The role of business incubators in the development of entrepreneurship

Business incubators are programs designed to support the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts. Business incubators, work with any small business at any stage of development, not only startup companies. Many business incubation programs partner with their local to create a "one-stop shop" for entrepreneurial support. Business incubators are spread all over the world.

 At the beginning of the XIX century, the number of business incubators amounts to 3000 in the world. According to the development of business incubator scientists divided it into the first and the second wave. The world wide countries as USA and West Europe countries are included to the first wave, China, Russia, India, Latin America’s, Israel to the second wave. |"1,6.11 According to the USA experiment, it is reported the number of business incubators in North America reached 1000-1200. If it is remembered in 1980 only 12 business incubators worked in the USA and Canada, currently they are known as one of the leading countries in business incubators activity.

Appearing of new startup companies are connected with technology parks dedication to startup and early-stage companies. Research and technology parks, tend to be large-scale projects that house everything from corporate, government or university labs to very small companies. At the time, North America estimated that nearly 40 %of technology incubators, 30% companies which work in different sphere of all incubation programs and another 30% are sponsored by different institutions. 75 % of this incubation programs are funded by regional or national governments as part of an overall economic development strategy and the rest 25% are for-profit ventures. Approximately 19% of business incubators which are sponsored by academic  institutions, including colleges, universities, and technical colleges of incubators has an aim to support the individual in opening the new company . In the United States, 70% of incubators use cash operating subsidies. Generally 47 % of enterprises live at the expense of the business incubator. The benefits from these companies influence to the development of the country. For example: incubator which is situated in Texas “Austin Technology IncubatorATI” supported the startup companies. This company’s aim is to develop innovative clean energy. It opened nearly 3000 high paid companies and raises its capital over $600 million. The company has a long­ standing track record in helping companies develop innovations from concept to investment. The graduate clients from the incubator have been helped to raise more than $1, 5 billion in investor capital. A development center technology incubator, which is located in Atlanta, Georgia, is one of the leading companies in producing advanced technology. In 2012, 64 companies were sponsored with $ 174 mln, it was opened nearly 4900 high paid companies and raise its capital over $784 million [3, p.11].

EU states are in the second place after among business incubator. In the first place are GB, Germany, and France. It is very important for the startups to follow examples, experiments of such incubator. Business Incubator was opened in Germany later inthe 1980. With major efforts for the last 15 years now it is one of the leading incubators in the world. There are 42000 workplaces, 5000 technological companies are participated in sites.

In many countries, incubation programs are funded by regional or national governments as part of an overall economic development strategy. Incubators are funded by the subsides of the state. North Westphalia Technology center estimates rents and contributions customers make up 22% of the income of incubators, 38% brings the fee for services or grants, and 40% subsidies for cash transactions [1]. Model of Germany incubators can be presented in example of well-known technological center Chemintz (Technische Universitat Chemintz) of Enterprise term of this incubator is limited to 5 years, and if it is necessary it can be prolonged for 3 years, but the client can stop renting at any time. Finland holds the leading position on entering the small enterprise to incubators in Europe . Helsink Biotechnology Scientific Park one of the leading incubator which works in the sphere of biotechnology is funded by Finland State, Technical University, associations, EU states. The state allows researchers to apply their ideas in commerce that is, offering intellectual property rights. In developed countries where was the first wake of business incubator are supported and funded by public funding. The main task of the incubator to promote the economic development of the country. The third wave of innovative ideas pouring into the business world! For example, the U.S. and Europe countries.

Let us consider experience of China, that was laid to the second wake of Business With the help of State funding there were more than 400 incubators were appeared. As the companies funded by the Ministry of Science and Technology, all the companies just serve technological company. Main feature incubators of China is their service volume . For example on the incubator of Shanghai specifies activity more than 300 companies. These the companies are opened by the scientists who got the knowledge in West Europe and North America.

