Realizing Potential: The Impact of Business Incubation upon the Absorptive Capacity of New Technology Based Firms.

Abstract

This article explores the potential of university technology business incubators to enhance the absorptive capacity of new technology-based firms. The research pursues three critical themes: it employs the absorptive capacity construct to analyse and evaluate the potential of incubation to strengthen the business model of new technology firms. It then explores the interaction between founders and incubator directors, mentors and business advisers to assess how this might enhance absorptive capacity. Finally, it indicates how such interactions can facilitate the transition from potential to realised absorptive capacity. The article interrogates the incubation process by using the absorptive capacity framework to evaluate how it might strengthen the business model of new technology firms. The qualitative findings suggest that where founders, advisers, mentors and incubator directors engage collaboratively to create an iterative dialogue which informs the development of a viable business model, the process by which potential absorptive capacity can be fully realised is substantially strengthened.