A Tool to Measure Performance and Impact of Business Incubators

Transcription

1 A Tool to Measure Performance and Impact of Business Incubators ISBE RAKE FUND Arnaud Drapier, UKBI James Chaffer, ra-systems

2 A Tool to Measure Performance and Impact of Business Incubators Arnaud Drapier, Research Manager UK Business Incubation James Chaffer, Technical Consultant ra-sytems Abstract: Objectives: UKBI has developed an accreditation scheme in order to benchmark business incubation environments against best practice. Via the development of an online tool, this work proposes to extend the remits of Inspire with the objective of: - Supporting business incubation practitioners in providing quality and tailor made support - Informing practitioners, stakeholders as well as policy and decision makers on the added value and socio-economic impact of business incubation through the collection, analysis and sharing of aggregated longitudinal information. Approach: different stages were identified for the completion of this practical project: - Market research - Design and development of an online tool - The production of an end report detailing the need for and challenges of assessing the performance and impact of business incubation environments as well as the functionality of the online tool. Results: This practical work provides the current accreditation scheme with additional services: - Strategic and operational use for business incubation managers: the accreditation scheme is based on an aspirational framework and business incubation environments will be invited to be assessed on a regular basis. It is intended that they will have online access to current and past evaluation reports as well as to longitudinal data determining their socio-economic impact. Business incubation managers will use the information for updating their business plans, strategies and more generally as evidence of the quality of the support provided. They will use it as a dashboard to be used for internal monitoring and staff review purposes. - Informative tool on the long term added value of business incubation: based on the information regularly collected, the tool will also provide the business incubation industry as well as regional and national stakeholders, policy and decision makers with evidence of the longer term impact and added value of business incubation. Implications: The ultimate outcome of this project is to highlight, improve and share information about the role of business incubation in the development firms with high growth potential. The project explores the support provided by business incubation in starting and growing entrepreneurial firms and ways to maximise it so as to adequately answer their business and R&D needs. Value: No tool exists in the UK to provide concise longitudinal evidence of the added value of business incubation as a process for stimulating enterprise and innovation. It is anticipated that the end product will fill this gap. Key words: business incubation; performance; socio-economic impact; accreditation; exploitation of knowledge 2

3 1. Introduction and Aim of the Project Where business incubation environments establish their own internal system for assessing their performance, the methodology and indicators used are often limited to quantitative data which relies heavily on requirements and remits of the initial sources of funding (e.g. ERDF, HEIF, etc). As such they fail to demonstrate the true added value of business incubation. In 2004, and upon request from its members, UKBI the lead body for business incubation in the UK identified a set of best practice standards and added value indicators (the Business Incubation Development Framework). Based on an aspirational model, the framework recognises that business incubation environments, like any small business, move through different phases of development over time during which a set of core principles and elements (common to all business incubation environments) are implemented and strengthened. A methodology and a matrix for the assessment of business incubation environments were developed in 2009 to form a national accreditation scheme (Inspire ) with international recognition and potential. The scheme is currently limited to a benchmarking exercise undertaken individually for business incubation practitioners. Through the development of an online tool facilitating the benchmarking of business incubation environments but also the measurement of their performance and impact, the ultimate outcome of this project is to highlight and share information about the role of business incubation in the development of knowledge based firms. The online tool will explore the support provided by business incubation to starting and growing new entrepreneurial firms and ways to maximise it so as to adequately answer their business and R&D needs. Over time, it is anticipated that the collection and analysis of longitudinal data will also provide evidence of the different roles of business incubation as: - An agent for knowledge exploration and examination, i.e. support of incubatees whose product/service is under development - A catalyst for knowledge exploitation, i.e. companies grow because their products meet market demand, businesses are visible and credible in the market place. As developed further in this report, UKBI will also inform business incubation practitioners and stakeholders as well as policy makers on the impact of business incubation. It is assumed that the role of business incubation as a knowledge broker should also be demonstrated. 2. Methodology This project looked at the development of a practical online tool. The methodology for the completion of the end product was therefore, different from traditional business research and involved the following stages: Stage 1: Analysis of demand for the use of the online tool and identification of the target market. Based on in house secondary (literature review) and primary data, stage 1 also involved consultation with - through the submission of a semi open questionnaire of a small sample of key business incubation practitioners and stakeholders. Stage 2: Design of the online tool. Taking the findings from Stage 1 into consideration, stage 2 detailed the content and use of the online tool, including: Objectives and methodology in use for the accreditation scheme - Template questionnaires and evaluation reports necessary during the accreditation process - The detail of the assessment method - The web application site structure and functionality - The website design and page layout. 3

