Business Incubators Business Resource Materials
Entrepreneurship Law Editorial Team
A Comprehensive Guide to Business Incubation (Meredith Erlewine & Ellen Gerl eds., 2d ed. 2004).
Abstract (from product description at NBIA Bookstore):
The editors have overhauled the entire first edition of the book. Its 71 chapters, featuring the advice and insight of more than 200 incubation professionals, are divided into four main sections: Fundamentals of Incubator Development – information on conducting a feasibility study, forming a business entity, finding or building a facility, acquiring funding; Best Practices in Incubator Management – advice from seasoned industry professionals on how to handle the diverse challenges of running a successful program;
Working With Clients – tips from experts on the wide range of business assistance services that an incubator can offer, with discussions on when and how to carry them out; andSpecial Topics in Business Incubation – unique concerns of incubators that specialize in niche markets, such as specialty foods and arts entrepreneurship.
Dinah Adkins, A BRIEF HISTORY OF BUSINESS INCUBATION IN THE UNITED STATES (2002).
Abstract provided by publisher:
Learn about the development of the business incubation industry, from its 1959 origins in Batavia, N.Y., to advancements in educational efforts, client services and incubator models. Author Dinah Adkins recounts this history from the viewpoint of a participant, sharing insights gleaned from 20 years’ experience - early on as an incubator manager and later as NBIA’s chief executive.
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Dinah Adkins, NATIONAL BUSINESS INCUBATION ASSOCIATION 10TH ANNIVERSARY SURVEY OF BUSINESS INCUBATORS, 1985-1995: A DECADE OF SUCCESS (1996).
Dinah Adkins, Hugh Sherman & Christine A. Yost, Incubating in Rural Areas: Challenges and Keys to Success (2001).
Abstract (from NADO website):
With support from the Tennessee Valley Authority, the National Business Incubation Association’s (NBIA) recently released study, Incubating in Rural Areas: Challenges and Keys to Success by Dinah Adkins, Hugh Sherman and Christine A. Yost, confronts the obstacles that rural incubators face.
Colin Barrow, INCUBATORS: A REALIST'S GUIDE TO THE WORLD'S NEW BUSINESS ACCELERATORS (2001).
Abstract: An analysis of the pros and cons of business incubators. Drawing on his experience at an e-business incubator,, the author gives an overview of the incubator movement. Actual case studies illustrate how entrepreneurs can benefit (or suffer) from being in an incubator.
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Corinne Colbert, Best Practices in Action: Guidelines for Implementing First-Class business Incubation Programs (2d ed. 2010).
Abstract (from nbia.org): Originally published in 2001, Best Practices in Action has been thoroughly updated and revised to reflect the realities of a maturing business incubation industry. Its eight chapters address key best practice areas, from incubator governance and facilities management to leveraging innovation and serving clients. Each chapter explains why individual practices are important to incubator or company success and provides examples of how those practices are implemented at some of the industry's most successful and innovative programs. A chapter of case studies examines incubators that are overall models of best practice.
Meredith Erlewine, Measuring Your Business Incubator's Economic Impact: A Toolkit (2007).
Abstract (from NBIA):
Collecting and reporting economic impact data can be a lifesaver for your incubation program. Armed with numbers showing the impact of your program, you can approach potential sponsors for funding and support, demonstrate your program’s contribution to the local economy, and add to the credibility of the incubation industry.
Gregg A Lichtenstein, The Significance of Relationships in Entrepreneurship: A Case Study of the Ecology of Enterprise in Two Business Incubators (1992).
