Business Incubators: What Services Do Business Owners Really Use?

INTRODUCTION Business incubators aid new business owners by providing supportive environments in which they can establish and grow their enterprises. These environments provide not only the necessary infrastructure (physical facilities, office equipment, etc.), but also the business support (managerial advice) and mediation services (assistance with networking) essential for growth and success (Bergek & Norrman, 2008; Rice & Matthews, 1995). Incubator tenants also form relationships with each other that can be conducive for expanding their businesses (Chrisman, Bauer Schmidt & Hoger, 1998; Neck, Meyer, Coben & Corbett, 2004). Although these various forms of assistance can be helpful in establishing a business, they are only beneficial if tenants actually take advantage of these opportunities. The purpose of this study is to determine the frequency with which five types of services are used by business owners whose enterprises are in business incubators in Norway. In addition to the frequency with which these services are used, this study also examines tenants' satisfaction with the services they have received. This study also compares the responses of women and men, and of business owners who have been incubator tenants for various amounts of time. The following section provides a brief background on business incubators. The results of this study are then presented. BUSINESS INCUBATORS Business incubators provide start-ups with a nurturing environment, hands-on assistance, and a variety of other services during their crucial first years of development. The term "incubator" is appropriate because these organizations foster the development of new companies, helping them survive their vulnerable start-up period and grow more quickly into successful firms (Finer & Holberton, 2002). Incubator facilities are quite diverse. The opportunities and resources offered by incubators are usually related to their purpose, goals, and resulting management policies (Hannon, 2005). Some incubators aim to provide an "artificial" environment that will aid the development of new firms that are expected to provide jobs and economic development for the local area. Others primarily seek to accelerate commercialization of knowledge research or technology, often at a profit to the sponsors (Hannon 2005). Universities and vocational-technical schools are often interested in training opportunities for students and commercial outlets for faculty research. Despite these differences, the common goal is to increase the chances of new firms' survival. Bergek and Norrman (2008) identified five components that are typical of most incubation models: selection, infrastructure, mediation, business support, and graduation. Selection and graduation procedures pertain to entry/exit policies while the remaining components describe the type of resources and services provided to tenants while they are in the incubator. Basic items such as photocopiers, postage machines, and other office equipment are useful and even necessary, but would present high costs to a single small venture just starting out. Large and specialized facilities and equipment such as loading docks, forklifts, autoclaves and water purifiers would be out of reach for most new businesses, but incubators can provide these through the cost-sharing model of the incubator organization (Boyd, 2006). These services and resources, conveniently provided in one location, are a great help to new businesses. Hansen, Chesbrough, Nohria and Sull (2000, p. 76) found that during the first six to nine months of operations, many managers of new ventures spend up to half their time just establishing the basic infrastructure they need to run their businesses. They quoted an incubator tenant extolling the virtues of his incubator where tenants do not have to deal with "back-office stuff like 'Why doesn't the fax machine work today?'...Here in the [named] incubator, we can focus entirely on the business issues at hand. …