Examining the Relationship Between Technology Business Incubators and Incubatees in Northern and Western Regions of India

Abstract

The measurement and optimisation of incubator performance is a contentious and regularly discussed issue among various stakeholders in business incubators. Numerous scholars have investigated various facets of business incubators, including their performance; yet, the literature remains deficient in certain areas. The performance of business incubators encompasses the performance of the incubatees, and both are mutually dependent for their survival and growth. The primary objective of the present study is to investigate the dyadic relationship between Technology Business Incubators (TBIs) and Incubatees. The study investigates the induction of the incubatees via the use of the selection criteria, different services and facilities offered by the business incubators to their incubatees, and the incubator sectoral differentiation. The present research empirically studies the different relationships between the exogenous (i.e., selection criteria, managerial skills, services, and facilities) and endogenous (i.e., incubator’s performance) constructs of the study. Using the Resource-Based View as the theoretical framework, it examines the influence of various incubator capital resource groups – organisational, human, and physical – on the sustained competitive advantage of the business incubators and how the different sub-resource groups affect their respective capital resource groups. The study uses a mix of descriptive, exploratory, and causal research designs. Out of 75 TBIs, respondents from only 34 expressed their willingness to participate in the study. One hundred responses were collected from the respondents – 41 from the incubator’s managerial team and 59 from the incubatees. Various measures of descriptive statistics and three inferential statistical techniques: Exploratory Factor Analysis (EFA), Partial Least Squares – Structural Equation Modelling (PLS-SEM), and Kruskal-Wallis test, were used to analyse the collated data. Through EFA, a varying number of sub-resources were identified for the different resource groups: four sub-resources for the organisational capital, i.e., incubator’s incubatee selection criteria; three for the human capital, i.e., incubator’s staff’s skills; ten for the physical capital, i.e., five each for incubator services and incubator facilities; and five for the sustained competitive advantage, i.e., incubator’s performance. Through PLS-SEM, empirical evidence was found that all the different incubator capital resource groups, to varying degrees, impacted the sustained competitive advantage of the business incubators, and various sub-resource groups also differently impacted their respective capital resource groups. Physical Capital in the form of Facilities (0.328) and Services (0.285) has the strongest influence on the business incubator’s sustained competitive advantage, followed by Organisational Capital (0.254) and Human Capital (0.232). Through the Kruskal-Wallis test, except for only two factors, i.e., Incubator’s Basic Facilities and Incubator’s Outreach Facilities, no sectoral differences were found. The study outcomes will provide valuable insights for the diverse stakeholders of TBIs and contribute to advancing theoretical understanding in this area. Using the study results, the researchers would be able to identify which sub-resource groups make higher and lower contributions to the overall strength of the construct within each resource group. Using the study’s findings, the incubation managers can streamline their incubation delivery and conserve the different scarce incubator capital resources. Using the study’s results, policymakers can strengthen existing programs or create new ones to support the continued skill development and capacity building of incubatees and incubation managers.