International Journal Of Technology
Management & Sustainable Development
MASTER THESIS SUBMITTED AS A
JOURNAL ARTICLE
Benefits of Shared Co-working Spaces
ABSTRACT
Background: ‘One way you might be able to take your idea and make it a business'
Business incubator originated in the United States, with aim to provide supportive environment for new ventures, provide incubatees' with affordable office spaces and a variety of support services and its considered as a tool for promoting innovation, economic growth and employment.
Purpose: Investigation on what should be considered most important when planning to
start a BI. Should there be synergies through collaborations or reduced cost through shared meeting spaces and technical equipment.
Delimitation: I acknowledged the fact that when practitioners share co- working spaces
in the Business Incubation, there could be both advantages and disadvantages. This study was focus on the benefits.
Method: The research had a deductive qualitative approach. The data was collect
through a global survey sent out by email and six firms participated.
Conclusions: Overall conclusion for this study is that, cohabitation in the BI promotes
networking between entrepreneurs, both new and mature firms. Entrepreneurs’ benefits from share co-working space through collaboration, relationships between incubated firms. Thus, internal networking. However, networking should be considered a deliberate strategy of a business Incubator and synergies should be considered based on that.
Language: UK English
INTRODUCTION
‘One way you might be able to take your idea and make it a business'
Business incubator originated in the United States, with aim to provide supportive environment for new ventures and has been a topic of interest for a long time, since 1985 (Allen and Rahman, 1985; Hackett and Dilts, 2004).Incubator should be more of a firm not only as an office building and infrastructure. It should not be limited to shared- office space facility, mission statement and infrastructure. It should also be seen as a network of individuals and organisations (Hackett and Dilts, 2004). Despite the fact that Business incubators have lots of limitations, however, they should be considered as an important component of an economic development strategy. Business incubators provide incubatees with affordable office spaces and a variety of support services and it is considered as a tool for promoting innovation, economic growth and employment. Literature has proposed definitions for BIs, but the number of definitions is still expanding (Hackett and Dilts, 2004; Hughes et al., 2007). The various dimensions are business incubators for profit/ non- profit, publicly/ university sponsored and private (Hackett and Dilts, 2004).
Definition-Business Incubator
'Business incubator is a shared office-space facility that seeks to provide its incubatees' with a strategic value-adding system of monitoring and business assistance'(Hackett and Dilts 2004, p. 57).
'Business incubator is a facility that house young, small firms to help them develop quickly into competitive businesses'(Hughes et al. 2007, p. 155).
1.1 Problem Discussion
Norman, 2008). Business Support services such as coaching and training are crucial elements of learning within Business Incubations. Coaching is an important service Business Incubations provide to tenants (Hansen et al., 2000). Literature argued that, services pertaining to business incubation such as networking could be more effective in specialised business incubators (Nolan, 2003; Hansen et al., 2000). The fact that incubatees operate under the same roof, makes collaboration much more likely. This can involve formal or informal partnerships, joint ventures, and information sharing. When networking is institutionalised, incubatees may achieve some benefits (Bøllingtoft & Ulhøi, 2005). Building knowledge and capabilities through inter-organizational relationships is faster than if the firm was to develop the knowledge and capabilities internally (Bruneel et al., 2010). Shared office spaces, business support and networking have received attention in the extant literature (Hackett and Dilts, 2004; Clarysse et al., 2005; Hansen et al., 2000). Access to specialised networks is critical for the development of tenant companies (McAdam & McAdam, 2008). Thus, networking opportunity for professionals from round tables and other events. This is to say that, when communities are brought together, it helps in the growth of companies.
1.2 Delimitation
I acknowledged the fact that when practitioners/entrepreneurs/tenants share co- working spaces in the Business Incubation, there could be both advantages and disadvantages. For this study, I choose to focus on the benefits and internal networking (relationships between incubated firms. This is because I believe that the disadvantages will always be within a company to control. Also, I had planned to conduct a structured interview for this study but due to time limit, this study is focus on survey questionnaire.
1.3 Research Question
What are the benefits of shared co-working spaces in a Business Incubator?
