Developing and Testing a Rural Business Incubator: A Best Practice Framework

Abstract

Compared to an urban context, starting a business in a rural context has its distinctive challenges such as the lack of entrepreneurial support infrastructures typical in an urban context. Business incubators are types of entrepreneurial support organizations that support the creation and growth of new companies with tangible and intangible resources. They help incubatees transform their ideas and concepts into feasible products and services with tangible and intangible resources such as facilities, shared equipment, administrative services, knowledge, and access to networks. In the rural context, business incubators can help to address rural entrepreneurship challenges such as population and infrastructure deficiencies, and rural entrepreneurship opportunities such as strong social bonds and embeddedness to a rural environment. In this manner, they can help to mitigate entrepreneurial challenges and foster the use of entrepreneurial opportunities through direct and indirect effects to the local, regional, and national economy. However, rural incubators tend to perform worse than their urban counterparts. The reasons for this aren’t well understood, as there is a lack of incubator research on how locational attributes affect rural business incubators. There is a need for further knowledge about how rural context influences business incubators to improve the development, tracking, and impact of rural business incubators. This study addresses this research gap by creating a rural business incubator best practice framework that addresses general incubator best practices and rural entrepreneurship-specific challenges and opportunities that should be addressed in rural business incubators. The proposed framework is tested in rural VAU!HAUTOMO business incubator and the results are analysed to review the framework´s capabilities and suggest future use cases and research avenues. The framework provides a novel approach to plan, measure, and manage rural business incubators which both researchers and incubator actors can use to develop rural business incubators that better take into account rural entrepreneurship challenges and opportunities.