INCUBATOR RESULTS: IMPRESSIVE OR IRRELEVANT? : A Quantitative Study of the Success of Swedish Incubator Graduates

Abstract: With the influx of state-funded business development programs and organizations, it is of increasing relevance to understand the success and value creation of said programs and organizations. Sweden is one of the states in the world with the highest number of incubators per capita, and has an extensive knowledge network surrounding incubation. However, the success of them is hard to predict at best, owing to different incubator practices and selection processes for different industries, for example. This creates the question of whether incubators are a worthwhile investment strategy to create growth, and how this should be assessed. Prior literature on the field have used a range of different measures, such as survival rate over time, but we are more interested in the long-term growth caused by incubators by their graduated firms. Thus, this study’s purpose is to assess whether Northern Swedish incubator graduates see stronger growth than comparable non-incubated firms over time. The approach taken has been to study the 5-year cumulative average employee and turnover growth rates of firms in IT & non-digital technology in Northern Sweden. Quantitative firm data was analyzed deductively in accordance to hypotheses developed on prior theory on the field. The incubator firm sample had been affiliated with either Uminova Innovation or Arctic Business Incubator (ABI), as the 3rd incubator in Northern Sweden, Bizmaker, had no suitable firms for our study. The comparable reference firms were from all counties related to Northern Sweden, Norrland Land. Analyzing the data revealed a significantly higher turnover growth rate for incubator graduates in the region, as opposed to the numbers of non-incubated firms. Incubated IT firms seemed to have a quicker turnover growth than that of incubated non-digital technology firms as well. However, this was not the case regarding employee growth, where no significant relation was between that and incubation, or lack thereof. The data suggests that incubators create some lasting economic growth, at the very least, but cannot show to great growth in things such as employment, societal growth, and creation of other kinds of value like environmental and social. The suggested course of action for further actors in the field is to expand the study, e.g. by using different time spans, regions and researched types of value. Incubators do seem to have an effect on their firms, but it is difficult to pinpoint and harder to assign a value to in comparison to the resources spent on them.