Business incubation and the network resources of start-ups

Abstract

The focus in this paper is to study whether business incubation can provide entrepreneurial start-ups with critical network resources. We make a distinction between incubator-provided network resources and start-ups’ “own” external network resources that are unrelated to the incubator context. Although there has been an increasing number of studies examining incubated entrepreneurs’ network resources, to our knowledge, this is the first study that explicitly compares incubator-provided network resources and start-ups’ own external network resources. Analyzing the results from qualitative interviews with start-up tenants at a technology incubator in Bergen, Norway, we find that network resources acquired by the start-ups’ own efforts (rather than network resources facilitated by an incubator) were most critical in all phases of enterprise development. They played a crucial role in terms of idiosyncratic (non-generic) knowledge generation as drivers of innovation, catalysts for financial contributors, and as a means to organizational reputation and market access. Nevertheless, internal networking with other incubator firms and external network resources facilitated by the incubator were also helpful and complementary, but they were more generic in nature and provided limited idiosyncratic resources. We also found that incubator network resources tend to have traits similar to those of identity-based network resources because they are not mainly governed by economic interests, but at the same time, they are not path-dependent. Inter-tenant network resources, therefore, can have nonbinding weak-ties properties and provide non-redundant information.