Seeding young entrepreneurs: The role of business incubators

Rosado-Cubero, Ana; Hernández, Adolfo; Blanco Jiménez, Francisco José; FreireRubio, Teresa Article Seeding young entrepreneurs: The role of business incubators Journal of Innovation & Knowledge (JIK) Provided in Cooperation with: Elsevier Suggested Citation: Rosado-Cubero, Ana; Hernández, Adolfo; Blanco Jiménez, Francisco José; FreireRubio, Teresa (2024) : Seeding young entrepreneurs: The role of business incubators, Journal of Innovation & Knowledge (JIK), ISSN 2444-569X, Elsevier, Amsterdam, Vol. 9, Iss. 4, pp. 1-14, https://doi.org/10.1016/j.jik.2024.100579 This Version is available at: https://hdl.handle.net/10419/327481 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ Seeding young entrepreneurs: The role of business incubators Ana Rosado-Cubero a, *, Adolfo Hern andez b , Francisco Jos e Blanco-Jim enez c , Teresa Freire-Rubio d a Complutense University of Madrid, Faculty of Commerce and Tourism, Av. Filipinas, 3. 28003 Madrid, Spain b Universidad Complutense de Madrid, Department of Financial & Actuarial Economics & Statistics, Faculty of Commerce and Tourism, Av. Filipinas, 3. 28003 Madrid, Spain c Universidad Rey Juan Carlos, Faculty of Social Sciences and Law, Edificio Departamental. Campus de Vic alvaro, P.° de los Artilleros, 38, 28032 Madrid. Spain d ESIC, business&marketingschool, Avda. Valdenigrales s/n 28223 Pozuelo de Alarc on Madrid, Spain ARTICLE INFO Article History: Received 11 March 2024 Accepted 17 September 2024 Available online 4 October 2024 ABSTRACT This study focusses on young entrepreneurs and considers the extent of business incubators’impact on the development and visibility of projects headed by young people. To do so, we analyse incubators’role as ecosystems for entrepreneurship in Spain based on the 2023 Funcas survey. First, we categorised incubators according to entrepreneurs’age, defining young incubators as those in which most of the businesses are run by individuals under 35, excluding those over that age. We analyse variables that include the services offered and the frequency of events or training within the incubators to determine which approaches benefitor harm young entrepreneurs. This study uses a statistical approach, with quantitative data from the questionnaire as a starting point to characterise and identify young entrepreneurial profiles in business incubators. We develop and test two hypotheses using the chi-squared test, which is a non-parametric (distribution free) technique. Finally, we include a brief analysis of young entrepreneurs’personality traits to shed light on some defining characteristics, concluding that personal initiative is a key feature amongst entrepreneurs under the age of 35. We conclude that the incubator system in Spain harms young entrepreneurs and propose some relevant recommendations to reverse this trend. © 2024 The Authors. Published by Elsevier España, S.L.U. on behalf of Journal of Innovation & Knowledge. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) Keywords: Young entrepreneurs Business incubators Entrepreneurial training JEL: L26 M13 Introduction It is generally accepted that entrepreneurial activity promotes economic growth and development, offering an attractive instrument of innovation (Aghion, 2017;Galindo & M endez-Picazo, 2013; Ribeiro-Soriano, 2017). To modernise rural areas, policy makers promote regional development through business incubators as mechanisms for nurturing and creating value for society (Lin-Lian et al., 2022a and b). Fortunately, the trend of lack of studies concerning business incubators has reversed since the initial studies obtained limited and contradictory results (Albort-Morant & Ribeiro-Soriano, 2016). Recent research has demonstrated the role of incubators in developing business models for students during training (Freire-Rubio & Rosado-Cubero, 2015;Muslim Saraireh, 2021), how incubators facilitate entrepreneur networks (Busch & Barkema, 2022)andthe increased number of people employed (Dlamini et al., 2022). Incubators’influence on regional development has largely been found to be positive (Johannisson & Nilsson, 1989;Lawton Smith, 1996; Laukkanen, 2000;Benneworth, 2004;Muringani et al., 2021;Madaleno et al., 2022). In addition to incubators’influence on economic development, the support for entrepreneurial ecosystems is a novel way to promote supportive entrepreneurial environments. Entrepreneurial ecosystems have been investigated for understanding the context of entrepreneurship at the macro level of the organisational community (Stam & van de Ven, 2021). Some studies have demonstrated how a rich entrepreneurial ecosystem supports entrepreneurship and subsequent value creation at the regional level; for instance, developing a dynamic entrepreneurial ecosystem lifecycle model focused on the internal commercialisation of knowledge (Cantner et al., 2021). Another study defined the following taxonomy: first, the incubator managers develop confidence among local companies of association. Second, when companies ‘graduate’(launch into the real work). Third, building trust in the incubator in which a region becomes extremely active in business and new start-up enterprises that * Corresponding author at: Faculty of commerce and tourism, Complutense University Madrid. E-mail addresses: [email protected] (A. Rosado-Cubero), [email protected] (A. Hern andez), [email protected] (F.J. Blanco-Jim enez), mariateresa.freire@esic. edu (T. Freire-Rubio). https://doi.org/10.1016/j.jik.2024.100579 2444-569X/© 2024 The Authors. Published by Elsevier España, S.L.U. on behalf of Journal of Innovation & Knowledge. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) Journal of Innovation & Knowledge 9 (2024) 100579 Journal of Innovation &Knowledge https://www.journals.elsevier.com/journal-of-innovation-and-knowledge require the incubator’s services appear (Rosado-Cubero et al., 2023). Incubators that act as seeds of an entrepreneurial ecosystem can be useful for encouraging young people to start businesses. An important aspect of the entrepreneurial process is related to governments’role in the early stages of an ecosystem’s development. It is inadequate to identify leading entrepreneurs to help them network, and traditional grants and subsidies may reduce the entrepreneurial core rather than encourage it, governments do not possess the right skillset or capabilities to advise or mentor entrepreneurs (Mason & Brown, 2014). However, strong skills and knowledge bases (i.e. apprenticeship schemes, entrepreneurship education and university research) are essential to ecosystem development, which requires collaborative industry−university efforts. According to our findings, training workshops are a significant variable that favours entrepreneurship amongst young people, which resonates with previous studies that have explained that higher education levels and entrepreneurial experience are more likely to involve young people as members of teams in the entrepreneurial process (Pinz on et al., 2022). We argue that incubators benefit entrepreneurship when they offer training and connect entrepreneurs in different sectors. This study examines the interdependent factors that enable and constrain the success of young entrepreneurs engaged in business incubators in Spain to determine the strengths and weaknesses of the current incubator system. Specifically, we aim to answer the following two research questions: RQ1: Is a connection evident between the age of entrepreneurs in incubators and the amount of financial support received? If so, in what sense? RQ2: Does the entrepreneur’s age influence the extent to which they exhibit personal initiative? If so, in what sense? We obtain a collection of statistical databases provided by managers of incubators to investigate the relationship between business incubators’characteristics and contributions to advancing the success of young entrepreneurial talent. We expect some of the chosen variables to be statistically significant and others to be irrelevant for measuring the success. This study contains two sections to examine the ways in which young entrepreneurs receive support from their affiliated incubators. We first analyse business incubator characteristics to determine their relevance, then focus on personal initiative (PI) as an entrepreneurial personality trait in the second section. Conclusions and discussion of results are included, and finally policy implications and recommendations complete the text. The preliminary conclusion is that incubators with a higher number of young entrepreneurs have lower budgets, tenants must pay more for services and incubators organise less frequent events, workshops and spaces or co-working opportunities. Literature review and hypotheses development Literature review Scholars involved in the Global Entrepreneurship Monitor (GEM) documented various forms of entrepreneurial activity across countries and regions over the years (Bosma et al., 2021), concluding that younger people are more likely than older people to start new businesses and younger adults tend to have less knowledge and experience, smaller networks, fewer resources and fewer skills. The first technology start-up accelerator, Y Combinator Management LLC, was founded in the United States in 2005. The incubator developed the tool that is widely used to evaluate start-ups and analyse the potential of specific business opportunities that is also called Y Combinator. While this application does not discriminate between young entrepreneurs and adults over 35 years of age, Y Combinator invests more in technology businesses where young entrepreneurs have more interest. Notably, younger adults may have more energy, enthusiasm and tend to give up less in terms of an established career and high salary because they may not yet have