Abstract (from UPenn ScholarlyCommons website):
This research examines two questions: What is the significance of relationships and how do they influence entrepreneurship? What kinds of settings or networks of relationships are conducive to entrepreneurship and how do we create them? A two track approach was used. First, a conceptual framework was developed in order to understand the questions and to make sense of observations about relationships and entrepreneurship. Second, actual examples of relationships were examined in order to see how they influence entrepreneurship and to learn under what circumstances they are successful. Two business incubators, the Fulton-Carroll Center in Chicago and the Enterprise Development Center on Route 128, were chosen as settings in which to explore these behaviors. The research methods used include in-depth interviews, participant observation and focus groups. The major finding is that the most important contribution of business incubators to entrepreneurship lies in the opportunities they provide for entrepreneurs to interact and develop relationships with other entrepreneurs, the incubator manager and other individuals associated with the incubator. Entrepreneurs receive three types of benefits: instrumental (such as increased sales, lower costs, enhanced capabilities and reduced risk), psychological and developmental. A typology which distinguishes the content of the exchanges and the structure of the relationships is presented in order to describe the variety of interactions within the incubators and to provide a basis for comparing them. Nine factors collectively influence the development of relationships and the interaction: the types of businesses, the personal characteristics of the entrepreneurs, the stage of the firms' development, the existence of a critical mass of firms, the layout of the incubator space, norms and attitudes, the existence of forums for discussion and the actions of the incubator manager. Lacking sufficient resources and skills, entrepreneurs must create or establish access to them by developing relationships of interdependence with others. Relationships are the vehicle that make the interactions as well as these benefits, possible.
Gregg A. Lichtenstein & Thomas S. Lyons, INCUBATING NEW ENTERPRISES: A GUIDE TO SUCCESSFUL PRACTIVE (1996).
Abstract provided by authors: The purpose of this article is to offer a methodical approach to deciding when, where, and how to invest in entrepreneurship as a crosscutting economic development strategy. To accomplish this, the authors present and operationalize the concept of a pipeline of entrepreneurs and enterprises in order to effectively segment the marketplace of businesses and differentiate among potential economic development clients within the community. They then describe three options for managing and intervening in a community’s pipeline of entrepreneurs and enterprises—performance-enhancement strategies, incubation strategies, and selective attraction strategies—and discuss how the pipeline can help policy makers and practitioners make informed decisions about where to invest (in what segment) and which strategies to use.
Sally Linder, 2002 STATE OF THE BUSINESS INCUBATION INDUSTRY (2003).
Abstract (from product description at NBIA Bookstore):
NBIA's periodic state of the industry (SOI) reports provide snapshots of the incubation industry over time. Through both statistical and anecdotal information, the 2002 SOI report provides the latest statistics available on business incubation and demonstrates that the industry continues to thrive. More than 70 charts and graphs, combined with commentary based on previous SOI reports, put the survey's results into perspective. Information is included on many incubation topics, including program type & start-up date, square footage, financial information, services offered and more.
Thomas S. Lyons, HOW WELL DO SMALL BUSINESS INCUBATORS SERVE ENTREPRENEURS?: ASSESSMENT FROM THE GRADUATE'S PERSPECTIVE (1994).
Anastasia Petrou, Panagiotis Liargovas & Irene Daskalopoulou, Entrepreneurship Incubators and Economic Growth: An Across-Countries Empirical Analysis (2010).
Abstract (from Book Description at Nova Publisher):
The immense importance of entrepreneurship in supporting the growth dynamic of regions/nations is widely accepted. This, however, has not always been the case. The focus on large-scale industrial units as the engines of growth was well supported on the grounds of efficiency and technological change. This focus has been characteristic of the post World-War II period while “Those who perceived small firms to be contributing significantly to growth, employment generation, and competitiveness were few and far between.” In the past decade, however, the way in which small firms are viewed has changed drastically and this book will be informative in representing the current development of business incubators.
Raymond W. Smilor & Michael Doud Gill, Jr., The New Business Incubator: Linking Talent, Technology, Capital, and Know-How (1986).
Abstract (from Review on Amazon.com):
This book can be considered as the classical reading on business incubation and it provides a clear understanding of this new and innovative tool - business incubation to promote entrepreneurship. It will give both practitioners and academics a thorough overview on ins-outs of business incubation.
Jacques Arlotto et al., What Is the Performance of Incubators? The Point of View of Coached Entrepreneurs, 16 Int'l J. Bus. 341 (2011).
