BUSINESS INCUBATORS

Business Incubators

Abstract

The concept of business incubation is progressing deriving from its success in the economic growth of countries. The paper highlights the success factors of business incubation, its types and services. It also discusses the role of business incubation in the economic growth of developed and the developing countries showing the statistics. Understanding the performance of an incubator is important both to the society in general and to incubator owners in particular. It is found that some incubators perform better than others. This may be attributed to differences in size, types of services provided, focus of service, and source of sponsorship.

Table of Contents

Introduction4

Business Incubation Process5

History5

Key Definitions9

Different Scholarly Reviews9

Differences among the Definitions11

Selecting the best Definition in Understanding business Incubators11

Types of Incubators12

By Funding13

Not-For-Profit Based13

Profit Based14

By the Stage of the Target Companies14

SMEs at the stage of start up or Growth15

Micro-Incubation15

By Business Focus16

Technology Incubator16

Multiple Use Incubators17

The Core Services17

Enterprise Development20

Statistics of Incubators Worldwide22

The Role of Incubators In Developed and Developing Countries29

UK33

USA34

China37

Russia39

Mexico42

Israel44

India45

Ukraine46

Conclusion47

References49

Business Incubators

Introduction

UKBI, (2011) sees business incubation is a powerful tool that supports the creation and development of small enterprises (p. 3). The structure and functions of an incubator depends on local and national needs. Well structured business incubators will provide some of critical resources and services needed to enable the survival and growth of small businesses. Despite the different types of business incubators, their processes and services are generally similar (United Nations Industrial Development Organization, 1999, p. 85). The major role of Business incubators is to help entrepreneurs start or expand their business by providing various functions in a supportive environment for business. They are composed of services that provide work spaces, utilities, facilities, equipment, cafeteria, post office, banks; and soft services that provide coaching, mentoring, making an effective business plan, counselling, legal advice, upgrading skills and techniques, networking, links to industries, access to market channel, assistance with intellectual property protection, financial resources for R&D, access to capitals, access to potential private investors and strategic partners, administrative services, finance and accounting, and other shared services (United Kingdom Business Incubator, 2010, 2). It is widely recognised that the small enterprises during the start-up period face many unavoidable difficulties and challenges in bringing their businesses to life (United Nations Industrial Development Organization, 1999, p. 85). Therefore, many early-stage companies choose to locate themselves on science parks or in business incubators in order to take advantage of their supportive services during the period of the development of their businesses. They can obtain privileged links to universities and research centres; access to bespoke facilities and equipment; and dedicated support from business advisers. The business incubation is significant in the current competitive business environment due to some of the main issues that SMEs come across. These issues include the lack of capital for business start up, the liability, and absence of enough resource to continue the operations. One imperative solution to these issues is the business incubation that facilitates the SMEs in the new venture process, technical development of growth sustainability. This paper discusses the business incubation with respect ...