This entry contains excerpts from the following resource:
- OECD (2020), International Compendium of Entrepreneurship Policies, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/338f1873-en.
This compendium of entrepreneurship policies illustrates 16 case studies of inspiring practice policies from 12 OECD countries.
For the case study summarized below, the authors explored how a set of two complementary programmes in Norway have supported business development services providers who serve different firm profiles.
This support mechanism operates nationally, but with a particular focus on rural areas where entrepreneurs face special challenges in accessing the resources to develop their businesses.
Siva provides financial support to incubators and business gardens enlisted in these programmes:
1. The Incubators Programme aims to boost innovative entrepreneurship and support further development of existing businesses. The incubators target innovative ventures with growth potential.
- Incubators are often part of and partially owned by a research facility, though some are stand-alone firms. Research facilities often have close ties to a university or college in the region, and may be (partially) owned by them.
2. The Business Gardens Programme aims to stimulate regional development by supporting business creation and boost growth of existing firms in District Areas. It also aims to reinforce the role of counties in support of regional development. The business gardens target firms in sparsely populated and remote areas, i.e. District Areas.
- The ownership and financing of business gardens varies. The business gardens are often co-owned by Siva, counties, municipalities or private organisations. Aside from the Siva grant, they often get financing from regional governments. In addition they can collect fees from the firms they serve.
These incubators and business gardens are referred to as “Siva partners”. There were 34 incubators and 40 business gardens in the programme as of January 2020.
The Industrial Development Corporation of Norway (Siva) has overall responsibility for managing the programme. Siva aims to spur innovation capabilities and economic growth in all parts of the country with a special responsibility to promote growth in rural areas. The 11 counties have also been involved.
The incubation programme is funded by the Ministry of Trade, Industry and Fisheries, and the Municipal and Regional Authorities Modernization Ministry.
The Business Garden Programme is financed by the Ministry of Local Government and Modernisation, and the counties. The business gardens received 25% co-financing from the counties until 2017.
Siva also cooperates with both the Norwegian Research Council and Innovation Norway. The business gardens and Incubators organise activities in support of other national programmes, such as the Siva Catapult-scheme which supports the development of national infrastructure for SME innovation.
Business gardens and incubators are selected on their capacity to serve their respective target entrepreneurs:
- Incubators should be implanted in regions at a stage of development where focus on innovation is of strategic importance. They should demonstrate linkages with industry as well as with higher education and research organisations.
- Business gardens must be active in providing and facilitating access to competence, networking opportunities and infrastructure for SMEs and entrepreneurs and be suitable as a knowledge-based grouping for SMEs in a small community.
The programme is currently planned to run during 2012-22 (ongoing).
The Business Garden programme started in 1998, with a second iteration in 2006-11.The Incubators programme started in 2000 working with individual incubators until 2011.
A mid-term programme evaluation was conducted in 2017 by the SNF Centre for Applied Research at NHH, covering the period 2012-16. The evaluation aimed to assess (i) the programme’s organisation, (ii) its impact on the firms wo use the incubation and business gardens’ services as well as (iii) the role of incubators and business gardens in the regions.
The evaluation was based on a survey of incubators (37 respondents), business gardens (43) and firms enrolled in incubators (333) and in business gardens (494). Interviews with Siva representatives and programme managers were also conducted. Previously conducted satisfaction survey and operating data were also used. A range of KPIs were used to evaluate the programmes’ performance:
Evaluation of process:
Assessment of role of KMD, NFD, LMD and counties (financing, targeting, goal management)
Assessment of Siva’s contribution (grants, expertise, network)
Evaluation of impact (value creation):
Programme operators (selection of companies, quality of services, expertise, networks)
Participating firms: characteristics, competence development, networks development, performance (profitability, turnover growth as compared with a control group)
Four incubation programmes were also evaluated in the previous iteration of the incubators programme (evaluations in 2003, 2008, 2009 and 2013).
The 2017 mid-term programme evaluation found:
- That both programmes were serving their established target groups in terms of the service providers supported and the companies served through them.
- That both programmes had a positive impact on the entrepreneurs who received support.