1.4 Originality /Value/ Relevance
how a business incubation process can lead to a specific outcome. (Hackett &Dilts, 2004; McAdam&Marlow, 2007; McAdam&McAdam, 2006; Amezcua, 2010; Bruneel et al., 2012). Other parties that will benefit from this study are Videum, students and the university. The contribution for this study is a synthesis and analysis of concepts. The aim of this study is to assess the extant literature on business incubation and to do an empirical perspective on how business incubation management can provide an environment that supports the development of incubatees/entrepreneurs and firms.
1.4 Outline for the thesis.
2. LITERATURE REVIEW
Business incubator is an entity that provides physical resources and support to start-up firms such as shared office space and technological infrastructure. With shared working spaces, formal and informal relationships with other members of the incubator can exist, knowledge exchanged and a network of people created (Hughes et al., 2007; Branstad, 2010). Business Incubators consist of three basic objectives, technology transfer, promotion of entrepreneurship and leading edge research (McAdam & McAdam, 2006). Business Incubators offer low-cost space, shared equipment and comradeship of entrepreneurs (McAdam & Marlow,2007). Business incubator plays a significant role and has gained recognition globally. The objective of a business incubator is not limited to improving services for incubatee firms but also focus on sustainability (Hackett and Dilts, 2004). Business incubators are very important today because they provide unique opportunity to entrepreneurs who benefit from resources that are located at the center (Rothaermel and Thursby, 2005). Literature has argued on the type of services offered in a business incubator e.g, administrative, business assistance and networking services (Bergek and Norman, 2008).
Services pertaining to business incubation such as networking could be more effective in specialised business incubators (Nolan, 2003; Hansen et al., 2000). Access to specialised networks is critical for the development of tenant companies (McAdam & McAdam, 2008). The fact that incubatee' operate under the same roof, makes collaboration much likely. This can involve formal or informal partnerships, joint ventures, and information sharing. When networking is institutionalized, incubatees' may achieve some benefits. (Bøllingtoft & Ulhøi, 2005). Entrepreneurs boast the usefulness and intensity of inter-tenant contacts (Sherman & Chappell, 1998). Partnering with other organizations also offers the opportunity to acquire new knowledge and develop new capabilities (Lane & Lubatkin, 1998). Building knowledge and capabilities through inter-organizational relationships is faster than if the firm was to develop the knowledge and capabilities internally (Bruneel et al., 2010). Shared office spaces, business support and networking have received attention in the extant literature (Hackett and Dilts, 2004; Clarysse et al., 2005).
attributed to partnerships, knowledge sharing, and other relationships. Networking in a business incubator could add value when it is a deliberate strategy. Network could be a deliberate strategy of a business Incubator and only in such a case should synergies be considered (Hansen et al, 2000).
Business Incubators should be seen as a network of individuals and organisations (Hackett and Dilts, 2004). Despite the fact that Business incubators have some limitations, however, they should be considered as an important component of an economic development strategy. However, literature report disadvantages of excessive networking and overflow of information. This implies that being in a close proximity to each other could lead to effects on secrecy. Which means that, when tenants copy and steal ideas/ secrets, entrepreneurs/tenants will turn to protect sensitive information from others (McAdam & Marlow, 2007).
3. METHODOLOGY
Research Framework
This chapter presents the methodological choices made for the study. It also ends with why a particular methodological decision is made. The chapter starts with the basic research approaches and ends with the Operationalisation , data display and analysis method.
3.1 Research approach
Its the way a researcher seeks to approach a research problem. Researchers can choose from which perspective to investigate a phenomenon: a qualitative perspective, a quantitative perspective and mixed method. Research approach seeks to explain how the study could be directed and decisions made (Bryman & Bell, 2011).
3.2 Deductive research
data analysis when they engage in qualitative case studies. As a result, this calls for a need to develop methodological protocols for deductive case studies in particular. Because the purpose for this study is to identify benefits of shared co-working spaces when entrepreneurs gather together and the precise phenomenon is the Business Incubation. This problem being researched is not very common, this would require that I have the possibility to reach potentials respondents who are and have been in such situations. Because of the fact that, only the entrepreneurs/tenants are unique and dynamic for this study, I think that its more productive to avoid statistical generalizations. For these reasons, I consider that a deductive will be more suitable for this study.
