A Focus on the Incubator as an Enterprise (part 2)

Key Points

  • The incubation program must be tailored to local needs;
  • The incubator manager and staff must be well equipped to manage present tenants.

Tailor-fitting to Local Community Needs
Many scholars agree that the general ‘fit’ of the incubator with the needs of the community to which it belongs is critical to its success (Allen and Rahman 1985; Campbell 1989; Scot-Kemmis et al. 2004; Hackett and Dilts 2004a). The NBIA provides the following advice to those planning on setting up an incubator:

Study the entrepreneurial climate in your community. The most successful business incubators match their services to the needs of local entrepreneurs. You can measure your community’s business development needs through feasibility studies, which identify potential incubator clients and the businesses they operate. This information can help you determine the optimal size, location and scope of your program — or help you recognize when a project has little chance for success (2006a).

Incubator Manager
The importance of the incubator manager’s role in the success of incubatees cannot be denied. Rice (2002) states “the incubator managers with higher impact invest more hours in co-production [of business assistance], invest more time on average in each co-production episode, and engage in a broader range of co-production modalities.” Even though Allen and McCluskey (1990) state that 50% of the variation in incubation outcomes is explained by the incubator’s age, this may have something to do with the findings of Allen (1988) that an incubator goes through three different stages in its lifetime and that in the first three to five years of an incubator’s life, the manager’s tendency is to focus on filling up the vacant units so much so that existing tenants do not get the attention that they need. Aside from intensity of business assistance, Rice (2002) also states that the incubator manager’s knowledge in the various aspects of business development (e.g. financing, sales, marketing, distribution, team building) also plays a key role and thus must be present if he or she is to be an effective influence.

For a backgrounder on the incubator-incubation concept and for a complete set of references, see my earlier post.

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