BUSINESS INCUBATOR: A “CRADLE”FOR SMEs AND INNOVATION Liming Wang, Business School Shandong University of Technology, P.R.China, [email protected]

Incubator has already been proven to be of great value in promoting small and medium enterprise (SME) entrepreneurship activities and technological development in developed and developing countries. Incubator not only provides a diversified and integrated service for entrepreneurial ventures but also contributes upward to regional and national innovation and economic growth. This paper tries to perceive and survey experiences of china’s incubators. In this paper, Background of the theory and purposes of incubator are analyzed. The core status of incubator in China’s technical innovation system is sketched out. The systematic collection of business incubator data we’ve collected help us to understand incubators’ performance. to find out success reasons and imperfection factors, to search for proper countermeasures and foresee incubators’ future development in China. Key words：Incubator, SME, Entrepreneur, Development, Countermeasure.

1 INTRODUCTION

The National Business Incubation Association (NBIA) of USA defines business incubators as: “a comprehensive business-assistance program targeted to help start-up and early-state firms, with the goal of improving their chances to grow into healthy, sustainable companies.”1 Furthermore the definitions of business incubators by a number of international organizations such as UN-ECE and ANPROTEC have a common feature that is to help the “growth and survival of new companies through support or help” .In 2009, Under the background of world financial crises, President Obama of USA pledged $250 million a year in federal funds to seed a regional network of such organizations--an effort aimed at growing jobs and innovation.2 The formal concept of business incubation began in the USA in 1959 when Joseph Mancuso opened the Batavia Industrial Center in a Batavia, New York, warehouse. It began as a real estate venture, essentially an attempt to utilize unused manufacturing building space. Then, some incubators have evolved to provide a range of services to help businesses succeed. From the 1970s onwards, business incubators in developed countries became a tool for improving regional and national competitiveness by fostering the emergence of innovative and technology-based firms. This shift was accelerated in the 1980s by linking the incubator concept more closely to higher education and public research institutions. Incubation expanded in the U.S. in the 1980s and spread to the UK and Europe through various related forms (e.g. innovation centres, science parks). Nowadays, the industry has grown dramatically, both in terms of the number of programs in operation and the depth and breadth of services they offer. The National Business Incubation Association (NBIA) estimates that there are about 7,000 incubators worldwide. More than 1,000 are in Asia (approximately half in China), 1,400 in North America, with 1,115 incubators in the United States. 900 in Europe and close to 400 in Latin America. Incubation activity has not been limited to developed countries. Incubation environments are now being implemented in developing countries and raising interest for financial support from organizations such as UNIDO,the World Bank and APEC. Business incubators are especially active in particular sectors which are relatively technology-intensive. Enterprises

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Adkins, Dinah, A Brief History of Business Incubation in the United States. National Business Incubation Association, Athens, Ohio. 2002. 2 Dennis Romero ,A New Take on Incubators. http://www.entrepreneur.com/magazine/entrepreneur/2009/may/201228.html.

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targeted under such schemes are typically small start-up companies which require support in terms of finance, technology and marketing. 2 PURPOSES AND FUNCTIONS OF INCUBATOR

The first incubator was simple: utilize unused factory floor space. Now, broadly speaking, the purpose of incubators is claimed to be “To increase the chances of an incubate firm surviving its formative years”3 and to “nurture the development of entrepreneurial companies, helping them survive and grow during the start-up period, when they are most vulnerable...Incubator graduates create jobs, revitalizing neighborhoods and commercialize new technologies, thus strengthening local, regional and even national economies.”4 The International Labour Organization argues that small business incubators are innovative instruments that are increasingly considered to be of prime importance in developing and promoting competitive small firms. SMEs are an integral part of the economy and an important source of components and materials for the larger industries. They represent 99.7 percent of all employer firms; Employ half of all private sector employees; and have generated 60 to 80 percent of net new jobs over the past decade in USA. Statistics from other countries are similar to USA. However, SMEs’ survival rate is very low. One-third of new small businesses don’t exist after two years, and 56 percent don’t exist after four years. 5Their Survival rate is not more than 20%. Small business incubators are a strategy intended to assist small businesses to be successful. An incubation programme’s main goal is to produce successful graduates: businesses that are financially viable and free-standing when they leave the incubator, usually within two to three years. Thirty percent of incubator clients typically graduate each year. 87 percent of incubator graduates were still in business.6 Thus, a business incubator is an economic development tool designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services. According to the survey of NBIA,USA, Incubators’ goals include: Create local jobs (84%); Foster entrepreneurial climate (77%);Commercialize technology (54%);Diversify local economies (48%);Build/accelerate local industry growth (48%);Retain firms in community (45%)；Encourage minority or women entrepreneurship (30%)；Generate revenue (28)%； Hackett, Sean M. with David M. Dilts. “A Systematic Review of Business Incubation Research,” Journal of Technology Transfer, Vol. 29, 2004, page 60. 4 National Business Incubation Association, “Business Incubation FAQ.” April 2007. 5 Small Business Administration, Office of Advocacy: Frequently Asked Question. June 2006. 6 United States of America, Department of Commerce,Impact of Incubator Investments (1997). 3

