Business Incubators

Business start-ups often suffer from a lack of legitimacy in the market place (Chan & Lau, 2005; Mian, 1996). It has been suggested in the literature that business incubators can provide access to market networks that would otherwise be out of reach for such com- panies (Scilitoe & Chakrabarti, 2010). Networks help start-ups to gain new business con- tacts such as customers and suppliers, as well as access to new financial sources. For example, locating a start-up in an incubator can lead to increased credibility for the firm, which in turn reduces search costs for the firm and hence reduces the overall costs of transaction (Bruneel et al., 2012). This could be of particular relevance when firms are located in institutional settings in which business contacts still require the personal in- troduction in order to establish a certain amount of trust between the business parties (North, 1990). Personal business contacts are also important in countries in which law enforcement is seen as slow and costly (Bowen & De Clercq, 2008; De Clercq et al., 2011; Estrin et al., 2013; La Porta, Lopez-de-Silanes, Shleifer & Vishny, 1998). Vanderstraeten and Matthyssens (2012) found evidence that an extensive business network is a differen- tiating feature among the incubators in their study, opening the possibility for incubators to differentiate themselves from competition in the incubator market. Contrary to that, Chan and Lau (2005) found no indication for the use of networks provided by the science park for business start-ups in Hong Kong. The authors argue that the western-model of clustering might not be as successful in an eastern context.

Abstract: Having in view the importance of creativity, innovation, financing and knowledge management in the entrepreneurial activities, this paper is focused on underlining some aspects regarding the structure of the creative and innovative approach and the business incubators which are the best background to activate creativity and innovation. Because many business incubators stopped their activity, we try to find solutions for them.

However, few researchers have considered the altruism of business incubators. Incubators as a kind of non-profit organization often behave altruistically. Al- truism, the opposite of selfishness, refers to helping others or engaging in a mu- tually beneficial arrangement. Sibly and Curnow [34] study the altruism and sel- fishness of individuals, and other literature examines the altruism of firms. Dur and Tichem [35] study the impact of the altruism from the firm’s managers and employees on incentive contracts. Haynes et al. [36] study the impacts of greed and altruism behaviors by a manager. They find that the firm benefits from al- truism. Guinot et al. [37] also note that altruism promotes firms’ learning capac- ity. Philosophers argue that altruism is the moral duty of individuals, whereas some economists view altruism as non-market behavior within families but not within firms [38]. Actually, business incubators often engage in altruistic beha- viors. Grimaldi and Grandi [39] define business innovation centers and univer- sity business incubators as non-profit institutions, whereas some private incu- bators are for-profit institutions. They note that the main model of the incuba- tors is non-profit. Markman et al. [40] investigate 128 university business incu- bators and conclude that most incubators are non-profit. Helping the new firms and encouraging creation are the targets of the non-profit incubator. Therefore, the incubator’s altruism impacts its decisions and cooperation among the three parties.

New directions for supporting and upgrad- ing the SMME economy continue to be explored in South Africa. One issue that has risen in poli- cy prominence over the past decade is establishing a network of business incubators to nurture par- ticular groups of emerging small enterprises (Mas- utha, 2014). In terms of international comparative data South Africa has one of the world’s lowest sur- vival rates of SMME start-ups with the country’s Small Enterprise Development Agency (SEDA) es- timating that as much as 80 percent of South Afri- ca’s SMMEs are failed businesses in their first year of existence (SEDA, 2010; Masutha, 2014). Across a range of both developed and developing coun- tries small business incubators have been identi- fied as potential strategic tools for helping to grow a country’s entrepreneurial base while reducing the high mortality of SMMEs (InfoDev, 2010a). In the most mature case of the USA the initial business incubators “were the instrument of urban renew- al and community development” (Jang, 2009: 16). By contrast, in developing countries such as Chile the focus is on developing businesses with high potential for economic development and job cre- ation (Chandra, Narczewska, 2009). Overall, as is argued by Al-Mubaraki et al. (2013: 896) busi- ness incubators are viewed by many governments as a “vibrant tool for nurturing innovative ventures regarding economic development and job crea- tion, and as critical components of entrepreneurial infrastructure”.

