Identifying the economic benefits of a business incubator redevelopment

Local government


Melbourne Innovation Centre - City of Darebin (VIC)


To model the economic benefits and impacts of redeveloping a Business Incubator in Melbourne’s inner northern suburb of Alphington.


The proposed redevelopment will generate a substantial boost to employment and new business development in Darebin and the northern region of Melbourne.


An evidence-based evaluation to support a National Stronger Region Fund Application.

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The Melbourne Innovation Centre is a business incubator for small businesses, indigenous Australian businesses and creative and digital arts-based businesses. In the last 18 years, over 300 new business have graduated from the incubation program, with 86% still operating successfully three years after leaving. Around 1,350 jobs have been created on graduation from the facility.

Business challenge

.id worked with the City of Darebin to answer the following strategic questions:

What economic benefits and impacts can be generated by a $10+ million redevelopment of the Melbourne Innovation Centre business incubator into a modern hub for entrepreneurship and accelerated business development?

How can this project contribute to specific economic development needs in the region?

The .id solution

.id’s framework for economic evaluation consisted of three components:

  • Strategic context
  • Rapid benefit assessment
  • Economic impact assessment.

The strategic context considered the economic profile of the City of Darebin and evaluated how the project would influence current specific needs within the region, such as addressing a significant decline in manufacturing and a desire to create new knowledge-intensive jobs.

The benefit-cost assessment was used to quantify employment and revenue generated from the development of the incubator over a 20 year period above the current situation (base case). This was compared to the overall estimated costs of the project and subjected to a sensitivity analysis.

The economic impact assessment used an economic impact model to identify the wider economic benefits for the City of Darebin and the broader region from both the construction and ongoing operations of the incubator.


The economic assessment revealed that the proposed redevelopment would make a valuable contribution to the City of Darebin and regional economy, generating a positive (and very high) benefit-cost ratio and contributing to the area’s strategic needs. Further benefits included:

  • A substantial number of construction jobs generated during the development phase of the incubator.
  • Flow on output and employment from business activity generated by graduated businesses.
  • Labour productivity benefits through networking and collaboration.
  • Transport and environmental benefits from the agglomeration of business activities.
  • Tourism benefits through the use of proposed event space.
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