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Identify potential spin-ins or spin-outs (25%) ； Generate benefits for sponsors (19%) ； Revitalize distressed neighborhood (18%)；Move people from welfare to work (8%). The value added continuum set out in Table 1 below helps to assemble incubators into a number of groups and reveal incubators’ primary objective and secondary objective. Table 1: The Business Incubator Continuum - Facility Objectives Business Developm ←…………………………→ ent For-Profit Non-Profit For-Profit Property Development Academic Seed Development Corporation Incubators Capital Incubators Incubators Incubators Capitalise Real estate Job creation Faculty industry investment appreciation Positive collaboration opportunit • Sell statement of Commercialise y proprietary entrepreneurial university • Rapid services to potential research enterprise tenants growth •Generate •Strengthen sustainable service and income for Create instructional •Product organisation opportunity mission Developm •Diversify for •Capitalise ent economic base, technology investment • Self •Bolster tax transfer opportunity Sufficienc base • Create •Create good y •Complement investment will • Wealth existing opportunity between creation programs and institution and utilise vacant community facilities Source: Allen D. N. & McCluskey R. 1990, page 65. Real Estate

Primary Objective

Secondary Objective

Value Added Through

3 BUSINESS INCUBATORS IN CHINA: DEVELOPMENT AND EXPERIENCE

3.1 History and Present Situation

The Government of China has implemented the Torch Program and identified science and technology industrial parks (herein after referred to as STIPs) and technology business incubators as means to industrialize technology and to enhance the competitiveness of small and medium-sized enterprises. At the end of the 1980s, with the deepening of China’s reforming in science and technology and economic restructuring as well as her policy of opening up to the outside world, the situation especially the transformation of scientific achievements necessitated the birth of technology business incubators. In 1987, Mr. Rustam Lalkaka, then Director, United Nations Fund for Science and Technology Development (UNFSTD) made a suggestion to the Science 4

and Technology Minister of China at that time to set up technology business incubators in China. In the same year, funded by UNDP and the Government of China, the National Research Centre for Science and Technology for Development conducted a study on the feasibility of establishing business incubators – high and new technology incubators in China. Wuhan, Tianjin, Guangzhou, Shenzhen, Xi’an Jiaotong University and Shanghai also carried out similar studies. In June 1987, China’s first business incubator – Wuhan Donghu Pioneers Centre was formally established. Since then, business incubators have sprung up in China.Nearly 30 business incubators were successively established in China during 19891990. In 1991, a group of business incubators with their own floor space were successively established and put into operation in Tianjin, Chengdu and some other places. At that time, there were nearly 40 business incubators in the whole country; more than 300 start-up companies and more than 1,000 high and new technology achievements were nurtured in the business incubators; the value of the business incubators’ fixed assets and funds exceeded Y 100 million; and the first group of tenant companies began graduating. Now China has established a fairly comprehensive business incubator system, with 896 incubators so far, ranked second highest number in the world after the United States. In the over 25 years’ development history of China’s incubators, China’s Ministry of Science and Technology (MOST)has played extremely important roles of guidance, organization and promotion. The Chinese business incubation program is under the guidance and coordination of a special institution—Torch Program Office of MOST, which is unique in the world. The Torch Center plays major roles in two aspects: first, policy guidance; second, fund support. According to the statistics from the Torch Center of China’s Ministry of Science and Technology, by the end of 2005, The Incubation space for tenants was 19699 square meters, hosting nearly 39491 tenant companies. These two numbers lay the first in the world. Total income of tenants reached to 162.54 billion. Totally income of graduated enterprises reached to 143.33billion. Incubator has made a great contribution to the development and cultivation of small and medium-sized enterprises (SMEs), enhanced their ability to face market challenges. Much attention has been paid to the impressive output of Chinese incubators in production, patent and job creation. During the tenth five-years plan course, tenants in incubators applied for 17225 patents, Graduated enterprises accumulated to15931.In 2006, Totally funds in 548 Technology Business Incubators (TBIs) reached to 192.6 billion RMB yuan.7 In 2010, There were 896 TBIs included in Torch Program development. Among them