3.3 Qualitative research
A qualitative research approach is suitable when the problem at hand involves a greater complexity and the situation where the research is done needs further explanation. Data gathering is less formalised and could be used when several variables are under investigation with a good number of respondents (Bryman & Bell, 2011). Qualitative research looks at the research setting from the viewpoint of deep understanding rather than micro-analysis of limited variables. The interest is in the stories and the experiences of people in the natural setting. This goes beyond what the statistics infer to examine the story behind the numbers. Instead of trying to prove or disprove a hypothesis, qualitative research looks for themes, theories, and general patterns to emerge from the data. Qualitative research is hypothesis-generating rather than serving to test a hypothesis (Merriam, 1988). This study seeks to investigate the Business incubation and the benefits of shared co-working spaces. As seen in the Operationalisation, research has been conducted in this area to be able to conceptualize constructs and a research question. The result aims to look for themes, theories, and general patterns to emerge from the data, which makes a qualitative research approach suitable for this study.
3.4 Research design
There are three categories to be chosen; descriptive, exploratory or causal (Aaker et al., 2010).
other. The aim with this approach is to see the cause and effect between variables and which of the variables that cause, and which variables that effects. This approach often requires an experimental study (Aaker et al., 2010). Exploratory research design is suitable when the problem under investigation is not clear. This type of research is often used in pre-studies to be able to identify a problem. The exploratory research helps to define a purpose to be able to research it further (Aaker et al., 2010).
This paper is focused on the benefits of shared co-working spaces in the business incubation for the purpose of answering the research question ( what). In order to analyse the benefits, I choose to study a single phenomenon to make a descriptive and not a comparison between different case studies. Because of this, I choose to use a descriptive research design.
3.5 Data sources
There are two different types of data collection method; primary data and secondary data. Primary data is data that is collected for a specific purpose and with a research question in mind. The data is also relevant because it is up to date. This reduces the risk of the results being out of date. Primary data collection often requires enough time/ time consuming and involves a high costs (Bryman & Bell, 2011). Contrary, secondary data is data gathered by others and for another purpose, thus could be less costly and time saving (Yin, 1994; 2012). The data is obsolete if it is not newly gathered; in this case the results of the study might be misleading (Bryman & Bell, 2011). For this paper I shall use secondary data in the form of previous research as well as primary data from the respondents. Both sources of data are used because I think that the secondary data will provide a framework for understanding the problem in a general context and highlights possible problem areas. In contrast, the primary data would be instrumental for answering the research question and clarifying the problem that this study seeks to resolve.
3.6 Data collection method
There are three ways of gathering data when it comes to primary data; experiments, observations and surveys. Survey is the most generally used method when it comes to descriptive research.
interviews and self-administered questionnaires (Bryman & Bell, 2011). Telephone interviews are similar to ordinary interviews but far cheaper and less time consuming. Using telephone interview can also solve geographical problems. Self- administered questionnaires are easy to distribute to a large number of respondents and is a fast way of gathering data. It could be carried out both in paper format and by electronic means. Because the respondent is anonymous in this type of data collection, honest answers could be given which will make the results of the study accurate (Bryman & Bell, 2011). The purpose of this study and the above-mentioned factors makes an email- based survey most suitable for this study.
Because of the intention to study the benefits of shared co-working spaces, the scope of the survey was not shaped only on University' business incubators. As the survey questionnaire reveals, there has been no restriction for this study, because the volume and quality of the primary data is collected from entrepreneurs'/tenants that share co-working spaces in a business incubator. I did not decide whether publicly sponsored non- universities business incubators could be advanced than universities business incubator because the common problem understudy was the benefits of shared co-working spaces. As a result, all the two types of business incubators were chosen to participate for this study. This is because; co-working spaces is common in all. A questionnaire survey was created with qualitative questions, 1- 5 Likert scale and respondents had to choose from multiples as seen in the Appendix. 100 questionnaires were sent to six global business incubators and 60 responses were collected, which resulted to 60%. The rate of response was high. In addition to that, it should be noted that the quality of response was high because majority/most of the respondents answered all the questions with '4' ‘5’ as indicated in the survey questionnaire. The data was collected from entrepreneurs/ tenants that have been and are present in the business incubation.
