Commission report says business incubators must be part of wider strategies
Business incubator operations should be integrated into wider regional strategies for technology development and supported by broadly-based partnerships, according to a report on the 'Benchmarking of business incubators' produced for the European Commission's Enterprise DG by the Centre for Strategy and Evaluation Services (CSES). The report recommends that in seeking to achieve best practice at operational level, 'business incubators should be designed to support and be part of a broader strategic framework,' explaining that they should work alongside other organisation and schemes to promote broader regional and policy strategies. In this context, the report adds, business incubators should be supported by a partnership of public and private sector stakeholders. Further value can be added by clearly defining the target market and admission criteria to focus incubators on projects where they can genuinely add value. Emphasis should be placed on the development of high quality business services such as entrepreneur training and technology support, recommends the report. It adds that 'virtual' incubation services should be developed in order to encourage networking, 'after-care' and the participation of a greater number of businesses, 'ensuring that job and wealth creation effects are retained in local economies.' The study recommends that business incubators should be encouraged to benchmark themselves against best practice standards. This benchmarking and sharing of best practice should focus on four key areas: entrepreneur training, business support, financing and technology support. It explains that 'the challenge facing incubators is more to focus on developing first class business support services, including a virtual dimension for firms not located in incubators. The study also calls on the Commission to support, if possible, the adoption of regular impact assessments by business incubators in order to identify best practice and demonstrate the benefits of public funding support, which currently accounts for a high proportion of the set-up costs of many incubators and around 37 per cent of their operating revenue. The report also says that a key future priority for business incubators should be to reduce this dependence on public subsidies, explaining that this would help resources to be spread more widely and used to promote new initiatives. The report contains a number of recommendations for action taken at EU level. It calls for the development of a set of common definitions and quality standards for European business incubators as the basis for any EU-level initiative, and that consideration should be given to establishing a European Business incubator association as a framework for taking action forward. The report's authors also call on the Commission to review the role of different initiatives and Commission Directorate-Generals in the promotion of business incubators in order to ensure that a coordinated approach is adopted. The report also recommends that action be taken to improve the sharing of best practice between business incubators in Europe and the USA, as 'there is much to be potentially learnt from sharing experience and know-how.' Business incubators make a significant contribution to job and wealth creation in the EU, according to the report, with the 900 incubators currently in operation throughout the EU Member States generating 40,000 new jobs each year. The process of business incubation also adds value by accelerating business creation and maximising the growth potential of SMEs (small and medium-sized enterprises).