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Report about china’s hi-tech enterprise incubator for it’s twenty years birthday

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there were 46 National level TBIs. TBIs hosted nearly 56 thousand tenant companies, Created 1178 thousand employment opportunities. 8 Table 2 :Growth of High-Technology Incubators, 1994-2002 1994 1995 Number of Incubators 73 73 in China Number of Tenant 1,390 1,854 Companies Average Number of Tenant 19 25 Companies per Incubator Total Employees NA NA in Tenant Companies Average Number of Employees NA NA per Tenant Company Total Income of Tenant 1.48 2.42 Companies (billion RMB) Average Income per Tenant 1.06 1.31 Company (million RMB) Number of Companies NA 174 Graduating

1996

1997

1998

1999

2000

2001

2002

80

100

100

110

131

324

378

4,138

5,293

7,693

14270

20993

41

48

59

46

NA

2,476 2,670

31

NA

27

45,600 68,975 91,600 128,776 263,596

NA

NA

17.1

16.7

17.3

16.7

28.4

36.3

3.63

4.08

6.07

9.58

17.88

40.54

NA

1.47

1.53

1.47

1.81

2.32

3.16

NA

284

177

491

618

836

2281

6207

Source: Development Report of Technology Business Incubators in China

Table 3: The Development and Performance of TBIs in China (2003-2010) Number of TBIs Incubation space for tenants(10000 square meters) Number of tenants Total income of tenants(billion $) Number of graduated tenants Number of employees in tenants (10000 persons)

2003 431

2004 464

2005 534

2006 548

2007 614

2008 670

2009 772

2010 896

1359

1515

1970

2008

2270

2316

2901

3044

27285

33213

39491

41434

44750

44346

50511

56382

NA

NA

162.54

192.6

262.1

186.62

178.76

118

8981

11718

15815

19896

23394

31764

47286

53198

48

55

71.7

79.3

93.3

92.8

101

117.8

Source: China Torch Statistical Yearbook 2009-2010&2011 China High-tech Industry data book

http://chineseincubator.bokee.com/viewdiary.180327063.html 8 see : http://www.ctp.gov.cn/dxal/ImportantReport/201202/17838.html

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Table 4（1）: Value-Added Service of incubator in China(2005) Rent Property Management Policy and Outside income management consultancy law info investment rateof consultation real estate 84.6 76.9 18.7 24.2 23.1

Imports and exports agency service 1.1

Enterprise Registration agency service 20.9

Table 4（2）: Value-Added Service of incubator in China(2005) Entrepreneurship training

22.0

Expand market

7.7

Personnel deputy service 5.5

Technology transfer service 9.9

Seed Capital management

16.5

Investment and fundraising service 25.3

Source: Sun Dahai , Investigation Report of 100 incubators in China. May 2005

3.2 Kinds of Incubator in China The types of China’s technology business incubators include comprehensive incubators namely General technology business incubators , Specialized technology business incubators , University-related S&T parks, Incubators for returned overseas scholars (IROS) ,International business incubators (IBI), Incubators set up by state-owned enterprises (SOE incubators).etc. An incubator in Tianjin focusing on enterprise creation by laid-off female factory workers, and sponsored by UNDP, Australian Agency for International Development (AusAID) and the Tianjin Women’s Federation, is presently in the implementation stages and has been operating well since its official stating in October 2000. The All-China Women’s Federation (ACWF) is expecting to promote the model in the whole country.There are 62 University Parks which have been jointly ratified by the Ministry of Education and the Ministry of Science & Technology, and more than 100 incubators have been set up around the country to accommodate enterprises founded by returned overseas scholars. In addition, 9 International Business Incubators (IBIs) and a dozen sector-specific incubators have also been established. In a demonstration of the dangers of centralised economic planning and "follow the leader" business strategies9, local governments in China have established more than 150 business start-up incubators and "pioneer parks" for Chinese students who have studied abroad. These incubators, many of which are in third-tier cities far from business centres provide business start-up services for more than 8,000 enterprises and over 20,000 returning students. Many local governments also provide loans, grants and other investment incentives for returnees setting up businesses, particularly those bringing in significant intellectual property or technology. Over the past three decades, a total of 632,200 overseas Chinese students have returned home and 399,300 of them have returned during the past five 9

http://rightsite.asia/en/article/china-builds-150-incubators-returnee-businesses.