4 Stage 3: Development of the web application and market testing. The web application was developed in accordance with the structure designed in Stage 2. Whilst doing so, the developer ensured that the web application was: - Tested fully as the various elements were developed, ensuring that the functionality was correct, - Conform to all current web standards and accessibility recommendations, - Cross-browser and cross-platform compatible. Stage 4: End report detailing functionality of the online tool. Stage 4 was the end report including: - Summary of the findings of the market research: identified challenges when assessing business incubation environments and analysis of demand for the use of the online tool - Detail of the functionality of the online tool - Detail of dissemination of finding. 3. Background In practical and policy terms, business incubation is an invaluable tool for stimulating enterprise and developing businesses with growth potential. Studies (Lalkaka 1996, 2000; 2006; Hannon & Chaplin, 2001, Infodev 2006) highlight the wider role and added value that business incubation environments can play, by accelerating the growth and increasing the survival rates of their client businesses but, nationally, very little has been undertaken regarding business incubation s return on (public) investment in the long term. Evaluative research on business incubation exists outside the UK (e.g. EBN s EC-BIC Accreditation and On-going Evaluation; NBIA s Benchmarknig Survey) and very often consists of intermittent and regular performance reviews, based on key performance indicators (KPIs) which are limited to public service agreements (PSAs), i.e. quantitative data which relies heavily on requirements and remits of the initial sources of funding (e.g. ERDF, HEIF or other national equivalent sources of funding). The purpose is not so much to evaluate the impact of business incubation environments against best practice but more to monitor their progress against fixed targets and project deliverables as set up in their business plans/contracts. In other cases (e.g. EU s 2002 Benchmarking Exercice), benchmarks have been established, but the collection of data was taken at one point in time across a wide sample of business incubation environments (cross sectional analysis), hence making the evaluation of the impact of business incubation over time difficult (longitudinal analysis). To fill the aforementioned gap, and upon request from its members, UKBI has identified a set of best practice standards and added value indicators for business incubation (See Business Incubation Development Framework figure 1 below). A methodology and a matrix for the assessment of business incubation environments has also been developed to form a national accreditation scheme with international recognition and potential (Inspire ). Appendix 1 gives an overview of the current indicators and methodology used. The tool, however, is currently limited to ad hoc/ individual benchmarking activity. By adapting the current process with an online tool allowing storage and treatment of information capacities, new activities for Inspire will be generated that will better meet the needs of the business incubation industry - practitioners, stakeholders as well as policy and decision makers - nationally and eventually internationally. The online tool will include a: - Learning tool for management teams - Strategic and operational tool for business incubation managers - Informative tool on the long term added value of business incubation. 4

5 Further detail and the demand for these are discussed in section 4. Figure 1: Business incubation Development Framework (BIDF) Foundation Phase Policy Control & Management Core Principles Selection Policy Strategies Skilled Team Nature and types of change in client companies & Business Incubation Environment Socio-economic Impact Long term Adding Value Direct impact Indirect Impact THE BUSINESS INCUBATION ENVIRONMENT Core Elements Infrastructure Operations Processes, People Leading Edge Phase Environmental influences Developing Phase Source: UKBI, Analysis of Demand for the Online Tool and Identification of Challenges This section begins by highlighting the latent demand (types and levels) for Inspire s proposed additional uses. For the online tool to be efficient and correspond to the needs of its end users, the section also discusses the factors as well as the methodological challenges to consider when assessing performance and impact of business incubation environments. Findings in this section are based on a literature review looking at examples of performance and/or impact studies -indicators and methodologies (Sternberg, 1994; RESI 2001; European Commission 2002; Hannon and Chaplin 2001; Hamdani 2006; UKBI 2003, 2009; EBN 2010). The data is then complemented with primary data collected with a sample of practitioners all familiar with the current Inspire process. 5

