Added value and determinants of the effectiveness of business incubation programs to incubators' clients: an Australian experience

This paper has two main purposes: to investigate value added contributions of business incubation programs (BIPs) from the perspective of incubator and to assess the effectiveness of BIPs by exploring circumstances (factors) where the BIPs are perceived as adding greater value and benefit to the incubator clients. Based on the previous research, this study developed a conceptual framework and several measures to assess the value added contributions and effectiveness of BIPs to incubator clients. It is conceptualized that while the value added contribution of the programs provide perceived clients’ benefits, effectiveness results in a higher level of benefits to clients. The effectiveness of BIPs was assessed by examining the factors affecting the variance of the value added contribution using a stepwise regression analysis. The proposed conceptual framework was tested using responses of 111 clients located in 24 business incubators in Australia. The results indicate that BIPs have resulted in significant value added contributions as perceived by the incubator clients. These include: reducing operational costs, enhancing business image, shortening learning curve, helping to solve business problems faster, increasing confidence, and accelerating overall business development. However, the perceived added value contributions varied among clients and the effectiveness of BIPs was found to be affected by seven factors: perceived usefulness of assistance services, intervention competence of incubator management, client age, client previous entrepreneurial experience in similar business area, length of clients’ tenancy in an incubator, business size and incubator age