The first report on the impact of business incubators and accelerators in Spain has been published by the Social Innovation Monitor (SIM) team, in collaboration with the Spanish Startups Association. There currently are 215 business incubators in our country, 26 of which belong to corporations and 23 to universities. The report is based on the analisis of 43 business incubators.
Services and sources of funding
A business incubator is an organization designed to accelerate growth and ensure entrepreneurial projects success through a wide range of business resources and services. What are these services? According to the report, the main services provided by Spanish business incubators are management assistance, infrastructure and shared services, entrepreneurial and management training, and access to sources of financing.
How are these incubators financed? In 2018, the main reveneu streams for the analyzed business incubators were: spaces for rent (25.7%), subsidies and grants (22.7%), and services provided to the incubated entities (14.2%). These three categories account for the 62.6% of the total revenue.
Business incubation in time
Historically, the business incubation industry has experienced continuous growth despite the slowdown in recent years. 32 business incubators were created between 2004 and 2008. Between 2009 and 2013, the number doubled, with 64 business incubators created. During the 2014-2018 period, the number rose to 86. This time reaching an annual maximum of 25 new incubators in 2014 and 2015. It is worth mentioning that more than half of the existing business incubators were founded after 2011.
The nationwide distribution of these incubators is uneven. 26.5% of them are in Madrid, while 17.2% are in Catalonia. Between these two regions, they account for 43.7% of the total, reinforcing their economic leadership. The third spot in the ranking is for the Southern region, accounting for 13% of the total. On the opposite side of the spectrum, the Canary Islands represent only 3.7%.
Types of incubators
Business incubators can be divided into public, private or hybrid based on their legal structure. The market distribution is presented as: 46.6% of the incubators are public, 42.8% are private, and 10.6% are hybrids.
Among the types of incubators, the emphazis falls on for-profit business incubators and mixed ones (for-profit and non-profit). These two types represent 88.4% of the total amount. The remaining ones are social incubators aiming towards social tourism development, responsible consumption, health and well-being, and animal and environment protection.
In 2018, business incubators received an average of 121 requests each. Approximately, one in four requests was accepted. These data must be contextualized, as they are affected by the influence of large incubators. Half of the incubators receive 30 applications or less, and accept less than 23. This means small incubators accept around 75% of the applications received, while large incubators are much more selective.
If incubators are measured by the number of people employed, the average is around 6 employees. However, this figure is again affected by the influence of large incubators. Whereas the record is 36 employees, half of the incubators employ less than 5 people. In fact, the most common number of employees is only 2.
To summarize: the business incubator industry has a great historical growth, despite the fact it has experienced a slowdown in the last five years. A clear gap between small and large incubators can be noticed. With the economy still being affected by the pandemic, its effect on Spanish business incubators is yet to be seen, leaving the open question whether the current situation will encourage incubators to increasingly turn to non-profit organizations with positive social and environmental causes.
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