Business incubation in China: effectiveness and perceived contributions to tenant enterprises

Purpose: Business incubation is an important strategy to foster entrepreneurship and innovation; it has gained enormous popularity in China since the mid-1990s. The purpose of this paper is to provide insights into the perceived value of business incubators from the perspective of start-up ventures and draw implications for future incubation programmes in China. Design/methodology/approach: The research was based on a sample of 61 incubator tenants from well-established business incubators in Shanghai. A questionnaire including Likert-type scales was developed to collect feedback/comments on incubator services as well as the perceived benefits of the incubation programme. Findings: True to their names, business incubators in China have added practical value to start-up ventures by providing wide-ranging services and tangible/intangible benefits via the incubation programme. However, compared to their counterparts in North America and Europe, the Chinese incubators are still deficient in some important aspects; for example, counselling and mentoring services. To achieve better incubation outcomes, it is crucial that the incubator managers be competent, qualified and highly skilled. Originality/value: Most of the previous studies on the effectiveness of business incubation in China were undertaken using a case-based approach or focusing on the contributions of the business incubator to local economic development. The findings in such studies cannot be generalized. This paper provides empirical evidence to confirm the previous findings.