Business Incubator Life Cycles

Abstract

This article examines the development process of business incubators. Nearly 60 stakeholders working with 12 incubators were interviewed. A three-stage life cycle model is posed to describe the development process. The start-up stage is characterized as real estate driven; emphasis is placed on preparing the space and locating initial tenants. The business development stage occurs when the facility is on sound financial footings and attention shifts to managing up tenant firms. Incubator maturation is characterized by a sophisticated enterprise support network and demand for additional user space. Five interdependent forces are posited as influencing the incubator development process. Policy implications focus on realistic development expectations, management philosophy, and performance criteria.