6 4.1 Validity of the Online Tool Because it does not involve storage and treatment of information, the accreditation scheme is currently limited to an individual ad/hoc benchmarking exercise during which the business incubation strategy, operations and resources are assessed against a set of recognised best practice standards. Through in house market research UKBI has identified the opportunity for developing additional purposes on the back of the current accreditation scheme. These were described and discussed with a sample of key practitioners all familiar with the benchmarking tool. Below is a summary of the findings. Purpose 1: Learning tool for management teams Business incubation managers and their staff will be able to use results of the benchmarking exercise to position their business incubation environment against best practice. People consulted felt that this was in fact the primary purpose of the tool as it currently stands. One respondent reported the results of the benchmarking exercise as driving the activity of their recently appointed incubation manager. There was consensus amongst respondents that one essential objective of the exercise is to support the future training and development strategy of staff. Continuous Professional Development programmes as well as case studies (based on weaknesses and corrective action) could be developed on the basis of the assessment. As highlighted in the literature review (see next subsection), one major issue for the online tool to be meaningful was the need for the contextual factors to be taken into consideration during the assessment. Purpose 2: Operational and management tool Business incubation managers will also be able to use the qualitative and quantitative information stored: - As a form of a dashboard to be used for internal monitoring and staff review purposes (operational purpose) - For updating their business plans and more generally as qualitative and quantitative evidence of the quality of the support provided (strategic purpose). To summarise the views of respondents, it would be a natural development from the current tool to leave the data in a form which can then be utilised by management on an on-going basis (e.g. periodic reviews, board meetings) to both target and measure performance across every area assessed. It will be crucial for the online tool to use metrics that support the long term operational and strategic development of business incubation environments (rather than a narrow focus on short term metrics as it is the case). One respondent suggested the following applications of the dashboard at strategic level: - Update of business plan - Examination of strategy implementation - Tactics effectiveness Purpose 3: Informative tool Policy makers at national and/or regional level will be able to access regular surveys on the impact of business incubation based on the aggregated data collected. The data from the surveys will be anonymous 6

7 Looking at the UK, generally, it is expected that the provision of information based on a nationally adopted framework would support the activity of policy makers, with limited efforts from themselves and allow them to work closer with the business incubation sector to maximise economic impact within their geographic areas. Finally, individual and aggregated longitudinal information would also be useful for useful comparative evaluations. The choice of indicators and benchmarks will therefore be crucial for such evaluations to be meaningful as the same data could be seen by policy makers from within and outside the UK. One respondent also mentioned the potential for collecting and comparing data from different geographical groups (e.g. northern Europe VS southern Europe). Equally, comparisons across differentiators should be possible (e.g. technology led VS mixed use business incubation environments, business incubation environments in fully developed ecosystems VS business incubation environments in developing ecosystems, etc). The next section highlights a number of factors and methodological challenges that Inspire in general and the online tool in particular need to consider for a meaningful and efficient delivery. These are based on a literature review. Primary data from the practitioners taking part in this study is also included where appropriate. 4.2 Factors to Consider Distinction and additionality between performance reviews and impact assessment studies. A general definition of impact assessment is one of a process that determines if planned goals and objectives were actually achieved/ will be achieved. Going further, the World Bank, for example, states that: An impact evaluation assesses changes in the well-being of individuals, households, communities or firms that can be attributed to a particular project, program or policy. In comparison, performance reviews focus only on one stakeholder, i.e. the business incubation environment. As such their main activity is monitoring. Monitoring the performance of a business incubation environment through regular reviews is necessary for the organisation and performance review and impact assessment studies operate in synergy. However, a performance review is not sufficient to evaluate the true and long-term impact of a business incubation environment. Multiple stakeholders analysis/ sources of information. Methodologies and indicators of performance reviews and impact assessments identified through the literature review are wide and varied. However, there is general agreement on the fact that a 360 degree perspective is necessary when assessing the impact (added value) of business incubation over time. The multiple stakeholders include: - The business incubation environment (including managers, Board), - The client companies, - The local and regional community (including investors). According to RESI (2001), one common criticism of impact studies is that the methodology used to calculate the impact of business incubation fails to consider a control group of companies that would allow a comparative study between companies of similar characteristics, one being located within the business incubation environment assessed and the other outside the business incubation environment. Finding data to assimilate a control group has, according to RESI, proven to be a difficult task due to the lack of data on start-up dates and performances of small businesses. However it can be argued that the real impact of business incubation comes after graduation and that the on-going relationship with and utilisation of entrepreneur/business incubation graduate resources not to mention the tracking of their growth is where the true and unique (added) value of business incubation lies. 7