In addition to incubator staff and experts, entrepreneurs benefit from interaction with other startups (Dahl, 2011). Abstract: Business Incubators and Startup accelerators have been the lubricants for rapid Economic development in both developing and developed countries all over the world. Since the inception of the first private Incubator in New York in 1959, Business Incubators (BIs) have been the centre of interest for researchers and academician alike but far too little has been said about the worth of Business Incubators and Startup Accelerators to boost employment for graduating students in Nigeria. This study examined the worth of Business Incubators and Startup accelerators in Nigeria using secondary method of data collection. The study reviews the importance, purposes, main goal, roles, value and challenges faced by Business Incubators and Startup Accelerators, to see if they are valuable assets to Individuals, Students, Graduating Students, Entrepreneurs, young or new business and firms or waste of time and money. Despite many studies regarding Business Incubators and Start up Accelerators, little attention has been paid to the effect or worth of Business Incubators and Start up Accelerators in boosting employment for graduating students in Nigeria. At the same time, Business incubators and Startup Accelerators are still a relatively new phenomenon in Nigeria especially in the higher institutions of learning. Existing incubators are still very young, and many topics in entrepreneurship are rarely addressed. Again, the study examined the importance, aims and values of business incubators and start-up accelerators to know their worth and values in Nigerian societies. The result of the study showed that Business Incubators (BIs) and Startup Accelerators are most vital to Economic growth, development of new and existing Entrepreneurs and Firms. The study made recommendations to new and aspiring entrepreneurs, growing firms and organizations, the federal government of Nigeria, and to the Nation as a whole. In short, the study presents some future directions for the establishment of university incubators and start-up accelerators with policy recommendations.

Lesákova (2012) outlines some of the operational characteristics of business incubators. Firstly, incubators have certain admission criteria which should be met by the potential incubatee. An entrepreneur who wishes to join a business incubation programme must not only apply for admission but must meet the requirement or acceptance criteria set by the management of the incubator (Lesákova, 2012). Secondly, although tenants’acceptance criteria do vary from one incubator program to another, incubators generally admit start-ups with feasible business ideas as well as a workable business plan (Lesákova, 2012). In the same vein, although the amount of time a tenant spends in an incubation program varies from one incubator to another, firms with a longer research and development cycle usually need more incubation time than service or manufacturing firms which can produce their products/service immediately. Nonetheless, rather than setting a specific time frame, many incubators set graduation requirements by developing benchmarks in the form of company revenue or staffing levels (Lesákova, 2012). Furthermore incubation services are usually rendered at a cost to the tenants, although most incubators’ charges are subsidized through grants from government and other stakeholders (Lesákova, 2012). However, some incubators provide the services/resources to the start-ups in exchange for equity ownership in the business.

Business incubators was act as an economic strategy for commercialization of new products, new processes and new business models or to develop new and emerging social and economic, opportunities in the growth. (Al-Mubaraki, H. M. , Muhammad, A. H. and Busler, M., 2015). Business Incubator has been describing in various ways by many researchers (Phan, P. H., Donald, S. Mike, W., 2005; Voisey, 2006) from previous research. Business incubation can be describing as business support process to accelerate the successful development of start-up entrepreneurs. This is supported by (Bruneel, Ratinho, Clarysse and Cock, 2010) who added that the continuous growth in business incubation and the ongoing diversification of configurations has led to increased difficulty in defining business incubators precisely.

A possible solution for this may be creating an institutional mechanism called Business Incubators (BIs) & Enterprise Resource Centres (ERC) at Community Development Block (CBD) level. Such BIs at CBDs, which are located in rural areas, may be called as Rural Business Incubators (RBIs). Such an institutional mechanism called RBIs & ERCs can facilitate creation of new start-ups and work to empower and assist informal sector enterprises, micro & small enterprises in their growth and expansion. This mechanism should have the capacity to address some of the issues that the small & micro enterprise sector, both formal and informal faces such as credit related issues, lack of information, marketing support, technological and technical assistance etc

The social function of business incubators in the United States was fully opened up during the recession in the early 90s. By that time, 49 states had regional programs for business incubation. It soon became clear that business incubation brings not only direct benefits. This conclusion was made by U.S. researchers Markley and McNamara in 1995. Business incubators, along with the fact that contribute directly to increased employment, incomes, broaden the tax base, encourage investment, create the missing components of infrastructure and promote the creation of additional jobs in the environment. Companies located in business incubators, service providers, are about 34 percent of U.S. firms. However, it should be said that from about 2000, Non- profit, incubators are increasingly pressed by commercial (for-profit) incubators. Currently, the number of non-profit incubators is reduced to 75 per cent of the total number of business incubators in the United States. Some researchers have predicted business incubators have a bright future. For example, one of them is Morales. Morales believes that in the next few years, half of the total number of incubators will be commercial (Markley and McNamara, 1996: 26). In the U.S., there are regions where business incubators, created at the initiative of local authorities and business development all closed. For example, in Orange County, California, the last such business incubator was eradicated in 1999. In their place came 7 new private investment companies. In contrast to "non-profit", for profit business incubators pursue a specific purpose - to make money. It also determines the conditions under which the business incubators have a range of necessary services for budding entrepreneurs. In exchange, they require a 30-70-percent stake in the company's business.

