Do University Incubators and Non-University Incubators Perform Differently?

Atlanta Conference on Science and Innovation Policy 2009This presentation was part of the session : Roundtables on Organizations of Science and InnovationTechnology business incubators (TBIs) are widely viewed as a promoter of regional/national innovation and competitiveness. Both developed countries and developing countries have established university incubators and non-university incubators since the 1960s. In China, the incubation industry has had a remarkable development. From 1987 (the year where the first Chinese technology business incubator was established in Wuhan) to nowadays, over 500 TBIs have been distributed almost thorough China. This paper aims to make a comparative study between university incubators and non-university incubators in China. It firstly outlines the background of Chinese incubation industry, and then compares university incubators and non-university incubators in terms of sponsorship, types of entrepreneurs, location, and services at a general level. In order to make the comparative study specifically, it samples Chongqing University incubator and Caohejing TBI (non-university incubator) as a case study. This paper is to focus on comparing the services and performance outcomes of these two types of TBIs and discussing which factors influence their incubation performance. We use Chan and Lau (2005)'s assessment framework with nine criteria as an analytical tool to compare the quality of services between Chongqing University Incubator and Coahejing TBI, like pooling resources, sharing resources, consulting, public image, networking, clustering, geographic proximity, costing and funding. We also employ the European Commission's assessment indicators (CSEC, 2002) to compare the performance outcomes of these two sampled incubators. Additionally, in-site visits, face-to-face interviews and semi-structured interviews are used in our research methodology. Our preliminary research finding is that the ultimate objective of technology business incubators converges in building-up innovation competitveness. But, university incubators and non-university incubators are different in terms of sponsorship, types of entrepreneurs, location, and services. University are sponsors of university incubators. They are often established around or in campus. The university sponsorship of incubators suggests that university incubators cannot behave as firms maximizing their profits. They function as an experimental base for academic entrepreneurs to accumulate innovation experiences and promote innovation capabilities. Since the management team of university incubators is lack of business background, their services are administration and building oriented rather than value-added oriented. For non-university incubators, industrializing high-tech and creating wealth are the key pursuing points. The corporate-based sponsorship of non-university incubators requires economic returns to investments. And the majority of the venture entrepreneurs come from firms, having both commercial experiences and technology skills. When they ask for help from the incubator, they want to get qualified specific services. To attain these objectives, non-university incubators employ some professionals and improve incubation services to attract venture firms with promising market potential. The location of non-university incubators concentrating in science and technical industrial park, provides tenant firms with sufficient incubation surface for potential large-scale production. Concerning the services of the two sampled incubators, we find that the Caohejing incubator has more advantages in pooling resources, consulting, public image, networking and funding than the Chongqing incubator. The Chongqing incubator has more advantages in terms of geographic proximity to the university. Our research results on their performance outcomes show that the Caohejing incubator is superior to its counterpart in terms of incubation funds, incubation surface, income creation of tenant firms, survival rate of tenant firms as well as the number of graduated tenant firms. However, the Chongqing incubator has an overwhelming advantage in the number of staff in tenant firms and the number of tenant firms. Finally, the Chongqing incubator prioritizes the fostering of domestic technology-based firms for upgrading indigenous innovation capabilities, whereas the Caohejing incubator gives preference to both foreign and domestic (mixed) technology-based firms for high-tech industrialization. The differences of these types of incubators are found to link with the type of tenant entrepreneurs, the quality of services and the specific context of each incubator. For example, Caohejing TBI is located in Shanghai whereas Chongqing Univeresity incubator is in Chongqing. Compared with Chongqing, longer open history, sustainable political and economical supports from the government and continuous foreign direct investments promote the regional innovation competence of Shanghai. The specific context contributes to the development of the Caohejing incubator and its tenant firms.Southwestern University of Finance and Economic