8 Different types of effects. The impact of business incubation comprises two different types of effect (Sternberg, 1994; Defreville & Volpi, 2004): - Direct effects - Indirect effects These effects may be positive or negative, expected or unexpected, and not always quantifiable. This has consequences in the methodology (measure, source of information, scoring system) to adopt for the assessment as detailed further in this report. Classification according to client base. It is crucial to remember that sponsors/sources of funding influence the goals and modus operandi of business incubation environments (Lalkaka and Bishop, 1996; Hannon & Chaplin 2001, UKBI, 2003): the mission, objectives and business targets therefore, need to be taken into consideration when reviewing the impact of business incubation environments. Equally, findings from the literature review suggest that some form of classification is necessary for the interpretation of the findings. The impact assessment study in Maryland (2001) for instance, states (not surprisingly) that business incubation environments aimed at empowering or revitalising a neighbourhood will have a far different impact on local economies than a for-profit, technology incubator. Different types of categorisation exist. Albert and Gaynor (2001) have demonstrated that business incubation environments were initially classified (and in many cases still are) according to their legal status (private/public). Classifications have then been broadened and can, for instance, include location, objectives, configuration, business model, lead sponsors and type of client companies. Most of them take the following into consideration: - Strategy - Client base (sector focus) - Sponsors/funders In addition to the above classification, Inspire also takes into consideration the stage of development of client companies at entry, for three primary reasons: - Business needs differ according to the stage of development of the business (pre start-up, start-up, early stage) - Business support evolves during the period of business incubation with consequences on the operation of the business incubation environment - Interpretation of findings based on indicators: job creation, for instance, is not an appropriate indicator if the incubator targets established businesses (jobs have been created before its selection into the incubator). In this case, business survival and growth will be more relevant. Stage of development of the business incubation environments. Past research by UKBI estimates that five to ten years are necessary for developing a business incubation environment to the point where it is successful at making a real and measurable impact. Equally, best practice (UKBI & Rowe 2003) demonstrates that five to seven years are needed for business incubation environments to establish themselves and eventually become self-sustainable. As a consequence, the online tool will need to include business incubation environments at any stage of their development but only findings of, say, organisations at least five years old should be taken into consideration when measuring its true impact and return on investment. Enabling environment. As mentioned earlier, the measurement of the added value of business incubation is the sum of two types of effect (direct and indirect) and involves the three main stakeholders of business incubation (the management team, the clients and the local community): 8

9 An incubator will be just one component of the overall economic development required to maintain a strong business community (Meeder, 1993: op cited in: UK Incubation Impact Assessment Study, Hannon & Chaplin 2001). Equally, business incubation environments during their life cycle have been found to rely highly on their surrounding economic and social environment which, by nature, is constantly evolving and changes from one region to another. 4.3 Challenges The previous section has highlighted essential factors which the assessment of business incubation environments has to take into consideration for the interpretation of data to be valid: classification of business incubation environments, mission and objectives of individual business incubation environments, contextual factors and minimum age of the business incubation environment. It also identified the stakeholders who will need to be involved in the assessment: core management team, tenants and, ideally the local community (public and private investors, policy makers, business support environment and control group of businesses). The literature reviewed for this study and findings from the questionnaires identified a number of shortfalls/gaps of past impact assessment studies (Lalkaka & Bishop, 1996; Hannon & Chaplin, 2001; RESI, 2001; Albert and Gaynor, 2001; Defreville & Volpi 2004) such as: - Lack of control group - Failure to identify a financial model that calculates/evaluates the financial and social return via an accepted and commonly used methodology - Failure to identify a method of assessing the long term impact of links between the incubator and its surrounding environment - Failure to define a single methodology that encompasses the different types of business incubation environments. The complexity of the concept of business incubation (sum of tangible and intangible assets) and the gaps identified above suggest a methodology combining longitudinal and cross sectional study (i.e. study of the same group of people at more than one point in time: incubator manager, tenants and non-tenants/control group) and cross sectional studies (i.e. study of a set of people at a single point in time: stakeholders forming the surrounding environment of the incubator). In addition, reviews of the local economic context (statistics, secondary quantitative data, analysis of RES) should also be undertaken. Partly quantitative, the assessment will however, include a qualitative approach through face to face questionnaires and group discussions (on site visits) and case studies. Longitudinal analysis Qualitative approach Core business incubation team, governing body, tenants Quantitative approach Core business incubation team, tenants Control group Cross sectional analysis Sponsors, sources of funding Graduates External stakeholders (e.g. RDAs, LAs, HEIs) As outlined in Appendix 1, Inspire is taking the various factors and methodological challenges highlighted in this section into consideration. As detailed in the next section of this report, the online tool developed through this project will add a new dimension to the existing accreditation scheme by allowing longitudinal analysis of the collected data. The remainder of this report provides an outline description of the online tool, including a summary of the structure and functionality of web application. 9

