At the heart of an entrepreneurial ecosystem : examining the main constructs of the business incubator StartUp Nijmegen : a case study

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At the heart of an entrepreneurial ecosystem

Examining the main constructs of the business incubator StartUp Nijmegen

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A case study

Name: Collin Janwarin Subject: Master’s thesis

Master: Entrepreneurship & Innovation Date: 18-08-2017

University: University of Amsterdam Student number: 11148217 Supervisor: Roel van der Voort

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Statement of Originality

This document is written by Collin Antoni Janwarin who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Acknowledgements

Finishing this research would not have been possible without the support of a number of people. First, I would like to Roel van der Voort, my supervisor, for guiding me through the entire research process and providing feedback whenever necessary. We both know that I had my ups and downs along the way, so thank you for not giving up on me and making sure I always had proper guidance when needed. Second, I would like to thank Dick Bos and all the entrepreneurs at StartUp Nijmegen for welcoming me in their community, sharing their experiences and in-volving me in their journey to become a better version of themselves. You guys are honestly among the most inspiring people I have ever met; just keep doing what you are doing! Third, I would like to thank my friends and family for supporting me – knowingly and unknowingly – each and every day. Last but not least, a special thank you to Ida van de Kamer. Thank you for believing in me, thank you for who you are as a person and thank you for pushing me and giving me energy when needed.

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Abstract

Three years ago, the municipality of Nijmegen published its “Economic Innovation Agenda”, acknowledging that the city’s economic development is more and more a joint responsibility of (local) government, entrepreneurs, educational institutions and research institutions. Already seeing tremendous growth in the amount of registrations in the Trade Register of the Chamber of Commerce, the Municipality intends to work towards this objective through the implemen-tation program “Strengthening the Startup Ecosystem”. At the heart of this ecosystem, we find the business incubator StartUp Nijmegen.

This research dives deeper into the main constructs, derived from current literature, that form the foundation of a business incubator; ultimately answering the question: What are the elements of the business incubator StartUp Nijmegen that are most important to its entrepre-neurs? By utilising various qualitative and quantitative research methods, this study aims to serve a two-fold goal. On the one hand, the more practical goal of this is to provide StartUp Nijmegen with detailed insights on how entrepreneurs perceive the incubation process that StartUp Nijmegen offers them; ultimately leading to practical implications to improve their performance as central entity in Nijmegen’s entrepreneurial ecosystem. On the other hand, the present study examines whether believes in current literature are present in this real-life case; substantiating existing knowledge or providing insights to criticise and/or expand what is cur-rently researched and discussed.

The findings show that, though playing a critical role in facilitating the incubation pro-cess, physical infrastructure is perceived as the least important construct (3,46 out of 5). This number indicates that the relative importance of this construct is slighter lower but is still per-ceive as valuable to their development by incubatees. Business support services and Network support & Mediation are perceived as virtually equally important constructs (respectively 4,04 and 4,07 out of 5). Though, in case of the latter, it is important to note that this construct seems to be relevant to incubatees in a later stage in their lifecycle.

Apart from these findings, this study identified the emergence of two different personas in the incubator’s community. Moreover, an underlying layer of the three constructs mentioned earlier was found. This psychological aspect, namely the feeling of belonging, lies at the foun-dation of what the community of incubatees is all about.

Key words: business incubators; business incubation; entrepreneurial ecosystems; physical in-frastructure; business support services; networking support; mediation; feeling of belonging.

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1. Introduction

“Entrepreneurs are the current and future solution for sustainable global economic develop-ment”, is the title of Murray Newlands’ article when he wrote for Forbes Magazine (Newlands, 2015). In addition, more and more evidence is presented to highlight the role of society as a whole in creating an environment in which entrepreneurship can flourish. Literature refers to this concept as “creating an entrepreneurial ecosystem” (Stam, 2014). The term “ecosystem” emphasises the importance of interaction and balance between different (social) actors. Alt-hough current literature does not apply one specific definition of the concept, the following description seems widely applicable: “the entrepreneurial ecosystem as a set of interdependent actors and factors coordinated in such a way that they enable productive entrepreneurship” (Stam, 2015, p. 1765). Besides criticising current literature for the lack of one accepted defini-tion, Stam (2014) mentions that research is only concentrated on describing the elements of ecosystems instead of indicating their relative importance, therefore lacking any form of causal depth. Since it is clear that entrepreneurs are put centre-stage in the entrepreneurial ecosystem literature, the World Economic Forum (WEF) commissioned a study on an important question that looks at entrepreneurs at an individual level: Which pillars of an entrepreneurial ecosystem do entrepreneurs view as most important to the growth/success of their companies? (Foster et al., 2013). However, the results of their research are published on a rather high abstraction level, making it difficult to apply these findings in terms of practical implications. Moreover, these findings are put into perspective by stating that human capital and options for financial support largely depend on the structure of underlying institutions related to either education or financial markets; making it difficult to conclude that these are fundamental success indicators of an entrepreneurial ecosystem (Stam, 2014).

1.1 Scope and demarcation

This research aims to dive deeper into Nijmegen’s entrepreneurial ecosystem and, in particular, the business incubator StartUp Nijmegen that plays a key role in this ecosystem. Three years ago, the municipality of Nijmegen published its “Economic Innovation Agenda”, acknowledg-ing that the city’s economic development is more and more a joint responsibility of (local) government, entrepreneurs, educational institutions and research institutions (Municipality of Nijmegen, 2014). One of the concrete objectives of the Agenda is to stimulate entrepreneurship, giving a strong impetus to a) starters that want to root in the region and b) the further develop-ment of entrepreneurs that are already based in Nijmegen and the region (from self-employed without employees to small and medium-sized enterprises). Already seeing tremendous growth

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in the amount of registrations in the Trade Register of the Chamber of Commerce, the Munici-pality intends to work towards this objective through the implementation program “Strength-ening the Startup Ecosystem” (Municipality of Nijmegen, 2016b).

The goal of the implementation program is to strengthen the opportunities and possibil-ities for successful entrepreneurship in Nijmegen and the region. One of the key objectives of this program is the realisation of the business incubator StartUp Nijmegen. Hackett and Dilts (2004, p. 57) define a business incubator as “a shared office space facility that seeks to provide its incubatees […] with a strategic, value-adding intervention system (i.e. business incubation) of monitoring and business assistance. This system controls and links resources with the objec-tive of facilitating the successful new venture development of the incubatees while simultane-ously containing the cost of their potential failure”.

