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In Case You Missed It, Research You Should Know 0

Do University Incubators Perform Better or Worse Than the Average?

By Endeavor Insight · On December 14, 2017

Founding a company is an overwhelming experience for most entrepreneurs. Acquiring key resources might seem hopeless at times which explains why investors preach the importance of  passion and more than 55 percent of firms go out of business in less than 5 years. One way to overcome these initial difficulties is working with an incubator. Incubators offer a wide variety of resources to new businesses, from office space to consulting, and by doing so they foster entrepreneurial spirit and economic growth. At least in theory.

In practice, the success and viability of incubators is often debated. Lasrado et al. tried to shed some light on what makes an incubator successful by comparing the performance of university and non-university incubators in the US. More than 150 university incubators and almost 900 companies were included in the study and the findings were clear: university incubated businesses kept growing after graduation and created 4 more jobs and almost 440 000 dollars more in sales than non-university incubated businesses which stopped growing after their graduation.

So why might university incubators be more efficient and getting companies off the ground? Because of their resources, according to the authors. Just being associated with a university may be an advantage due to the reputation and connections of these institutions. University incubators also have access to the human capital and patents of their parent  universities, resources that are hard to match by non-university incubators.

To read the full article, please click here.

Contributed by Bence Juhasz.

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