3.7 Operationalisation
Construct Type of scale Items Questions Entrepreneurs(
Tenants) co- development
3- point Likert scale 1- strongly agree 5- strongly disagree -Building knowledge -Inter-organizational relationships - Idea generation
To what extend do you co-develop with other entrepreneurs /tenants Adapted from; Bøllingtoft & Ulhøi, 2005 ; Clarysse et al.,2005; Bøllingtoft & Ulhøi, 2005 ;
Clarysse et al.,2005 Tenants information
sharing
3-point Likert scale 1:None – 5:Extensive
- Share Business plans - Share technological information
- Share marketing information.
To what extend do you collaborate with other tenants/ entrepreneurs? Adapted from; Hughes et al., 2007 ; Branstad , 2010 ; Clarysse etal.,2005 Entrepreneurs
benefits from shared spaces
4-point Likert scale 1-Strongly disagree 5-Strongly agree - Spontaneous networking -Share knowledge - Acquire new knowledge - Develop new capabilities Entrepreneurs benefit from collaboration under the same roof and networking with other entrepreneurs Adapted from; McAdam & McAdam, 2008; Bøllingtoft & U l h øi , 2005 ; Sherman & Chappell, 1 9 9 8 ,Rothearmel and Thursby, 2005
Services performance 4-point Likert scale
1:None – 5:Extensive
-Office space -Coaching
-Organized networking -Information Technology
To what extent will you rate the following services performance? Adapted from; Hansen et al., 2000; Clarysse et al., 2005; Bergek & Norrman, 2008
Basic services 3 -point Likert scale
1:None – 5:Extensive
-New to your market know-how
-New to your technology know- how
-Finding, negotiating and contracting
How will you describe the service innovation? Adapted from; Hansen et al., 2000; Clarysse et al.,2005 Figure1, Operationalisation Table
on perception items (Bryman & Bell, 2011). It is also necessary to use items that have been created and used by other researchers as it increases the validity and reliability of the study (Bryman & Bell, 2011). The items used in this study have all been tested before in the literature mentioned in the Operationalisation table and therefore could be seen as reliable. When items and questions are reused, it makes it easier for other researchers to replicate the study and compare the results (Bryman & Bell, 2011). In order to make the research accurate and reduce mistakes made by respondents when answering the questionnaires, multiple items could be used for each of the constructs (Bryman & Bell, 2011). The choice of using multiple items could reduce the risk of having a respondent rate a question wrong and therefore also increase the validity of the research (Bryman & Bell, 2011). This is explains why multiple items have been condered instrumental for this study.
3.8 Data Display Method Pattern Identification
3.9 Methological choices figure
Figure 2 Methological choices
4 RESULTS & FINDINGS
The material presented here, has been collected from survey questionnaires responses.
4.1 Results Matrix
Questions
RA V DMZ K MY I I.I Co-develop ideas with other entrepreneurs/ tenants Building knowledge Inter- Organizational relationships Idea generation Collaborationwith other tenants / entrepreneurs
Share information share technology
Share marketing information How will you
describe the Product/service innovation?
New to your market know-how
New to your technology know- how Finding,negotiating and contracting Integrate more with other tenants/ entrepreneurs? Knowledge transfer Development of new capabilities
Transfer of Business oriented knowledge
Figure2 Results Matrix
The empirical result presented in the matrix above is a transcription of the global survey interviews conducted from 60 respondents in 6 business incubators. The yellow symbol stands for positive answers with 4 and 5 as noticed in the Likert scale. In contrast, the white symbol stands for differences/ negative with 3, 2 and 1 as noticed in the Likert scale. The patterns identified are not very significantly different. The strategy was suitable for pattern finding. The differences do not appear to be wide, but what is obvious is the visible impact indicated in each group. The result from findings shows that every respondent works to a high degree with other entrepreneurs in co- development and achieve benefits in sharing co-working spaces and long term relationships, that is, networking adavantage with incubated firms. All the companies answered that entrepreneurs do benefits from a great number of factors in co-creation of value with other tenants and other entrepreneurs ideas are also considered during development process. As noticed in the results matric, what I found interesting in the response is that, cost reduction and save on equipment cost was noticed to have no significant effects as benefits when entrepreneurs share co-working spaces in the BI.