Only started since April 2016, StartUp Nijmegen is steadily growing as an interactive community of entrepreneurial actors. The foundation of the incubator had already been laid by the CVJO1_{. Dick Bos (StartUp Nijmegen’s initiator) aimed to take things to the next level,}

making sure that this incubator would be more than “just a place to work” by offering incubatees a combination of different facilities, services and activities (extensively outlined in Section 3.2). The social context and the way incubatees perceive this context are the main topics of interest here. Conducting a case study, the purpose of this study is to understand and describe the envi-ronment that creates value for SUN’s incubatees, ultimately answering the following question:

What are the elements of the business incubator StartUp Nijmegen that are most important to its entrepreneurs?

The objective of this research is two-fold. On the one hand, the more practical goal is to provide StartUp Nijmegen with detailed insights on how entrepreneurs perceive the incubation process that StartUp Nijmegen offers them; ultimately leading to practical implications to improve their performance as central entity in Nijmegen’s entrepreneurial ecosystem (section 6.3). Moreover, a model of StartUp Nijmegen, substantiated by theory and validated by qualitative and quanti-tative dated, is developed during the research process. This model is the epiphany of the deliv-erables of this study, summarising the results and conclusions in a visual manner. On the other hand, the present study examines whether believes in current literature are present in this

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life case; ultimately leading to either providing empirical evidence to substantiated existing knowledge or providing insights to criticise and/or expand what is currently researched and discussed in the light of business incubation and entrepreneurial ecosystems. Assumptions, based on an extensive review of literature (section 2), are presented in section 3.3 and are dis-cussed in the light of this study’s findings in section 6.2.1.

1.2 Research methods

This research utilises a mixed-method to gather insights used to answer the research question presented above (Vennix, 2011; Creswell, Plano Clark, Gutmann, & Hanson, 2003). Combin-ing multiple qualitative and quantitative research methods allows for a thorough understandCombin-ing of the social context that is under investigation; gathering insights that applied methods inde-pendently of one another would not be able to harvest. For a detailed description of research methods, visit section 4.2. The process of triangulating different research methods is outlined in section 4.3

1.3 Research process

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This introduction is followed by an extensive literature on entrepreneurial ecosystems (to a lesser extent) and business incubators (in particular). Next, a comprehensive profile of StartUp Nijmegen is presented. In this section is outlined how StartUp Nijmegen interprets the three main constructs of business incubators (derived from literature review); physical infrastructure, business support services and networking support and mediation. At the end of this section (section 3.3), assumptions about what is expected to be found during this study are formulated, including a model that graphically represents these assumptions. Again, the reviewed literature serves as a foundation of these assumptions. Thereafter, the Data & Method- and Results-sec-tion are discussed sequentially. Finally, the research quesResults-sec-tion will be answered in by drawing conclusions based on gathered data. To mark the end of this thesis, the assumptions presented in section 3.3 are discussed in the light of findings, practical implementations are presented and the limitations of this research and possibilities for further research are examined.

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2. Literature Review

This literature review provides an overview of the current body of knowledge on entrepreneur-ial ecosystems (in general) and business incubators (in particular), ultimately leading to the abstraction of the three main constructs that together form the foundation of business incuba-tors; physical infrastructure, business support services and networking support and mediation.

2.1 Entrepreneurial Ecosystems

Originally, the term ecosystem comes from biology and was first defined as “a dynamic com-plex of plant, animal and microorganism communities and their non-living environment inter-acting as a functional unit” (Mace, Norris & Fitter, 2012, p. 19). However, when this line of thought is applied to building a community in which startups can grow and flourish, it happens to be about individuals and institutions that are interconnected and relate to one another. A so-called “entrepreneurial ecosystem” in which actors interact to stimulate entrepreneurial activity, is defined in multiple ways in existing literature and the concept still lacks a shared understand-ing. To get a grip on this rather abstract concept, what entrepreneurial ecosystem are is dis-cussed, before taking a closer look at the main topic of interest; business incubators.

2.1.1 What is an entrepreneurial ecosystem?

It was not up until 1985 that entrepreneurship research was mainly concerned with personal traits of entrepreneurs instead of the environmental factors that play a role in the life cycle of starting ventures (Suresh & Ramraj, 2012). Stating that businesses do not develop and grow by themselves and noting that firms interact with their surrounding environment (suppliers, cus-tomers, financiers, et cetera), James Moore first mentioned the term “ecosystem” in a business-related context (Mason & Brown, 2014). Since then, policy makers started to realise that “easy-money-based” forms of support simply do not cut the deal when it comes to assisting startups. Although they might be helpful in early stages, they are less effective later on when companies tend to have a need for networking, peer-based support and customer interaction (Brown, Ma-son & MawMa-son, 2014).

One of the first to dive into infrastructures that could potentially support and/or constrain entrepreneurship was Andrew van de Ven (1993), arguing that entrepreneurship is not strictly about the characteristics and actions of individual entrepreneurs. Instead, he proposes a way of thinking that states that “the process of entrepreneurship is a collective achievement requiring key roles from numerous [actors] in both the public and private sectors” (Van de Ven, 1993, p. 1). In this line of thought, various authors started exploring a new approach, namely the entre-preneurial ecosystem approach.

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Although the concept has received substantially growing attention over the last few years, researchers fail to formulate a widely shared definition (Stam, 2015). Dividing it into two separate parts, we see that it is ultimately about “entrepreneurship” and some sort of “eco-system”. Entrepreneurship can be broadly defined as the process by which individuals create new value for society through the discovery, evaluation and exploitation of new goods and services (Shane & Venkatamaran, 2000). However, literature on entrepreneurial ecosystems tends to narrow this down to “high growth start-ups” instead of looking at entrepreneurship as simply “being your own boss” or “pursuing self-employment” (Stam, 2015). It is often claimed that the former contributes to productivity growth, creates new employment and increases in-novation (Mason & Brown, 2014). However, as stated by Baumol (1996), productive entrepre-neurship is not necessarily about “the high potentials”. He found, through empirical evidence, that networks of ambitious, creative and innovative startups could lead to productive entrepre-neurship as well. In this line of thought, “productive” should be defined as “exploring oppor-tunities to discover and evaluate new goods and services and exploit them in order to add as much value as possible” (Stam & Spigel, 2016, p. 2). The “ecosystem” component of the con-cept is not so much related to its biological origin. Instead, it indicates that entrepreneurship does not take place in a vacuum but that it results from a community of interrelated actors (Stam & Spigel, 2016). More specific, this means that this approach focusses on the restricting and enabling factors of the (social) context in which entrepreneurial activity takes place.

As highlighted by Daniel Isenberg (2010), a big pitfall for policy makers is that they fail to address entrepreneurial ecosystems as a whole. Instead, they tend to isolate certain elements and try to perfect these elements to stimulate entrepreneurship. Although this approach might have a (temporary) positive effect on entrepreneurial activity, it is proven that it does not lead to sustainable improvements over time. Instead, he offers policy makers nine principles for creating an entrepreneurial ecosystem (see Table 1). These principles represent clear statements regarding how to address this rather abstract concept.

