Construction crews already were on site Monday when ground was broken for a business incubator on Central Avenue.
The development, which could open as early as next fall, would house as many as 30 small businesses.
Each entrepreneur will be able to take advantage of assistance from Fredonia State College.
Before the customary shovel of dirt was thrown to signify the start of work on the $5.7 million project, Dennis Hefner, Fredonia State president, welcomed a crowd that included dignitaries from around the state.
Business incubators with college support historically have posted a high success rate, Hefner said.
About 87 percent of companies started in college-associated incubators succeed within five years, compared with only 30 of those begun without such an association, he said.
"In a time when we are surrounded by negative news about the economy, it is so encouraging to be part of a project like this that could potentially have such a positive and significant impact on our region," Hefner said.
The 21,000-square-foot facility will target companies using technology, and a wide assortment of services from the School of Business and other components of the college will be available.
Chautauqua County Executive Gregory J. Edwards said he is committed to finding capital to help companies start at the site.
The location within an Empire Zone will offer tax incentives, reduced-rate utilities and low-cost financing to the business owners.
Perry Construction Group of Erie, Pa., is the principal contractor for the project.
The two-story design of the new building is being viewed as an extension of the college campus about two miles away.