Chinese business incubatory used foreign i.e. USA experience based on the national program “ChinaTorchProgram”. The program is funded by State and it’s aim to place incubatory in the territory of the country. In 1992 - 2012 number of enterprises that comes in the incubator grew from 19 to 89 in China. The capital of enterprises, that applies activity of incubators, according to 1992 estimates $ 120 000, and it grew to $ 410 000 in 2012. But, according to official facts just some incubation can have a profit because during the 3-4 years just 1/3 leaves the incubatory. Other companies become poorer or prolonged the term[2, 6.7-10]. About the business incubators in Russia one knew long ago, but more and more first-hand, inthe literature. Only in theearly nineties ofthe last century, a group of employeesofthe Department of Labor and Employmentof the Government of Moscow, traveling abroad to explore western experience employability of unemployed for the first time had the opportunity to visit such "incubators" and learn about the experience of their work. The idea immediately gained a lot of supporters. After summarizing the foreign experience in 1992, there was a first in Moscow and the Russian business incubator. Federal programs adopted by the State at the moment are aimed at continuing increase in the rate of growth of small, medium enterprises and individual entrepreneurs and have several directions.

The advantage of Russia as well as all developed and advanced state participated in all waves. Unlike the United States from the European Union states that the incubators compile 70 percent in the first wave, the second and third wave is completely evolved. It is because, in the program, which began Ministry enough attention was not paid in 2005. As a result, Russia lags behind the advanced countries [2, p.11]. 

 Technology business incubation (TBI) was formed in 2010. The program of technology business incubation is implemented and supported by the Ministry of Industry and New Technologies of the Republic of Kazakhstan and is aimed at helping the initiators of innovative projects to promote the market. From the 2004 the program involves industrial parks in the regions; Karaganda “Saryarka”, Uralsk “Algoritm” Almaty “Almaty regions techno park”, Satpaev technopark, Astana “Astana regions techno park”, Ust-  Kamenogors “East Kazakhstan regions techno park”, Shymkent “South Kazakhstan regions techno park”.

In 2012 for the program were submitted 153 entries. For technology business incubation, 20 projects were selected. Average cost of technology business incubation, a single applicant was 12 mln tenge, in comparison with 2011 2 times, 2010 three times more . Table shows that in 2011 40, in 201220 entries were submitted .

 Table. Selected projects on each branch of business incubation technology


Title of branch 2012 number











National Information 5

76 976 470


41 575 343







Industrial agriculture 4

36 115 232


67 341 581


Ecology 1

21 208 462


12 549 400


Building 2

17 180 979


46 591 600


Machine Industry 2

28 323 017


13 126 000


Energy 1

16 768 730


45 004 253


Chemical industry 1

7 899 660




The others 4

36 595 233


18 854 883


Total: 20

241 067 783


245 043 060


"National Innovation Fund" (JSC


companies and

technoparks. The

  "National Innovation Fund") technology business incubation

From the selected 20 entries 13 is from Astana, the project accounted for 150 875 847 tenge, 5 from Almaty- 74 364 865 tenge, one from South Kazakhstan whose project estimated to - 7 899 660 tenge and one from East Kazakhstan who got 7 981 411tenge. [1, 6.2].

From 2005 there are 51 business incubators work in Kazakhstan, but this number includes small business centers and main activity of 21 business incubators is to lease the manufacturing and service in the areas [3, B.13].

To the startup incubator:

  • implementation of the technical operation of the building (the building), a business incubator;
  • market analysis;
  • record keeping, typing documents, printing and photocopying, a selection of documents from the regulatory framework on a specific topic and others;
  • recruitment; 
  • consultations to form a strategy to promote business;
  • search investment;
  • performance of different thematic workshops, seminars on business issues and the psychology of success;
  • postal and secretarial services;
  • advisory services for tax, accounting, credit, legal protection and development of the enterprise, business planning, development and training;


  1. Ministry of Technology and Industry of RK. JSC “Innovative Industry of Science and knowledge”http// of business incubation 2012: Information for potential participants.
  2. The program technology of business incubation in supporting the innovation of Kazakhstan, Astana,
  3. "To develop entrepreneurship resources" JSC “Damu” A report on the state of entrepreneurship (SME) in the Republic of Kazakhstan on the 1st half of 2012, official site. kz.
Year: 2013
City: Almaty
Category: Economy