What do you benefit most in co-working spaces in BI from the following?
Formal & Informal
relationship Knowledge exchange Network Creation Spontanious Networking Cost reduction Comaradeship
Save on Equipment costs Get external advice
Increase entrepreneurial
skills
Access to new technology Generate new business ideas Write and present a business plan
5. Discussion and conclusion 5.1 Discussion
Should there be synergies through collaborations or reduced cost through shared meeting spaces and technical equipment. In other words, what are the benefits/ advantages of shared co-working space in the BI?
Having investigated six business incubators globally, findings have resulted to empirical evidence that could contribute to the phenomenon, business incubator and internal networking advantages. The survey response generated some interesting results. As noticed in the literature perspective, networking with other firms has always been considered to be strong. The result of this study found that, cohabitation is indeed positive.
The results have shed new light on the topics of benefits and internal networking advantages when incubated firms share buildings. From the results, spontaneous networking in the business incubator as a result of co-working and interaction, entrepreneurs/ tenants can get ideas, motivation and solutions from other mature or experienced firms. Share spaces in the business incubation play an important role in promoting internal networking between new and experienced firms. Some facts can be considered to leverage the potential benefits of internal networking in the business incubation. Example could be types of entrepreneurs and co-working with mature/ experienced firms/ entrepreneurs helps in giving new firms/entrepreneurs access to external networking. Internal networking (relationships between incubated firms) in the business incubation can increase chances of a firm surviving after leaving the period of the BI.
business incubator should not be limited to improving services for incubatee' firms but also focus on sustainability. (Hackett and Dilts, 2004; Rothaermel and Thursby, 2005). While most Business incubators are office buildings, those with strong networking have more successful tenants (Hansen et al., 2000). This is to say that, success could be attributed to partnerships, knowledge sharing, and other relationships. Internal networking in a business incubator can add value when it is a deliberate strategy. However, network could be a deliberate strategy of a business Incubator and only in such a case should synergies be considered (Hansen et al, 2000).
Business Incubators should be more of a firm not only as an office building and infrastructure. It should not be limited to shared-space office facility, mission statement and infrastructure. It should also be seen as an internal networking of individuals and firms (Hackett and Dilts, 2004).
Despite the fact that Business incubators have lots of limitations, however, they should be considered as important component of an economic development strategy. One reason why the results of this study differs from other studies is that, this research was focused only on the internal networking advantages, that is, relationships between incubated firms when they share buildings. Factors that facilitate internal networking could be related to the individuals. This study vision was limited to internal networking.
5.2 Conclusions
This study also affirms what earlier literature argued concerning co-working with other firms and internal networking advantages. When incubatees operate under the same roof, makes collaboration much more likely. This could lead to formal or informal partnerships, joint ventures, and information sharing. Networking with other firms also offers the opportunity to acquire new knowledge, develop new capabilities and achieve some benefits (Bøllingtoft & Ulhøi, 2005; Hansen et al., 2000; Sherman & Chappell, 1998; Clarysse al., 2005; Rothaermel and Thursby, 2005; Hughes et al., 2007; Branstad, 2010). This study found that, there was no confirmation on cost reduction and save on equipment cost as benefits related to individuals in the business Incubator. However, more research is needed before making a generalization on these factors.
co-working space through collaboration, relationships between incubated firms. Thus, internal networking. However, network could be considered a deliberate strategy of a business Incubator and synergies should be considered based on that.
Figure4 Benefits of shared co-coworking spaces in the Business Incubation´
5.3 Managerial Application
Managers in Sweden, primarily Växjö Municipality that are interested in knowing what to be considered in a business incubator should consider to invest more on relationships between incubated firms when sharing spaces in the BI. As internal networking advantages have been noticed in the results, it will be wise to consider this aspect in the process.
Although cost reduction and save on equipment cost was noticed to have no significant effects as benefits in the BI, managers should not completely consider them as not important because they could facilitate the process. These factors have shown to play
Proximity/ co-working with other Tenants/ Entrepreneurs
Networking advantages
Relationship among incubated firms
Inc re ase entre pr ene ur ial ski ll s Share Knowledge Generate new business ideas
Write and present a business plan
C
omar
ade
ship
Get external advice
Network Creation Formal & Informal relationship
important role in a study by McAdam & Marlow (2007). It might serve as a protected environment.