(adapted from authors):
This article examines the performance of incubators because their economic model implies constantly finding external sources of financing. In order to evaluate the performance of incubators in France, the authors questioned 404 entrepreneurs in 80 incubators. The results show the social utility of incubators in France. Indeed, they encourage entrepreneurs to pass to the act of creation, but also contribute to the success of incubated firms. Moreover, these companies create more jobs than other start-ups. However, the services provided by incubators could be more developed and focus more on the assistance in order to find potential investors. Lastly, the work quality of an incubator as perceived by entrepreneurs is largely dependent on its director. This fact can explain important variations of performance between incubators.
Peter Bearse, On Ethics and Values in the Field of Economic Development, 23 J. Soc.-Econ. 169 (1994).
Abstract (from EBSCO):
Issues of ethics and values in the field of economic development are identified, discussed, and interpreted through the lens of the recent experience of a single case--an inner city economic development project which was once one of the largest and most successful business incubation facilities in the nation. The lessons and implications of this case bear on several major concerns, including "reinventing (entrepreneurial?) government," program performance evaluation, and the oversight, accountability, and governance of economic development programs involving public finance.
Anne Bøllingtoft, The Bottom-Up Business Incubator: Leverage to Networking and Cooperation Practices in a Self-Generated, Entrepreneurial-Enabled Environment, 32 Technovation 304 (2012).
The purpose of this study is to report the findings of an exploratory study of two self-generated, entrepreneurial-enabled environments labeled ‘bottom-up business incubators'. They are characterized by being jointly established by the entrepreneurs, they are not supported by public or private funds, thus, they carry no costs for society. The bottom-up business incubators share the same overall traits as for business incubators as described in the literature, e.g. co-location of businesses and access to shared equipment, but in contrast to traditional business incubators, it is characterized by being based on mutual recognition of the value of networking as well as cooperation among the firms. Based on observations and interviews with tenant firms, the study identifies networking and cooperation activities among the entrepreneurs. Furthermore, the study investigates the role of the bottom-up business incubator in terms of facilitating and enabling the conditions for internal networking and cooperation among the entrepreneurs, thus, how the business incubators become a formal mechanism for embedding the companies in entrepreneurial networks. The closing section of the paper addresses the implications for research and practitioners.
Johan Bruneel et al., The Evolution of Business Incubators: Comparing Demand and Supply of Business Incubation Services across Different Incubator Generations, 32 Technovation 110 (2012).
(adapted from journal):
Business incubators (BIs) have been established around the world to stimulate new business creation. Whilst it is accepted that incubation models have evolved, little is known about whether existing incubators have adjusted their value proposition to incorporate recent incubation paradigms or have simply remained operating as originally founded. The authors present data collected within seven BIs and their tenants regarding service provision and selection criteria. Their findings show that whilst BIs of all generations offer similar support services, tenants in older generation BIs make less use of the BI's service portfolio. This suggests a consequence of slack selection criteria and the absence of clearly defined exit policies. These results imply that older generation BIs should update their service portfolio while simultaneously imposing stricter selection criteria and introducing exit policies. Finally, the authors discuss the wider implications this raises for BIs' managers, prospective tenants and policy makers.
Abraham J. B. Cable, Incubator
Cities: Tomorrow's Economy, Yesterday's Start-Ups, 2 Mich. J. Private Equity & Venture Capital L. 195 (2013),
available at http://ssrn.com/abstract=2294084.
