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That is why, the most effective way to deal with the problem under these circumstances turned out to be two Western schemes — leasing and credit unions. They have been used in Russia in the framework of the projects for business incubators establishment funded by Western institutions. Russian government has made considerable efforts to support business incubators lately.

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Meanwhile, the priority in receiving support from the government must be given to the target groups of entrepreneurs - beginners, high-growth, innovative and export-oriented companies. Agency for International Development, business training centers Morozov Project and others Samsonova, Comparison of Strategies of Business Incubation in these Countries. After highlighting the incubation landscapes in the Unites States, Germany and Russia, we are moving to studying the similarities and differences in strategies of business incubation between the three countries.

Creating Communities of Practice: Entrepreneurial Learning in a University-Based Incubator

In order to compare incubators operating in these countries, key dimensions derived from the description above were selected. They include:. In addition, the role of government and its impact on the approach to incubation as well as policy implications are discussed. Table 2 summarizes the results of the research with short extracts related to the dimensions for each country: the USA,. As we can see, business incubators in these countries are similar in some aspects and differ in others. The strategic focus of the incubators varied a lot throughout their history in each country, but nowadays they are all mostly aimed at technology transfer, fostering entrepreneurship and economic development.

How does A Business Incubator Work - Meaning Definition Examples startup Incubator - Speak Like Shaf

Speaking about levels of sponsorship, it can be stated that the government plays a predominant role in incubator funding in three countries. Though, in comparison with Germany and Russia, in the USA start-up companies are also well supported by private funds, business angels and venture capitalists. The type of tenant businesses and industries they operate in is also a subject to discuss.

A large and developed network of business incubation programs and supporting organizations in the U. This leads to a mixed population of tenants in American business incubators. At the same time, in Germany the majority of residents are high tech companies and in Russia they are mostly manufacturing, IT or technological businesses. The structure of tenant mix influences the set of services that incubators are ready to provide, that is why it is quite different in these countries. The last but not the least is the role that the government of each country plays in supporting business incubators.

Table 3. In Table 3, we bring together a number of them. Meanwhile, it is worth noting that there was never any thorough data collection on the performance of Russian business incubators. This provides a strong evidence of the insufficient attention of local authorities and researchers to this industry.

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Although we have rough estimations of several indicators, especially referring to Russia, we may still draw some conclusions. It appeared that the proportion of non-profit incubators is higher in Germany and in whole Europe than in the US. This could be explained by the increase in the number of for-profit incubators in the US that are willing to nurture businesses quickly and receive big payoffs. Similarly, German incubators operate with higher occupancy rates. However, it is not a surprise that the US has higher survival rate for start-ups than other two countries and the incubators invest directly in their tenant companies on a far more frequent scale there.

There is a significant gap between the survival rate of Russia and Germany, nothing to say about the performance of US incubators. An interesting indicator is the density of business incubators distribution calculated as the ratio of the amount of incubators divided by the number of SMEs in the country. A pronounced difference in the results proves that the existing amount of business incubators as the institutes of support for small businesses is not enough in our country.

Next two parameters — average number of tenants per incubator and average number of full time jobs created per tenant company - are almost the same among all three countries. Another significant finding from the comparison above is the fact that the percentage of the incubators that apply enforced graduation policy, for instance, the limitation for the length of the incubation period, is much higher in Germany than in the United States.


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Therefore, one can assume that the US is more flexible in this issue than European countries, also taking into consideration the fact of the smaller average length of tenancy. Russian incubation programs usually last even less - from 6 months to 2 years. The analysis of both qualitative and quantitative dimensions made it possible to compare the performance of business incubators in the United States, Germany and Russia, identify their strengths and weaknesses, and give recommendations about the application of foreign incubation strategies to Russian incubators.

As was mentioned above, a number of experts who had experience of working at business incubators in the USA, Germany and Russia or took part in the incubation process as a start-up company in these countries were invited to express their opinions on the topic of this paper. All in all, about ten unstructured interviews with people based both in the USA and Russia were conducted.

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Unfortunately, no interviewees originally from Germany participated in the study, so other experts were asked to give some comments on business incubation activity in Germany as well. The study shows that most experts share similar views about main differences and similarities of business incubators in the USA, Germany and Russia. The most popular idea is that American incubators have higher status and global recognition as well as the more substantial amount of capital than German and Russian ones. This judgment might be the reason for the further suggested opinion about a considerable gap in the level of investments in fledgling companies between these countries.

Most American incubators provide seed funding and have a well-organized established system of raising money for start-ups. In Germany and especially in Russia the financial issues are still tough to deal with if we talk about independent private incubators. Moreover, all experts agree that there is no big difference between incubators supported by municipal power structures and universities in the countries under review. Basically, they provide a standard set of services for their tenants that we discussed in the previous section. One of the most valuable insights from the experts had not been disclosed in the literature review as it could be experienced first-hand only.

Several experts highlight the differences in mentality and cultures of the US citizens, the Germans and the Russians which affect directly both the strategy of business incubation and the satisfaction of start-up companies during this process. Firstly, cultural aspects contribute to the development of acceleration programs in different countries.


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  7. For example, as was noted by the interviewees, American incubators usually do not have a standardized structured program applied to each tenant. The incubating process is organized mostly in an informal way with various master-classes and meetings being held. This approach works perfectly because people there are used to such a way of doing business.

    What is for Germany and Russia, the programs are more formal as mentors have to impose additional tasks such as regular updating of traction maps, etc. Entrepreneurs who were residents of business incubators in the US and Russia fully support these conclusions. Furthermore, they emphasize prejudice of the American accelerators and investors against foreign start-up companies: no matter how good and innovate your idea is, cultural differences and language barrier may have an adverse impact on the final result of the incubation process. However, the researcher managed to get some new interesting insights that added value to the study.

    The study focused on the comparison of strategies of business incubation in the USA, Germany and Russia shows that the concept of a business incubator still needs to be further developed and put into practice.

    The heuristic of representativeness and overconfidence bias in entrepreneurs

    Firstly, there is no commonly accepted definition of a business incubator. Numerical data for instance, survival rate, number of jobs created, average number of tenants per incubator , as well as qualitative indicators selection process for residents, access to financing and capitalization, entrepreneurial networks and many others , are available.

    Considering the topic of the article, we should mention that few studies devoted to the comparison of business incubators were conducted with reference to particular countries. Our study contributes to this field because it includes the results obtained through the literature review and first-hand insights from experts who took part in the business incubation process in the US, Germany or Russia.

    Their points of view enriched and reiterated the findings outlined in the second chapter. All in all, we concluded that there were more differences between the strategies of business incubation in these countries than similarities. Undoubtedly, the experience of foreign countries might be adapted and used in Russia. The study might impact a business practice in the way of clarifying the most significant characteristics and general trends of business incubation strategies in particular countries to take them into account in the process of launching and developing startup companies in one or another country.

    Aerts, K. Critical role and screening practices of European business incubators. Technovation, 27 5 , Allen, D. Structure, policy, services, and performance in the business incubator industry. Entrepreneurship: Theory and Practice 15 2 , Amezcua, Alejandro S. Public Administration - Dissertations. Paper Retrieved Bruneel, J. The Evolution of Business Incubators: Comparing demand and supply of business incubation services across different incubator generations. Furthermore, we have analyzed our data using an analytical framework set to investigate network features. Findings: We have found that there are four mechanisms that can lead to network formation at incubators: i institutional mechanisms; ii social relations; iii institutional association; and iv public policies.

    Additionally, we show that the strength of ties is related to the type of resources circulating; the level of openness of the network can improve innovation activities; and the lack of ties cause delay to the innovation process.