Exploring the critical factors that hinder the growth of incubatees in South Africa

Thobekani Lose,Robertson K Tengeh,Eugine Tafadzwa Maziriri,Nkosivile Welcome Madinga

doi:10.21511/ppm.14(3-3).2016.13

Abstract

In as much as entrepreneurial action fosters job creation and economic growth, entrepreneurs encounter the significant risk of failure, and community bears the brunt. Though business incubators were designed to provide support and hope to ailing businesses, evidence suggests that not all on these programs succeed. Going on the assumption that even businesses on incubation programs do not seem to be immune to failure, this study sought to determine the key factors that hinder the growth of incubatees in South Africa. Adopting a quantitative approach, the questionnaire was utilized as the primary data collection tool, and the snowball sampling method was employed resulting in a sample size of 93 respondents. The research participants for this study were limited to firms that were registered on the databases of two business incubators who promote small business development strategy and programs in Cape Town and Johannesburg, respectively. The findings indicated that lack of funding, lack of credit facility, competition, crime, lack of access to external market, lack of business skills and lack of product selection and design were the key factors that hinder the growth of incubatees. Given the substantial resources invested in business incubation programs, the fact that business incubators are entrepreneurial ventures in themselves, understanding and finding sustainable solutions to the factors that hinder the growth of their clients (incubatees) would be a win-win solution for the relevant stakeholders. Keywords: business incubatees, business incubators, entrepreneurship, growth, South Africa. JEL Classification: M1, L84

Highlights

The move to acknowledge the role of Small and medium-sized enterprises (SMEs) with regards to economic development has gained traction over the years
The researchers opted for a quantitative research approach for this study, because it enhances the accuracy of results through statistics analysis (Berndt & Petzer, 2011) and avoids the elements of subjectivity associated with the qualitative approach (Du Plessis & Rosseau, 2007)
The target population for this study was restricted to all small business enterprises operating in the Western Cape Province and Gauteng Province of South Africa that were on the incubation programs and in the databases of two identified organizations in both sites

Summary

Introduction

The move to acknowledge the role of Small and medium-sized enterprises (SMEs) with regards to economic development has gained traction over the years. Ph.D., Senior Lecturer, Faculty of Business & Management Sciences, Cape Peninsula University of Technology, South Africa. Eugine Tafadzwa Maziriri, Faculty of Management Sciences, Vaal University of Technology, South Africa. Business incubation as a research area has gained traction over the years, the relevance of investigating the critical factors that hinder the growth of business incubatees in South Africa remains glaring. This is so, because previous studies in South Africa have marginally engaged incubators or incubatees along these lines. The previous study was expanded to another province (Gauteng)

Literature review

Research methodology

Findings

Presentation and discussions of findings