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years. They have made important contributions to the country's industrial structure adjustment and innovation promotion efforts. Because of the different sponsors, the business incubators’ organization models and leadership styles vary. Table 5:Three Types of Business Incubators Category Investor

Government Sponsored Model Government

Private Enterprise Model Private

Multi-Investor Cooperation Model Multiple investors

Main purpose

Service oriented

Profit oriented

Diverse interests

Nature Characteristics Issues

Public institution Policy tool Relationship between the government and the incubator, and funding issues

Corporate enterprise Flexible Potential conflict between the incubator’s function and profit

Diversified Shared model Diversified goals contradiction management confusion goals

Source: Zhang Jingan, China’s Science and Technology Business Incubator, Case Analysis and Development Countermeasures (Science and Technology Document Publishing House, May 2001), p. 243.

During its 25 years of development, China’s business incubator has formed some certain service models. In terms of structure, functionality and other aspects, the business incubators has gone through continuous development, all the while maintaining a common model among all incubators and yet allowing each incubator to develop their own distinct characteristics. In summary, the incubation service models can be described as the following three: Service model 1: Shared space + shared facilities + shared service Service model 2: Shared space + shared facilities + shared service + professional consulting Professional consulting services include: Consulting with regard to business planning, market development planning, human resources development planning, financial planning, product development planning, and production planning; Consulting in finance and law and other professional services; Providing practical training courses to enterprises; Assisting in market development for enterprises; Assisting enterprises in connecting with all walks of life. Service model 3: Shared space + shared facilities + shared service + professional consulting + venture capital investment

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3.3

The Core Function of Incubator in Technical Innovation Incubation System in China

Figure.1 illustrates the core function of incubator in technical innovation incubation system in China ,it also reveal the importance of cooperation between institutions and organizations to support SMEs. With the 25 years development, The commercialization rate of China’s technology fruits has been dramatically increased, from national average 25%~30% to over 80%. The survival rate of technology enterprises also increased significantly, after the incubation and nurturing in incubators, the survival rate of small start-ups has generally exceeded 80%. Figure .1 The Core Status of Incubator in Technical Innovation Incubation System in China Industrial chain

SMEs

Policy Support

Business Incubator

Intermediary Resources

Finance Resources

Technical Resources Enterprises’ Resources

Source: Development Report of Technology Business Incubators in China

As important generators of innovative technologies as well as cradles of technology-based enterprises, TBIs have made a remarkable contribution to China’s economic development and industrial restructuring by nurturing the development of 15,931 successful enterprises in the past 25 years, of which 50 had gone public by 2006. Some of these enterprises have become international companies, such as Lenovo, Huawai, Suntech Power, etc.

3.4 Characteristics of Technology Business Incubator in China

3.4.1 Sponsored and supported by governments initially Most of the Chinese business incubators were established by technology administrations or STIPs. The programme is incorporated into the Torch Program and local high-tech industry development programmes. The initial fund mainly came from government. All the incubators got total or partial financial support from governments at provincial and city levels and STIPs in their early stage; 9

3.4.2 Rapid expansion in number and construction scale 3.4.3 Gradual diversification of investment entities China’s incubators experienced rapid transit from single investment by government to diversification of investment entities. 3.4.4 With nurturing high-tech enterprises as core mission 3.4.5 Close linkage between incubators and STIPs Many incubators are set up by STIPs. The STIPs give great support to incubators. Many STIPs have well-built infrastructure, therefore,incubators can get access to the infrastructure easily in its initial period. Some STIPs even don’t expect incubators to be economically independent; instead, they expect incubators to provide them high-tech enterprises of good performance. 3.4.6 Attach great importance to value-added services Include financing, training, developing international cooperation, Preferential policies.

3.5 Main Achievements

3.5.1 Creation of employment opportunities 3.5.2 Increasing the commercialization of science and technological fruits 3.5.3 Promoting the development of high and new technology industrialization, leading to the development of emerging industries in many cities 3.5.4 Creating and promoting active entrepreneurial culture and environment, attracting a great number of high-tech talents especially overseas Chinese scholars to set up new businesses 3.5.5 Promoting international cooperation 3.5.6 Promoting venture capital development in China

4 IMPERFECTION AND MAIN RESTRICTED FACTORS OF INCUBATOR IN CHINA

4.1 Over-Sufficient Hardware and Insufficient Services

In china, Some incubators pay too much attention to hardware construction, the services of technology business incubators have far been lagged behind the large-scaled and high quality

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hardware construction. “Over-sufficient hardware and insufficient services” is a phenomenon existing in many technology business incubators.