This study aims to examine the effect of critical success and moderating factors in Indonesian public universities’ business incubators. The study of business incubators benefits university professors in their roles as managers and advisors, university faculty entrepreneurs and start- ups/tenants in the knowledge transfer and entrepreneurship learning processes, and government officials in effective policy making. For the universities, the incubators serve as a platform for the commercialization of their research efforts. The incubators assist the universities’ stakeholders in fulfilling their newly identified responsibilities towards building the nation’s economy and giving the faculty members and graduate students the chance to conduct research. Regarding the economic environment, the incubators help create job opportunities, increase the country’s economic value, and reduce poverty. This research employed the quantitative method approach, and the data were analyzed using the IBM SPSS version 23 and Smart PLS version 3 statistical software packages. The samples of this research were comprised of 31 business incubator managers from Indonesian public universities. Although there have been previous models about critical success and moderating factors for business incubators in other countries, this study is the first that was conducted in Indonesia and found direct and indirect relationships between critical success factors and moderating success factors for Indonesian Public University Business Incubators. The results of the research demonstrated that good system and infrastructure showed a strong direct relationship with success factors and that information technology showed a strong relationship with the moderating factors, namely age and quality of

In terms of conditions, Incubators give starting businesses inexpensive space to rent, shared office support such as telephone receptionists/secretaries, office services and equipment such as photocopiers, technology support services, financing assistance, and most important, other people who are in the same situation of starting their own businesses (Clint Johnson 2010). In the United States, about 87 percent of the companies that graduated from an incubator since the 1970s are still in business. Furthermore, during their stay in the incubators, these companies recorded an average sales increase of more than 400 percent. It is estimated that in their relatively short span of existence, North American incubators have created nearly 19,000 companies that are still in business and more than 245,000 jobs. Nowadays, more than 400,000 entrepreneurs start new businesses in the US yearly. 350,000 of those new businesses close their doors before the end of the year. Comparing this disturbing number to the success of new companies in business incubators, we state that more than 80% of the incubated companies are profitable within two years and are still doing business by the end of five years.

This research examined the Entrepreneurship and SMEs through Business Incubators in the Arab World (Jordan). SMEs and entrepreneurship development; it particularly, distinguishes between SMEs and entrepreneurship development. Both SMEs and entrepreneurship have been acknowledged to be important tools for economic transformation and economic growth of a country. In this, they are believed to aim at the same objective. On this note, it is clearly pointed out in this paper that SMEs are firms that engaged in one form of business or the other. In terms of size, they are classified into small and medium and their definition vary according to countries, industries, number of employees and asset value. On the other hand, entrepreneurship is the process of creating SMEs or business ventures which are later seen as small and medium sizes of firms or businesses. Thus, this paper reveals that entrepreneurship is a process and not SME. On the other hand, SMEs are firms and not entrepreneurship. Based on this, the paper draws the conclusion that SME is different from entrepreneurship. Although both may tend to achieve the same aim, however, they differ according to definition, function and purpose. The research through the interviews also shows that businesses that have been through an incubator programme are far more likely to succeed in the long term which is why institutions run an incubator centre to support technology entrepreneurs. The centre’s incubator programme is designed to accelerate the successful development of young entrepreneurs and their businesses through an array of support resources and services. Launching incubation programme is crucial for technology innovation and exporting tech- based products, the technology incubator can form a catalytic component of a national innovation system.

In terms of numbers of incubators by 2013 the audit of national incubators reveals a total of 51 functioning incubators. This figure represents a marked growth in the numbers of South African business incubators from a total of only four in 2004, to 37 by 2011 to 51 by 2013. The majority of the 51 business incubators have been established by the public sector. Of the national total of incubators 42 or 82 percent are public sector driven through the activities of SEDA, South Africa’s national small enterprise development agency. The remaining nine incubators or 18 percent are private sector operations. Overall, it was disclosed in interviews that the primary objective of public sector incubators is to broaden economic participation in South Africa by creating employment opportunities and the transference of skills, most importantly for disadvantaged communities. By contrast most private sector incubators focus upon growing small businesses into assets of value with specific emphasis on maximizing the profitability and annual turnover of the small business. In terms of the incubators’ institutional environment, all public incubators report to the Department of Trade and Industry’s Small Enterprise Development Agency, while private incubators are accountable to their parent companies. Within the international landscape of business incubators it is apparent that the public sector has been particularly strong in driving the growth trajectory of the business incubator movement in South Africa (SEDA, 2010, 2011a, 2011b; 2012). Indeed, it is only in recent years that a set of parallel private sector incubators have made their appearance.

