Comparative study technology incubators in Quebec and abroad

4. Performance of Incubators

This section describes the performance of the incubators studied, based on the primary and secondary indicators of the results achieved by the incubators and their clients, both graduates and those in incubation.

4.1 Results Achieved by Incubators

Table 4.1 summarizes the average annual results achieved by incubators inside and outside Quebec for the years 2003 to 2007.

Incubators outside Quebec have operating budgets about 14% higher, on average, than incubators in Quebec. The incubator with the highest budget and the incubator with the lowest budget were also both in Quebec. As well, the average budget for incubators in Quebec in 2007 was about $1.29 million, and the average budget outside Quebec was about $1.68 million; this suggests that incubators outside Quebec have experienced stronger average growth than those in Quebec. However, these comparisons do not take into account cost of living differences among the various countries (for example, rent).

Incubators in Quebec evaluate more projects than incubators outside Quebec, and there is a greater difference in the number of projects submitted to them. On the other hand, incubators inside and outside Quebec accept a very similar number of projects each year.

Incubators outside Quebec have a larger number of projects in incubation, on average, than incubators in Quebec (60% more). This difference is significantly higher than the difference between their respective operating budgets. However, the two categories of incubators produce the same average number of graduates per year, although the Quebec incubator that produces the highest number has more than double its counterpart outside Quebec. As well, these figures include an incubator that was founded in 2004 (Quebec) and one founded in 2005 (outside Quebec), and they are the two that account for the lowest figures observed.

Incubators outside Quebec are therefore larger on average than those in Quebec. However, incubators in Quebec evaluate more projects, although incubators in both categories accept the same number each year; this suggests that incubators in Quebec are more selective.

4.2 Results Achieved by Enterprises

Table 4.2 sets out the average annual results achieved by the client enterprises of incubators inside and outside Quebec for the years 2003 to 2007. It is important to note that caution must be exercised in interpreting these results, given that the data in question was sometimes limited.

The data needed for calculating these rates could be obtained only from the incubators that had incubated enterprises before 2003, and this eliminated one incubator in Quebec and one incubator outside Quebec from the sample.

The main conclusion to be drawn from this table is that each incubator outside Quebec generates more jobs, on average, and obtains more funding through its incubated enterprises and graduates. As well, more incubated enterprises and graduates of incubators outside Quebec obtain funding, as compared to enterprises that come out of incubators in Quebec. More specifically, 90% of graduated enterprises outside Quebec obtain funding, as compared to 64% for graduated enterprises in Quebec.

In addition, the average survival rate for enterprises that come out of incubators in Quebec is much higher than the provincial average. Even the incubator with the lowest survival rate does better than the average for Quebec. Nearly 50% of enterprises in Quebec close down before or in their third year, while only 35% of them survive beyond five years in operation, and 22% make it to nine years.⁴

4.3 Secondary Indicators

Table 4.3 sets out the results when the secondary indicators are calculated for incubators inside and outside Quebec. As in the previous table, caution must be exercised in interpreting these results, given that the appropriate data was sometimes limited.

As in the previous table, the results for incubators outside Quebec are higher, in general, than results for incubators in Quebec. However, incubators in Quebec outdo incubators outside Quebec on certain indicators, including those for graduated enterprises (cost per job and jobs per graduate). The results of the secondary indicator "cost per graduate" for incubators outside Quebec are biased by the presence of an indicator that started in 2005 and has only one graduate.

In addition, when the ratios of contributions from various levels of government per enterprise incubated and graduate are calculated, they are lower for incubators in Quebec. However, they are higher per job because of the lower number of jobs created by each of the incubators in Quebec.