Creating Communities of Practice: Entrepreneurial Learning in a University-Based Incubator

By Oswald Jones, PingPing Meckel and David Taylor

This book introduces concepts of business incubation and suggests a learning process. This process begins with prior knowledge at the opportunity identification phase, progresses through the acquisition of new skills and knowledge necessary to develop an opportunity and concludes with a transformation phase where new knowledge is acted upon.  The book draws on extensive qualitative data and documentary evidence from a range of stakeholders associated with a University Business Incubator known as Innospace. The process of opportunity development within the business incubator is explored by combining experiential and social learning theories as heuristic tools.  Presented implications for policy-makers and incubator managers are that attention and scarce resources should be focused on providing relevant information and encouraging an atmosphere of learning and mutual support. Recruitment practices should be revised to include a more holistic appreciation of potential incubatees contribution to the Business Incubation learning community as well as an assessment of their business plans.  For policy makers the book suggests that successful business incubators do not necessarily require a large financial investment in state-of-the-art premises and technology. Appropriate management training together with carefully selected incubatees can create an effective learning community where opportunities are developed and transformed into enterprises and individuals into entrepreneurs.

• Language: English
• Publisher: Springer
• Release date: Feb 1, 2021
• ISBN: 9783030629625

Book preview

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021

O. Jones et al.Creating Communities of PracticeInternational Studies in Entrepreneurship46https://doi.org/10.1007/978-3-030-62962-5_1

1. Introduction: An Overview of the Research

Oswald Jones¹  , PingPing Meckel² and David Taylor³

(1)

University of Liverpool Management School, University of Liverpool, Liverpool, UK

(2)

University of Central Lancashire, Preston, UK

(3)

Business School, Manchester Metropolitan University, Manchester, UK

1.1 Introduction

In the early years of the twenty-first century, a number of UK reports stressed the importance of universities making a bigger contribution to economic development and growth (DfES 2003; DTI 1998, 2000; Lambert 2003). Incorporation of the ‘third mission’ (Clark 1998; Lambert 2003; Van Vught 1999), which encouraged universities to become integral to regional economic development, formalised a process that was widely adopted in the USA (Etzkowitz 1998; Henry 1998). In addition, changes to UK government funding regimes promoted ‘the third mission’ to the top of the agenda for Vice-Chancellors (Woollard et al. 2007). For example, involvement with the New Entrepreneur Scholarship (NES) enabled a number of universities to develop innovative programmes designed to support individuals from disadvantaged backgrounds start their own businesses (Jayawarna et al. 2011). More recently, Paolini et al. (2019: 197) stressed the importance of ‘relational capital’ as the means by which universities ‘promote and emphasise the effectiveness of the third mission’.

Etzkowitz (2003) uses the term ‘entrepreneurial university’ to define those institutions committed to regional economic development. It has been adopted by academics and policymakers to describe universities that effectively deliver on their ‘third mission’. Developing a more entrepreneurial culture is regarded as the essential mechanism through which universities become effectively involved in economic development (Hagen 2002; Fairweather 1990; Liu and Dubinsky 2000). Etzkowitz and Leydesdorff (2000) describe the evolution of tripartite relationships between university, industry and government through the Triple Helix III model which, they claim, most countries are trying to achieve. Other work on university–industry links emphasises the role of higher education institutes in regional systems of innovation as the primary driver of economic development (Bercovitz and Feldman 2006). There is a large degree of agreement with the view that active relationships within the Triple Helix system helps develop an entrepreneurial culture within universities (Etzkowitz et al. 2000; Wonglimpiyarat 2016). Increased understanding of universities in economic development provides a useful framework to assist managers and administrators create strategies for their institutions to become more entrepreneurial and innovative (Woollard et al. 2007; Horner et al. 2019). Recently, Galvão et al. (2019: 815) identified the emergence of quadruple and quintuple models (Carayannis and Campbell 2009), which add civil society and the ‘natural environments of society’. According to the quintuple helix approach, the natural environment of societies and economies drive the production of knowledge and innovation (Carayannis et al. 2012; Carayannis and Campbell 2011, 2012; Carayannis and Rakhmatullin 2014). Incorporating the ecological helix can be linked to the ecosystem approach in which end-users and stakeholders combine to develop innovation in a real-world environment (Alsos et al. 2011; Baccarne et al. 2016).

