Technology incubators: Hothouse accelerators or life support shelters?
Business incubators provide environments for aspiring entrepreneurs to draw on assistance and mutual support as they implement a new business venture. The broader economic development objective is to seed the local economy with new start-ups of high growth potential that maintain allegiance to their place of birth (Phan et al. 2005). Assistance in developing business and marketing plans, building management teams, obtaining fi nancial capital and access to a range of other more specialized professional services may be included in the incubation process (Sherman and Chappell 1998). The incubator provides workspace on fl exible lease terms with the opportunity to draw on shared offi ce and perhaps other business services. A graduation policy may set a maximum period of stay refl ecting the intent of supporting a transition to becoming a standalone commercial enterprise. Incubators aim typically to accommodate a cohort of new enterprises with growth potential and over time rotate occupants and do this with a high post-incubator survival rate, including a proportion that develop into substantial businesses. To achieve these outcomes, incubator managers are expected to have good links to the wider business community, including providers of business fi nance, centres of R&D expertise and universities, and to advance the reputation of entrepreneurial activity more broadly. The broad case for this activity rests on the perceived barriers to new enterprise formation and growth. This means that while intended to deliver measurable impacts for their local economy, incubators are also of interest as laboratories for testing theories of the constraints on enterprise development.