VENTURE CAPITAL AND THE INCUBATION OF SMALL ENTERPRISES

Zoltan Bajmoczy, Andreasz Kosztopulosz and Szabolcs Imreh

GAZDÁLKODÁS: Scientific Journal on Agricultural Economics, 2007, vol. 51, issue Special Edition 19, 10

Abstract: The present paper has reviewed the potential interpretations of the incubation process and examined in detail the basic types of corporate incubators having an increasing role in everyday practice together with the main objectives of the different types. We have also mapped how the different types of enterprises can join the incubation process and highlighted that for-profit organisations can also play a significant role within financing solutions. We made an attempt to prove that – under adequate conditions – the cooperation of private capital and incubators is suitable for creating a bridge over the equity and knowledge gap, which means that such co-operations can also have significant economic development effects. Incubators operating on such bases can support small and medium-sized enterprises not only by offering financial and professional help. Experience has shown that the incubation process can be "naturally accompanied” by the initiation of a networking process, the advantages of which can also be used by the companies participating in incubation. After examining the special features related to the operation of corporate incubators –which served to set the logical frames of the analysis – we studied in detail what role the state can assume in such type of incubation. Following some theoretical considerations and an analysis of successful and failed practical examples we reached the conclusion that governmental interventions „can have their place” in this process. Since there are various different ways for the development of incubators, the types of roles taken by the state can also differ. A model was developed in which we summarized potential governmental strategies, also discussing the possible effects on the players of the incubation industry. We are convinced that the analysis of this highly new and dynamically developing area may also lead to conclusions that can be applied in practice and the recognition of defined rules and laws may contribute to the improvement of the national practice.

Keywords: Community/Rural/Urban Development; Financial Economics (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ags:gazdal:58909

DOI: 10.22004/ag.econ.58909

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