Assessing the Intervention Effectiveness of Business Incubation Programs on New Business Start-Ups
Vol. Volume 4, Number 2 April/1999
Hugh D. Sherman
Hugh D. Sherman is a member of the Management Systems Department, College of Business, Ohio University. This research was undertaken by the University of Michigan Business School, Ohio University, and the Southern Technology Council in collaboration with the National Business Incubation Association in response to a request for proposals from the Economic Development Administration. The author would like to acknowledge the other key members of the research team, especially Larry Molnar, Don Grimes, Lou Tornatzky and Dinah Adkins.
This article examines the effectiveness of business incubation programs on helping start-up businesses survive and grow. Several different methodologies were used including macroeconomic analysis, surveys and telephonic interviews of firm managers, community stakeholders and incubator managers. Evidence was found to suggest that the rates of failure for firms that had been in incubation programs was significantly lower than the failure rate of all start-up firms reported by the other studies. Several recommendations are suggested to assist incubator programs in being a more effective intervention tool.
Business Incubators, entrepreneurship, economic development