Business Incubators: Creation of a Fit in Armenia

In this paper, we evaluate the extent to which business incubation services meet tenant’s needs. Additionally, we pose the question of whether the current business incubators actually cover the needs of a particular industry. Our empirical setting is a developing country in the Caucasian Region (Armenia) and we chose to research solely the IT industry. We employed a two stage procedure: first, we conducted interviews with pivotal people familiar with business incubation in Armenia; second, an electronic questionnaire survey was sent to the entire Armenian IT population. The results suggest a moderate need of IT companies for the typical business incubation services. Further, we show that incubated companies are generally satisfied with the services they enjoy albeit this satisfaction level decreases as the needs increase. Non-incubated companies, on the other hand, perceive incubation services to be valuable for their development and this value increases when their needs increase. Our study implies that a more extensive service provision is necessary to fully cover the needs of the Armenian IT industry for business incubation services.