Abstract (by author):
Venture development funds ("VDFs") are products of state and local
government law that use public funds to invest in local start-ups, in the hope
that these companies will then attract venture capital investment. Existing analysis
by legal scholars largely assumes that establishing a private venture capital
market is essential to encouraging entrepreneurship. This article challenges
that assumption. It argues that VDFs and other policies focused on encouraging
venture capital are outmoded and inconsistent with the ultimate economic
development goals of state and local governments. In many industries,
entrepreneurs can now get by with less capitnal because the cost of developing
a product is rapidly declining due to technological advances (e.g., cloud
computing) and other developments (e.g., the ability to market an app through
Apple’s App Store). But venture capital funds continue to seek out investments
in a small number of industries that still require a great deal of capital,
such as biotech firms trying to develop new drugs. This narrow focus is
inconsistent with the advice of economic development experts to pursue
industry-neutral policies that broadly encourage entrepreneurial activity in
all of its forms. Also, policies oriented towards venture capital may undermine
goals of employment diversity and stability because companies seeking venture
capital pursue particularly high-risk business strategies that often fail. This
article recommends that state and local governments shift their policies to
encourage, or at least not hinder, alternatives to venture capital.
Rhonda P. Culp, Guidelines for Incubator Development, 8 Econ. Dev. Rev. 19 (1990).
Abstract (from EBSCO):
Outlines the steps necessary in establishing business incubators. Includes establishing a working group; Assessing small business support network; Analysis of the local market economy.
Douglas Cumming & Eileen Fischer, Publicly Funded Business Advisory Services and Entrepreneurial Outcomes (2011), available at http://ssrn.com/abstract=1926864.
(adapted from authors):
Given the mixed evidence for the impact of various publicly funded initiatives that aim to foster entrepreneurial activity, this paper empirically examines the efficacy of publicly funded business advisory services in relation to entrepreneurial outcomes. Based on a sample of 228 early-stage firms, of which 101 used business advisory services focused on helping companies secure 1st rounds of financing and start generating revenues, the authors examine the firm-level impact such services can have on sales growth, innovation, finance and alliances. They find services are positively associated with firms’ sales growth, patents, finance and alliances. They assess statistical and economic significance, and assess robustness to controls for the non-randomness of the firm’s using business advisory service program, as well as endogeneity of advisors’ hours spent with firms. Other robustness checks are also included. The authors find significant robustness of hours spent on sales and finance, but sensitivity of the effect of hours on patents and alliances after controlling for endogeneity.
Charles F. D'Agostino, The Business Incubator, 8(4) Econ. Dev. J. 25 (2009).
Abstract (from author):
The Article focuses on the Incubator on Wheels program established by the Louisiana Business & Technology Centre (LBTC) at Louisiana State University. The program has brought support, technical assistance and entrepreneurship to over 120 communities in the rural areas of Louisiana. The mobile classrooms facilitate the potential clients with innovative entrepreneurial education. The Article also offers information on history, features and recognition of the mobile classroom.
Riccardo Fini et al., Complements or Substitutes? The Role of Universities and Local Context in Supporting the Creation of Academic Spin-offs (2010), available at http://ssrn.com/abstract=1719019.
Abstract (from author):
In this paper, the authors analyze the extent to which University-Level Support Mechanisms (ULSMs) and Local-Context Support Mechanisms (LCSMs) complement or substitute for each other in fostering the creation of academic spin-offs. Using a sample of 404 companies spun off from the 64 Italian Science, Technology, Engineering, and Mathematics universities (STEM universities) over the 2000-2007 period, we show that the ULSMs’ marginal effect on universities' spin-off productivity may be positive or negative depending on the contribution offered by different LCSMs. Specifically, in any given region, ULSMs complement the legislative support offered to high-tech entrepreneurship whereas they have a substitution effect with regard to the amount of regional social capital, regional financial development, the presence of a regional business incubator, regional public R&D expenses as well as the level of innovative performance in the region. Results support the idea that regional settings’ idiosyncrasies should be considered for universities to develop effective spin-off support policies. This paper contributes to the debate on the evaluation of economic policies supporting entrepreneurship.
Gozem Guceri-Ucar, Exploring
Business Incubation and Drivers of Software Start-Up Success in Turkey
(2013), available at http://ssrn.com/abstract=2202227.