5.4 Limitation of the study
Time and distance limited this study. As the survey questionnaire was sent by email. The use of emails could have both facilitated and hinder respondents from asking questions concerning the questionnaire. This might have resulted to a rush in answering the questions.
5.5 Future Research
I noticed some interesting area suggested for other researchers to consider. What are factors that facilitate and hinder networking when related to the construction of the business incubator and the individuals?
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APPENDIX 1
Appendix 1A: Survey- Questionnaire
Hi,
Thank you for participating in this survey. We are students at Linnéuniversitetet, Växjö. We are investigating on how Business Incubator could be considered as an enterprise that facilitates the early-stage development of firms by providing office space, shared services and cohabitation. This study is important because no research has been conducted primarily on the Swedish market, which makes this investigation unique. This survey is anonymous and the accumulated results will only be presented in the study.
Entrepreneurs (Tenants) co-development what extent do you co-develop with other
tenants? None Extensive
Building Knowledge
1 2 3 4 5
Inter-Organisational relationships 1 2 3 4 5 Idea generation 1 2 3 4 5 Tenants information sharing
To what extent do you collaborate with
other tenants? None Extensive Share Business plans 1 2 3 4 5 Share technological information 1 2 3 4 5 Share marketing information
1 2 3 4 5
Entrepreneurs benefits from collaboration and networking with other
Entrepreneurs?
Strongly agree Strongly disagree
Acquire new knowledge
1 2 3 4 5
Develop new capabilities 1 2 3 4 5 Share knowledge 1 2 3 4 5 Basic Services
How will you describe the service
innovation? None Extensive New to your market know-how 1 2 3 4 5 New to your technology know- how 1 2 3 4 5 Finding, negotiating and contracting 1 2 3 4 5 Entrepreneurs partnership & Networking During what stage in the business incubator
process do you integrate more with other tenants?
None Extensive
Knowledge transfer 1 2 3 4 5
Develop new capabilities 1 2 3 4 5
Transfer of Business oriented knowledge 1 2 3 4 5 Services Performance
service performance?
Office space 1 2 3 4 5 Coaching 1 2 3 4 5 Organized networking 1 2 3 4 5 Information Technology. 1 2 3 4 5
Benefits of sitting in the same room in a Business Incubator What do you benefits most from the
following? No Benefits Benefits
Formal & Informal relationship 1 2 3 4 5 Knowledge Exchange 1 2 3 4 5 Network Creation 1 2 3 4 5 Cost reduction 1 2 3 4 5 Comaradeship 1 2 3 4 5
Save on Equipment costs 1 2 3 4 5
Get external advice 1 2 3 4 5
Increase entrepreneurial skills 1 2 3 4 5
Access to new technology 1 2 3 4 5
Generate new business ideas 1 2 3 4 5
Write and present a business plan 1 2 3 4 5
Increase credibility 1 2 3 4 5
Appendix1B : Paticipants in the Survey and Criteria
BIs Country No OF start
ups
Respondents background
R.A USA 270
It was established in 2000. The best Business Incubator in the world. It was ranked by UBI global index comparison study as the 1st in the world(UBI index. Com, June 2014)
with stakeholders in the innovation system and strategic support.
V Sweden 8
Its one of Sweden's Business incubator with co-working spaces for entrepreneurs known as business incubator of Småland. It was founded in 2000 and the idea was generated in 1995. Its the 10 best in Europe.
DMZ Canada 120
Canada’s largest business incubators and co-working spaces for entrepreneurs. It was founded in 2010. UBI Global Index
comparison study ranked DMZ as the 5th in the world.
Goodperformer; Access to network and
competence development.(UBI index. Com, June 2014)
Contributor Details
Elisabeth Atem Tabetando is a research student in Business Administration, she has been awarded a Master degree in Business and Economics in June 2015 from Linnéuniversitetet, School of Business and Economics. She got her MSc in Marketing in June 2013 and BSc in International Sales and Marketing in June 2012 from Linnéuniversitetet.
