Brussels, 04/09/2014 (Agence Europe) - In a report published on Wednesday 3 September, the European Court of Auditors commends the “generally good” quality of EU co-funded business incubator infrastructure but criticises the incubators' “modest” performance in terms of support offered to business start-up clients.
The Court of Auditors' assessment of the contribution of the European Regional Development Fund (ERDF) to the development of business incubators reveals that a significant financial contribution was made to the creation of business incubator infrastructure, particularly in member states in which this type of business support is relatively rare. However, the Court of Auditors considers that the performance of the incubators audited is “modest”. “We consider that the provision of incubation services (…) was rather limited due to financial constraints and the low level of incubation activities. This was mainly because member states and incubator managers lacked expertise concerning incubation practices. There were also shortcomings in management systems”, said Henri Grethen, the Court of Auditors member responsible for the report.
These disappointing results can be explained by the insufficient use of good practices, says the Court of Auditors. More specifically, too little attention had been paid to the effectiveness of incubators' business support functions when incubators were being established. Furthermore, incubation services were only loosely linked to clients' business objectives. Another shortcoming is that the monitoring systems within the incubators had not provided adequate management information. Finally, incubators' financial sustainability had conflicted with the objective of providing adequate incubation services.
The Court of Auditors states that at EU member state level, management systems did not pay sufficient attention to the operational activity of business incubators. In particular, the procedure for selecting incubators for co-funding had not given due consideration to several elements which are crucial for incubation activity such as staff qualifications, the scope and relevance of incubation services, and financial sustainability. Finally, the European Commission did not take sufficient steps to facilitate the exchange of knowledge and good practices, the Court of Auditors states - whose special report no 7/2014 is accompanied by a series of recommendations to the Commission. (EH)