Abstract (by author):
This study is the foundation of a longitudinal analysis of business incubators
in Turkey, and their effectiveness in enhancing the success and sustainability
of new software ventures. A thorough review of entrepreneurship and business
incubation literature was put to use in identifying software start-up success
indicators and devising a field study involving 15 start-up companies as well
as 5 different business incubators located in Istanbul. The results were
combined with literature review findings to derive propositions relating
emergent constructs and software start-up success in Turkey. These will be used
in formulating our longitudinal study encompassing nearly 20 business
incubators, their tenants, and their graduates. Aside from being the first of
its kind in Turkey, this study is a significant contribution to literature due
to its explicit focus on the tenants rather than the incubators, its large
scale encompassing multiple incubators, and its concern with the incubation
outcomes having been achieved.
Gabi A.Kaffa &
Norris F. Krueger, From Grand Idea to Viable Execution: How Do Ventures and
Entrepreneurs Co-Evolve? (2012), available at http://ssrn.com/abstract=2098031.
Abstract (by authors): The
authors empirically investigated the effect of intensive mentoring and
feedback on co-evolution of cognitive development of entrepreneurs and their
venture. A diverse sample of forty entrepreneurs was followed over twelve
months in a business incubator in the Netherlands, and extremely detailed
qualitative data from the entrepreneurs' weekly logbooks were
collected. The authors found that focused feedback does influence
co-evolution of entrepreneurial mindset and venture but also depends on the
stage of the venture as well as on prior entrepreneurial experience.
Gregg A. Lichtenstein & Thomas S. Lyons, Managing the Community’s Pipeline of Entrepreneurs and Enterprises: A New Way of Thinking About Business Assets, 20 Economic Dev. Q. 377-386 (2006).
Abstract provided by authors:
The purpose of this article is to offer a methodical approach to deciding when, where, and how to invest in entrepreneurship as a crosscutting economic development strategy. To accomplish this, the authors present and operationalize the concept of a pipeline of entrepreneurs and enterprises in order to effectively segment the marketplace of businesses and differentiate among potential economic development clients within the community. They then describe three options for managing and intervening in a community’s pipeline of entrepreneurs and enterprises—performance-enhancement strategies, incubation strategies, and selective attraction strategies—and discuss how the pipeline can help policy makers and practitioners make informed decisions about where to invest (in what segment) and which strategies to use.
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Abel Kinoti Meru & Miemie Struwig, An Evaluation of the Entrepreneurs’ Perception of Business-Incubation Services in Kenya, Int'l J. Bus. Admin., Nov. 2011, at 112.
Business incubators provide an important service network for new and fledgling Small and Medium Enterprises (SMEs) in Kenya. To ascertain the perception of the importance of business incubation process and how recipients perceive the service to be rendered, perceptions of 124 entrepreneurs are compared. The survey endeavored to cover all types of business-incubation programme in Kenya that target SMEs, but it was found that although close to twenty-five institutions operated some form of business incubation services or another, only twelve were confirmed as business incubators per se. The findings on the entrepreneurs’ responses, first from the descriptive statistics shows that the mean scores for the importance of services of business-incubation processes is higher than the rating of how actually the services were received. The hypothesis empirically tested using paired t-test indicates that a gap exist between how entrepreneurs’ perceive business-incubation (services) process and what they actually receive. Based on the means of the two, they actually received less than anticipated. However, being a quantitative study the exact details of the real nature of business-incubation- services attached to the importance/ rendered services are not documented in the study. While the research provided new insights into business-incubation services in Kenya, numerous questions ring out in mind.
D. Patton & S. Marlow, University Technology Business Incubators: Helping New Entrepreneurial Firms to Learn to Grow, 29 Env't & Planning C: Gov't & Pol. 911 (2011).
With this paper the authors explore how differing forms of entrepreneurial learning are facilitated within the context of business incubation. To support new technology venturing, university business incubators offer their tenants professional support and advice plus exposure to entrepreneurial networks with the objective of assisting them to address associated liabilities of newness. Accordingly, new venture founders are offered access to a range of resources to assist them in learning how to commercialize technological ideas. Entrepreneurial learning can be deemed explorative or exploitative; the authors explore how business incubation assists entrepreneurs to leverage these differing learning approaches to generate a secure resource base within the firm. From case-study evidence the authors suggest business incubation is effective in aligning a balance of learning approaches which support future growth prospects and add competitive advantage to young, fragile firms. The paper concludes by suggesting that incubator managers are critical actors in facilitating appropriate learning environments for new technology entrepreneurs.