It is clear now that an entrepreneurial ecosystem consists of a comprehensive set of actors, institutions and resources which play an important role in influencing entrepreneurial action (Stam, 2014). Putting entrepreneurs at centre stage, the concept of entrepreneurial eco-systems distinguishes itself from other related concepts by the likes of industrial districts, clus-ters and innovation systems (Stam & Spigel, 2016). Where those concepts put their focus on economic and social structure, the entrepreneurial ecosystem concept emphasises the key role

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fact that entrepreneurs play such a key role in building and sustaining an entrepreneurial eco-system is support by Feld (2012). He provides four postulates – which together form his famous “Boulder Thesis” – to guide entrepreneurial communities. Feld (2012, p. 25), describes a frame-work that consists of: 1) entrepreneurs that lead the startup community, 2) leaders that have long-term commitment to the community, 3) a community that must be inclusive of anyone who want to participate in it and 4) a community that must have continual activities that engage the entire entrepreneurial stack.

Recently discussed by Mason and Brown (2014) is the “dynamic nature” of the entre-preneurial ecosystem concept, meaning that a) each ecosystem emerges under a unique set of conditions (they do not just emerge anywhere) and b) the time dimension is often ignored in current literature on entrepreneurial ecosystems. This is partially debated by Isenberg’s (2010) as well through his prescriptions for creating an entrepreneurial ecosystem (Table 1). Based on

Table 1 - Isenberg’s nine prescriptions for creating an entrepreneurial ecosystem

Principle Description

Stop emulating Silicon Valley SV evolved under a unique set of circumstances; SV is fed by an overabun-dance of technology and technical expertise; SV does not just breed local ventures, it attracts ready-made entrepreneurs from all around the globe. Shape the ecosystem around

lo-cal conditions Tailor ecosystem around local entrepreneurship dimensions, style and cli-mate; Foster home-grown solutions, based on realities of own circum-stances, resources, geographic location and/or culture.

Engage the private sector from the start

Governments cannot build ecosystems on their own; Start with a candid conversation – advice on reducing structural barriers and formulating entre-preneur-friendly policies and programs; Design in self-liquidation – the Yozma-model (Israeli venture capital strategy).

Favour the high potentials In case of scarce resources, focus first on ambitious, growth-oriented entre-preneurs who address large potential markets.

Get a big win on the board Even one success can have a surprisingly stimulating effect on an entrepre-neurship ecosystem – by igniting the imagination of the public and inspiring imitators; Early, visible successes help reduce the perception of entrepre-neurial barriers and risks, and highlight the tangible rewards; Over-celebrate the successes – be bold about it

Tackle cultural change head-on Although difficult to achieve, reality has proven that it is possible to alter social norms about entrepreneurship in less than a generation (e.g. Chile, Ireland); Media can play an important role not just in celebrating wins but in changing attitudes.

Stress the roots Do not flood entrepreneurs with easy money but expose them to the rigors of the market as early as possible (develop toughness and resourcefulness); Weed out opportunists

Don’t over-engineer clusters;

help them grow organically Though entrepreneurial clusters do exist naturally and can be important el-ements of an ecosystem, there is only questionable anecdotal evidence that governments can play a major role in breeding them; Governments should reinforce and build on existing and emerging clusters rather than attempt to create entirely new ones

Reform legal, bureaucratic, and

regulatory frameworks Critical to thriving entrepreneurship; Often the first and exclusive focus of governments, even though they have a more comprehensive, holistic role to play; Legal and regulatory reforms often take many years to push through, and entrepreneurship frequently occurs in their absence; Reform won’t be truly effective in the absence of all the other principles mentioned earlier Source: Adapted from Isenberg (2010, pp. 3-10)

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prior research, Mason & Brown (2014) concluded that entrepreneurial ecosystems often arise in places that a) already have a “fertile soil” (meaning that valuable resources are already in place), b) have supporting technology and industry conditions (i.e. market developments, tech-nology exploitation, creation of new opportunities) and c) are in the presence of one or more institutions that function as incubators to foster future entrepreneurs.

2.1.2 Different models to address entrepreneurial ecosystems

When one reviews the existing literature on entrepreneurial ecosystems, it quickly becomes clear that multiple models to represent the concept coexist. Although it is not the goal of this study to develop a model of Nijmegen entrepreneurial ecosystem as a whole, Appendix A pro-vides insights on different models to address entrepreneurial ecosystems.2

Worth mentioning in the light of this literature review, are two key findings of the World Economic Forum (WEF). In their report “Entrepreneurial Ecosystems Around the Globe and Company Growth Dynamics”, Foster et al. (2013) aimed to provide ground-braking insights by asking the question: Which pillars of an entrepreneurial ecosystem do entrepreneurs view as most important to the growth/success of their companies? Based on their research, they con-clude that accessible markets, human capital/workforce and funding & finance are most im-portant to entrepreneurs. Moderately imim-portant are support systems/ mentors/advice, govern-ment/infrastructure/regulatory framework, and education & training. Major universities as cat-alyst and cultural support are indicated as least important.3_{Although the WEF (Foster et al.,}

2013) found what entrepreneurs indicate as “most valuable to the growth of their businesses”, Stam (2014) puts these findings into perspective citing an article by Acemogly, Johnson and Robinson. In their article, Acemogly et al. (2005) state that human capital/resources and options for financial support largely depend on the structure of underlying institutions related to either education or financial markets. Therefore, Stam (2014) concludes that it cannot be stated with certainty that the pillars mentioned by Foster et al. (2013) are the fundamental success indica-tors of an entrepreneurial ecosystem.

2.2 Business Incubators

Business incubator research started off back in the early eighties when Temali and Campbell (1984) published the results of ‘Business Incubator Profiles: A National Survey’. Since then, the topic of incubators-incubation quickly received growing attention and the body of research has substantially developed ever since. Mason & Brown (2014) concluded that the presence of

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one or more institutions that function as incubators is one of the conditions that positively affect the development of entrepreneurial ecosystems. However, when doing a systematic review of available literature on the topic, Hackett and Dilts (2004) realised that this the concept of busi-ness incubators lacked a clear and consistent overview of what was already out there and what was yet to be discovered.

2.2.1 What is a business incubator or business incubation?

The US National Business Incubation Association (NBIA), the world’s leading organisation advancing business incubation and entrepreneurship, defines the process of business incubation as “a business support process that accelerates the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and ser-vices” (NBIA, n.d., p. 1). They state that the main goal of a business incubator is to make sure that successful firms will eventually leave the incubator financially viable while standing on its own feet, all through the help of incubator management and its network of contacts. Although other (inter)national institutions (e.g. ELAN 4_{, EBN}5_{) put an emphasis on the ‘output’ of}

incu-bators (namely the growth & development of startups through the process of incubation) rather than the physical elements, most institutions agree upon the fact that it is about an integrated environment that aims to support starting businesses.

