Business incubators as a places for the establishment of small enterprises have emerged in the late 50-ies of XX century (USA). The first project was made by an American sociologist.
The idea seemed primitive: sociologist rented cheaply the old station, divided it into small rooms, hired qualified staff (lawyer and economist) and cheap rented offices for beginning a small business.
The results exceeded expectations. If usually of 100 businessmen reduced to nearly 12, whereas the business incubator almost 30% of them successfully moved from small to medium businesses, and a significant number have successfully captured a specific niche market.
It is important to lead some common definitions of the term “business incubator” that reflect more thoroughly the nature of the term and its understanding:
- Business Incubator is a variant of the organizational forms of interaction between science and business, which represents a multi-functional complex, which provides, among other things, favorable conditions for the effective operation of the newly developed small innovative firms that realize interesting scientific ideas.
- Structures that provide assistance to new companies during their formation and organization.
- The innovation organizational structure, which creates an enabling environment for start-up of small businesses by providing them with a specific set of services and resources.
- An institution that creates innovative structure of the state.
- An organization that provides under certain conditions and for a time specially equipped premises and other assets to small and medium enterprises, which begins its activities in order to facilitate them in gaining financial independence.
- Business Incubator - organizational structure, which creates an enabling environment for start-up of small businesses by providing them with a specific set of services and resources.
- Business Incubator – like a "forge" of startups, that is the place where you can make a reality of ideas, with the possible pick a team of people with common interests. The main interest - building your own business.
By itself, the issue of small business can be considered, without a doubt, the key issue of economic development in general. The bottom of this is pretty obvious, when you consider the enormous role that small business plays in the economic development of all countries in the path of market reforms.
Business incubators develop small businesses that play an important role in the formation of a stable market economy in which concentrated its main potential business resources.
International practice confirms the ability of tasks solution for improving industrial structure and accelerate economic development areas; active introduction to production of domestic and foreign scientific-technological developments; locally level test of different options introduction of new forms of management and adaptation to the conditions of the domestic market, the practical training of local specialists to tricks and techniques of international business.
Due to small business performs a number of important socio-economic objectives, such as creating jobs, increasing competition, which ultimately leads to a decrease in unemployment, lower prices.
A certain part of a small business is a "launching pad" that allows innovative designs and projects implemented like small businesses and after that use a variety of approaches already gives rise to mass production of certain products and service
Business incubators involved in the initial formation of small businesses that provide numerous innovative services form and implement priority strategies of the newly created company.
The functional objectives of the business incubator:
- Consulting services;
- Provision of office space ;
- Assistance in developing business plans;
- Assistance in finding sources of funding;
- Support for the project in the initial stages ;
- Analysis of the market environment and competitors;
- Hire of scientific and technological equipment for a specified period;
- Technical and administrative services (mail, Internet, telephone, fax , copier , office secretary , etc.);
- Information and advertising support;
- Providing legal and accounting services;
- Services in the field of business valuation, business risks and others.
- Scientific and technical ( implementation of new technologies, know -how, new products ).
The effectiveness of business incubators associated with both organizational and economic factors. Their development does not always require budgetary inflows and may be due to sponsorship or self. Their ability of self-sufficiency only 10 - 60%.
Ukrainian business incubators are exist mostly due to funding from international donor organizations, premises provide them by public employment services which obey to Administration of cities and regions. The sources of their funding is often funded by international foundations and grant programs, and only a small extent - means local authorities and sponsors. To facilitate the development of Ukraine business incubators - Ukrainian Association of Business Incubators and Innovation Centers.
The most successful Ukraine business incubators are Eastlabs, iHUB, Happy Farm, GrowthUp, Wannabiz, Voomy IT-park and Polyteco.
Thus, the contribution of the organizational structures of small businesses in the development of innovative processes is significant. However, often innovative product is characterized by high degree of novelty due to lack of adequate material basis for its creation. Large-scale innovation projects by the small business can’t be realized. The organizational structure of a business incubator focused on quality service to small innovative structures, since their success depends on that small innovative structure as soon as possible become successful.