Incubators are valuable tools for supporting growth in a wide variety of enterprises - from 'traditional' businesses to high technology, and from cultural to rural businesses. The choice of focus for a new incubator's activities is an important one, and this article sets out some common rationales - from building on existing strengths to tackling known weaknesses in the local economy. See also Types of Incubator.
Objectives
This definition is derived from an analysis of the region’s needs and potentialities.
Definition of the incubator’s focus determines the structure and types of services offered. An incubator can be classified as:
- Traditional Incubator: supports development of companies linked to sectors of the economy that possess broadly disseminated technologies, such as textiles and footwear. As Pereira and Pereira (2002) emphasize, “the objective is to aggregate value to products and processes through utilization of new technologies”.
- Technology-based Incubator: incubators that include companies with products, processes and/or services that are the result of scientific research and represent a high combined value. These incubators support biotechnology, informatics, and electronics companies, among others.
- Mixed Incubator: provides support to both traditional companies and technology-based companies.
- Cultural Incubator: supports cultural activities such as music, sculpture, photography, and cinema.
- Social Incubator: as stressed by Pereira and Pereira (2002), these are incubators that support “undertakings that originate in social projects connected to traditional sectors that have knowledge that is in the public domain and that meets demand for employment and income and improvements in the quality of life of the community”.
- Agribusiness Incubator: encompasses crop/livestock undertakings and have the objective of stimulating entrepreneurism and technological innovation in the area.
- Sectoral Incubator: supports activities in a single area. In this sense, an incubator can be sectoral and technology-based, for instance, supporting only companies in the area of software.
Key Issues
Definition of the incubator’s focus must consider the local circumstances in which the incubator is to operate and the region’s strategic objectives. In this sense, some critical questions must be raised:
- Vocation: in defining the incubator’s focus, survey the networks and clusters in the region. This survey could, for example, demonstrate that there are a large number of software development companies in the region. The incubator could then define its focus as a technology-based and sectoral incubator. Thus, the incubator could support companies that meet the demands of already existing companies as well as those developing products for new markets.
- Weaknesses: the incubator’s focus can be defined in terms of the recognized weaknesses of the region. The objective would be to support generation of companies that could eliminate/diminish the identified weaknesses. In one region, for example, the level of competitiveness in the textile sector might be low. Then a traditional incubator is needed to support companies that develop products and/or services for the textile sector. Another possibility is establishing an incubator to create opportunities for minority groups, such as indigenous people, people with disabilities, and other minorities.
- Potential: an interesting alternative is to establish an incubator to generate companies in an area that has not yet become one of the region’s strengths, but that has perceived potential. In this case the area should be evaluated for professional workers and a consistent, growing demand for products/services.
- Leading Institution: the incubator’s focus is strongly influenced by the needs and interest of the leading organization. If this is a private company, for example, a profit-seeking incubator could be built to generate technology-based companies. A public university, on the other hand, may be more interested in improving the quality of life of needy communities so the focus may well be a social incubator prepared to form cooperatives.
- Entrepreneurial Culture: a critical aspect of the incubator’s focus is the existence of entrepreneurs to generate new companies in the chosen area. For this, it is important to assess the number of schools, universities and professional training programs with an entrepreneurial profile. Should there be a shortage of organizations involved in creation of an incubator then publicity about entrepreneurism is needed.
Responsible Parties
Definition of the incubator’s focus is the task of the team elaborating the project. When the project is the responsibility of more than one organization, at least one representative of each one should be involved at this stage. Contact should be made with different sectors of the local community, even if they are not participating in creation of the incubator.
Indicators
Information gathering related to the region’s needs and potential is essential, as well as deciding the strategic objectives to be attained. The following indicators can aid in defining the incubator’s focus:
- Number of technical schools
- Number of university courses
- Number of professionals (technicians and university students) trained in the different areas
- Number of companies involved in the regional major sectors
- Number of jobs generated by the companies from different sectors
- Evolution (growth/decline) of the region’s principal sectors
- Evolution (growth/decline) of the principal sectors at the national level
- Evolution (growth/decline) of the principal sectors at the international level
- Number of entrepreneur training programs
Results
An adequate definition of the focus can facilitate the incubator’s integration into the community, making it easier to obtain funding. At the same time, meeting the needs of the community can facilitate development of entrepreneurialism in the region and broaden demand for projects submitted to the incubator.
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