Promoting Innovation through Incubation in Beijing : An Innovation Systems Approach to Characterizing High-Tech Business Incubators and Start-Up Companies

Taking an innovation systems approach, this study sought to characterize high-tech business incubators and incubated companies in Beijing in terms of their institutional environment, interaction with other entities in the innovation system, and knowledge content. In-depth interviews were conducted with entrepreneurs and incubator managers and a survey based on these interviews was carried out. The empirical material reveals that the incubators generate a few positive externalities, but only to a small extent facilitate the establishing of vertical and horizontal linkages and mitigate imperfections in the institutional environment. Such imperfections consist of lack of capital, lack of skilled labor, lack of business information, and lack of intellectual property protection. These factors are all partially rooted in various aspects of the broader institutional environment. The preliminary results further suggest that the incubated companies overcome shortcomings in the institutional environment by forging ties with universities, research institutes, competitors, suppliers and government