to support a family, pay a mortgage and other lifestyle choices (Calvo et al., 2023). Establishing business incubators in less developed countries can be a viable option for improving economic development. For example, business incubators in Oman provide shared resources and facilities for young businesses such as office space, consultants and personnel, with moderate yet promising success (Sanyal and (Sultanate of Oman), 2018). More recently, previous studies have defined the variables that can improve young people’s entrepreneurship such as entrepreneurial education and self-perceived creativity to shape young individuals’attitudes towards e-entrepreneurship (Abdelfattah et al., 2023). In Mexico, when students complete a master’s degree they generally do not consider pursuing entrepreneurial endeavours because of their age (P erez Paredes et al., 2022). Previous studies have found that young people in Indian communities independently establish enterprises (Agarwal et al., 2020;Biney, 2023). Entrepreneurial intentions of young people in Indonesia are determined by the need for achievement, risk perception and locus of control (Wardana et al., 2020). Young people in Pakistan are eco-friendly and enjoy pursuits that can change consumer practices, with favourable market conditions for sustainable entrepreneurship (Soomro et al., 2020). In Malaysia, the key traits amongst entrepreneurs are individuals’openness to experience and resilience (Sahrah et al., 2023). In Portugal, the importance of enhancing entrepreneurial culture and education to promote self-efficacy and develop entrepreneurial intentions has been recommended (Ant onio Porfírio et al., 2023). Across Europe, young adults (18−34 years of age) are more likely than older adults (35−64 years of age) to start or run a new business, according to three of the classical GEM adult population survey questions addressed to young, emerging or established entrepreneurs only (but not non-entrepreneurs) (Bosma et al., 2021). The results indicate that western Europe has the highest levels of adults perceiving good opportunities to start a business locally who are deterred from doing so by fear of failure, which is especially high in parts of Spain, Portugal, France and the United Kingdom (Bosma et al., 2021). In contrast, in northern European countries such as Denmark, young founders who became ‘serial entrepreneurs’have seen sales revenue nearly double between their first and second firms (Shaw & Sørensen, 2022). In Spain, the years of COVID-19 pandemic restrictions affected young people tremendously and full socioeconomic recovery had not yet occurred in 2022; therefore, Spain has an ageing entrepreneurial profile (Calvo et al., 2023), and there are significant differences in motivation between juniors and seniors that can boost intergenerational cooperation (PerezEncinas et al., 2021). In Spain, a positive attitude towards entrepreneurship prevails amongst young people, who focus on working independently as alternative to unemployment, underemployment or increasing income sources (Adalid Ruiz & Kayahan, 2021). One study also determined that highly qualified young people tend to stay in Madrid, citing quality of life as the main reason (Angoitia, 2023). Another study demonstrated that entrepreneurs in northern Spain tend to maintain their businesses longer than those in the central zone (Yurrebaso et al., 2021). Previous research has shown that young tenants find incubators’services most useful (Albort-Morant & Oghazi, 2016). This is a relevant point as well as other factors such as education level, professional experience and family experience. This study focusses on young entrepreneurs that have been accepted into Spanish incubators to identify the characteristics of incubators that promote or hinder young entrepreneurs’pursuits. A. Rosado-Cubero, A. Hern andez, F.J. Blanco-Jim enez et al. Journal of Innovation & Knowledge 9 (2024) 100579 2 Hypotheses development This study explores two hypotheses. Based on previous research, particularly studies that have demonstrated that young incubator tenants find incubators’services most useful (Albort-Morant & Oghazi, 2016) and to enhance the role of incubators in supporting young entrepreneurs, we propose our first hypothesis. H1. There is a connection between the age of entrepreneurs in incubators and the amount of financial support received by incubators. Sub-hypothesis. The higher the average age of the entrepreneurs in an incubator is, the greater the financial support for the incubator will be. A seminal article that remains relevant is the basis of our second hypothesis and reiterates the importance of PI in entrepreneurship. PI sharpens entrepreneurship, alongside other traits such as innovation and work performance (Frese & Fay, 2001). H2. Entrepreneurs’age influences the extent to which they exhibit personal initiative. Sub-hypothesis. Younger entrepreneurs will