Business Incubation Support for Small and Medium-Sized Enterprises (SMEs)
About this good practice
The practice reaches its objectives by providing financial grants, mentorship, and technical assistance, allowing startups to develop viable products, refine their business models, and scale into international markets. The support includes access to training and lectures in RIS3 fields (research and innovation strategies for smart specialisation), which help companies innovate and stay aligned with key economic growth sectors. Additionally, the program provides access to coworking spaces, helping startups reduce costs and avoid renting traditional office space. This flexible working arrangement fosters collaboration and networking opportunities within the startup community.
The main stakeholders are government bodies, industry experts, investors, and academic institutions, while the primary beneficiaries are startups and SMEs working in innovation-driven sectors, particularly those focused on exportable goods or dual-use technologies. Indirectly, the broader Latvian economy benefits from increased innovation and export potential fostered by the program.
Expert opinion
Resources needed
The business incubation program is funded by both national and EU sources, with a total of €33.31 million in aid for entrepreneurs. It is implemented through 22 regional offices across Latvia.
Evidence of success
Between 2016 and 2023, Latvia's incubation program supported 921 companies, offering 7450 financial grants and creating 2568 new jobs. The program generated a total turnover of €379.5 million, with an export volume of €216.9 million, representing 57.1% of the turnover. This initiative significantly boosted entrepreneurship and economic growth, positioning Latvia as a rising hub for innovation and business development.
Potential for learning or transfer
The business incubation support practice in Latvia serves as a valuable model for promoting entrepreneurship and innovation. Its substantial financial support, well-structured program with regional offices, involvement of external committees for business eligibility assessments, and strong networking opportunities are key success factors that other regions can learn from. This approach not only enhances local business viability but also encourages collaboration and knowledge transfer within the entrepreneurial ecosystem
An example of national-level knowledge transfer occurred when Latvia University of Life sciences and Technologies sought to establish a student business incubation program called HatchUp. They learned significantly from Latvia’s national incubation practices, adapting successful elements to fit their specific context. This demonstrates the potential for effective knowledge transfer within Latvia, making this practice a noteworthy model for enhancing startup ecosystems.