It is widely acknowledged that micro-firms, together with small- and mediumsizedenterprises (SMEs), contribute economic value to their countrys Gross DomesticProduct such that they are considered to be the backbone of their countrys economy.However, small- and micro-firms face tests emanating from a lack of resources, access tofinance, shortage of databases, increase in market competition, and a lack of entrepreneurialeagerness, capacity, and expertise. This research study examines to what extent Gozo, asmall island, can strengthen its economic development and competitiveness by offeringits micro-firms a business incubation centre. A micro-firm employs up to nine employees.The research stance applied is grounded theory methodology as advocated by Charmazs(2006) constructivist approach. The use of interpretive and qualitative in-depth interviewsis undertaken with nine owner-managers of micro-firms where one could note that thespirit of entrepreneurship of these owner-managers is high. Mistakes committed by theowner-managers past management endeavours signals if there is the need of a businessincubation centre in Gozo, a centre that will offer support to new business start-ups ona small island, with around 30,000 inhabitants. This research study came up with verysignificant findings. New micro-firms established in Gozo are after innovation and newmarkets. Their owner-managers have the drive and the insight to innovate and are eagerto move forward. New firms are ready to look for capital so that their venture can competemore effectively, notwithstanding that banks have become very restrictive when providingfinance. In most cases, micro-firms are politely denied finance as they are deemed too unsafeto lend to. EU funding necessitates that micro-firms have expert advice in the completionof EU funds applications; most micro-firms in Gozo cannot afford to employ a specialistfor such a job. Owner-managers of micro-firms hold that Gozos necessities should belooked at in a different manner from Malta as they consider the lead time to import rawmaterials to be much longer than their counterparts in Malta. Micro-firms managers areseeking a facility in Gozo that is able to provide them with managerial training relating tothe recruitment of personnel, business planning, marketing capability, new investments,and organisation. Owner-managers seek to address their innovation eagerness by having abusiness incubation centre in Gozo that caters for research and development programmes.