exhibit more personal initiative. We employ a non-parametric statistical (chi-squared) test to evaluate the validity of our hypotheses and determine the significance of the different variables considered in incubators with young entrepreneurs. Methodology The questionnaire was designed following earlier surveys designed for Ranking Global Funcas de Viveros de Empresas, which is calculated with data gathered since 2018. We group the items collected in the survey following the response criteria of the business incubators. These data correspond to surveys conducted in November and December 2023. We obtained a list of all existing incubators in Spain (413), contacting the person in charge (director or equivalent) of each incubator via email (questionnaire sent) and phone. The contact presented themselves as a member of the Funcas team, working towards the elaboration of incubators’and accelerators’Funcas ranking. If a response was not received within a reasonable period (approximately two weeks), they were contacted again, via phone and email, up to two more times. It took incubator managers about 30 min to complete the questionnaire. The final sample includes 93 questionnaires from Spanish incubators, representing 22.28 % of the total population of incubators, which is a reasonable response rate. The questionnaire included all items found in (Blanco Jim enez et al., 2021). We gathered information about the different services that incubators offer, grouped into categories such as assistance and services, consultancy, project monitoring and seminars and workshops. Public and private financing is also relevant. Frequently incubators offer parking spaces and support with consultancy services and project follow-up, as well as workshops to meet tenant companies’demands. Securing funding, either directly or through third parties is also included in this category as part of the support for businesses as an integral form of support provided by business incubators. Support seeking financing and legal advice are found to be the most important service offered by the incubators. Public financing continues to be most prevalent when opening new incubators or maintaining existing incubators, as this study demonstrates. The tech industry is the sector with the most interest in incubators’ecosystems, and young entrepreneurs are keen to start a business in this sector. To analyse the variable of financing that firms used during start-up within the business incubator, we use data from the survey and separate it into public or private. To analyse entrepreneurship amongst young adults within incubators, we employ the age distribution proposed by GEM, where those identified as starting or running a new business are grouped by age into a younger age group (adults aged 18−34) and an older age group (aged 35−64) (Hill et al., 2023). Since project promoters’average age in each incubator is known, we construct a synthetic variable classifying incubators as having significant young input when the incubator’s average age is below 35 and incubators with an average age above 35 as not young. In our sample, 32 incubators, or 34,40 %, fall into the young category and 61 (65,60 %) are in the second category. Analysis of business incubators’characteristics In this section we examine the variables that characterise the incubators, encompassing annual budget; annual frequency of entrepreneurial events; training courses (transversal topics or support); monthly frequency of training courses (transversal topics or support); pre-incubator projects and workshops; pre-incubator or co-working spaces; whether the incubator offers free services, consulting sessions with experts or monitors the of pre-incubator projects’activities; the proportion of companies that are currently continuing business activities; the percentage of graduated projects that obtained public financing; and which projects obtained private funding. Support through access to investors, access to peers, help with team formation and direct funding from the programme could have a positive impact (Bone et al., 2019), which we link with our variables covering entrepreneurial events, training courses, co-working spaces and consulting sessions with experts. Some variables are quantitative in nature such as the impact of events and learning, mentorship, access to funding and collaborative network provided by the Circular Jumpstart acceleration programme for start-ups (Muchtar & Nalurita, 2023). In addition, mentorship programmes, entrepreneurship education and an emphasis on innovation and creativity through entrepreneurial universities and academia (Dhiman & Arora, 2024)as well as providing necessary resources for success such as expert-level technical assistance and a safe, empowering third space for collaboration (Palazzolo & Devasagayam, 2023) have also been found beneficial. Variable consulting sessions with experts highlighted the role of