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Hatching Prosperity Together: A Dynamic Assessment of Relationships in Business Incubation in New Zealand

The concept of business incubators has attracted much attention in recent years, both as descriptive of an increasingly important phenomenon and as an effective public intervention in the economies of lagging cities, regions, and countries. However, little empirical research has explored this phenomenon.  To better understand what type of relationships contribute to the performance of newly hatched business ideas, the following study applies a social capital and proximity lenses to explore relationships in business incubation and how they contribute to start-up performance.  Through the use of open-ended questions this study carried out semi-structured interviews with 25 total participants of the New Zealand incubation system. These in-depth interviews allowed participants to express their perspectives on business incubation.  This study revealed that there are tensions that exist in the incubator environment which are as much about the relationship between the two central participants - incubator personnel and entrepreneur - and other stakeholders, as between the two central participants themselves. These tensions, if not aligned, restrict incubating entrepreneurs from gaining advantage from business incubators. Additionally, the study reveals that the role of geographical proximity in business incubation is surprisingly of less importance than other forms of proximity.