In this line of thought, the Centre for Strategy & Evaluations Services (CSES) defines a business incubator as “an organisation that accelerates and systematises the process of creat-ing successful enterprises by providcreat-ing them with a comprehensive and integrated range of support, including: Incubator space, business support services, and clustering and networking opportunities” (CSES, 2002a, p. 9). It is about providing various business-related services through a ‘one-stop-shop’ principle while at the same time allowing overhead costs to be re-duced by sharing facilities (general as well as business-related). In doing so, business incubators have the potential to significantly improve the survival and growth prospects of startups.

Whereas the definitions mentioned above are given by more practical institutions, Hack-ett and Dilts (2004) found that various researchers defined the concept of business incubator-incubation in a slightly different way. This definitional and conceptual heterogeneity makes it rather difficult to advance in a scientific manner (e.g. defining the scope and boundaries of the phenomenon, developing a set of axiomatic statements related to the phenomenon). However,

4_{ELAN, Réseau National des Pépinières d'Entreprises (France)} 5_{EBN Innovation Network (Belgium)}

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most researchers agree that the core of the concept is a systematic method of providing assis-tance to firms in the early-stages of their development. This assisassis-tance is provided in to increase a startup’s survival rate and decrease overall uncertainty (Bøllingtoft, 2012). Ultimately, Hack-ett and Dilts (2004, p. 57) offer us following, formal definition: “A business incubator is a shared office space facility that seeks to provide its incubatees […] with a strategic, value-adding intervention system (i.e. business incubation) of monitoring and business assistance. This system controls and links resources with the objective of facilitating the successful new venture development of the incubatees while simultaneously containing the cost of their poten-tial failure”. This overarching definition, based on insights gathered from reviewing the litera-ture as well as from conducting fieldwork in Asia and North America, takes the existing base of knowledge into consideration and aligns with definitions used by internationally recognised institutions (e.g. NBIA, CSES).

2.2.2 Main constructs of a business incubator

Taking a closer look at the definition of business incubators provided by Hackett and Dilts (2004), we see that the core of this concept consists of three main constructs. Namely:

I. Physical infrastructure (shared, fully equipped office space facility) II. Business support services (e.g. coaching, shared support services) III. Networking support (e.g. access to SMEs in the region, access to clients)

Physical infrastructure (i.e. the provision of physical space) is, according to the CSES (2002a), central to the incubator model. Rice (2002) outlined infrastructural support as the various ways an incubator assists incubatees that do not directly relate to management support and/or other forms of coaching. This involves, amongst others, collective use of equipment (e.g. copy ma-chines, Wi-Fi access), shared facilities (e.g. kitchen, entertainment room, presentation room) and office space. As mentioned earlier, practitioners tend to put more and more emphasis on the actual process of business incubation instead of the physical infrastructure and design of incubators (NBIA, n.d.). However, without a physical space where entrepreneurs can work and come together under one roof, facilitation of an incubation process is impossible. Therefore, it is acknowledged that physical infrastructure is not everything but at the same time a physical aspect is vital in the incubation process (Bøllingtoft, 2012).

Business support services can, as concluded by the CSES (2002a), be divided into four key areas. Namely: entrepreneur training (i.e. counselling support), business advice (e.g. on strategic choices, marketing, sales, leadership), financial support (either through incubator

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added of incubator operations lies increasingly in the type and quality of business support ser-vices provided to [incubatees]” (CSES, 2002a, p. 3). Entrepreneur training is closely related to personal advice. Since the business incubator manager is located on site with the incubatees, “there is the potential for an ongoing and multi-faceted counselling relationship” (Rice, 2002, p. 174). Rice (2002) mentions three approaches to entrepreneur training: “reactive and episodic” (entrepreneur asks for help when dealing with a problem, initiated by incubatee), “proactive and episodic” (ad hoc counselling, initiated by incubator management) and “continual and pro-active” (focussed on ongoing development of incubatee, constant dialogue). In contrast, busi-ness advice is more related to incubatee management support. Here, we find incubator tasks like accounting assistance, help in developing business plans, legal services and support in re-search and development (AL-Mubaraki & Busler, 2011). Although the term “financial support” tends to speak for itself, it is important to state that the degree to which incubator management is involved in the actual funding of incubatees strongly depends on the institutional mission and strategy of the incubator. Whereas for-profit incubator managers tend to invest in incubatees themselves, non-profit incubator managers often aim to connect incubatees to external parties that provide funding of incubatees (Grimaldi & Grandi, 2005). Technology support is for ex-ample providing access to sophisticated computer processing that incubatees cannot afford themselves, website design and training and other computer-related training sessions (AL-Mu-baraki & Busler, 2011). Although the CSES (2002a) and other authors find that business sup-port services can be divided into different sub-categories, it is emphasised that some of the services mentioned above can be assigned to multiple sub-categories and that other services do not fall in one of these categories at all. However, a certain classification allows for structuring the business support services offered by StartUp Nijmegen, as can be found in section 3.2.3.

Recently, various authors within the field of entrepreneurship have highlighted the crit-ical role of networking (support) in the survival and growth of startups and small ventures (Bøl-lingtoft, 2012). Not only does it offer entrepreneurs access to new knowledge, information and perspectives, through a vibrant and diverse network can acquire resources that would not be available via market transaction as well (Witt, 2014). In the context of entrepreneurship re-search, this explicit advantage of networks is often referred to as the ‘network success hypoth-esis' (Brüderl & Preisendörfer, 1998). Although networks are considered to be a vital aspect of the incubation, Peters, Rice and Sundarajan (2004, p. 88) found that a) “there is variation in the characteristics and quality of networking offered by the different incubators” and b) “sec-ondary data clearly did not account for the characteristics and quality of the networking

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[show-ing] only a slightly significant difference for the impact of networking on the number of gradu-ates”. Though look at the external environment is explicitly mentioned here, the potential added value of internal networking (between incubatees and between incubatees and incubator man-agement) should not be overlooked either (CSES, 2002a).

2.2.3 Different types of business incubators

Numerous authors tried to (re)formulate the categorisation of incubators into sub-categories, leading to a range of taxonomies and typologies, all focused on different details, and all based on different perspectives and beliefs (Hackett & Dilts, 2004). However, in the early nineties Allen and McCluskey (1990) presented a very convenient and important model; namely ‘the business incubator continuum’. Widely spread and often used in business incubator-incubation research, their model combined insides from previous research conducted on financial sponsor-ship and strategic goal-setting. A slightly adjusted version of this model (see Figure 2) can be found in a more recent article published by Bøllingtoft and Ulhøi (2005). However, although Hackett and Dilts (2004) published their article a year before Bøllingtoft and Ulhøi (2005) did, they already mentioned an important shortcoming of these kind of typologies and models. Namely, the fact that they are descriptive of nature; meaning that they simply state that different types of incubators exist, describing their differences in the process. However, they lack an explanatory element in which is explained why these variations exist and why it is useful to make these distinctions.