entrepreneur-coach in the context of a university-based accelerator (Mansoori et al., 2019). Gaps remain in the services provided by the incubators such as operating practices, business accelerator forms, organisational structure, operations and outcomes, incubators performance and how they function within a structured framework (Kramer et al., 2023). Other scholars have explored how incubators’programme design influences new ventures’ability to access, interpret and process the external information needed to survive and grow. The target should be to design and operate such programmes based on theories and empirical research concerning firm-level entrepreneurial performance (Cohen et al., 2019). To assess the survival of new businesses, we endeavour to identify the mechanisms that explain how incubators operate and their role in supporting entrepreneurship and innovation (Crișan et al., 2021), as well as practices and tools for sustaining start-ups’innovation process and increasing their survival probability (Battistella et al., 2017). In addition to the more traditional success measure we introduce graduated projects that have obtained public financing, which was also considered by Zudaire and Alf erez (2018). Other research has examined start-ups receiving benefits linked to strategic business development acceleration in the areas of strategy and business model improvement, pitching, financing and strategic partnership (exit) development (Gutmann et al., 2019). Investment can involve new tools such as private funding via mutual funds for qualified investors (Astapov & Zhdanov 2022) and A. Rosado-Cubero, A. Hern andez, F.J. Blanco-Jim enez et al. Journal of Innovation & Knowledge 9 (2024) 100579 3 companies’financial priorities should generate sufficient resources to ensure start-up development (Kupp et al., 2017). Securing external support is a critical issue that determines business viability (de Klerk et al., 2024), and entrepreneurs must manage the tension between acquiring resources and preserving autonomy (Seidel et al., 2016). Analysing the relevant variables from those detailed above allows us to test our first hypothesisH1. There is a connection between the age of the entrepreneurs in the incubators and the amount of financial support to the incubators Sub-hypothesis. The higher the age of the entrepreneurs in an incubator, the greater the financial support for the incubator Fig. 1 shows that young incubators have smaller budgets that those with entrepreneurs over 35. Considering the older age profile of Spanish entrepreneurs, it seems logical that stronger incubators with larger budgets and more resources are overrepresented by more consolidated and competitive projects led by older entrepreneurs as networking, experience and market knowledge are key for such projects. Clear, though not significant, differences are found in the distribution, and the p-value of the chi-squared test is 0.117, which is very close to rejecting the null hypothesis at a 10 % significance level. Fig. 2 shows the events held by incubators to foster entrepreneurship, revealing that incubators geared more towards a younger audience hold fewer events than those with older tenants. This indicates that young entrepreneurs are at a disadvantage because they access incubators with lower budgets that offer less activity such as networking or training. The difference, in this regard, is statistically significant at the 10 % level (p-value=0.078). Fig. 3 shows that incubators with a higher proportion of young entrepreneurs offer fewer training opportunities or entrepreneurial support. It is also found that as entrepreneurs’training is primarily offered outside of the incubator itself, it is difficult to assess the value of belonging to the incubator, at least in terms of access to training. However, as the p-value is 0.238 it is not considered to be a significant aspect of improving young entrepreneurship. Fig. 4 reflects the monthly frequency of training courses. Once again, the younger group is at a disadvantage as the distribution of training courses in these incubators exhibits lower values. These differences are significant at the 10 % level (p-value = 0.054). Fig. 5 shows that the frequency of training workshops for preincubated and incubated projects is higher for older age incubators, with a highly significant difference (p-value = 0.029). The variables of entrepreneurial events, training courses and workshops confirm the findings of (Bone et al., 2019;Muchtar & Nalurita, 2023;Palazzolo & Devasagayam, 2023). The right hand figure in Fig. 6 shows that incubators offer consulting sessions with experts (p-value = 0.109), spaces for co-working (pvalue = 0.074) and monitoring project activities (p-value = 0.067) with more frequency in older incubators. The left hand figure shows services offered for free to a greater degree in incubators are higher in older incubators (p-value = 0.172). According