In addition to the ‘third mission’ and engagement with business, an increasingly important element of any entrepreneurial university is a strong commitment to enterprise education (Hyams-Ssekasi and Caldwell 2018; Lourenco et al. 2013; Pittaway and Cope 2007) and the support of graduate entrepreneurship through the provision of incubation facilities (McAdam and Marlow 2008). The UK government, like most other developed and developing countries, has encouraged the creation of business incubators to enhance technology transfer from universities as a way of improving economic performance (Cooper and Park 2008; McAdam et al. 2009; Redondo and Camarero 2019a). US universities have also been heavily involved in the development of business incubators (Hackett and Dilts 2004; Temali and Campbell 1984). Such facilities enable universities to engage in technology transfer as well as providing support for nascent entrepreneurs (Mascarenhas et al. 2019; Markman et al. 2005; Rothaermel and Thursby 2005a). This emphasis on incubation coincided with an increase in university courses designed to promote entrepreneurship to undergraduate and postgraduate students (Herrmann et al. 2008). Pittaway and Cope (2007), based on their systematic review of the literature, suggest there are areas where there is a critical mass of knowledge related to enterprise education. These areas include ‘student propensity, pedagogy, management education development and work on the enterprising university’ (Pittaway and Cope 2007: 498). The authors also suggest that there are significant gaps in the knowledge based including a lack studies that provide a better understanding of the impact enterprise education has on the ‘performance’ of those choosing to pursue entrepreneurial careers.

Enterprise education is aimed at ‘achieving a learning culture’ which will equip greater numbers of students to engage in business start-up activities (Kothari and Handscombe 2007). This commitment to enterprise education is based on the idea that entrepreneurship can make a real economic difference by creating new firms and new jobs as well as innovating new products and services. The authors describe the role of Sheffield’s White Rose Centre for Enterprise (WRCE) in embedding enterprise skills within the University’s curriculum. Science Enterprise Challenge (SEC) helped promote the importance of links between universities, enterprise education and business (Handscombe 2003; Handscombe et al. 2009). SEC was reinvented as ‘Enterprise Education UK,¹ and continues to promote the benefits of student entrepreneurship. Champions of academic enterprise suggest that student education needs to shift away from a traditional learning mode of study to an approach that immerses students in enterprise activities (Gibb 2011). For example, Lorenco and Jones (2006) describe the importance of enterprise educators adopting active learning techniques such as role-play, field trips and scenario planning alongside conventional classroom pedagogy.

Enterprise education is only effective if it encourages some members of the student population to consider starting their own businesses. Many UK universities offer pre-incubation or ‘hatchery’ facilities to help students make the transition into entrepreneurship (Voisey et al. 2013). Recent graduates engaged in business start-ups have a number of significant disadvantages including, of course, the likelihood that they will have accumulated substantial debts during their studies. Most are unlikely to have any real business experience although they will have limited social networks and lack credibility with resource providers. Incubation can help overcome such liabilities in a number of different ways. For example, being based in a university incubator is consistent with the idea that entrepreneurial learning is experiential in nature. Incubation provides an ideal opportunity for learning-by-doing as well as social learning through engaging with others who are involved in the start-up process. Becoming part of a ‘community of practice’ (Lave and Wenger 1991) helps nascent entrepreneurs acquire knowledge and engage in active learning. In addition, incubation provides access to key knowledge brokers such as incubation managers who can link young and inexperienced entrepreneurs to those with greater experience (Van Weele et al. 2018), as well as potential resource providers in the form of larger companies, business angels and, eventually, venture capitalists (McAdam et al. 2016).

In a study of university technology business incubators, Patton and Marlow (2011) argue that to gain real benefit entrepreneurs have to actively engage with support offered by incubation managers (Kakabadse et al. 2020). Equally, incubation managers have to work within the existing ‘institutional logics’ to ensure that incubators provide integrated services for those engaged in business start-up (Dee et al. 2015; Redondo and Camarero 2017). Battisti and McAdam (2012) examine how graduate entrepreneurs develop their social capital while based in a university science incubator. They found that family and friends were the most important resource-providers for graduates at the start-up stage. More surprisingly, these strong ties still dominated after more than 2 years of incubation. This suggests that the incubator offered a limited brokerage role in helping these inexperienced entrepreneurs link into broader networks (Eveleens et al. 2017).

