Assessing government-supported technology-based business incubators: evidence from China

This study examines the effectiveness of government-supported incubator programmes in China. Findings highlight the importance of private-sector involvement in the incubators’ governing body. Previous literature acknowledges the importance of government intervention in the entrepreneurial incubation process to overcome innovation market failure. However, factors that potentially influence the effectiveness of government-supported incubators have not been explored. Using surveys and follow-up interviews with managers of tenant venture firms, as well as administrators of four sampled incubators in Shanghai and Chongqing, we find that government-supported business incubators effectively provide physical infrastructure, general resources such as administrative support, and access to university resources. Except for the incubator that has been managed by business professionals, government-supported incubators are found to be rather ineffective in offering counselling, external private financing, and networking services to incubated tenant firms, which suggests that government agencies and officials lack business and technological expertise. The implications of the effectiveness of government-driven incubator programmes and avenues for future research are discussed.