10 5. Outline Description of the Online Tool (Web Application) 5.1 Structure and Functionality The questionnaire system developed by the subcontractor (software company) taking part in this project is divided into four distinct integrated modules, each performing a specific function in the overall configuration. These modules are described below: Questionnaire Designer. This module allows the end-user complete freedom to create and modify questionnaires. This involves the maintenance of individual questions, answer lists, questionnaire sections and questionnaire layout. It also includes the ability to design the flow of a questionnaire, via the creation of trigger questions. Questionnaire Publisher. This module controls the online publication of questionnaires. It allows the selection of a specific questionnaire and Inspire candidates to publish this questionnaire. Publishing a questionnaire to a candidate makes that questionnaire available for completion via the Online Questionnaire Wizard. This module also controls the import of completed questionnaire data, and allows the monitoring of any incomplete published questionnaires. Online Questionnaire Wizard. This module is available via a dedicated UKBI Inspire website domain, with access to the questionnaires controlled by secure username and password entry. Once logged in, a candidate is then guided through the completion of the questionnaire, with answers being provided by standard tick-boxes, check-lists, drop-down lists and text boxes. Navigation of the questionnaire is controlled by simple previous and next buttons, with options for the candidate to indicate whether a question needs to be completed at a later date, or cannot be answered. Progress is saved at the completion of each individual question, allowing the candidate to stop at any point and pick up the questionnaire later on without losing any of the previous answers. Once the questionnaire has been completed, the questionnaire answers are then flagged as available for import via the Questionnaire Publisher module. Questionnaire Data Analysis. This module allows the detailed analysis of the data captured by the Online Questionnaire Wizard. The data can be analysed by questionnaire type, individual question and date range, to provide aggregate, average and summary values for any area of interest over specific periods. This data can be easily exported to Excel, to allow more detailed analysis, reporting and dissemination of trends and benchmark values to candidates. Additionally, questionnaire responses can be analysed on an individual candidate basis, providing a means of assessing a candidate s suitability for the programme. Finally, a scoring matrix has been incorporated into the definition of the questionnaire, allowing the automatic grading of individual candidates according to specific criteria. 5.2 Design and Layout The modules have been designed in such a way as to allow complete flexibility for the user, in terms of both designing questionnaires and analysing the resulting data. The structure and content of the questionnaires is completely open-ended, allowing for future tailoring to meet changing needs, ensuring that the tool can always be kept in line with future policy and reporting requirements. 10

11 The layout of the Online Questionnaire Wizard has been designed in such a way as to simplify the process of completing the questionnaire online. This has been achieved with the use of common control elements, such as drop-down combo-boxes and check-lists, whilst the navigation options are simple, guiding the user through the relevant questions and sections, whist ignoring any irrelevant sub-sections. The design of the underlying data has been structured in a way as to allow the easy extraction of any data, and the Questionnaire Data Analysis module allows the user to easily define query parameters, providing a completely flexible tool for the analysis and publication of historical data to fit any future need. 5.3 Conformity to web standards and accessibility recommendations The Online Questionnaire Wizard web application has been developed using the industry-standard Microsoft s Internet Server Application Programming Interface (ISAPI), and is being hosted by Microsoft s Internet Information Services (IIS) web server. This creates HTML pages with embedded java, and stores the question and response data in an Extensible Markup Language (XML) format that conforms to World Wide Web Consortium (W3C) standards. The web application has been tested in a number of standard web browsers, including Microsoft Internet Explorer, Mozilla Firefox, Apple Safari and Google Chrome, on a variety of operating system and hardware environments, to ensure that it is accessible by the widest variety of users. Consideration was also given to screen layout, font size, colour schemes, images and interface components, to ensure optimum accessibility. 11

