Review of 20 Business Incubation Models – Chandra and C.-A. Chao Model_2009 & Metibtikar model_2012 (Parts 17-18 of 20)

2011, Chandra and C.-A. Chao model: external, process, operations

Chandra & Chao’s Incubation and External Environment Model (2011)

The Сhandra & Chao model[1] (2011) conceptualize the flow of the resources between key stakeholders in the innovation ecosystem which are connected to business incubators. Authors distinguished 4 key players:

  • Public, government
  • Business incubator
  • Entrepreneurs
  • Universities

Public, government, and university support for incubation is generally provided with the expectation of economic growth and job creation or technology transfer and commercialization respectively as illustrated in figure above. Government provides grants & loans and expects that incubatees will pay taxes after  reaching mature phase, incubator pays taxes from their income. University sponsor harvests it’s return on investment “by way of technology transfer/commercialization and its attendant benefits to faculty and students.” (Сhandra & Chao model, 2011) Incubators around the world are either affiliated to a university/government or to a local economic development agency that invests public/private resources into incubation to support a new venture at the earliest and most vulnerable stage of its life cycle.

Important feature of this model is conceptualization of resources’ (money, knowledge) flow (or cycle) between stakeholders. Business incubators are viewed as moderators of these resources. Thus, efficiency and effectiveness of any business incubator are directly linked to the taxes which government use in order to support entrepreneurs. 

Lessons learned and comments about the model:

  • The model describes resources flow between stakeholders of business incubators. This is very important aspect that haven’t been discussed before. An attempt to understand the whole environment and a place of business incubator in the innovation value chain is critical to this service organization.
  • However, I think authors failed to identify all stakeholders in this process. Venture funds, corporations, and market were not put in the list. Another view could be also proposed.

Summary of the model

Source (Author, Year): Chandra and C.-A. Chao, 2011
Purpose of a model: To show a flow of resources (money and technology) in the innovation ecosystem
Type of a model: Process model
Abstraction technique: Black-box
Theoretical background: No information
Resources: Money by government (grants, loans)Technology & knowledge by universities

Infrastructure and business services by incubatorsProcesses and practices:No informationEfficiency and effectiveness:No informationLinkages “Entrepreneur – Business Incubator – Innovation Ecosystem”:Model links together incubators, entrepreneurs and government through the flow of resources (inputs and outcomes) between themKey contribution:This model is a conceptualization of a resources (money, knowledge) flow (or cycle) between different entities. Business incubators are viewed as moderators of these resources. In that efficiency and effectiveness of the business incubators are directly linked to the public and ordinary people’s taxes which government use in order to support entrepreneurs.


[1] A. Chandra and C.-A. Chao / Growth and evolution of high-technology business incubation in China, 2011

2012, Metibtikar model: process, internal, operations

Metibtikar’s Incubation Process Model (2012) (a)

Metibtikar’s Incubation Process Model (2012) (b)

I need to say that Metibtikar’s model (2012) was found occasionally and I haven’t read or heard any explanation of how it works. Thus, further explanations are fully based on the interpretation of the pictures above which were extracted from presentation. However, this model  is valuable for analysis because it describes business incubation process. There are several building blocks of the model:

  • Entrepreneurs’ needs
  • Incubation process
  • Monitoring & mediation processes
  • Support services
  • Built-in PDCA[1] cycle.

Let’s describe the latter first. Every practice that is delivered in the incubation value chain is a subject for continuous improvement. It is true for both points of views:  for the entrepreneur’s perspective who is getting a results out of it, and for the incubator that can’t stop delivering certain service after the end of the particular stage of incubation process. On the opposite every service (or practice) that is delivered by an incubator has different intensity along the stages of the incubation process lifecycle. See analogy from the Hump diagram below. As an example we can take team building activity and consider it along the life cycle of the incubation process. In the beginning there is strong need for team building services in order to strengthen the team/venture. On the later stages the intensity of team building is smaller, but still incubator managers should pay attention to it and guide a team from a “forming stage” of the team to an “excellent performing stage” of the team work (Tuckman model of the group development)[2].

Hump Diagram (IBM, 2005)[3]

Thus, PDCA cycle applied by incubator managers helps tenants to continually change and tweak what they do in order to:

  1. “Achieve higher quality in their results and processes.
  2. Gain continual increases in work efficiency.
  3. Allows you to clearly see which stage your project is at.
  4. Assists you in handling your work logically and systematically.”[4] ( Bulsuk, 2009)

The other building blocks are well known to the public and Medibtikar haven’t invented something new. There should be an incubation process which is supported by services that incubator deliver to the tenants and monitoring /mediation practice.

Summary of the model

Source (Author, Year): Metibtikar, 2012
Purpose of a model: To map incubator’s processes
Type of a model: Process model
Abstraction technique: White-box
Theoretical background: No information
Resources: HR, finances, facilities
Processes and practices: Processes are organized into interrelated chain:
  • PR/Selection of tenants
  • Needs’ assessment services
  • Delivery of extension services
  • Training and advising
  • Funding & Partnership
  • Evaluation of performance
  • Graduation
  • Monitoring the system (strategy, communication, funds raising)

Plan-Do-Check-Act cycle is built into each process / service delivered by the incubator.Efficiency and effectiveness:The model is built on the needs of entrepreneursLinkages “Entrepreneur – Business Incubator – Innovation Ecosystem”:Links project/entrepreneur needs to incubator’s processes, and eventually to the needs of stakeholders’ with the loop of a feedback from the latter.Key contribution:Clear distinction between the process of entrepreneur and support services that are delivered to him. Built-in PDCA cycle into every separate process/practice of an incubator.

Plan-Do-Check-Act cycle is built into each process / service delivered by the incubator. Efficiency and effectiveness:The model is built on the needs of entrepreneursLinkages “Entrepreneur – Business Incubator – Innovation Ecosystem”:Links project/entrepreneur needs to incubator’s processes, and eventually to the needs of stakeholders’ with the loop of a feedback from the latter.Key contribution:Clear distinction between the process of entrepreneur and support services that are delivered to him. Built-in PDCA cycle into every separate process/practice of an incubator.


[1] Deming, W. Edwards. Out of the Crisis. MIT Center for Advanced Engineering Study. 1986

[2] Tuckman, Bruce (1965). “Developmental sequence in small groups”. Psychological Bulletin 63 (6): 384–99

[3] This diagram is Copyright 1999 -2005 IBM

[4] Karn G. Bulsuk. Taking the First Step with the PDCA (Plan-Do-Check-Act) Cycle, 2009

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