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Examining the role of business incubators



A business incubator is a structure designed to facilitate the creation of enterprises by providing
technical and financial support, advice and services.

These structures emerged in the early 1980s, initially within the structures of research
development before spreading to promote business creation and jobs.

Incubators differ in the manner they render services, in structure, and the range of clients they
work with. Start-up companies which successfully complete the business incubation program
tend to stand a good chance of surviving the start-up storms to stay afloat in the long term.

Most incubators are generalists and provide services to entrepreneurs whose business is
related to handicrafts, services or industry. The services usually consist of offering premises and
support services (advice, training and integration into economic networks).
Incubators offer both cost and development advantages for start-up companies through
consultation, and coaching in the areas of planning the operations of the company. Along with
assistance in raising capital, management support, secretarial service and networking among
other things.

Business incubators are in some instances managed directly by universities, research centers
or even by local authorities. Specialist business incubators can be involved in various sectors
such as transnational cooperation projects, nanotechnology, information technology,
biotechnology, environmental technology and music industry, etc.

The costs of incubators are mostly borne by different stakeholders (government, associations,
private sector). In addition, there are so many business models, and in some cases it is such
that only one start-up funding is necessary, and the daily operations are designed to be more or
less self-supporting.

Entrepreneurs keen on taking advantage of business incubation programs have to apply
through the relevant bodies for admission. The basic ingredient for a successful application
revolves around sound business ideas and the business plan presented.

The core of a typical business incubation program constitutes the services it offers to start-up
firms. A good number of incubation programs also render their services to affiliate or virtual
clients, and the clients do not necessarily occupy the incubator facility.

Instead, affiliate clients can actually be home-based ventures or use their own facilities, and
only access incubator services. Some of the virtual clients can be located far from an incubation
facility to take part on site, thus get assistance electronically.

The concept of business incubators comes with its own disadvantages, and these pertain to
funding measures that are borne by taxpayers. The costs will only be repaid if the funded
enterprises can establish themselves in the market, and the funds invested reimbursed.

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