Since the 1980s, Technological Business Incubators (TBIs) have been considered by governments in both developed and developing economies to be an important mechanism for stimulating technology-based entrepreneurial activity (Phan et al., 2005). They have become an accepted catalytic instrument of economic development, providing a range of business resources and services to nurture and support the growth of new technology-based ventures (NBIA, 2007). Although there has been considerable research interest in various aspects of the development of TBIs in the USA and Europe (e.g. Mian, 1996; Phan et al., 2005; Mian et al., 2016), there have been fewer studies of their contribution to economic development in transition economies such as China given the rapid growth in the numbers of TBIs over the last quarter century (Dutt et al, 2016; Smith & Zhang, 2012). We also know relatively little about the role TBIs are playing in China in supporting innovation in diverse spatial contexts, particularly the differences between more and less developed regions. As recognised by Kuratko & LaFollette (1987), business incubators are likely to make specific regional adaptations in order to fit spatially diverse needs and conditions. Thus their aims, organisational structure and provision of services are likely to adapt to local circumstances and the challenges of creating successful technology-based businesses. Moreover, the availability of other local resources such as human and financial capital is likely to influence to some extent the outcomes from TBIs (Theodorakopoulos et al 2014; Dee et al, 2011). China is playing an increasingly important role in the global knowledge economy through developing a new generation of TBIs to facilitate business innovation (OECD, 2007). It therefore presents a fascinating context in which to study the possible influences of TBI support services on the innovation activity of new technology-based enterprises. Furthermore, China is characterised by large geographical disparities in terms of economic development that are becoming greater as the economy grows. Thus we might expect that the kind of support that TBIs give to the development and commercialisation of innovations in incubatees (i.e. incubated firms) to vary according to the economic health of a TBI’s host region (Folta et al., 2006; Fritsch and Slavtchev, 2011). TBIs located in regions with a more entrepreneurial culture and support infrastructure are likely to have an advantage over those in regions lacking in these respects. This paper covers all three of China’s mega geographical regions classified according to their level of wealth and economic development, consisting of 3

Two selections were made regarding government subsidies, which comprised 40% of the responses, while 1 (20%) indicated that they cover cost though payments from bank and other private sector organisations, and 2 (40%) indicated that costs were covered through other means (self-sustaining through consulting). This could mean that some of the operating costs of the incubators are passed on to their incubatees, with 40% self-sustaining. This is in line with Lesokova’s (2012:87-88) views that although business incubators are supported by the governments, regional grants, academic institutions universities and colleges, they charge for their services and resources. This might also be the reason why most of the survivalist entrepreneurs did not enroll in their programs, because they cannot afford to pay for the services and resources. Even though one of the goals of the incubators is to become financially self-sufficient, developing through rents and fees charged for tenants does not symbolize the incubator’s success (Azriel and Laric, 2008:0818)

The presence of these start-up companies in one place and the shared services enhance their knowledge and cooperation. Thus being accepted in an incubator might increase the opportunities for growth (Ratinho et al. 2010, p.7). In the literature review about business incubators, the researchers confirmed that the chances of cooperation between the owners of incubated projects who are working under one roof is often likely to take place (Bøllingtoft, 2012, p.305). Ratinho et al. (2010, p.7) add that the existence of incubated start-up projects under one roof and sharing joint resources has the potential to increase the cooperation between them and increase the formation of acquaintances and alliances. Bøllingtoft and Ulhøi (2005, p.278) mentioned in the MG50 (networked incubator) experiment that there was an agreement on the main elements including: 1- the exchange of information and knowledge between incubatees should be considered important and that they should be colleagues rather than being competitors 2- the objective is not sharing the same building, but the owners of the projects should spend time with each other in a social way. On the other hand, for the sake of building a suitable environment for the owners of projects, what is required of the establishment of incubators is to support the start-ups and not to compete among them (Al- Mubaraki and Busler 2011, p.457). In addition, incubators provide the benefit of greater cooperation among incubatees including a set of services and skills (Bøllingtoft and Ulhøi 2005, p.269). That means that the incubator is not only a geographical location where the owners of the projects meet to reduce operational costs (Allen and Rahman, 1985, P.13; Bøllingtoft and Ulhøi 2005, p.269). From what has been mentioned in other research in the literature review, it can be shown that the incubator environment can add positive value for start-ups under one roof.

