New Business Ideas Incubation Process: Some Exploratory Findings of Three Portuguese Business Incubation Programs

New Business Ideas Incubation Process: Some Exploratory Findings of Three Portuguese Business Incubation Programs

Jorge Cunha (ALGORITMI Research Center, University of Minho, Portugal), Tiago Resende Leite (Department of Production and Systems, Portugal) and Daniel Ferreira Polónia (GovCOPP, Economics, Management, Industrial Engineering and Tourism Department, University of Aveiro, Portugal)
DOI: 10.4018/978-1-7998-3628-5.ch004
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Abstract

The ever increasing competition in which firms operate at a global scale and the need to shift the type of economic growth have led countries to adopt instruments that give them a competitive advantage and deliver growth based on entrepreneurship and innovation. One instrument is the incubation of new business ideas, where incubators play a relevant role in helping firms to survive and grow during their initial stages. This chapter analyzes and discusses the incubation process in three different types of business incubators in Portugal, describing their modus operandi, the relationship with the incubatees, and the results obtained. The main findings are the three incubators are focused on stimulating entrepreneurship, new business ideas and innovation, and are concerned in being a facilitator agent of the success of those new projects; however, some differences might be seen among these incubators, namely in terms of criteria used to select the new business ideas or projects, the support services provided to the incubatees, the incubation period, and the type of projects supported.
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Introduction

The ability to continuously innovate has become a source of competitive advantage for firms (Tola & Contini, 2015). In this context, the promotion of entrepreneurship is increasingly recognized as an important driver of economic development and job creation (Bruton, Ketchen, & Ireland, 2013). Thus, several countries have been creating instruments to promote and encourage entrepreneurial activities to stimulate economic growth (Mueller & Thomas, 2001). One of the mostly used instruments are incubators of new business ideas (Albort-Morant & Ribeiro-Soriano, 2016), which aim to support the creation or development of small and medium-sized enterprises, especially in the initial stage (Aernoudt, 2004). Business incubators can be seen as mechanisms to strengthen countries’ economic and technological development, by fostering entrepreneurial ideas, encouraging the growth of newly created firms, and reducing the likelihood of failure of new business ventures (Carayannis & von Zedtwitz, 2005). Moreover, business incubators can be seen as intermediary organizations, helping newly founded and young ventures to establish cooperative relationships with a broad range of economic actors (Schwartz & Hornych, 2010). Hence, incubation has the objective of reducing new firms’ mortality rate, providing physical support and technical-managerial support, promoting networking with other stakeholders and providing access to sources of financing. Zedtwitz (2003) stresses that expectations for a business incubator should not be exclusively financial or short-term, since the success of a start-up is a time-consuming process. So, any business model of an incubator should be designed on a long term perspective.

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