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Fostering Entrepreneurship Through Business Incubation: The Role and Prospects of Postsecondary Vocational-Technical Education (Report 1: Survey of Business Incubator Clients and Managers) (MDS-893)

V. M. Hernandez-Gantes, R. P. Sorensen, A. H. Nieri

This report presents the results of a national survey of entrepreneurs in business incubation and business incubator managers. The purpose of the survey was to examine the collective experiences of entrepreneurs, business incubator managers, and postsecondary institutions involved in educational and training strategies aimed at fostering entrepreneurship. The experience of entrepreneurs in business incubation-an environment where business owners are nurtured and provided with opportunities to develop entrepreneurial skills-was viewed as an appropriate medium to gather rich insights about entrepreneurship. The study derived from the need to describe broader education and training systems in tune with current skills demanded in the workplace and recent education reforms seeking to establish creative partnerships to improve the preparation of workers for alternative career paths (Bailey, 1994; Stasz, 1995).

Through business incubation-a strategy to foster community development by nurturing the development and growth of new small firms-community development agencies, universities, two-year colleges, and a combination of sponsors seek to promote entrepreneurial talent and jobs, revitalize local economies, and assist in the development of technology. Thus, in collaboration with the National Business Incubation Association (NBIA), a national survey of business incubator managers and clients was conducted to develop a shared understanding of entrepreneurship development in business incubation, and to identify opportunities for two-year colleges to develop entrepreneurship as an alternative career path for individuals with diverse backgrounds.

Survey results were consistent with previous research on business incubation (Campbell, 1987; Lichtenstein, 1992; National Council for Urban Economic Development, 1985; Smilor & Gill, 1986). The results showed a limited contribution of two-year colleges in business incubation and suggested a number of implications for improvement of these connecting activities. Two-year colleges appeared to be providing primarily commercial space at low cost and clerical support to entrepreneurs rather than consulting services and strategies aimed at fostering entrepreneurship. Limitations in management arrangements (e.g., managers' spending considerable time in fundraising activities and building maintenance) seemed to prevent managers from focusing on the broader mission of business incubators, that is, to provide an environment conducive for development of entrepreneurship through consulting services, and through education and training activities. Further, although two-year college-sponsored incubators appeared to be supporting a slightly more diverse population of entrepreneurs in comparison to university-sponsored incubators, both managers and in-house clients were predominantly represented by Caucasian males. Minorities and women continue to be disproportionately represented, both as entrepreneurs and in incubator management positions.

Five entrepreneurial characteristics were identified by managers and entrepreneurs. These include personal characteristics (intrinsic motivation, hard work values), technical preparation, business and management skills, the capacity to utilize available resources and information to take advantage of business opportunities (entrepreneurial vision), and interpersonal skills to communicate effectively with others and to understand the social impact of business development. Also, entrepreneurs and incubator managers recognized the need for education and training opportunities to assist in business development and growth. However, the contribution of two-year colleges to the business and technical preparation of entrepreneurs was disproportionately low in comparison to the contribution of four-year colleges and graduate schools. Two-year community college faculty and resources appeared to be underutilized in comparison to university faculty who contributed to a greater extent in incubators sponsored by universities and other organizations in the community.

Several opportunities to improve services provided during the start-up, survival period, and expansion and growth stages were identified. Business and technical services, and access to information systems and technology are but a few of the opportunities to support entrepreneurs through their business development. The implications for two-year community colleges lie in the revision and implementation of an expanded role to prepare students for a productive school-to-work transition, help individuals ease the transition to business owners, support the needs of the established local industry, and become proactive players in the development of the community. In the context of current education reforms, the implications are presented in four areas: (1) integration of entrepreneurship content into two-year curriculum activities, (2) opportunities for exposure and exploration of entrepreneurial environments, (3) connecting activities with secondary institutions, and (4) integration of entrepreneurship content in secondary curriculum activities.

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