Growth and evolution of high-technology business incubation in China

Abstract

The business incubator is an innovative organizational entity, with origins in the United States, designed to provide a supportive environment for new ventures. This innovation was adopted by Chinese government in the late eighties as part of a plan to address market failure in innovation and to win the global game of technological competition. The successful diffusion and subsequent reinvention of this innovation in China has resulted in one of the most successful business incubation movements in Asia that is second only to the United States in the number of business incubators. Chinese incubator models initially tended to be monolithic in form due to the heavy influence of government as innovation gatekeeper guiding their creation and operation; however local demands, such as the need to attract well educated overseas Chinese students back to the homeland, have led to indigenous incubation approaches within these broad parameters as manifested in the second generation of incubation approaches. This contribution traces the growth and evolution of the two phases of business incubator growth in China, taking into consideration determinants of incubator success, along with the role of government, and the macro-environment for new venture creation. Related incubator level dimensions are discussed followed by the various indigenous genres of incubators that have evolved in China in response to local needs. The study includes a critical assessment of the successes and the challenges that lay ahead of the incubator movement in China. Policy and managerial implications are put forth at the conclusion of the study.