The Creation of Social Capital Across Different Types of Canadian Business Incubators

Abstract

Social capital plays a prominent role in economic and business literature, but to date, limited research has focused on social capital within a business incubation environment. My research investigates two business incubator models, nonprofit economic development business incubators (NEDBIs) and university business incubators (UBIs), and how they create social capital for the start-ups residing within them. As expected, both types of business incubators proved to be well suited to the creation of social capital, by providing access to their network, building trust among the members of the business incubators and encouraging knowledge sharing among business incubator members. The difference between the two business incubator models was the outcome or resources accessed through the social capital. Eighty-three per cent of startups located in UBIs were successful in securing grant funding, while only 6% of startups located in NEDBIs secured grant funding. University business incubator startups were also more successful in job creation with 83% reporting full time staff compared to only 38% of startups in NEDBIs reporting full time staff. In terms of revenue generation 56% non-profit startups reported revenues, while only 17% of university business incubator startups reported revenues. There were also some additional themes that emerged from the interviews that provide interesting insights into Canada’s entrepreneurial culture.