to all the variables we have analysed, we conclude that younger incubators offer a lower level of benefits, confirming the results of (Mansoori et al., 2019;Dhiman & Arora, 2024;Muchtar & Nalurita, 2023). Incubators’budgets favour older entrepreneurs, as does the frequency of events that support entrepreneurship. We highlight statistically significant characteristics of incubators such as the training courses on offer, their frequency and their transversal nature alongside the training workshops, spaces for co-working, consulting sessions with experts and monitoring project activities and free services. These are highly indicative and reveal how younger entrepreneurs are hampered in their entrepreneurial endeavours. Plot 1 shows business incubators’characteristics and their role in seeding and nurturing young entrepreneurs’activities. We divided them into qualities of a business incubator that serve as seeds and those that provide relevant assistance. Plot 1. Significant seeds for young entrepreneurs Events to spread the entrepreneurial spirit Monthly frequency of training courses Training workshops for projects Co-working spaces Monitoring project activities Pertinent seeds for young entrepreneurs Incubator budget Training courses Consulting sessions with experts Free services Fig. 1. Business incubators: Income budget (2022). A. Rosado-Cubero, A. Hern andez, F.J. Blanco-Jim enez et al. Journal of Innovation & Knowledge 9 (2024) 100579 4 Thus far, chi-squared tests have been used to determine which seeds are relevant for the characterisation of young entrepreneurial profiles in business incubators. However, for more research depth and quantitative robustness, we employ a logistic regression model that takes the age-related incubator classification as the dependent variable. This technique enables us to examine the impact of each of the nine seeds in Plot 1 on young entrepreneurial success. Due to the large number of explanatory variables included, we use a forward selection method. We fit the model to all the individuals in our sample, with only one significant variable in the logistic model (Table 1): the impact of training workshops for projects. To evaluate the results of the logistic regression model, it is advisable to consider the so-called confusion matrix (or classification table), which is a tabular representation of actual (observed) vs values predicted (by the model). This table contains four cells that correspond to true positive (TP), true negative (TN), false positive (FP) and false negative (FN) predicted values. Some important metrics can be defined from this information, encompassing the model’s accuracy [(TP + TN) / Total], specificity [TN/(TN + FP)] and the sensitivity [TP / (FN + TP)]. Table 2 presents the associated classification table. The overall percentage of correct classifications in the chosen model is 65,9 %, with a sensitivity of 56,7 % and a specificity of 70,9 %. These are good results, considering the heterogeneity of the business incubators. Other descriptors of young entrepreneurship in Spain This part of our research examines young entrepreneurship by region, which sectors generate more interest amongst the young and whether they obtained financing for their projects. The subsequent recommendations we propose for public administrators are based on the analysis of these results. Fig. 2. Spreading entrepreneurial events. Fig. 3. Training courses. A. Rosado-Cubero, A. Hern andez, F.J. Blanco-Jim enez et al. Journal of Innovation & Knowledge 9 (2024) 100579 5 Fig. 4. Monthly frequency of training courses. Fig. 5. Training workshops for projects. Fig. 6. Consulting sessions with experts, spaces for co-working, monitoring projects’activities and free services. A. Rosado-Cubero, A. Hern andez, F.J. Blanco-Jim enez et al. Journal of Innovation & Knowledge 9 (2024) 100579 6 Autonomous regions We next analyse the proportion of young entrepreneurship and that of entrepreneurs over 35 according to geography based on Spain’s autonomous regions. As shown in Fig. 7, most of the incubators in Spain have entrepreneurs over 35 years of age, which is consistent with the current profile for entrepreneurs in Spain as being older than other European countries nearby, where 80 % are between 25 and 54 according to GEM (Calvo et al., 2023). Madrid and Galicia stand out regarding the number of entrepreneurs over 35 years of age. Notably, Madrid has the highest level of entrepreneurial activity in the whole country. The greatest concentrations of business and entrepreneurial activity are in Madrid, Catalonia and Galicia, where mature entrepreneurs prefer to engage in entrepreneurial activity. Furthermore, incubators receive a greater level of support in Madrid and Catalonia, primarily through seminars and workshops (Rosado-Cubero et al., 2023), and this study demonstrates that these regions clearly support senior talent. The opposite is true in the