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The social profitability of business incubators: a measurement proposal

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  • Eloy Sentana
  • Reyes González
  • José Gascó
  • Juan LLopis

Abstract

Public business incubators are services placed at the disposal of original, generally newly-created projects, to which physical accompaniment, supervision and location are offered at prices below market value. They have as their aim to help set in motion and consolidate these firms during the stages in which they are weaker. The ultimate goal consists in favouring the generation of innovative firms, inducers of high-quality jobs, which can diversify the local business fabric, thus becoming a key tool in local development. The present paper provides a methodology to study the economic – but above all social – impact of business incubators, based on the examination of 40 from the 42 incubators existing in the Valencian Community (a Spanish autonomous region with five million inhabitants). Data analysis allows us to state that, although business incubators are not economically profitable since they need financial aids and public investment to start operating, they do have social profitability, insofar as the activity developed by entrepreneurs permits to provide public administrations – via taxes – with returns exceeding what was invested in these incubators. It has been determined that 2.8 euros (which can be applied to a variety of social areas) are collected via taxes for each euro spent to start them up.

Suggested Citation

  • Eloy Sentana & Reyes González & José Gascó & Juan LLopis, 2017. "The social profitability of business incubators: a measurement proposal," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 29(1-2), pages 116-136, January.
    • Handle: RePEc:taf:entreg:v:29:y:2017:i:1-2:p:116-136
    DOI: 10.1080/08985626.2016.1255436
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    Cited by:

    1. Rosado-Cubero, Ana & Hernández, Adolfo & Blanco Jiménez, Francisco José & Freire-Rubio, Teresa, 2023. "Promotion of entrepreneurship through business incubators: Regional analysis in Spain," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    2. Photchanaphisut Pattanasak & Tanyanuparb Anantana & Boontarika Paphawasit & Ratapol Wudhikarn, 2022. "Critical Factors and Performance Measurement of Business Incubators: A Systematic Literature Review," Sustainability, MDPI, vol. 14(8), pages 1-39, April.
    3. Arta Antonovica & Javier Esteban Curiel & Beatriz Rodríguez Herráez, 2023. "Factors that determine the degree of fulfilment of expectations for entrepreneurs from the business incubator programmes," International Entrepreneurship and Management Journal, Springer, vol. 19(1), pages 261-291, March.
    4. Klofsten, Magnus & Lundmark, Erik & Wennberg, Karl & Bank, Nata, 2020. "Incubator specialization and size: Divergent paths towards operational scale," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    5. Cristina Lin-Lian & Carmen De-Pablos-Heredero & José Luis Montes-Botella & Susana Lin, 2022. "The Influence of Entrepreneurial Motivation on the Valuation of Socioeconomic Benefits of Business Incubator Functions," Economies, MDPI, vol. 10(11), pages 1-21, November.
    6. Kameliya Deyanova & Nataliia Brehmer & Artur Lapidus & Victor Tiberius & Steve Walsh, 2022. "Hatching start-ups for sustainable growth: a bibliometric review on business incubators," Review of Managerial Science, Springer, vol. 16(7), pages 2083-2109, October.
    7. Angelo Cavallo & Antonio Ghezzi & Alessandra Colombelli & Gian Luca Casali, 2020. "Agglomeration dynamics of innovative start-ups in Italy beyond the industrial district era," International Entrepreneurship and Management Journal, Springer, vol. 16(1), pages 239-262, March.
    8. Migliavacca, Milena & Patel, Ritesh & Paltrinieri, Andrea & Goodell, John W., 2022. "Mapping impact investing: A bibliometric analysis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 81(C).

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