1.2 The Study of INNOSPACE

The catalyst for this book was the involvement of the first author in the founding of the incubator based in Manchester Metropolitan University Business School’s (MMUBS) Centre for Enterprise [CfE] (see Chap. 10). Staff in the Centre had been involved in a number of projects supporting young entrepreneurs attempting to start their own businesses. However, on leaving their academic studies there were few avenues to obtain support while they developed their business ideas. Another influence was a doctoral study that compared nascent entrepreneurs from the NES programme (managed by CfE staff) with students participating in SEC (Science Enterprise Challenge) at Manchester University (Lee 2009, 2017). SEC students were based in a business incubator that provided working space for those attempting to establish new businesses and helped create ‘a community of practice’ amongst the students (Lee 2009). The SEC incubator stimulated interest in the potential for a similar facility in MMUBS. INNOSPACE was founded using support from MMUBS, in the form of a large space in which to house the incubator, and ERDF funding, which was used to convert and equip the building to provide support for at least 100 students and graduates from all Faculties within the University. INNOSPACE was viewed as part of the University’s commitment to ‘third mission’ rather than a commercial enterprise (this issue is discussed in more detail in Chap. 10).

From the outset, the vision was to encourage the development of a ‘community of practice’ within INNOSPACE, which would lead to knowledge-creation and knowledge-sharing amongst all incubatees. Staff from the CfE (Centre for Enterprise), as well as from MMUBS, were encouraged to participate in various activities within INNOSPACE. As academic members of the CfE were all active researchers, they were also aware that setting up INNOSPACE provided a unique opportunity to examine the effectiveness of the incubator in creating a true learning community. Therefore, soon after the incubator was founded, a Ph.D. student (second author) was recruited to research the operation of INNOSPACE. The doctoral candidate was embedded in the incubator and became an active member of the Steering Group, which oversaw the progress of all incubatees.

This book draws on extensive qualitative data and documentary evidence from a range of stakeholders associated with INNOSPACE. The process of opportunity development within the business incubator is explored by combining experiential and social learning theories as heuristic tools. This leads to a nuanced conceptualisation of business incubation as a learning process that begins with prior knowledge at the opportunity identification phase, progresses through the acquisition of the skills and knowledge necessary to develop an opportunity and concludes with a transformation phase where new knowledge is created (business ideas and opportunities). Unlike many earlier studies that examine business incubators (BIs) from management’s point of view, we focus on the incubation process from the perspectives of incubatees. In particular, to understand the role played by university-based incubators (UBIs) in enhancing entrepreneurship, we explore incubatees’ learning activities associated with their INNOSPACE tenancy. The research outcomes suggest that being located in INNOSPACE helped incubatees obtain specialist knowledge and skills while developing their business ideas. A novel finding of the book is that the incubatees used INNOSPACE as a ‘fast-track’ to acquire additional skills by forging alliances with other incubatees. Developing skills in this way helped incubatees to start up and grow their businesses more quickly than when working alone.

The findings indicate that knowledge alone cannot fully explain the entrepreneurial process (Gartner 1985; Reynolds 2011). The dynamics of learning offer a fuller understanding of how information, experience, skills and identity can be transformed into new knowledge, which in turn leads to opportunity identification and development. Crucial to this process is a supportive learning community where incubatees receive relevant information in an atmosphere of trust. Incubator management teams should create a supportive environment, where incubatees will not give up too early as they learn throughout the process to become entrepreneurs. As for prospective and existing incubatees, the outcomes of the study highlight the importance of the transformational process (experience, knowledge and identity) that takes place in an incubator. Learning is key to the entrepreneurial process as incubatees obtain relevant information and combine it with their prior knowledge to create new knowledge.

