Evaluating the Contribution of Start-Up Incubators to Firm Growth and Performance

Policy makers in developed economies see merit in supporting the innovative abilities of technology entrepreneurs. It is hoped that from these highly–educated entrepreneur(s) new technology and service–based firms... [ view full abstract ]

Policy makers in developed economies see merit in supporting the innovative abilities of technology entrepreneurs. It is hoped that from these highly–educated entrepreneur(s) new technology and service–based firms (NTBFs) can emerge. Indeed empirical evidence suggests that it is fast-growing young firms (Gazelles) which provide the bulk of new employment growth.
Start-up incubators are one of a number of micro-policy interventions with which the state attempts to support these technology entrepreneurs to develop and commercialise their innovations. Incubators offer a range of services such as shared office accommodation, shared support services, business support (hard), business advice (soft) and network provision (Bergek & Norman 2008). They are typically located in or near universities as they generally fall under the universities knowledge transfer remit.
This paper outlines the methodological challenges associated with attempting to link the provision of start-up incubator services to economic outcomes. To date, empirical evidence gathered on incubator effectiveness is mixed. However this paper finds, using theory-based evaluation methodologies, that publicly–funded start-up incubators can contribute to firm growth and survival when there are certain combinations of factors present. The paper concludes by making recommendations to increase policy effectiveness.