Business incubators have the potential to enhance bank/business sector relationships

As countries confront the challenges of increasing productivity, economic growth, employment, innovation etc there is a constant search for effective tools and mechanisms to facilitate achievement of these objectives. One possible tool/mechanism increasingly being discussed is business incubation.

The formal concept of business incubation is said to have began in the United States of America in 1959 as a one-stop-shop for Entrepreneurial support. The concept then spread to the United Kingdom and Europe in the 1980’s. In the Caribbean there have been notable efforts by eg The World Bank Group with a number of Caribbean countries who in 2009 initiates a Caribbean Business Incubator Association (which did not last), and the Technology Innovation Centre/The University of Technology in Jamaica.

Business incubators can enable businesses to share services, reduce costs and risks and increase opportunities for business success especially when resources are limited. The International Journal of Economics, Commerce and Management, September 2016 says: The experience to date confirms that there is no unique business incubator model. Rather, there is considerable diversity in the types of incubators, their modes of operation and the objectives they pursue – most incubators tend to be either physical incubators providing work space for clients, virtual incubators which utilize computer technology to deliver services or a hybrid approach incorporating elements of the two main types. A number of theories have been put forward to explain the incubator system including: The Structural Support Theory, The Cluster Theory, The Social Network Theory and The Resource-based theory.

There is little doubt that Tourism and New Technology are playing important roles in global economic development and will continue to do so in the future, and that business incubators’ contribution in that process is likely to grow. However, to do so, the tourism industry (e.g hotel and travel products) and systems of data analysis and forecasting, and business incubation systems have to improve their efficiencies and effectiveness of operation which means, raising productivity levels. Incubator organisations ought to strive to be sound organisations enabling themselves and their client businesses to develop national, regional and international linkages (including with financial institutions) with the help of which, development constraints may be overcome.

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