The study has a number of implications for policymaker and incubator managers. Developing a deeper understanding of how incubatees explore, identify and develop opportunities suggests a fresh approach to the policy agenda. First, scarce resources should be focused on providing relevant information and encouraging an atmosphere of learning and mutual support. Secondly, a less ‘managerial’ approach should be adopted by managers acting as mentors to support and encourage incubatees. Thirdly, recruitment practices should be revised to include a more holistic appreciation of potential incubatees’ contribution to the incubator learning community as well as an assessment of their business plans. For policymakers, the study suggests that successful business incubators do not necessarily require a large financial investment in state-of-the-art premises or technologies. Appropriate management training, together with carefully selected incubatees, can create an effective learning community where opportunities are developed and transformed into enterprises and individuals into entrepreneurs. Ultimately, the growth in entrepreneurship will have an impact on the regional economy. Crucial to a successful UBI is the management team and incubatees working together to build an effective learning community.

At the conceptual level, this study links entrepreneurial learning within an incubator to the concept of ‘communities of practice’ (Lave and Wenger 1991). Handley et al. (2007) claim that, originally, situated learning in communities of practice (CoP) was associated with relatively small groups of learners with similar skills (tailors and midwives for example). Gradually, the focus shifted to what Soekijad et al. (2011: 1005) describe as ‘geographically distributed groups of individual members, who might neither know one another nor meet face-to-face (Brown and Duguid 1991)’. As pointed out by Agterberg et al. (2010: 86), most research on networks of practice (NOPs) has focused on intra-organisational learning in large companies such as Shell (Wenger et al. 2002). This study is very different, unlike earlier firm-level studies and more recent work (Lefebvre et al. 2015), which focus on formal CoP (communities of practice) networks, the INNOSPACE ‘community’ was characterised by a diverse, informal group of would-be entrepreneurs who were pursuing a range of business opportunities. This study also builds on earlier work which examines entrepreneurial learning (Patton and Marlow 2011), the significance of social capital (Battisti and McAdam 2012; Taylor et al. 2004) and networking (McAdam and Marlow 2008) in the context of university incubators. In extending work on entrepreneurial learning and communities of practice, we are able to demonstrate how a diverse group of individuals were encouraged to create an effective learning community.

Business incubators are used by policymakers around the world as tools to encourage early entrepreneurial activities, promote business start-ups and encourage regional economic development (Harper-Anderson and Lewis 2018; Mian et al. 2016). Indicators of success are often based on agreements with funders and typically require quantitative data recording start-up survival and success rates, turnover and jobs created. However, conceptualising success in terms of conventional, quantifiable outcomes fails to capture softer measures of success such as learning, knowledge and experience that are arguably equally important in building and sustaining entrepreneurship (Gabrielsson and Politis 2015). Importantly it says little about the complex and nuanced journey that entrepreneurs undertake during the incubation process (Mian 2014). To redress this imbalance, business incubation researchers (Lukeš et al. 2019; Mian et al. 2016; Theodorakopoulos et al. 2014) have called for more process-orientated studies that explore softer measures of success, such as learning within a business incubator (BI). This book will address this gap in knowledge by exploring the incubation experience from the perspective of the incubatees, drawing on theories from both entrepreneurship and learning frameworks.

The overall aim of the research is to examine the role of a university-based incubator (UBI) in developing a learning community of practices that supports entrepreneurship. In order to do so, we draw on rich qualitative data collected from various actors associated with INNOSPACE. The book is organised as follows; Chap. 2 sets the context for the study by charting the development of business incubation through the existing literature. It is evident that definitions of business incubation evolve with the development of this literature. However, a general consensus emerges which suggests that the study of business incubators should shift from a focus on outputs to the incubation process itself. In order to achieve this, it is proposed that viewing incubation through the lens of entrepreneurial learning will contribute to a more robust understanding of the business incubation process.

Chapter 3 builds on this work by reviewing literature in the fields of entrepreneurship, opportunity identification and entrepreneurial learning. The chapter begins by highlighting the interplay between entrepreneur and opportunity in contemporary definitions of entrepreneurship. Recent developments in the entrepreneurship literature, which shift views from the notion that ‘opportunities are discovered’ to the idea that ‘opportunities are created’ are then examined. Accepting that opportunities can be created opens up the possibility of exploring the interplay between the entrepreneur and the opportunity as a learning process. The chapter builds on this approach by drawing on literature related to entrepreneurship, learning and communities of practice to develop a framework for studying the business incubation process.

