BUSINESS INCUBATION IN PORTUGAL

The role of cohabitation for networking between incubated and mature firms in a science and technology incubator

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the Faculdade de Economia da Universidade Nova de Lisboa.

A Project carried out with the supervision of Professor Stefan Meisiek

27th June 2008

Bruno Serrano Nº82

Agenda

Business incubators

Main objectives

Research site

Findings

Discussion

Conclusion

Next steps

Agenda

Business incubators

Main objectives

Research site

Findings

Discussion

Conclusion

Next steps

Evolution of the concept of Business Incubator

Physical space +

Shared services +

Business development

services+

Focus on Networking

• Multi-tenant buildings

• Secretarial support;

• Office equipment

• Business advisory

• Networked incubator;

• Internal and external networking

Organizations that offer a protected environment for new-born firms, providing resources at below-market rates

Business Incubators (1 of 2)

The networked incubator

Social dimensions in the entrepreneuring process Social Capital Theory

Implementation of formal mechanisms of networking

Provide access to resources beyond the incubator

Increase chances of firms surviving after leaving the protected environment of the incubator

Business Incubators (2 of 2)

Internal networking relationships between incubated firms

External networking relationships with entities outside of the incubator

Agenda

Business incubators

Main objectives

Research site

Findings

Discussion

Conclusion

Next steps

Portugal: Incubators in Science & Technology Parks

Lispolis, Taguspark, Madan Parque, (...)

Taguspark Incubated firms share buildings with mature firms

Main objectives

Cohabitation

Incubated firms Mature firms

Networking advantages

Agenda

Business incubators

Main objectives

Research site

Findings

Discussion

Conclusion

Next steps

Taguspark Science & Technology Park created in 1992; Foster the development of S&T activity; Suburban area of Lisbon; Universities + R&D institutions + S&T based industry; Business incubator:

Commercialize the results of scientific investigation Disseminate new technical competencies

Methodology - Semi-structured interviews with 4 entities:

Business Incubator

Incubated firms

Mature firms

Ex-incubated firms

Different perspectives on the same phenomenon

Research site

Agenda

Business incubators

Main objectives

Research site

Findings

Discussion

Conclusion

Next steps

Findings

1st incubation program: “incubator of ideas”

― ≤ 6 months

― Working space (telephone, internet)

― Business advisory business plan

Taguspark

Incubator of ideas

Building

Building

Building Taguspark

Building

Building

Building

Incubator of ideas

2nd incubation program: “business incubator”

― ≤ 9 years

― Discounts on rents

Established firms

Incubated firms

Connections between incubatees

Connections between incubatees and established firms

Universities and R&D institutions

Findings

1st incubation program: “incubator of ideas”

Taguspark

Incubator of ideas

Building

Building

Building Taguspark

Building

Building

Building

Incubator of ideas

2nd incubation program: “business incubator”

Proximitywith other

entrepreneurs

Networking

Problem solvingShare ideas

Share knowledge

Reputability

Access to resources

Motivation

Spontaneous networkingOrganized networking

Findings

Networking in Taguspark:

Informal:

- Events that promote informal

interaction between all firms

Formal:

- Meetings between potential

partners

- As a result of physical proximity

- Solution-driven interaction

When problems or challenges arise, entrepreneurs can walk across the corridor to find help from more experienced firms

Good opportunities to meet people

Not regular; little attendance; little results in terms of business

Not happening anymore

Recognized as the most important advantage from being in the incubator

Real benefits from networking not unanimous

Agenda

Business incubators

Main objectives

Research site

Findings

Discussion

Conclusion

Next steps

Discussion

In literature: relationships between incubated firms within the incubator

≠In the 2nd program: relationships between incubated firms and with

mature firms in the same building

Building

Incubator of ideas

The transition from the 1st to the 2nd incubation program causes a redefinition of the concept of internal networking

The presence of mature firms leverages the potential benefits from networking:

Experience

Resources

Networks

Discussion

Factors that facilitate and hinder networking:

Why are some firms benefiting from this cohabitation while other are not?

Related to the construction of the

incubator

Related to the individuals

Discussion

Factors related to the construction of the incubator:

Number of firms;

Complementarity of skills and competencies;

Existence of common areas

Related to the construction of the

incubator

Related to the individuals

These factors are imposed equally to all firms in each bulding

They don’t explain why, in the same conditions, some entrepreneurs draw benefits from networking while others don’t

DiscussionRelated to the

construction of the incubator

Related to the individuals

Factors related to the individuals:

Networks are not given, but created by individuals

Networks are perceived and valued differently

Need for common motivation

Transition from 1st to 2nd

incubation program

Opportunity to forge relationships with mature firms

Negative impacts in the relationships between incubatees

Business relationships rely on social relationships trust

Agenda

Business incubators

Main objectives

Research site

Findings

Discussion

Conclusion

Next steps

Conclusion

Cohabitation has an important role in promoting networking between young and mature firms. However, it isn’t enough to forge business relationships;

Not all variables are in the hands of the incubator, but some steps can be taken to leverage the potential benefits of networking:

Selection criteria of entrepreneurs;

Criteria for placing firms in the building (both mature and incubater firms);

Industry

Technology

Complementarity of businesses

Complementarity of skills and competencies

Mechanisms of organized networking

Concerning the resources offered by the incubator:

Eliminate the gap between the actual support offered and the way firms perceive it

Agenda

Business incubators

Main objectives

Research site

Findings

Discussion

Conclusion

Next steps

Next steps

Dimensions of networking to be explored in future studies:

Relationship between young firms and universities;

External networking:

How does the incubator promote external networking?

How cohabitation with mature firms helps giving young firms access to external networks?

Comparative studies between Portuguese business incubators

Thank you