Strategic Review of Scottish Enterprise Incubation Support

The aim of the evaluation was to review the incubation support offered by Scottish Enterprise (SE). The brief was to “contextualise lessons learned using the evaluation evidence gathered to date by SE together with external evidence of good practice”. The following specific questions were to be addressed: how has investment in incubation units created the right conditions for growth; how has the range of incubation services facilitated higher levels of investment in innovation; to what extent are incubation services focussed on and responsive to the specific growth needs of businesses; and how far are incubation services linked to the SE Priority Industries and how far do they attract other industry support services?

Desk research was augmented by consultations, principally within the SE network, but there was no collection of new primary information, for example through surveys of beneficiaries of incubation services.

SE should aim to derive more start-up businesses in the field of innovative research and technology, and focus on targeting support at the common market failures which are known to occur within technology-orientated businesses. The risks involved in new technology mean the private sector is never likely to pick up the services that SE is currently providing. SE’s interventions have been tailored to meet the aspirations of participating businesses. Most of these interventions have met their objectives in a reasonably cost-effective and well-targeted way. The main weaknesses identified relate to: direct commercial experience among advisers; networking between beneficiaries; networking with mainstream SE interventions; and alignment with SE Priority Industries. The evidence suggests that very effective forms of incubation can be delivered without dedicated premises, although opinion was divided on the question.

Key elements of support that should be available if high growth businesses are to be supported include: selectiveness about who should benefit; advice from advisers who understand technology businesses; the capacity to bring in private sector expertise; and regular reviews of business performance. SE would do well to make better use of existing business premises rather than invest in new premises, and invest more in the non-physical aspects of incubation support. The existing range of interventions should continue to be supported, and regular collection and analysis of monitoring data carried out.