12 6. Conclusions and Dissemination Building upon its current accreditation scheme for business incubation environments and with the technical support of ra-information Systems, funding from RAKE has allowed UKBI to develop an online tool which will facilitate the sharing and exchange of knowledge about the true added value of business incubation amongst practitioners, stakeholders and policy makers. As a result of the project and in addition to its original/ initial benchmarking service - Inspire can now be used as: I. A learning tool for management teams: Business incubation managers and their staff will be able to use results of the benchmarking exercise to position their business incubation environment against best practice II. An operational and management tool for incubation managers: Business incubation managers will also be able to use the qualitative and quantitative information stored during the assessments - As a form of a dashboard to be used for internal monitoring and staff review purposes (operational purpose) - For updating their business plans and more generally as qualitative and quantitative evidence of the quality of the support provided (strategic purpose). III. An informative tool by practitioners and stakeholders: academics, policy makers and other business incubation stakeholders at national and/or regional level will be able to access regular surveys on the impact of business incubation based on the aggregated data collected via Inspire. The data from the surveys will be anonymous. Ultimately, it is anticipated that the collection and analysis of longitudinal data on business incubation according to best practice (which the online tool will make possible) will demonstrate the extent and remits of business incubation as a process for stimulating enterprise and developing early stage businesses with high growth potential. As such, Inspire will be acting both as an agent for knowledge exploration and examination as well as a catalyst for knowledge exploitation. The online tool will shortly be added to the portfolio of services provided by UKBI and therefore, will be promoted through all UKBI marketing channels: website, newsletter, UKBI national conference, events, seminars and workshops and word of mouth. UKBI s Board of Directors (i.e. key and influential business incubation practitioners and stakeholders) will also be requested to promote the tool. A consequent part of UKBI s membership is composed of representatives from research centres, universities and other HEIs. UKBI will make sure that these members are aware of the purpose and use of the end product. Information workshops will take place where the benefits of Inspire and the long term added value of business incubation will be detailed. UKBI is also a part of an EU funded consortium project (ACHIEVE MORE) which consists of pan- European collaboration of investors, business and technology incubators and ICT clusters. One of the aims of the project is to share knowledge and best practice in business incubation, including showcasing of best practice tools. If successful, the Inspire tool will be promoted through the aforementioned EU project. Promotion of the tool will be sought at EU Commission level also. UKBI will also: - Present the project at regional workshops organised jointly by the ESRC, Barclays, BIS and ISBE - Present the on-going work at the annual ISBE conference in November 2009 and the final product at the annual ISBE conference in Make findings available to the ESRC s business channel on ESRC Society Today (EST) - Make findings available to other organisations such as NESTA, Innovation UK. 12

13 UKBI will also recognise the ISBE RAKE fund in any presentations or publications arising from an award Appendices Appendix 1: Inspire : outline description of the current methodology and scoring system Appendix 2: List of people consulted Appendix 3: Basis for discussion with sample selected 13

14 Appendix 1: Inspire : outline description of the current methodology and scoring system Currently, the methodology and scoring system for Inspire are mainly paper based and as follows: I. Best practice assessment: the operational and strategic management of business incubation environments are assessed against a set of core principles and stage of development as defined in the Business Incubation Development Framework. Maximum scores differ for each stage of development II. Performance and impact assessment: the performance and socioeconomic impact of business incubation environments are assessed against a set of generic performance and impact indicators III. The replies given to the questions (and evidence brought during the on-site visit) determine which stage of development business incubation environments are benchmarked against: e.g. a business incubation environment at the Foundation stage will not be able to reply satisfactorily (or provide satisfactory evidence) to some of the questions/ indicators IV. The interpretation of ratings is using an overall numerical rating assessment matrix, based upon both quantitative and qualitative data. How each criterion is scored on the point scale is a crucial element of the matrix. However, the development of business incubation environments is not only reliant on their specific characteristics (e.g. stage of development, industry sector focus) but also on the contextual factors and local circumstances that are existing and developing alongside. Judgement values made by UKBI during the visit when assessing Best Practice will be essential to the final, overall scoring. The table below gives a view of the framework according to which business incubation environments are currently benchmarked. A total of 93 indicators are being used to review business incubators against best practice as established by the Business Incubation Development Framework. Benchmarks have been established based on in house and external research. As no benchmark have been established for the UK yet, it is anticipated that these will be reviewed in the medium term following results from data collected through the online tool. Currently, areas explored during the assessment include: OPERATIONAL AND STRATEGIC ASSESSMENT AGAINST BEST PRACTICE: INDICATORS A. SELECTION POLICY B. GRADUATION POLICY C. BUSINESS INCUBATION (PROCESS) STRATEGY AND DELIVERY Broad components of a comprehensive business incubation package Incubation strategy Client Needs Assessment 14

