Stimulating Dynamic Value: Social Capital and Business Incubation as a Pathway to Competitive Success

Studies of business incubation tend to examine how managing the incubator can help incubating firms create value. In the past, emphasis has centred on the provision of core business services and the design of the incubator, but more recent approaches focus on the provision of a rich network through which an incubating firm can engage in collaborations. We argue that such provisions dictate only the opportunities for value creation; how incubating firms choose to behave and pursue network opportunities dictates the extent to which these opportunities can be realised and, thus, the value creation. Firms' destiny lies in the hands of their combinations of strategic networking activities, and incubation outcomes do not occur because of their mere presence in an incubator.We identify two value-stimulating behaviours (networking activities)—resource pooling activity (resource-seeking behaviour) and strategic network involvement (knowledge-seeking behaviour)—and develop a value matrix that classifies incubation into four types of outcomes on the basis of the extensive versus narrow combinations of these activities. Each incubation outcome has merits and can be used to inform the evaluation of incubating firms and the relational strategies of their managers.