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Saturday, 17. August 2019  

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Business incubation in challenging times

Research reports


The UK has begun to create an environment in which starting a business is easier and more popular than before. High-growth new firms drive productivity and employment, but the UK has had less success in growing those new firms. And the recession is likely to have a particularly severe impact on new and small businesses.

Business incubation is a technique whereby promising new firms are provided a managed and structured environment in which they can grow to their potential. Business incubators provide mentoring, support services and advice, as well as a space in which incubated businesses can learn from each other and benefit from ‘clustering’ effects. Incubators can act as an ‘anchor’ for an area, securing valuable skills and knowledge that can help that area gain a competitive advantage.

The evidence suggests that incubation adds value to a firm, with incubated businesses significantly less likely to fail in their first years than the average.

Successful incubation requires a strong entrepreneurial culture, with demand for new business creation locally creating the need for an incubator. A new incubator should be carefully tailored to meet its locality’s requirements, necessitating careful feasibility studies alongside building local coalitions of support for the proposed scheme.

And a well-designed incubator will provide for the painless exit of successful firms to new premises, once they have outgrown the incubator’s capacity and can stand on their own feet.







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