Allen and McCluskey (1990) stated that no two business incubators are ex-actly alike. However, numer-ous researchers in the field of entrepreneurship (and in par-ticular the field of business incubation) try to find or de-velop a business incubator “best practice model” and ex-amine whether or not a cer-tain incubator-type adds more value to startups than

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CSES (2002a) identified relevance of the incubator (i.e. – are the objectives of an incubator aligned with broader policy objectives?) and utility (i.e. – to what extend are business support services and other facilities aligned with the needs of incubatees?) as two key issues in the light of incubator best practices (CSES, 2002a). However, Hackett and Dilts (2004) found that most studies take for granted that there exists one superior incubator model and that business incu-bators are homogenous in nature. This important misconception is recognised by Bergek and Norrman (2008).

However, they do conclude that selection, business support and mediation are the key indicators when one tries to separate different incubator models. Selection is in this case incu-batee selection, an important management task that has a big influence on the incubator’s re-source allocation and the overall state of affairs (Lumpkin & Ireland, 1988; Hackett & Dilts, 2004). Regarding selecting incubatees, incubator management needs to make two important decisions (Bergek & Norrman, 2008). On the one hand, management must decide whether they use an idea-focussed approach (evaluate viability of ideas, e.g. product itself, market, profit potential) or an entrepreneur-focussed approach (evaluate personality and general business de-velopment skills of an individual/team). On the other hand, it is about the strictness of applying these criteria. Do you, as incubation management, try to identify a few potentially successful ventures upfront (“picking-the-winners”) or do you take on a larger number of incubatees and rely on markets to do the selection process for you (“survival-of-the-fittest”)?

As far as business support goes, the authors stay in line with what was mentioned earlier when discussing the three main constructs of business incubators (paragraph 2.2.2). However, they add an interesting insight related to the incubator management’s approach. Bergek and Norrman (2008) state that incubator management can take different approaches when it comes to the ‘intensity’ of business support. One extreme would be so-called strong intervention (steady guidance of incubatees through the whole incubation process) whereas the other ex-treme would be a more “laissez-fair”6_{style of support (incubatees are only provided with}

as-sistance and guidance when they take the initiative themselves). Since this management ap-proach strongly affects the layout of the actual incubation process, it is important not to over-look Bergek and Norrman’s (2008) additional insights into consideration when assessing StartUp. The CSES (2002a) is not only interested in the selection process (and corresponding criteria) but they underline the importance of sufficient exit criteria as well (i.e. – when is time for incubatees to move on and how do you encourage them to take the next step?). In addition,

6_{Literal translation from the Oxford Dictionaries: “A policy or attitude of letting things take their own course,}

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they state that it important for incubators to stay in touch with ‘graduates’/alumni in some way, since experience indicates that “many [incubatees] are at the most vulnerable stage in their development when they leave [the “safe environment of] an incubator” (CSES, 2002a, p. 8).

As described by Bøllingtoft and Ulhøi (2005), mediation is an interactive process in which the incubator builds bridges between the incubatee and its surrounding environment in order to leverage critical resources (e.g. knowledge, market related resources, human capital). Though not explicitly mentioned, mediation can therefore be seen as a form of (external) net-working support (Bøllingtoft, 2012). Based on an extensive study of existing literature, Bergek and Norrman (2008) formulate two types of mediation, namely network mediation and institu-tional mediation. The former describes a role of the incubator that primarily deals with con-necting incubatees to relevant external actors in its direct environment (e.g. SMEs in the region, financiers, potential customers) to compensate a lack of established networks on behalf of the incubatee. The latter concerns a form of mediation that helps incubatees to understand and in-terpret the demands that (governmental) institutions put on them (e.g. taxes, formal regulations, laws). All in all, mediation will be considered as a “bridging” role of the incubator when con-ducting this research. This means that mediation will be assessed and looked at separately.

This literature review leads to the abstraction of three main constructs that, together, form the foundation of an entrepreneurial. Namely: physical infrastructure, business support services and networking support and mediation. Section 3 (in particular 3.2) outlines how StartUp Nij-megen interprets and fulfils these constructs.

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3. StartUp Nijmegen & Nijmegen’s Entrepreneurial Ecosystem

This section is the transition from the literature review presented in section 2 to the context of this research, namely: What does Nijmegen’s entrepreneurial ecosystem, and in particular the business incubator StartUp Nijmegen, look like? Eventually, the initial model of StartUp Nij-megen is constructed and assumptions based on the current body of knowledge are formulated.

3.1 The municipality of Nijmegen

Three years ago, the municipality of Nijmegen published its “Economic Innovation Agenda”. In this proposal, they acknowledge that economic development of Nijmegen is more and more a joint responsibility of (local) government, entrepreneurs, educational institutions and re-search institutions. Innovation and new business activity are generated by all parties com-bined. This has been the case for years now, but actors believe that there is still much more to come (Municipality of Nijmegen, 2014).

3.1.1 Economic Innovation Agenda

Steps in this direction are taken through Nijmegen’s “Economic Innovation Agenda” (Munici-pality of Nijmegen, 2014). The essence of the Agenda is to give more space and responsibility to the Municipality’s economic partners (mentioned above). All efforts will be targeted at an innovation strategy that generates new employment opportunities and secures current employ-ment opportunities by ensuring future competitiveness.

One of the concrete objectives of the Agenda is to stimulate entrepreneurship; giving a strong impetus to a) starters that want to root in the region and b) the further development of entrepreneurs that are already based in Nijmegen and the region. It is important to note here that the Municipality aims to improve entrepreneurship in general, instead of only focussing on high-growth firms (common sense in entrepreneurial ecosystem literature to narrow entrepre-neurship down this – Stam & Spigel, 2016). This objective is strongly related to the significant growth of entrepreneurship in Nijmegen and the region (Figure 3). At the beginning of 2016, 16.500 entrepreneurs from Nijmegen where registered in the Trade Register of the Chamber of Commerce. This is more than double the amount of registrations in 2005 (~ 8.000). It should be noted here that the requirements to register were expanded in 2010 (we can see a peak in the numbers in that year) but even after 2010 the growth of entrepreneurship has dramatically in-creased (Municipality of Nijmegen, 2016a). How the Municipality intends to work towards this objective is mainly outlined in the implementation program “Strengthening the Startup Ecosys-tem” (Municipality of Nijmegen, 2016b).

