The Underlying Determinants that Impact Business Incubation Performance in Indonesia

The advent of business incubators in the late 1950s is attributed by the National Business
Incubation Association (NBIA) in the U.S. to Frank Mancuso the then mayor of Batavia, a small
city located in the western region of the state of New York. The city, in the 1950s faced
problems not too dissimilar to issues facing many towns, regions and nations in current times
including structural transitions due to the erosion of manufacturing opportunities and
capability as well as job losses and stagnation in economic growth and development. In
particular, detrimental impacts were being felt at the SME level and it was obvious to Mancuso
that if actions were not taken, the backbone of his community would surely suffer further
atrophy. His solution was for he and his brothers to convert a vacant chicken incubator into a
gathering place for would be entrepreneurs with basic shared services and peppercorn rental
rates. The notion of business incubators as an economic development tool was born and the
number of incubator programs in the U.S. has grown from 12 in the 1980s to around 1,400 by
the end of 2015, creating approximately 49,000 sustainable companies, more than 245,000
jobs and $15 billion in annual revenue (OECD 2016). The concept of a collective aimed
at fostering access to resources, capability enhancement, networking, collaboration, and
knowledge spill-overs (Siahaan, Gilbert & Tan, 2016).