Kreo tn2 Karlsruhe, Rhône Alpes, Emilia-Romagna and Oxfordshire Thematic Network for the Support of Innovative Companies

7Incubation services

A far-reaching analytical classification of the services that a business incubator can provide requires to identify first the needs that a new enterprise has independently from the context where it is located. Such background can be set starting from an analysis of the success and risk factors relevant to the creation of a new enterprise.

7.1New enterprises: success vs failure factors

There are many studies carried out by business strategy researchers on the factors that may lead a new enterprise to success or failure. Based on an extensive literature review, S. Sammut (2001) has identified various success and failure factors that strongly affect new companies’ start up phase. Such factors are linked to four main features, i.e. the characteristics of the entrepreneur, those related to the company’s environment and activities, the access to financial resources and the organisational structure.

SUCCESS FACTORS
ENTREPRENEURS’ CHARACTERISTICS	Parents are entrepreneurs
	Experience
	Learning capacity
	Control the situation
	The business is well defined
	Efficient time management
ENVIRONMENT and ACTIVITIES	Market research
	Support from professionals or from a mentor
	Efficient information management
	Network and partnership development
	Aggressive market penetration
FINANCIAL RESOURCES	Moderate risk taking
	Sufficient quantity of funds
ORGANISATION	Specialised personnel
	Responsibility sharing and participation in the decision process

FAILURE FACTORS
ENTREPRENEURS’ CHARACTERISTICS	Lack of experience
	Lack of competences
	Lack of motivation
	Training is insufficient
ENVIRONMENT and ACTIVITIES	Inappropriate strategy niche
	Insufficient customer diversification
	Inappropriate distribution strategy
	Customer targeting is difficult
	Product range is too narrow
FINANCIAL RESOURCES	Own financial resources are insufficient
	Cash “crisis”
ORGANISATION	Inefficient team
	Lack of team spirit
	Lack of cohesion

This information is functional to different uses. First of all, it may help business creation operators to establish selection criteria for the identification of potentially successful business projects. Second, it is a base against which defining the services to supply to decrease failure risks.

7.2Main types of services that may be offered

Relevant literature on business creation offers many possible ways to group resources that a business incubator can offer.

Among them, its worth notice the classification given by R.C. Wolcott and J. P. Ballou (2003), focused on the experience of the Technology Innovation Center in Evanston (Illinois, USA). Their analysis identified three main groups of features that encourage early-stage firm success:

1. 
   Tangible resources: (1) capital, (2) talent/human resources/team of employees, (3) physical space, (4) capital equipment, information infrastructure and data access;
   
2. 
   Services: (1) understanding markets, sales, (2) executing marketing and sales properly, (3) product development, (4) cash flow management, (5) IP, legal assistance, (6) professional services;
   
3. 
   Intangible resources: (1) commitment, focus, (2) personal professional networks, (3) credibility of the incubating structure, (4) entrepreneurial guidance.
   

This approach, which has been based on the single experience of the Technology Innovation Center in Evanston (Illinois, USA), represents only a possible way to group resources that a business incubator may offer; relevant literature offers many other classifications.

Moreover, intangible factors the incubator may provide to its beneficiaries can be very fruitful for start-up businesses. For example, the participation of the start up into a prestigious structure can have a positive impact on the new company’s image being guarantee of quality toward investors and clients. However, this is a very vast field, often related to cultural aspects and local dynamics.

Our methodological approach will focus on tangible resources and service supply.

In particular, possible services an incubator may provide have been grouped according to two main categories, relating to crucial aspects for new companies:

• 
  Structural services: space, instruments, supporting human resources
  
• 
  Non structural services: training, consultancy, capital, networking
  

An analysis is made on each possible service and illustrated with concrete solutions provided by those structures selected in the KREO regions.