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3.1.2. Implementation program – Strengthening the Startup Ecosystem

The goal of the implementation program “Strengthening the Startup Ecosystem” is to strengthen the opportunities and possibilities for successful entrepreneurship in Nij-megen and the region (Municipality of NijNij-megen, 2016b). The corresponding policy document includes three features that give us a better perspective on the be-liefs and the standpoints of the Municipality. First, the results of a stakeholders’ workshop held on the 9th_of

June, 2015 are presented. During this workshop, the aim was to obtain more insight into the region-specific needs of startups and relevant support institutions to develop a clear vision on a) which building blocks are necessary to build Nijmegen’s entrepreneurial ecosystem and b) which steps need to be taken in order to get these building blocks in place (Municipality of Nijmegen, 2016b). A summary of key findings can be found in Table 2. Second, the document provides a definition of what the Municipality specifies as an “entrepreneurial ecosystem”. Based on the model in Figure 4, they define an entrepreneurial ecosystem as an interacting system that consists of startups and a variety of organisations that, together, aim to create and grow new startups. Though not referring to any scientific sources, this is more or less in line with current literature on entrepreneurial

ecosys-Figure 4 - Model of Startup Ecosystem according to the Municipality of Nijme-gen (2016b)

Figure 3 - Individuals from Nijmegen registerd in the Trade Register of the Chamber of Commerce (Municipality of Nijmegen, 2016a).

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tems (e.g. Shane & Venkatamaran, 2000; Stam, 2015; Stam & Spigel, 2016). Third, they pre-sent an overview of identified shortcoming of the current situation. Amongst other things, they found that a) there has been a lot going on in relation to startups, but there is a lack of coordi-nation, b) distribution of information on matters related to startups is incomplete and incon-sistent, c) support for startups is lacking (e.g. coaching, support of existing companies and in-stitutions), d) promotion and branding of Nijmegen as a startup community is absent and e) the breakdown of financial instruments is too complex, not transparent and incomplete (Munici-pality of Nijmegen, 2016b).

Part of the implementation program is the realisation of the incubator StartUp Nijmegen since Nijmegen’s current startup ecosystem did not have one yet. They described this hub as a not-for-profit (Bøllingtoft & Ulhøi, 2005), physical place for startups that facilitates so-called accelerator-programs combined with numerous other events for Nijmegen and the region to further strengthen entrepreneurial activity. Therefore, one of the main practical implementa-tions of the program is the development and realisation of the incubator StartUp Nijmegen, which would fulfil a crucial role in the further development and realisation of the implementa-tion program.

3.2 StartUp Nijmegen

Now that is known how the municipality of Nijmegen tends to improve its entrepreneurial eco-system, it’s time to take a better look at the business incubator that plays a central role in this ecosystem; StartUp Nijmegen. This section contains background information on the business incubator and discusses the three main elements of a business incubator (abstracted from our

Table 2 - Key findings of stakeholders workshop Municipality of Nijmegen

Theme Most important ideas and actions

Financial instruments (in-centives and venture capi-tal)

Inventory of (regional) instruments (pre-seed till growth) and specific (regional) incentives for startups

Connect supply and demand (online and offline) Make supply transparent (e.g. regional website)

Organise financing events (e.g. on how to finance your business, in which stage) Gather regional investors and develop a proposition for (inter)national funds Physical spaces Clusters startups based on certain themes/sectors

Let physical spaces develop into dynamic and passionate hubs & hotspots – coherent and inspiring coaching program and facilities (i.e. incubator)

Talent development,

coaching and education Coaching – personal development as well as management/entrepreneurial skills. Stimulate established companies to share their knowledge, experience and networks More attention for entrepreneurship in formal education

Role of large corporates Connect large corporates to ecosystem – various ways (active role)

Connect specific corporates to certain groups of startups (e.g. R&D partnership) Exploitation of knowledge

institutions Engage management and professors Decrease distance between education and practice

Branding/profiling Consistently communicate (locally/regionally/ (inter)nationally) that Nijmegen is an im-portant player when it comes to startups

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literature review): the physical infrastructure, business support services and networking support and mediation

3.2.1 Background information

The CSES (2002) states that an incubator should not be an isolated entity but instead should align its objectives and goals with local policy priorities. This is exactly what the Municipality of Nijmegen envisioned when they expressed the need for a so-called startup hub; a physical space where startups come together to grow and develop their businesses (Municipality of Nij-megen, 2016b). This hub, StartUp NijNij-megen, aims to establish a prominent role in Nijmegen’s entrepreneurial ecosystem. General principle is to further strengthen the coherence and cooper-ation – locally as well as regionally – through joint programs and promotion.

As mentioned by the Organisation for Economic Cooperation and Development (2000), it is important to take specific weaknesses of startups into account and create a special, support-ing environment that addressees their specific needs. StartUp Nijmegen has the ambition to engage startups in a community that provides them with a firm base to set effective and efficient entrepreneurship in motion. The incubator intends to focus their efforts on business-to-business service providers. These services range from the more traditional services by the likes of HR advice and marketing, to services that make use of the latest technologies to provide clients with custom-made apps or 3D-product visualisations. Potential incubatees need to match one of the following descriptions: you have an idea that you want to convert into reality, you just started your own business and are trying to establish yourself or you started your business sev-eral years ago (no longer than 5 years) and need new insights and perspectives to take the next

Table 3 - Key Incubator Performance Statistics StartUp Nijmegen

Setting up and operating StartUp Nijmegen Average (CSES, 2002a, p. 14) Average capital investment cost ~ €55.000 p.a. (grant) €3,7 million

Average operating costs ~ €150.000 p.a. €480.000 p.a.

% of revenue from public grants ~ 33% 37%

Incubator space 700 m2 _{3.000 m²}

Number of incubatees 58 (43 FT, 15 PT) 27 firms

Incubator functions

Incubator occupancy rates ~ 60% 85%

Length of tenancy Not specified 35 months

Number of management staff 1 manager, 5 volunteers 2,3 managers

Ratio of staff/incubatees ~ 1/10 1/14

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steps. However, Dick Bos7_{, StartUp Nijmegen’s initiator, stated explicitly that incubator}

man-agement is not too strict in applying these application criteria. He believes that, to grow as an entrepreneurial community, StartUp Nijmegen´s entrepreneurs should be as diverse as possible. Instead of excluding certain entrepreneurs in advance, he aims to ensure continued accessibility for every starting entrepreneur that needs help and/or guidance. Although this approach is not completely in line with key conclusions of the CSES (2002a), we have already seen that Bergek and Norrman (2008) stated that a so-called “survival-of-the-fittest” approach (take on a larger number of incubatees and rely on markets to do the selection process) can be applied by incu-bator management when selecting incubatees. Moreover, Feld (2012, p. 25) stated that a “startup community must be inclusive of anyone who wants to participate in it”. Taking this approach, StartUp Nijmegen can build a community that is available for like-minded, passion-ate individuals. It is their goal to make sure that every starting business-to-business service provider can support itself and makes the best use of its potential through the support and guid-ance that StartUp Nijmegen offers them. Regarding exit criteria (CSES, 2002a), StartUp Nij-megen does not apply a certain “time limit”. Instead, incubator management implements the following rules: 1) Hiring one intern/staff member has no consequences, 2) hiring a second intern/staff member (three team members in total) means that your monthly fee will increase with an additional €215 (three team members, pay for two) and 3) when a startup is hiring a third intern/staff member, it is time to move on and look for a new place to work. In doing so, StartUp Nijmegen ensures the turnover of startups and can keep the occupancy rate under con-trol.

