The Entrepreneurial Ventures Social Interaction with the Business Incubator Management and the Relationship's Impact on Firm Performance

Examines the impact of the social capitalprovided by an incubator manager and support staff on the success ofhigh-technology entrepreneurial firms in the United States and Finland that arelinked to university business incubators. The goal of an incubator is to assistfirms during their growth and development phase. The research examines whetherthe social structure of the university business incubator will positivelyimpact the firm's acquisition ofbusiness knowledge, productivity, andtechnological capabilities. A social capital construct containing threevariables (social interaction, incubator network ties, and relationshipquality) is used. The study was based on closed-end questionnaires and open-ended interviewsof twelve incubator managers in the United States, four incubator managers inFinland, and the CEOs/founders of thirty-seven firms residing in incubators inthe United States and fifteen such firms in Finland. It was found that the increased social capital increases the level ofbusiness learning for the firm as a result of the effects of interaction withthe incubator manager; the more contact, the more learning occurs; an increasein the quality of the relationship with the incubator manager increases thelevel of knowledge acquired by the firm. Also found that new product development, cost of sales to customers, andtechnical competence were not affected by the knowledge acquired from theincubation manager. Significantly, the reputation of a firm improves as aresult of the interaction with the incubator. Reputation enhancement may be onereason why firms enter and remain in incubators. Concludes that an incubatormanager can most usefully share business knowledge, rather than technicalknowledge. (TNM)