University-Industry Linkage Through Business Incubation: A Case Study of the IPN Incubator in Portugal

University-Industry Linkage Through Business Incubation: A Case Study of the IPN Incubator in Portugal

Dinis Caetano (University of Algarve, Portugal), Miguel T. Preto (University of Lisbon, Portugal) and Miguel Amaral (University of Lisbon, Portugal)
Copyright: © 2019 |Pages: 22
DOI: 10.4018/978-1-5225-5849-1.ch011


This chapter focuses on the role played by business incubators in developing and facilitating knowledge transfer, networks, and business support to tenant firms through a sustainable ecosystem. The authors conduct an in-depth qualitative case-study of one tech-based business incubator in Portugal—IPN, created in 1991 by the University of Coimbra—to provide insight on how the incubator's direction/management board and a group of incubatees perceive incubation and its impact. Primary data was collected via participant observation/focus group involving the incubators' CEO and six team members. Semi-structured interviews were carried out among the CEOs and top managers from 11 companies supported by IPN whether as (1) incubates, (2) under acceleration, and (3) graduates. Results show a positive impact of incubation on internationalization and growth for incubatees and companies under acceleration. However, there is a need for new post-incubation follow-up mechanisms and a normative context promoting richer interactions with graduates.
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Business incubators (BIs) became a popular tool to promote entrepreneurship through the creation of new technology-intensive companies (Lewis, 2001). Usually, they offer a set of resources and capabilities to support and accelerate the tenants´s development and success (Bruneel, Ratinho, Clarysse, & Groen, 2012; Peña, 2004). BIs have been identified as a new organizational model for the creation of innovative companies (Hannon, 2003), with a critical role in the technology development and innovations (Phan, Siegel, & Wright, 2005; Tsai, Hsieh, Fang, & Lin, 2009), jobs creation (Aernoudt, 2004; Aerts, Matthyssens, & Vandenbempt, 2007) and to prevent the higher risk of failure among new and small companies, characterized by liability of newness (Stinchcombe, 1965) and liability of smallness (Freeman, Caroll, & Hannan, 1983). Tipically, the mortality rate of new ventures is higher than among established companies (Aernoudt, 2004).

According to Aerts et al. (2007), BIs guide new companies during their growth process and constitute a strong tool to promote innovation and entrepreneurship. The initial incubator concept was based on business support reduced to the provision of office space (Adkins, 2002), providing low cost facilities (Barrow, 2001). More recently, incubators have increased the offer of business support, namely consultancy, networking and access to venture capital (European Commission, 2002). Nowadays, BIs are aimed at promoting the development of innovative technology-based firms (TBFs) through strategies to develop appropriate mechanisms to help promote their main objectives (Mian, 2014).

In general, BIs support companies on the expectation that they will later be self-sustaining, viable and independent. The combination of services and networking offered by incubators favours survival, contributing positively to reducing the risk of mortality of companies during the start-up period, when they are more vulnerable (Aernoudt, 2004). Nowadays is consensual that BIs “promote and accelerate the development of affiliated companies, helping their survival and growth” (Storopoli, Binder, & Maccari, 2013: 42).

We focus on one Portuguese business incubator – Instituto Pedro Nunes (IPN) – created in 1991 by the University of Coimbra (UC), to specifically analyse knowledge transfer, networking business support activities provided by the incubator, according with the tenants (within IPN) and graduates (outside IPN after physical incubation) perspective. Given IPN reputation and resources and organizational capabilities, this incubator has the means to play a critical role in creating a sustainable business ecosystem, with the potential to foster industrial and regional development.

This study aims to understand the business incubator (in this case IPN) as a mechanism or interface for University-Industry interaction, which promotes innovation and technology transfer between academia and companies. To illustrate the case, we look at several companies supported by IPN that are currently in different stages of incubation.

While this study brings academic contribution on the understanding of university-industry linkage through business incubation, it also brings practical contributions for companies, namely: (1) insight into the actual knowledge transfer, networking activities and business support taking place among companies within IPN through favourable ecosystem; (2) insight into the perceived value of these knowledge transfer, networking activities and business support in stimulating the development of the firm and their business growth.

We focus on the organizational level (Aernoudt, 2004; Hackett & Dilts, 2004; Grimaldi & Grandi, 2005), analysing adjustment between services offered by the IPN Incubator through the development of their resources and capabilities (Mian, 1997) and the demand of entrepreneurs and new ventures. In this context, this study shows: (i) which interactions between IPN and several well succeeded companies facilitate knowledge transfer, networking and business growth, and (ii) how IPN promotes an entrepreneurial ecosystem which favourable to company development.

Key Terms in this Chapter

Knowledge Transfer: Refers to the process of transferring knowledge produced in technological-based entities and scientific research to other organizations, especially companies, associated with innovation. Knowledge transfer has a very broad context, but in this case, it is understood as the mechanism that allows the new knowledge produced by public research to be transferable to companies, namely through technology commercialization, intellectual/industrial property licensing, creation of spinoffs, to obtain technological maturity and business survival in early-stage phases.

Networking: Interaction activities among network actors (individual and collective actors such as, companies, organizations) based on a set of inter-organizational relationships built and developed through relationships, ties and links between actors who formally and informally cooperate with each other, in order to acquire and share information, knowledge, resources, learning opportunities and value creation at a personal and entrepreneurial level.

Business Incubator: A tool for economic development designed to accelerate the growth and success of businesses through a broad set of resources and services to support new firms (infrastructure, specialized services, access to networks), most vulnerable in the early stages.

Entrepreneurial Ecosystem: A set of entrepreneurial actors (both potential and existing) interacting in shared context, which formally and informally come together to connect, mediate and govern performance within the local entrepreneurial environment, namely, entrepreneurial organizations (e.g., firms, venture capitalists, business angels), institutions (universities, public sector agencies, R&D agencies), and entrepreneurial processes (e.g., the entrepreneurial activity rate, numbers of high growth firms).

Business Growth: Refers to the growth of companies through the expansion of their business in regional, national or international markets, resulting from the combination of resources and capacities used in the production of marketable goods or services that increase business performance over a period of time compared to previous periods (e.g., sales turnover, market share, job creation, internationalization).

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