The incubator’s business model consists of three elements. First, every incubatee is re-quired to pay a monthly fee of €215 (excl. VAT). Part-timers pay €100 a month and in return they have access to Startup Nijmegen’s facilities for one day a week. Second, every partner (established SMEs from Nijmegen and the region) pays a contribution of €100 a month to re-main an associated company. Third, StartUp Nijmegen and the municipality of Nijmegen set up a multi-annual, decreasing grant to the budget to allow StartUp Nijmegen to develop its business model and achieve a balanced budget before 2020.8

A unique feature of a place where entrepreneurs and/or like-minded people come to-gether, is the so-called “vibe” that prevails in the community. To get a better understanding of

7_{Dick Bos is a well-known entrepreneur in Nijmegen and the region. Being an entrepreneur for decades himself,}

he is a source of a wide variety of knowledge to SUN’s incubatees.

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this “community feeling” and interpersonal relationships, two specific actions were taken (dis-cussed extensively in section 4.1). First and foremost, Dick Bos invited me to start working fulltime at StartUp Nijmegen’s office (November 2016 till March 2017) to properly observe what the community is all about. Second, I invited ten entrepreneurs to take part in a 30-to-45-minute (unstructured) interview to get more in-depth insights in their experiences at StartUp Nijmegen. Being surrounded by like-minded people is perceived to be a huge benefit of being a part of StartUp Nijmegen, whether entrepreneurs make extensive use of the various business support services or not. As perfectly explained by one of the interviewees: “I started to feel lonely at home, even though I have an amazing group of friends and a family that supports me in every aspect of my life. […] I experienced a lack of new connections and stimuli [which had] a negative effect on my productivity as well as my overall motivation to try and become a suc-cessful entrepreneur. […] That is when I started to realise that I needed to get out of there” (Jasper Rietrae, personal conversation, 04-01-2017).

3.2.2 Physical infrastructure

StartUp Nijmegen is located close to Nijmegen’s central station. The building’s ground floor provides space for a large conference room, the management’s office, several meeting rooms and an open floor office area. The building´s basement is completely refurbished and accom-modates the kitchen area, a “living room”, two meeting rooms and a large, L-shaped office area. Total incubator space is 700m2_.

Regarding the office areas, StartUp Nijmegen provides its incubatees with all the basics they might need. This includes desks, office chairs, Wi-Fi connection throughout the whole building, lockers for personal belongings, storage cabinets and multifunctional printers. Up un-til recently, StartUp Nijmegen used to apply a so-called “clean desk policy”. However, experi-ence showed that more and more incubatees needed space to put their desktops and screens (for example mobile app developers, graphic designers and programmers) in place. Therefore, the following rule is applied: 50% of every office space area should be left available for flex-work-ers. In doing so, they meet the needs of every incubatee as much as possible.

A highly-appreciated feature of StartUp Nijmegen is the 24/7, 365 days a year access that they offer their incubatees. Instead of having standard office hours, every entrepreneur gets a pair of keys when he or she starts working at SUN. In doing so, it is no exception that incu-batees work during weekends and even late at night. For some entrepreneurs, this is even one of the to pick StartUp Nijmegen over other co-working spaces in the area. As one of the

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and work here. I doubted whether I should go to Honing9_{, but when I heard about the keys I}

was convinced that SUN was the place to be” (Evelien Donkers, personal conversation, 04-01-2017).

3.2.3 Business support services

To structure the business support services provided by StartUp Nijmegen, the four types of support as described in section 2.2.2 are involved. Namely: entrepreneur training (i.e. counsel-ling support), advice on business issues, financial support and technical support (CSES, 2002a). Before diving into the topic, it is important to notice that SUN’s management applies a more laissez-fair style of support (Bergek & Norrman, 2008); meaning that, in general, incubatees are only provided with assistance and guidance when they take the initiative themselves. Noth-ing is compulsory.

3.2.3.1 Entrepreneur training

Entrepreneur training, mainly focussed on incubatees’ personal development (Rice, 2002), is provided through a diverse set of workshops facilitated either by one of the incubatees or an external professional (for example workshops on intellectual property rights, pitching and per-sonal presentation or how to be a frontrunner on LinkedIn). Moreover, incubatees are more than welcome to discuss personal issues with Dick Bos or one of the other staff members. In a con-fidential and safe environment, the team offers entrepreneurs a sympathetic ear, feedback on ideas, input for decision-making or simply serves as a sparring-partner. It should be mentioned that incubator management takes a “reactive and episodic” approach to entrepreneur training (Rice, 2002); meaning that the initiative lies mostly with incubatees themselves.

3.2.3.2 Advice on business issues

Advice on business issues is provided in a variety of ways, partially covered by the sessions that StartUp Nijmegen organises for its entrepreneurs. First, entrepreneurs are invited to be-come a part of a so-called “BAM! Focus op groei” group. A “BAM!”-group usually consists of four entrepreneurs that come together once a week to share their ideas, the problems they run into, get feedback on projects, gather advice from their peers or simply to share what is on their agenda for the coming days. Peer-to-peer learning and knowledge sharing are central to these sessions. Second, StartUp Nijmegen organises the weekly “Lightning Talks”, a 30-minute meeting that consists of three ten-minute mini-presentations that incubatees can use to share a dilemma with the whole community in order to gather as much feedback as possible in a short amount of time. Based on the feedback they receive, the entrepreneurs often make one-on-one

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appointments in order to further discuss the input provided by one of their peers or one of StartUp Nijmegen’s staff members. Third, StartUp Nijmegen and the “Bedrijfskundewinkel Nijmegen”, a consultancy company ran by students that offers free advice to SMEs in Nijmegen and the region10_{, arrange a monthly brainstorm session. During these sessions, two}

entrepre-neurs get the opportunity to present a business issue. Incubatees, staff members, partners and students come together to discuss the issues and concerns raised by the two facilitators. The unique contribution of these sessions mainly lies in the fact that it allows for a combination of insights from students (mostly theoretically grounded) and entrepreneurs (based on practical experiences). Fourth, StartUp Nijmegen connects incubatees to established SMEs in the region that are affiliated with the incubator the incubator as a partner (further explained in section 3.2.4). They share their knowledge and experience with incubatees to contribute to their devel-opment as entrepreneurs and to learn from each other in general. Every partner facilitates a certain amount of office hours a month where incubatees can sign up for. Finally, incubatees are always welcome to come by the staff members’ office. They are encouraged to enter when-ever they have questions or issues they are unable to solve themselves. Either one of the staff members can help them right away or they schedule an appointment as soon as possible. They key of all these five opportunities is to share and exchange knowledge, ideas and experiences, growing as a community and as individuals.