Mediterranean, Valencia, Murcia and Castile-la Mancha, where young entrepreneurial talent is particularly prominent. Notably considerable differences are found between youngsters from Madrid and Catalonia in terms of accessing business incubators due to the clear cultural differences of their university graduates. According to the GUESSS 2021 report (Ruiz-Navarro et al. 2021), Catalan universities have a high proportion of students that intend to start their own businesses in five years (23 % from Universidad de Girona and 18 % Universidad de Barcelona) and less see themselves working for a large company (12 % and 15 %, respectively). These figures are remarkably different for students from Madrid, who generally do not see themselves owning a business in the same time frame (Universidad Carlos III only 3.8 % and Universidad Rey Juan Carlos 13.8 %) and lean towards working for a large company in five years (37.8 % from Universidad Carlos III and 30.4 % from Universidad Rey Juan Carlos). Economic sectors We begin by examining whether young people become entrepreneurs in the tertiary sector and the other two sectors. Fig. 8 shows that older and younger incubators tend to focus on the tertiary sector. Notably, Spain is highly focussed on the service sector for a variety of reasons such as high production costs, low investment in research and development, less competition in many productive areas and related characteristics. This directs the focus towards the tertiary sector, which is a trend that young people are also following with entrepreneurial activity. Project financing Project financing is an interesting variable that is, once again, found to be a hindrance for the young. As shown in Fig. 1, older incubators have larger budgets than those with entrepreneurs below the age of 35. Fig. 9 illustrates how projects led by mature entrepreneurs also gain more public and private funding. Securing public financial support is a highly competitive process. The findings reveal that young entrepreneurs are at a disadvantage concerning business incubation. This study of how incubators are financed aligns with (Bone et al., 2019;Astapov & Zhdanov 2022; Seidel et al., 2016). Quality and quantity of services provided by incubators Funcas establishes low, medium and high levels for incubators based both on the quality and quantity of the services provided. Once again, Fig. 10 shows that incubators geared towards young entrepreneurs are more likely to be in the low category. Table 1 Variables in the equation. B S.E. Wald df Sig. Exp(B) Step 1 Training workshops for projects 1159 ,473 6002 1 ,014 3187 Constant 1099 ,320 11,768 1 <,001 ,333 Table 2 Classification table. Predicted Young incubators Percentage correct Observed No Yes Step 1 Young incubators No 39 16 70,9 Yes 13 17 56,7 Overall Percentage 65,9 Fig. 7. Proportion of young incubators by autonomous regions in Spain. A. Rosado-Cubero, A. Hern andez, F.J. Blanco-Jim enez et al. Journal of Innovation & Knowledge 9 (2024) 100579 7 Table 3 shows that 43.8 % of the young incubators are in the lower level of the Funcas classification, whilst only 28.3 % of older incubators are at this level. Furthermore, 36.7 % of the older incubators develop higher quality and quantity of activities and offer a greater number of services, while only 28.1 % of young incubators reach a high level of quality and a wide range of services, which is a novel variable analysed in this study. Personality traits of young entrepreneurs In this section we explore our second working Hypothesis H2. Initiative is one of the qualities of business people that is more prevalent in entrepreneurs under 35. Entrepreneurs’personality traits have been explored at length (Kerr et al., 2018), and meta-analysis studies have highlighted significant associations between personality and entrepreneurship (Brandst€ atter, 2011). Nevertheless, the impact of founders’personalities on the success of new ventures is largely unknown. We next demonstrate that founder personality traits are a significant feature of a firm’s ultimate success (McCarthy et al., 2023). Some of the personality traits include self-efficacy and the ability to identify business opportunities (Paranata et al., 2023).ThemostrecentGEMalsoindicatedthatspecificpersonal characteristics can encourage enterprising activity, which is crucial for advancing contemporary economic activity (Calvo et al., 2023). We examine whether young entrepreneurs have specific personality traits that can help us make suggestions for improving entrepreneurial models. We identify PI as a personality trait that is linked to young entrepreneurship, and after the age of 35, entrepreneurs also Fig. 8. Business incubators: economic sector of activity. Fig. 9. Financed projects. Fig. 10. Incubators’quality and quantity of services. A. Rosado-Cubero, A. Hern andez, F.J. Blanco-Jim enez et al. Journal of Innovation & Knowledge 9 (2024) 100579 8