- Positive results in terms of building local capacity to facilitate entrepreneurship and business development.
- That Siva promoted learning between operators and strengthened the networks for incubators and business gardens, mostly at the national level.
- That county councils played an important role as co-funders of business gardens and supported their development.
- Through a quantitative analysis comparing firms served by incubators/business gardens to firms that have not been affiliated with these support programmes, the evaluation estimated higher levels of value-added after 3 years.
In terms of incubators in the programme, the evaluation showed the following results:
- They tended to be located in central areas (74%).
- They tended to serve young firms, often in knowledge intensive industries (69%). Participating firms tended to have higher growth ambitions than these in business gardens.
- Incubators were well linked to Innovation Norway (the national innovation agency) and business clusters but also collaborated with a wide range of actors (e.g. county councils, local businesses, HEIs).
- Incubator managers who responded to the survey estimated that their main contributions were strengthening participants’ business knowledge and an increasing firm survival.
- 79% of participating companies reported being satisfied or very satisfied with their experience, especially in terms of business development support: 88% reported a positive impact of their affiliation with the incubator on their firm’s development. The effect was significantly higher for firms located in the incubator’s premises.
In terms of business gardens, the evaluation showed the following results:
- In contrast to incubators, business gardens tended to be located in peripheral municipalities (60%), and in District Areas (89%).
- They tended to serve more established firms and cover a wide range of sizes and industries.
- Business gardens primarily reported linkages with other local businesses and other innovation companies (e.g. incubators).
- Co-operation with counties was found to have contributed to increased linkages with research and education institutions as well as linkages with other business gardens.
- While companies in business gardens tended to collaborate less with research and education institutions than those in incubators, there was more collaboration among enterprises in business gardens than in incubators.
- Business garden operators who responded to the survey estimated that their main contribution was to improve participating entrepreneurs’ business knowledge. Other cited contributions included developing networks with research and education institutions and innovation.
- Some 77% of participating companies reported being satisfied or very satisfied with their experience, particularly in terms of skills development. Some 80% reported a positive impact of their affiliation with the business garden on their company’s development.
The evaluation provided recommendations including developing stronger linkages to communities and stakeholders and developing models for more tailored follow up with former participant companies.
Incremental changes have been implemented over time to improve the efficiency of the programme. For example, Siva has introduced a tool helping incubators and business gardens to report on the use of the grant and, optionally, other sources of funding. Formalised processes were also put in place to conduct structured talks between operators and Siva using a tool called Qimono. The structured talks are held every 18 months and the process involves an extensive assessment questionnaire to identify areas for further development in a particular business garden and incubator.
Following an assessment, a further differentiation in the grant amounts paid to incubators and business gardens was introduced in 2016, in order to increase support to providers with untapped potential and downgrade support to bad performers. The new system also facilitates exit of bad performers.
Lessons for other ecosystem:
The two programmes have demonstrated a positive impact on service providers (Siva partners) and the firms using them. In particular the programme was successful in targeting support to different profiles of firms by supporting two types of operators targeting different populations of businesses and entrepreneurs. Key lessons for the development of similar programmes include:
The use of non-governmental structures helps obtain a good geographic coverage. It is crucial that similar programmes include capacity building and networking for partner organisations, to ensure good quality support is provided and help the development of strong local business support ecosystems.
The use of a brand to signal quality services is helpful for users to navigate the system. The system must be designed to allow for exit of sub-par service providers to maintain service quality while helping providers with potential to improve. Programmes should set up a robust evaluation framework and sufficient resources to regularly assess impact of different delivery structures on firms.
Monitoring of incubators and personalised feedback for incubator staff are important for development. Incubator programmes should set up a formalised system for incubator managers to report on their activities, communicate regularly with, and receive personalised feedback and guidance from programme managers.
Programmes should not overlook supporting small structures. Evaluation suggested that smaller incubation structures showed better results than larger facilities.
Physical co-location of start-ups is an important part of the support offered. The evaluation found that firms which opted for physical co-location received stronger benefits than those who received services without locating on the premises.