4.2 Not Efficient Enough in Management and Operation

The long existing operation and management mechanism problems have adverse effects on the operation of incubators. Some state-owned incubators are very traditional in management mechanism, incubators are difficult to develop through their own accumulation. Some incubators lack incentive mechanism, therefore they are unable to attract first-rate management talents, Lack of enough ability to integrate interlinkage and relative resources. and what’s more, it’s hard to find staff with business startup experiences in the management team.

4.3 Incomplete Intermediary Service System There Lack of enough funds and venture capital support. It’s very difficult for incubation enterprises to finance for lack of enough venture capital support and guarantee system because of the high requirements of guarantee services.

4.4 The Relationship Between Research Organization (university, scientific research center etc.) and Incubator is Not Tight Enough

4.5 Support Policy and Induct System Need to be Perfected Local governments haven’t laid out effective policies to support the development of incubators.

5 STAGES AND FUTURE DEVELOPMENT

5.1 Stages China’s high-tech business incubators have generally experienced the following two important periods of development.

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The first period of development of business incubators are from the late 1980s to the late 1990s. The main characteristic of this period was that the government offered special policies for supporting the establishment and development of incubators and made heavy investment in building the most basic facilities needed by the incubators. Institutionally, as self-reliance organizations independently responsible for their own incomes and expenses, the incubators gradually evolve into corporate management. This period lasted for about 10 years. The second period started from the end of the last century. In this period, the focus of incubation is laid on serving high-tech enterprises and entrepreneurs in a wider range and at a higher level, bringing out their potentials and satisfying the needs in the transformation of scientific achievements and the development of technology industrialization. Service scopes gradually transits from providing the tenant companies with thorough and all-round service to directly serving the entrepreneurs, especially value-added services like financing and financial consulting, talent training, market especially international market planning and preferential policies. The profit-oriented development of incubators seemingly goes against their objective. However, the profit-oriented development here does not mean the profitoriented business behaviour in general sense. It means that incubators make profit while properly taking their responsibility as institution for the public good for the purpose of enhancing their own strength and capability and consequently realizing further development of public good undertaking in a greater scale and at a higher level, which means to enter a “sound development cycle”. 10

5.2 Future Development

According to the Eleventh Five Years Plan（2005-2010,by the end of 2010, the number of incubators in china increase from 500 to 1000. Space for tenants reach to 25000 thousand square meters. Hosting more than 50,000 companies and helping create over one million job opportunities. This plan has came true. As customized incubation services with entrepreneurial tutoring are being promoted, TBIs in China will play an even more important role in encouraging the development of tech-based SMEs. 6 EXPERIENCES AND LESSONS

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Sun Dahai, Technology Business Incubator in China. Research Center of Business Incubator, Xiamen University, China. http://www.aspa.or.kr/files/Webzinevol.8_050810/050810_ASPA%20paper10_eg.htm.

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6.1 Government Support

Incubators as cradle for SMEs and innovation deserve support from government. Experiences indicate that government backup assumes tremendous significance for development of incubators in China.

6.2 Right Location Choice

The right choice of the location of an incubator will speed up its further progress and create enough income. Generally speaking, the incubators should be located in the STIPs, close to knowledge-intensive area surrounded by universities and research institutes, so that incubators can enjoy resources of technologies and knowledge workers as well as share R&D facilities of these institutes.

6.3 Market Orientation

For-profit or non-profit, an incubator must adopt market-oriented governance mechanism in its operation.Though government support in financing and administration is necessary in the start-up period of incubators, the ultimate purpose of incubators is to be self-sustaining and economically independent.

6.4 Integration with Venture Investment

Experience at home and abroad shows that both venture capital and incubator are effective tools to promote development of hi-tech companies and high-tech industries. Venture investment can greatly enhance the success rate of business incubation and accelerate the growth of tenant companies. Incubators offer facilities and services to start-up companies to lower the risk of commercial failures, and improve chances of success for venture investment. It’s a win-win cooperation .

