Start-EU-up! Lessons from international incubation practices to address the challenges faced by Western European start-ups

Despite the continued efforts of policy makers, Western European start-ups are still struggling. Further, as questions are being raised about the effectiveness of incubators, there is a growing call for incubators around the world to learn from each other and improve themselves. Our paper enables Western European incubators to learn from their foreign peers by qualitatively exploring the challenges faced by Western European start-ups and the practices that incubators around the world use to address these challenges. Our study thereby takes a two-step approach. First, using the components of the entrepreneurial ecosystem to structure data coming from 90 qualitative interviews with Western European entrepreneurs and incubator managers, we explore five interrelated challenges that constrain the ability of Western European start-ups to grow into high-impact businesses. In the second part of our study, we conduct a total of 191 interviews in Silicon Valley, the greater Boston area, Israel and Australia to identify practices that incubators in these regions use to address the five challenges identified in the first study. Our findings suggest that, rather than addressing the underlying institutions that cause challenges in the entrepreneurial ecosystem, incubators provide symptomatic solutions by creating an environment that protects start-ups from unfavorable institutions. Accordingly, we conclude that existing incubators have only limited potential to strengthen entrepreneurial ecosystems, and we end our paper with a call for a new generation of ‘systemic incubators’ that aim to transform or create institutions to address the institutional challenges that constrain start-up activity.