Technology business incubators as engines of growth: towards a distinction between technology incubators and non-technology incubators

Business incubators are an increasingly popular tool for promoting job and wealth creation. Yet given the heterogeneity of incubation models, it is not always clear how incubators operate, what their main characteristics are and how can they best contribute to job and wealth creation. If technology is central in promoting economic growth and new firm creation the crucial mechanism in transferring new knowledge to markets, then technology incubators have the biggest potential to contribute to economic growth. We define technology incubators by their strategic choices in terms of mission, linkages to universities and geographical location. We investigate their nature by comparing the levels of business services provision, selection criteria, exit policy and tenants’ characteristics. Our sample includes 12 incubators located in six Northwestern European countries and a total of 101 incubated companies. Data were collected in both incubators and among their tenants. Results show that technology incubators provide more tenants with their services, select younger companies and practice stricter exit policies. Additionally, they tend to attract more experienced teams of entrepreneurs. Our main contribution is a better understanding of the technology incubators impact against the remainder population of business incubators. We speculate that incubators not focussed in incubating technology might not be contributing to company creation at all. Further, the low levels of service provision are both a product and a consequence of slack selection criteria and weak exit policies. Finally, we discuss the implications of our findings to business incubator managers, policy makers and prospective tenants

Performance differentials of agglomeration and strategic groups: a test of incubation and new venture strategy

Our paper investigates how nascent firms ‘performance is affected by strategic group membership and industrial agglomeration. Agglomeration is defined using geographical concentration while strategic groups are measured as incubated firms that belong to the industry most highly represented within an incubator. Results reveal that incubated firms in counties with higher levels of agglomeration experience a lower hazard of exit. Similarly, incubated firms that belong to a strategic group have a lower hazard of exit. However, the combined effects of agglomeration and strategic group membership based on a three-way interaction between incubation, agglomeration, and strategic group membership leads to an increased hazard of exit

Are Business Incubators helping? The role of BIs in facilitating tenants’ development

Business incubators (BI) are among a variety of initiatives to stimulate economic growth by promoting the creation and development of new companies. The rapid growth of BIs in recent years confirms their importance in the economic fabric. In this study, we conceptualize BIs using insights from knowledge based theory of the firm, resource-based view thinking and capabilities literature. BIs will be seen as service providers geared towards helping their tenants in solving developmental problems. The more problems the BI helps to solve the bigger the incubation value for tenants; further, as tenant firms solve problems they develop important capabilities which will yield increase their chances of survival once they graduate. Results show that tenants unequivocally seek support after experiencing problems. Solving those problems is a function of BI support and other external sources part of each tenant firm’s network of contacts. Age and human capital of tenant firms have a negative impact in the total number of the problems solved, suggesting BIs’ deficiencies in helping more experienced and older tenants. Our main contribution is to shed light on the processes of delivering support to young firms within BIs. Importantly, we assess the value of the BIs’ intervention by measuring the amount of developmental problems they help tenants to overcome. Finally, we discuss the implication of our finding to BI managers, prospective tenants and policy makers

Planning effectual growth: a study of effectuations and causation in nascent firms

Two main contrasting approaches are used in the entrepreneurship literature to explain how new ventures strategize: causal/planned strategies and effectual/emergent strategies. In this study, we explore the use of these strategies within micro and small firms. Our results show that larger companies typically used more planned strategies while simultaneously relying on effectual mechanisms. We observe that companies operating in known markets, anchoring their business ideas on experience and having a strong growth intention grow larger. This suggests that causal and effectual mechanisms can co-exist and lead to growth when combined. Theoretical and practical implications of these findings are discussed

Business Incubators: Creation of a Fit in Armenia

In this paper, we evaluate the extent to which business incubation services meet tenant’s needs. Additionally, we pose the question of whether the current business incubators actually cover the needs of a particular industry. Our empirical setting is a developing country in the Caucasian Region (Armenia) and we chose to research solely the IT industry. We employed a two stage procedure: first, we conducted interviews with pivotal people familiar with business incubation in Armenia; second, an electronic questionnaire survey was sent to the entire Armenian IT population. The results suggest a moderate need of IT companies for the typical business incubation services. Further, we show that incubated companies are generally satisfied with the services they enjoy albeit this satisfaction level decreases as the needs increase. Non-incubated companies, on the other hand, perceive incubation services to be valuable for their development and this value increases when their needs increase. Our study implies that a more extensive service provision is necessary to fully cover the needs of the Armenian IT industry for business incubation services

Business support within business incubators

Business incubators (BI) have been established worldwide as tools for company creation and small businesses support. BIs claim to help their tenants by providing them with the optimal conditions for increasing early stage survival. Practitioners and researchers agree that business support is a crucial dimension of BI. Yet this feature is seldom researched. In this study we investigate to what extent business incubators support their tenants overcome their developmental problems. Results show that tenants do not experience many problems and when they do business support is not necessarily sought. Furthermore, our data suggests that business support is not preferentially sought within incubator environment. When this happens, support provided by the BI does not contribute to problem solving. Finally, we discuss the impact of the type of BI in helping their tenants

Are they really helping? : an assessment of evolving business incubators'value proposition

Most studies about business incubation describe an array of available services but often fail to present the tenants’ assessment quality. We set out to investigate if business incubators differ in terms of their value proposition. To do so, we identify three distinct generations of business incubators based on different dimensions included in their value proposition. We pose the question of whether the generation affects the extent to which tenant companies use the different dimensions of the incubator’s value proposition. Using data collected within business incubators and their respective tenants, the results show that while incubators claim to have similar support structures regardless of their generation, tenants in the older generations make less use of the incubator’s service portfolio. We discuss the implications of our findings for incubator managers, prospective tenants and policy makers