Chapter 4 sets out the research methods and establishes the philosophical stance underpinning the research. The research approach is then outlined together with details on the study sample as well as the techniques used for data collection, data management and analysis.

Chapter 5 explores the process of business incubation by presenting in-depth lived experiences of the participants. Using narratives as a tool, the chapter presents six detailed and distinctive pathways of business incubation. These pathways provide a context for the study and allow a deeper understanding of the process through which individuals start-up and nurture their businesses in INNOSPACE, as well as the role played by the incubator management team.

Chapter 6 examines the interaction between entrepreneur and opportunity by focusing on the role of prior knowledge in opportunity identification. In total, 23 opportunities were identified amongst the 20 participants and the relationship between each opportunity and the incubatee’s prior knowledge are explored. The chapter builds on Shane’s (2000) three types of prior knowledge and proposes the inclusion of a fourth (personal interests), based on the work of Ardichvili et al. (2003). The chapter extends the current understanding of the role of prior knowledge by detailing the impact of each combination of these forms of prior knowledge and identifying three outcomes that prior knowledge can have on opportunity identification.

Chapter 7 builds on the work presented in Chaps. 5 and 6. The process of opportunity identification and development is investigated in greater detail. Using experiential learning theory, we explore how the new information and skills were acquired through INNOSPACE, which lead to opportunity development. In addition, the chapter investigates the transformation process of individuals, specifically in relation to ‘becoming entrepreneurs’ and joining the INNOSPACE community. Both information and skills are crucial for incubatees to develop their business ideas. Belonging to INNOSPACE provides a fast-track for incubatees to acquire new skills by creating a friendly, supportive and informal learning community, forging alliances and building partnerships with other incubatees.

Chapter 8 draws the work together by setting out how the book has addressed the research question described in Chap. 4 and assesses the contribution to knowledge. Drawing on an abductive approach to the research, we also develop a revised model of the incubation process.

Chapter 9 summarises the study and outlines the implications for incubation managers, incubatees and policymakers. Our reflexive account of undertaking this study is presented together with suggestions for future research.

Chapter 10, Postscript: Creating and Managing a University-based Incubator, provides a narrative account of how INNOSPACE was originally founded and where the idea of a community of practice originated. We also bring the story up-to-date by outlining recent developments in the incubator together with details of outcomes such as the total number of incubatees nurtured over a 13-year period. In addition, we provide a number of case studies to illustrate some of the most successful businesses to have emerged from INNOSPACE.

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Footnotes

1

https://​www.​enterprise.​ac.​uk/​. Accessed 14 August 2020.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021

O. Jones et al.Creating Communities of PracticeInternational Studies in Entrepreneurship46https://doi.org/10.1007/978-3-030-62962-5_2

2. Business Incubation

Oswald Jones¹  , PingPing Meckel² and David Taylor³

(1)

University of Liverpool Management School, University of Liverpool, Liverpool, UK

(2)

University of Central Lancashire, Preston, UK

(3)

Business School, Manchester Metropolitan University, Manchester, UK

2.1 Introduction and Background

Researchers associated with the Global Entrepreneurship Monitor (GEM) 2011 Global Report interviewed over 140,000 adults in 54 economies and found that 388 million entrepreneurs were actively engaged in starting and running new businesses (Kelley et al. 2012). Entrepreneurship continues to be a global phenomenon regarded as the key to economic growth, social development, innovation and labour force dynamics. Bosma and Kelley (2018) describe GEM’s most recent initiative, the National Entrepreneurship Context Index (NECI), which ranks 54 countries based on a range of factors including: finance, Government policies, entrepreneurship education, R&D transfer, physical infrastructure as well as culture and social norms. Interestingly, the UK is ranked 34th of 54 countries on the NECI lagging other European countries such as the Netherlands (3rd), France (10th) and Germany (19th) as well as the USA, which is ranked in 6th place.

In 2018, the UK business population was 5.7 million, which represented a fall of 27,000 businesses from 2017. Small businesses still account for 99.3% of all private sector firms, 60% (16.3) of all private sector employment and 52% (£2.0 trillion) of private sector turnover in the UK (Department