The Chinese government has recently promoted innovation and entrepreneurship in an attempt to reverse the slowdown of the economy. This has contributed to the rise of startup companies and enhanced the development of the incubator industry.

China's first incubator appeared in 1987, and in 2005 there were already more than 500 incubators across the country. By 2015, that number had more than tripled, and there are expected to be at least 5,000 incubators in China by the year 2020.

Governmental policies support companies that encourage startups by providing free or low cost land, lower tax rates, subsidies for operational cost and financial assistance. Business incubators further contribute to the development of startups by offering benefits such as affordable office space, access to financial resources and different types of management and marketing training.

Chief Operations Officer, Bai Jie, speaking to a reporter about the HomeX Accelerator in the company salon. [Photo by Li Xiaohua/China.org.cn]

According to a report from iiMedia, most of China's incubation spaces stay empty, with an average occupation rate of less than 40%. However, there are some incubator businesses that have been able to avoid this problem.

HomeX Accelerator's Chief Operations Officer informs China.org.cn that her incubator business has had no trouble filling its offices. "We have 27 startups with more than 400 employees in our accelerator," said COO Bai Jie.

HomeX Accelerator was started by CEO, Zhang Zhihao in August of last year and carries out its business practices with a small staff of 17 people. The company, located in Wudaokou, focuses on technology startups and prides itself on being unique from most other incubators in its field.

"Our market position is quite unique compared to normal accelerators because our position is A Round Accelerator. A Round is the most difficult stage for a startup company, because at this stage you may have proven that your product is worthy, but you may not have the ability to bring your product to the market," said Bai. Most business incubators help startup companies during their early stages of development; however, as a startup accelerator, HomeX chooses to support startup companies at their point of breakthrough.

The word "Home" in the company's title is meant to represent the fact that they offer consistent support and serve as a home for ambitious startups. The "X" represents the unknown factor and stands for the infinite possibilities available to their startups.

To connect their startup clients with investors, the company often hosts a "demo day" which allows a few of their client companies to present their business projects to multiple investors at a time. So far these events have been successful for their clients, as it provides them with financial support and feedback about their products or services.

Sources of capital for China's incubation spaces primarily include government (28.4%), enterprise or private (22.8%) and universities (17.7%), with the remaining made up of other mixed resources.

As both the CEO and COO of HomeX are graduates from Tsinghua University, they have built relationships that allow them to continue to use the university as a resource. Since companies like HomeX can't expect to earn large short-term returns from the startups themselves, government incentives and university resources will continue to play a large role in the growth of the business incubator industry in China.

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