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San Jose State University’s University Based Incubators: Loosely Coupled Elements In Silicon Valley’s Entrepreneurial System

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2005 Annual Conference


Portland, Oregon

Publication Date

June 12, 2005

Start Date

June 12, 2005

End Date

June 15, 2005



Conference Session

IP, Incubation, and Business Plans

Page Count


Page Numbers

10.1096.1 - 10.1096.14



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Paper Authors

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Dean Burton

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Ashbjorn Osland

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San Jose State University’s University Based Incubators: Loosely Coupled Elements in Silicon Valley’s Entrepreneurial System

Abstract The San Jose Redevelopment Agency (RDA) fostered and continues to nurture incubators. In partnership with the RDA, San Jose State University (SJSU), through its Foundation, operates four fairly autonomous loosely coupled university based incubators (UBIs). Their primary mission is to develop start-ups. They also provide excellent learning opportunities for students. What they have not done is commercialize university or faculty intellectual property. The incubator directors are experienced business people who have the business acumen to nurture start-ups successfully, which they have done. The RDA, SJSU, the UBIs, and the incubator directors are all part of the entrepreneurial system that characterizes Silicon Valley.

Introduction In this paper we will briefly review the significant literature on UBIs. The main benefit of the literature, primarily derived from the articles written by Mian (1996a, 1996b, 1997), was to develop a framework, adapted based on our experience with incubators, and used to analyze the four UBIs affiliated with SJSU. Then we will describe the context of the current paper (i.e., Silicon Valley and San Jose State University), the four incubators and the RDA, a partner with SJSU in facilitating the development of the incubators.

A fifth incubator existed for three years under the name “Incubator Without Walls” (Dean, Burstein, Woodsmall, & Mathews, 2000). It was fully funded for three years by a HUD grant. Faculty-student teams engaged in service learning in projects designed to serve the needs of the 26 existing businesses and 67 potential businesses in the neighborhood surrounding the university. Business owners expressed satisfaction with the process. The incubator ceased operations when funding stopped.

We will conclude with our findings regarding the critical role of industry clusters, access to resources, organizational learning, social networks within the incubation industry, and the pivotal role of mentoring/coaching.

Literature Review Business incubators typically provide office space, administrative support and equipment, and mentoring (Peters, Rice & Sundararajan, 2004). Small businesses can lease these spaces on flexible terms and at reduced rents as compared to the general market. Wiggens and Gibson (2003), in their analysis of the Austin Technology Incubator, conclude that successful incubators do the following: clearly measure performance, offer leadership to start-ups, provide needed services to tenants, use an effective selection process, and facilitate access to networks of needed resources, both financial and people.

University based incubators: Many of the UBI’s are the result of science and technology research projects. Rensselaer’s Incubator Program, founded in 1980, is one of the oldest U.S. incubators and the first U.S. incubator wholly sponsored and operated by a university (Retrieved September 12, 2004 from ). Its accomplishments include the following: • “Greater than 80% survival rate for participating companies. • Over 180 companies served since 1980. Most have remained in the capital region of New York State. • 43 current tenants; 230 jobs. • Occupancy in the Incubator typically exceeds 95%. • Over 2,000 jobs created. • Annual sales of Incubator “graduates” exceed $500 million. • Approximately 2/3 of participating companies have evolved from research at Rensselaer or have been started by Rensselaer Alumni. • Hundreds of RPI students have been employed. • Recipient of NBIA’s 1995 Randall M. Whaley Incubator of the Year Award. • The Incubator has remained financially self-sustaining since its inception.”

Other universities observed Rensselaer’s success and founded their own incubators. Mian (1996a) in a study of university technology business incubators found that the university affiliation adds value to incubator client firms due to the university’s image, laboratories and equipment, and student employees. Mian also listed the


Burton, D., & Osland, A. (2005, June), San Jose State University’s University Based Incubators: Loosely Coupled Elements In Silicon Valley’s Entrepreneurial System Paper presented at 2005 Annual Conference, Portland, Oregon. 10.18260/1-2--15598

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