15 Coaching Monitoring Client networking Business Support and Development Services Financial support Seed Fund activities Advisory Board Facilities and Shared Admin Support Dealflow Financial Management Institutional and industry links Program evaluation D. SKILLED BUSINESS INCUBATION TEAM Governance Management team ASSESSMENT OF PERFORMANCE AND IMPACT: Jobs created (incubatees and graduates) Cost per job created Average employment in graduate companies Average wage paid for jobs in graduate firms Clients survival (incubatees and graduates) Capital raised Graduate revenues Innovation and R&D % of total running costs covered by public subsidy 15

16 Appendix 2: Experts consulted Name Position Organisation Saint John s Innovation Centre Ltd, David Gill Managing Director Cambridge Andrew Stevenson Director - Enterprise & Policy University of Lincoln (Sparkhouse) Ross Clarke Incubation Manager Innovation Centres (Ltd) Scotland Amanda Parris Business Centres Manager Rotherham Metropolitan Borough Council StravianaKofteros Director Diogenes Business Incubator (Cyprus) Geoff Riley Chief Executive Staffordshire and Black Country BIC 16

17 Appendix 3: Basis for discussion with sample selected UKBI has recently been awarded a grant by the Institute for Small Business and Entrepreneurship (ISBE) in order to design and develop an electronic tool for the effective accreditation and measurement of performance and added value of business incubation environments in supporting the commercialisation and growth of business ventures. In essence, the aim of the project is to include additional purposes to the current tool by developing a web platform and therefore upgrade the methodology of the current Inspire exercise (UKBI s benchmarking and accreditation service). One objective is to allow different levels of information to assessed practitioners and to policy makers. Part of the work is to establish levels and types of demand for the use of the upgraded Inspire tool. Many thanks in advance for your contribution Please return completed profiles to [email protected] Name and position of respondent Address Phone Web address 17

18 1 Learning Tool for Management Teams: please develop whether, according to your experience and knowledge, there would be demand from practitioners and their staff for using results of Inspire for training and development purposes. If NO, please detail why. If YES please develop the potential uses derived from the learning tool 2. Operation Management Tool: please develop whether, according to your experience and knowledge, there is demand from practitioners for using the data stored (after assessments via Inspire ) as a dash board for the daily management of their centre. If NO, please detail why. operational management tool. If YES please develop the potential uses derived from the 18

19 References Albert & Gaynor (2001) Incubators Growing Up, Moving Out: A Review of the Literature Defreville & Volpi (2004) Les conditions d Efficacité des Pepinières d Entreprises Department of Communications, Information Technology and the Arts Australia (2001) Evaluation of the BITS Incubator Program and the Intelligent Island Incubator European BIC Network (2010) The Smart Guide to Innovation- Based Incubators (IBI) European Commission (2002) Benchmarking of Business Incubators Hamdani (2006) Conceptualizing and Measuring Incubation Infodev (2006) Innovation and Entrepreneurship in Developing Countries: Impact Assessment and Lessons learnt from the Infodev Network of Incubators Lalkaka (1995) Best Practice in Business Incubation: Lessons (yet) to be Learnt Lalkaka (2000) Assessing the Performance and Sustainability of Technology Based Incubators Lalkaka & Bishop, (1996) Business Incubators in Economic Development: An Initial Assessment in Industrializing Countries OECD (1997), Technology Incubators: Nurturing Small Firms RESI (2001), Maryland Incubator Impact Analysis Sternberg (1994) Assessment of Innovation Centres: Methodological Aspects and Empirical Evidence from Western and Eastern Germany Hannon & Chaplin (2001) UK Incubators: Identifying Best Practice UKBI (2003) Benchmarking Framework for Business Incubation UKBI (2009) Business Incubation Development Framework (BIDF) UKBI & Rowe (2003) Financing of UK Incubators and Incubation Programmes UnirCoop, vol2, (2004) Modèle d Intercoopération sur les Incubateurs de Coopératives 19