later with a $550,000 grant from the Arkansas Science and Technology Authority. Although there once were seven incubators in the state, funding problems cut that to four.

In 1990, the Arkansas Legislature appropriated $2 million to Genesis. It is again up for funding this year.

Arkansas ranks 45th nationally in the number of Small Business Innovative Research grants it receives. Out of the 17 Arkansas has received, though, 15 have been at Genesis.

In the last four years, that has meant $6 million to the companies Genesis assists.

Pruett says Genesis offers a win-win situation for the university, for companies and for the students who build their resumes working at Genesis and who sometimes take jobs with the companies helped by Genesis.

Fayetteville prospers as well.
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Title Annotation:Tangent Computer Inc.; University of Arkansas
Author:Rengers, Carrie
Publication:Arkansas Business
Date:Mar 29, 1993
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