Critical Success Factors for Technological Incubation: Case Study of Hong Kong Science and Technology Parks

Article excerpt

Technological based incubation is designed to enhance local innovation capacity and technology development. There are various incubation models. However, the criteria of these models differ significantly. What are the critical success factors for incubation programmes and how the factors affect performance are still worthy of study. It is especially necessary in Hong Kong and China where the topic has not been studied sufficiently. In this paper, a conceptual framework of critical success factors for incubation programme is proposed based on a literature review. The framework contains three categories; environment-related, incubator-related and incubatee related factors. The framework is used to evaluate the incubation programme in the Hong Kong Science & Technology Parks Corporation. The model has practical implications for incubation operations and hopefully will stimulate further research.

1. Introduction

Technology based small and medium enterprises (SMEs) have become an integral part of the regional and world economy. It is agreed among policy makers and scholars that these SMEs deserve some type of nursery at their inception so as to protect them from violent competition with large business enterprises (Buratti, and Penco, 2001). An incubation programme is one of the perceived effective ways to accelerate the growth and development of these technological SMEs (Aernoudt, 2004). The number of incubation programmes has boomed since the early 1980s. The National Business Incubation Association (NBIA) estimates that there are about 1000 business incubators in North America, up from only 12 in 1980; and the number at present exceeds 4000 worldwide. Many science park and incubation programmes are very successful in fostering growth of emerging entrepreneurs, creating new job opportunities, and speeding up development of regional economy (Lee and Yang, 2000; Walcott, 2003; Phan, Siegel and Wright, 2005). Their prevalence with successful stories in Italy (Colombo and Delmastro, 2002), China (Sutherland, 2005; Lai, and Shyu, 2005), Poland (Matusiak, 2003), Singapore (Koh, Koh, and Tschang, 2005), Korea (Lee, 2003), Nigeria (Adegbte, 2001), and Brazil (Lalkaka, 2003) are numerous; and there is no word needed about the experience of North America and UK which are exemplars of the world in developing such incubation programmes to enhance the growth of regional economies and foster new firm development.

However, incubation programmes are not always successful. Evidence on the effectiveness of incubation programme are not conclusive. For example, Colombo and Delmastro (2002) pointed out that "in spite of the diffusion of science parks in Europe, whether they have been successful or not in supporting new technology-based firms still is unclear". Some even concluded that science parks in specific context might be a 'technology fantasy' (Bakouros, Mardas, and Varsakelis, 2002). There is little systematic research and empirical study on the relationship between critical success factors and the performance of incubation programme. How to improve the success rate of the technological incubated entrepreneurs has become a critical issue. While there is a considerable amount of research on the performance of incubation programmes (Mian, 1996, 1997; Sherman, 1999; Lindelöf, Löfsten, 2002; Siegel, Westhead, and Wright, 2003; Bigliardi, et al, 2005), few studies have examined related performance-driven factors.

In this paper a framework of critical success factors for incubation programme is constructed, based on a literature review. The model contains three categories; environment-related, incubator-related and incubatee-related factors. The model is evaluated by case studies in the Hong Kong Science & Technology Parks Corporation. The model has practical implications for incubation operations. It hopefully will also lead to future research of more incubated companies.

2. Literature review

According to the National Business Incubation Association, business incubation is "A business support process that accelerates the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services. …