Business Incubation Success in Biotechnology : How Should Bio-incubator Performance be Assessed?

Abstract: University business incubators (UBIs) are organizations that provide new startup companies with a support environment. However, there are split opinions on the UBIs’ contributions to the startups and the regional economy and, consequently, there are also split opinions on  how to assess UBI performance. According to the resource-based view (RBV), a company’s competitive advantage results from the various resources the company has access to. The biotechnology industry is characterized by high research intensity, weak entrepreneurial and managerial skills of the entrepreneur, huge capital requirements, and long product  evelopment approval processes. Previous research has showed that these characteristics imply certain challenges for new biotech ventures. In this study, these industry specific characteristic and challenges were believed to affect what constitutes successful bioincubation and how bio-incubators’ performance should be assessed. The purpose of this report is, thus, to examine how bio-incubator performance can, and should be, assessed. An existing framework for assessing UBI performance is used as a basis for performing  emistructured interviews with 18 incubator managers in order to examine what performance indicators are perceived as robust for assessing bio-incubator performance. The findings show that the value contributions of bio-incubators mainly include space and network provision, support services, and coaching. The perceived value contributions, in combination with the perceived challenges, imply that it is particularly appropriate to assess bio-incubators performance in terms of Job Creation, Economy Enhancement, Access to Funds, and the Incubator Offer and Internal Environment. However, Job Creation and Economy Enhancement are closely related and are therefore suggested to be merged into a single performance indicator. Hardware and Services, on the other hand, seems to be less relevant for assessing bio-incubator performance as it depends on the incubator’s strategy. The study concludes that there are additional ways of assessing bio-incubator performance, such as shortened time to graduation, links with universities, and the flexibility of the incubator. Further research may include the entrepreneurs’ point of view or use the approach of this study to examine incubator performance in other high-technology industries.