Lois J. Peters, Mark P. Rice & Malavika Sundararajan, The Role of Incubators in the Entrepreneurial Process, 29 J. of Tech. Transfer (Jan. 2004).
Abstract: Outlines a model of the role of incubators in the entrepreneurial process, specifically focusing on the impact of the services such as infrastructure, coaching and networks, on the graduation rates of the respective incubators' tenants. The model proved incomplete when tested among three different types of incubators: for-profit, non-profit, university-based incubators.
Michael Schwartz, Incubation Time, Incubator Age, and Firm Survival after Graduation, 15 Int'l J. Entrepren. & Innov. Mgmt. 108 (2011).
(adapted from journal): On the basis of a sample of 149 graduate firms from five German business incubators, this article contributes to incubator/incubation literature by investigating the effects of the age of the incubators and the firms' incubation time in securing long-term survival of the firms after leaving the incubator facilities. The empirical findings from Cox proportional hazards regression and parametric accelerated failure time models reveal a statistically significant negative impact for both variables incubator age and incubation time on post-graduation firm survival. One important implication that follows from the empirical results for policy makers and managers of those initiatives is that, when incubator managers become increasingly involved in various regional development activities, this may reduce the effectiveness of incubator support. Also, the finding speaks in favour of a strict limitation of incubation times and reinforces arguments of the supporters of maximum tenancy.
Pia Ulvenblad et al., Academic Entrepreneurship - the Structure of Incubator Management and Best Practice Reported on Swedish Business Incubators' Websites, Int’l J. Entrepren. & Small Bus. 445 (2011).
Abstract (from author): The aim of this paper is to describe the extent and content of information regarding incubator management structure, selection, support and network mediation on Swedish incubators websites and analyze connections between different incubator management structure and the content of incubator best practice. The data is based on information reported on 44 incubator websites in Sweden processed within the SPSS system. The findings show that incubators with more male representation in board and coach/advisor personnel report a more active part in business support including network mediation.
Vij & Hitesh Jhanji, Business Incubation: A Review of Research
Orientations, Impacts and Determinants of Success (2013), available at
Abstract (by authors): The need and importance of business
incubation is amply emphasized in the recently drafted National
Entrepreneurship Policy for India. Business incubators have been widely
promoted and supported in the developed countries. A lot of research has been
conducted on various aspects of business incubation in other countries but
research on business incubation in the Indian context is in its nascent stage.
The purpose of this paper is to take stock of existing publications and
identify the research gaps by systematically reviewing the literature on
business incubators and business incubation. This paper reviews a range of
research publications on business incubation published during 1980-2012,
sourced from EBSCO and PROQUEST databases, which describe incubator
configurations, incubator-incubation impacts, critical success factors for
incubation, incubator development, and incubatee development. It aims to
provide an account of important perspectives from the literature which are
likely to be of relevance to researchers, incubator managers and incubatee
start-ups. The observations from this paper can provide lessons for the private
and government promoters of business incubation in India for the adoption of
suitable and relevant models of business incubation. The paper also identifies
possible areas of future study.
Centre for Strategy and Evaluation Services, Benchmarking of Business Incubators
National Business Incubation Association, Resource Library http://www.nbia.org/resource_library/
Small Business Notes, Business Incubators.
Dinah Adkins, Identifying Obstacles to the Success of Rural Business Incubators, National Business Incubation Association (2001). (Contractor paper).
Battelle Memorial Institute, Feasibility Study for a New Incubator Assistance Program at University of Maryland Baltimore (2002).
Darren Dahl, How to Choose An Incubator, N.Y. Times, Jan. 27, 2011, at B4.
Sally Linder, The Compensation Question: NBIA's 2000 Survey of Incubation Executives (2001). (Survey).
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