3.2.3.3 Financial support

Although experience thought StartUp Nijmegen that financial issues are the least of entrepre-neurs’ concerns11_{, financial support is facilitated in two ways. First, StartUp Nijmegen took the}

initiative to set up the “Pro Startup Ondernemersfonds Nijmegen”, an investment fund that al-lows StartUp Nijmegen’s entrepreneurs as well as other entrepreneurs in the region to present their business plans to be considered for investments by twelve established business people.12

Second, Dick Bos, StartUp Nijmegen’s initiator, has a huge (local) network of multiple forms of investment or different sources of financing in the region. He functions as a connecting party when entrepreneurs are seeking support from potential investors such as venture capitalists or private investors.

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3.2.3.4 Technical support

Technical support is not provided by StartUp Nijmegen since incubatees do not need compli-cated technologies to build and sustain their business. As mentioned earlier, StartUp Nijme-gen’s target market consists of business-to-business service providers. Entrepreneurs who need certain technical equipment (e.g. monitors, desktops, laptops) make sure they buy it themselves.

3.2.4 Networking support and mediation

Witt (2014) stated that networking support allows for a combination of does access to new knowledge, information and perspectives and the opportunity to acquire resources that would not be available via market transaction. Moreover, mediation is defined as a key function of business incubators; involving an interactive process in which the incubator builds bridges be-tween the incubatee and its surrounding environment (Bøllingtoft & Ulhøi, 2005). One can distinguish internal (between incubatees and between incubatees and incubator management) as well as external networking support and mediation (provided by external relations that are connected to an incubator).

3.2.4.1 Internal networking support and mediation:

First and foremost, SUN offers entrepreneurs an environment in which they are surrounded by like-minded, enthusiastic and driven people. Getting better together is what it is all about, while there is time for a little fun every now and then as well. However, offering entrepreneurs social interaction and social activities allows incubatees to share. Share their thoughts, ideas, problems they run into and everything else that is on their minds. In doing so, SUN becomes an interactive community in which people discuss their day-to-day life with one another. However, sharing knowledge and experiences often leads to sharing networks and potential clients. Therefore, incubatee-to-incubatee network mediation (Bergek & Norrman, 2008) is not uncommon at all. Moreover, SUN’s initiator and staff dedicate a lot of their time to connecting incubatees to potentially relevant actors in their personal and professional network. As mentioned by Bøl-lingtoft and Ulhøi (2005), this interactive process functions as a “bridge” between the incu-batees and their external environment, compensating their lack of established networks.

3.2.4.2 External networking support and mediation:

Kleijn and Masurel (2011) emphasise the critical role of ‘outsiders’ in the development of startups and medium-sized ventures. In doing so, they outline business advice, sharing knowledge and experiences, and exchanging connections (i.e. networks) as key factors. As mentioned earlier, StartUp Nijmegen has a partner network of over 15 SMEs in Nijmegen in the region that are connected to the incubator in order to provide incubatees with knowledge,

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ideas, feedback and potential customers.13_{This external network of SMEs allows incubatees to}

tap into channels of knowledge, stakeholders and connections that they potentially would have never reached by themselves (Wang, Lin, Yin, Lu & Cheng, 2008). Even though the whole idea behind the partner network is about interaction, it can be seen as a form of institutional media-tion (Bergek & Norrman, 2008) as well. After all, the network of SMEs and the knowledge the SMEs provide to incubatees helps incubatees to deal with the demands that (governmental) institutions in their external environment put on them (e.g. taxes, formal regulations, laws).

When being a part of SUN’s community, it became clear that there is a certain degree of uncertainty regarding the exact role of the partners and why they are connected to SUN. As one of the interviewees stated: “When I just started here, I found it pretty difficult to make an appointment with one of the partner because I didn’t get to know them yet. You don’t know what they could do for you and when you register for an office hour you will have a meeting of an hour. Maybe it’s better when you first had an informal meeting, for example here at SUN” (Sam Rikken, personal conversation, 10-01-2017). Since literature indicates that network support and mediation are such a critical tasks of a business incubator, this construct will be closely exam-ined when conducting further research.

3.3 Model of StartUp Nijmegen – Theory and profile combined

In section 2, the current literature on entrepreneurial ecosystems and business incubators was reviewed. Based on this review, three constructs that essentially form the foundation of an in-cubator were abstracted; physical infrastructure, business support services, and networking support and mediation

This section represents how SUN interprets and addresses these three constructs by out-lining the different aspects that the incubator offers to its incubatees. However, this does not provide any evidence on the perceived relative importance of these constructs.14_{Based on what}

is currently believed and discussed by researchers in the field of business incubators and entre-preneurial ecosystems, this study expects to find the following when examining the social con-text of StartUp Nijmegen:

I. Though the physical infrastructure of an incubator plays an important role in facilitating the incubation process, added value of business incubator operations lies increasingly in the type and quality of business support services offered to incubatees (CSES, 2002a).

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http://www.startupnijme-33

II. Networking support plays a critical role in in the survival and growth of startups and small ventures (Bøllingtoft, 2012)

III. In the light of networking support and mediation, external mediation (i.e. the critical role of a network of ‘outsiders’) is the most important factor (Wang et al., 2008; Kleijn & Masurel, 2011)

IV. Financial support (part of business support services) and networking support (referred to as “accessible markets” in WEF-report) are two of the most important elements in terms of the growth/success rate of startups (Foster et al., 2013)

The assumptions about the relative importance of the three main constructs of business incuba-tors are graphically represented in the model below (Figure 5). In this model, the expected relative importance of sub-elements of constructs (e.g. “Financial Support”) relative importance is not included. Furthermore, it should be mentioned that the colours of the different constructs have nothing to do with relative importance of constructs. Through the utilisation of various qualitative and quantitative research methods (explained in section 4), this study aims to gather sufficient data to conclude whether what we find in this particular case is in line with what was assumed to be found based on the existing body of research or that findings (partially) disprove the assumptions presented above. Assumptions are discussed in the light of the findings of this study in section 6.2.1 Now, section 4 will outline the different research applied during this study to gather sufficient data.

At the heart of an entrepreneurial ecosystem : examining the main constructs of the business incubator StartUp Nijmegen : a case study