The most important type of business incubators in the Kingdom of Saudi Arabia is the university-based business incubators. As mentioned earlier, business incubators play a key role in supporting and promoting nascent entrepreneurs, particularly during the startup periods of their firm’s life cycle. University type of business incubators is not exceptional in pursuing such goals and objectives. University business incubators provide clients with a range of services that include shared offices, access to sophisticated business equipment and software services, and network pools that promote startup companies. These kinds of business support provide entrepreneurs and their startup enterprises a relatively secure environment and a head start over others (Peters et al., 2004). University business incubators, as used in the KSA, provide a unique opportunity to young and highly promising entrepreneurs to benefit from the knowledge acquired in the university and the wide range of resources provided by the university, particularly in starting new business ventures that require a higher level of knowledge, research, and technology.

 Study of (shahada et al., 2020) aimed to identify the reality of improving the performance of business incubators in Gaza Strip, and the study relied on the descriptive analytical approach, and the study population consisted of all employees working in business incubators in Gaza Strip in addition to experts and consultants in the incubators, where the total number (62) individuals, The researchers used the questionnaire as a main tool to collect data through the comprehensive survey method, where (55) questionnaires were retrieved with a recovery rate (88.7%). The results of the study showed that there is a high level of improving the performance of incubators in Gaza Strip with an average weight of (80.12%). The results also showed that there were no statistically significant differences between the averages of the respondents ’answers about improving the performance of business incubators in Gaza Strip due to the following personal data (gender, age , Educational qualification), and the presence of differences attributable to the following data (nature of work in the incubator, years of work experience). The study came out with several recommendations, the most important of which is the need for incubators to evaluate their performance periodically, and the necessity of holding training courses for workers in incubators to familiarize them with ways to improve performance and its tools such as a balanced performance card and how to apply them, and that a more effective mechanism be designed to follow up with companies after the end of the incubation period and monitor The progress of these companies.

By exploring this academic discussion, the literature has recognised that entrepreneurial universities invest resources and capabilities to generate adequate infrastructures, mechanisms, and educational programs to support the university community’s (students, academics, graduates) exploration and exploitation of entrepreneurial ideas (Grandi and Grimaldi, 2005; Guerrero and Urbano, 2012; Shane, 2004; Wright, 2007, 2017). In this vein, previous studies have explored why some universities create more start-ups than others located in developed countries (Di Gregorio and Shane, 2003; O’Shea et al., 2008; Shane, 2004; Wright et al., 2004; Guerrero et al., 2014; Guerrero and Urbano, 2017; Guerrero et al., 2017; Guerrero et al., 2018). In particular, previous studies provide insights about the enabling factors for creating university business incubators (McAdam and McAdam, 2008; Sternberg, 2014), the evolution of university business incubators (Miller et al., 2014), the influence of university business incubators on students’ entrepreneurial intentions (Saeed et al., 2014; Guerrero et al., 2017), and the influence of university business incubators on knowledge transfer and commercialisation (Scillitoe and Chakrabarti, 2010; Ebbers, 2014; Lundqvist, 2014). However, a few studies have explored the influence of university business incubators and entrepreneurship education on the graduates’ career choice decisions of becoming an academic entrepreneur (Al-Dajani et al., 2014; Guerrero and Urbano, 2017; Guerrero et al., 2017; Good et al., 2019). In this vein, the influence of incubators and entrepreneurship education on graduates’ occupational choices have not been explored in-depth (Peters et al., 2004; Nabi and Holden, 2008; Nabi and Liñán, 2011; Guerrero and Urbano, 2015; Guerrero et al., 2016; Nabi et al., 2017). This phenomenon is attracting the attention of academics and policymakers given the significant socio-economic changes that have negatively influencing job market conditions (González-Pernía et al., 2018) and the current higher education challenges (Guerrero and Urbano, 2019a).

Business incubators are programs designed to support the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services. These services are usually developed or orchestrated by incubator management and offered both in the business incubator and through its network of contacts. A business incubator’s main goal is to produce successful firms that will leave the program financially viable and freestanding. These incubator graduates have the potential to create jobs, revitalize neighborhoods, commercialize new technologies, and strengthen local and national economies.