6.5 High Quality Services

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Although a facility with appropriate amenities is one component of a successful incubator, but the backbone of these programs is the array of business support services they provide entrepreneurs, "No building can grow companies, provide mentoring and handholding, and assist an emerging company in meeting the benchmarks necessary for growth." Critical to an incubator is on-site management, which develops and orchestrates business, marketing and management resources tailored to a company’s needs. Best practices of business incubation should ensuring that management time is focused primarily on serving companies, rather than managing buildings, raising money or holding politicians' hands. Quality of services is the core value of an incubator and to a large degree determines the success rate of its tenant companies. Allen had analysed about how incubators are managed in incubator life cycles. The interaction of the "stages of evolution" of an incubator facility with the three areas of responsibility which must be covered by an incubator manager as set out in Table 6 below. Table6: Incubator Time/Function Matrix Stakeholders

Start-up

Business Development

Maturity

•Create core group of sponsors •Assemble mission statement •Determine needs and resources of sponsors

Facility •Perform cost/benefit analysis of building rehabilitation •Rehab initial space to be rented •Admit first tenant companies

Tenant Companies •Provide basic shared tenant services •Offer flexible, inexpensive space •Provide access to professional assistance

•Enlist aid of sponsors •Assist firms in capital to market facility •Attract one or more acquisition •Enlist aid of sponsors anchor tenant companies •Create programs to to provide business •Renovate space on encourage the mixing of support services as needed basis companies •Expand base to •Provide space for •Market the collected include more shared tenant service products and services of stakeholders tenants •Reassess levels of commitment to original •Manage cash flow •Take equity in tenant plan •Construct specialised companies •Evolve programs to lease hold components •Sub-contract to private reflect changing needs of •Leverage physical service providers stakeholders plant for future interest •Coordinate seed •Construct alliances opportunities capital pool between and among sponsors Source: Allen et al (1987) Small Business Incubators

Incubators in China have finished the Start-up stage and entered the development and maturity stage. The key factors of building balanced ecological system for China’s technology business incubators lie in providing three key services for incubation enterprises, namely, resources service dominated by investment, technology service and market service. When such service needs are met, incubation enterprises can solve financing bottleneck in

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their early stage and complete middle tests and industrialization, realize relatively large-scale market expansion and enter into a new development stage.

6.6 Coperation and Extensive Networking

Incubator serves as a platform for convergence of resources between R&D institutions, universities and other companies. The incubators should set up such non-governmental organizations as association, chamber of commerce and club, which connects the incubator with the all walks of life. Those organizations offer opportunities to incubator in training, exchanging experience and other cooperation.

6.7 Selection of Promising Tenants

Incubators should be very careful in choosing tenants, such aspects as market potential, management team and business plan should be emphasized. REFERENCES [1] Adkins, Dinah, A Brief History of Business Incubation in the United States. National Business Incubation Association, Athens, Ohio. 2002. [2] Dennis Romero ,A New Take on Incubators. http://www.entrepreneur.com/magazine/entrepreneur/2009/may/201228.html. [3] Linda Knopp,The Role of Incubators in Cultivating Small Business. http://www.frbsf.org/publications/community/investments/0308/article3a.html. [4] Hackett, Sean M. with David M. Dilts. “A Systematic Review of Business Incubation Research,” Journal of Technology Transfer, Vol. 29, 2004, page 60. [5] National Business Incubation Association, “Business Incubation FAQ.” April 2007. [6] Small Business Administration, Office of Advocacy: Frequently Asked Question. June 2006. [7] United States of America, Department of Commerce,Impact of Incubator Investments (1997). [8] Andrew Duff Best Practice in Business Incubator Management. http://www.wantree.com.au/~aduff [9] Reserch on the Role of the Incubation Policy in Helping the Growth of New Technology Based-Firm [10] Report about china’s hi-tech enterprise incubator for it’s twenty years birthday. http://chineseincubator.bokee.com/viewdiary.180327063.html [11] Sun Dahai ,Technology Business Incubator in China .ASPA Weihai. http://www.aspa.or.kr/files/Webzinevol.8_050810/050810_ASPA%20paper10_eg.htm. [12]Junbo Yu , Yongda Yu , Shaoming Cheng, The role of government in incubatorincubation development.http://161.31.108.27research/ICSB/2005/215.dpf.

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[13]Allen et al ,Small Business Incubators – Phases of development and the Management Challenge, Economic Development Commentary, Volume 11/Number 2/Summer1987, pp 6 11.

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Acknowledgement This paper is one research result of the projects: “SME Finance Based on Industrial Cluster” supported by National Social Science Foundation. 10BJL025. Introduction of the author Wang Liming (1964-), Professor of Business School of Shandong University of Technology Major research fields: Industrial Economics

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