The Development and Diffusion of Business Incubation Capabilities in Five Emerging Markets in South America

Abstract

Business incubation encourages new business formation and offers the potential to improve emerging market economies. Business incubation is a system of routines for creating and improving survival rates and growth of new businesses. Incubation originated in developed economies and is now spreading globally to emerging markets. Incubators are designed to reduce start-up costs and train entrepreneurs in business practices while connecting them to markets and assisting in securing financial backing for the new ventures. For this qualitative study I interviewed managers from business incubators, government agencies, nongovernmental organizations and entrepreneurship educators from Peru, Bolivia, Chile, Argentina, and Brazil. This study integrates incubation practices in these five countries with organizational learning and diffusion of innovation theories to propose a model of stages of development for incubation practices in emerging markets. The model describes how national systems of business incubation develop and differentiate due to unique cultural, political, and economic contexts.