Abstract
Business incubation has been known in the literature as an economic development tool. Around the world, and in the developing countries particularly, business incubation is deployed to stimulate the growth of small-to-medium sized enterprises or SMEs, which are the lifeblood for many countries. Malaysia’s business incubation system has been established since the 1980s and in line with the country’s aspirations to become a developed nation by year 2020, much has been done by the government to catalyse the growth of SMEs, particularly, ICT SMEs. Despite establishing numerous ICT incubators over the two decades, the process involved in assisting new entrepreneurs in the incubators remains fragmented. This paper examines a component critical to the business incubation process: monitoring and business assistance intensity and its impact on the performance of incubates. Quantitative method was deployed with a total of 118 incubatees from ICT incubators in Malaysia responding to an online survey questionnaire. Multinomial logistic regression analysis revealed that monitoring and business assistance intensity is statistically significant in predicting incubatee performance. The findings will provide valuable information for entrepreneurs, business incubator managers, and policy-makers on best practices of incubation management and benchmarking towards fourth-generation incubators. This paper fills the gap in the current incubation literature, contributing in several aspects including empirical data, methodology, and noteworthy findings regarding the Malaysian incubation phenomenon.
Highlights
The increasingly important role of business incubation as a useful strategy and effective method to accelerate growth and development of technology-based small and medium sized enterprises (SMEs) has been widely acknowledged in the economic and entrepreneurship literature [40] [28] [1] [44]. [3] state that incubators are known for their role to accelerate the growth of new businesses and to create vast employment opportunities through the generation of new businesses
The interaction of all four constructs reveals the strongest effect as a predictor (p = .003, χ(3) = 14.024). This suggests that business incubation management will be at its optimum with the inclusion of all factors including proper selection performance, adequate monitoring and business assistance intensity, allocation of resources, and is provision of professional management services
This paper investigates the relationship between monitoring and business assistance intensity and incubatee performance among Malaysian ICT incubators
Summary
The increasingly important role of business incubation as a useful strategy and effective method to accelerate growth and development of technology-based small and medium sized enterprises (SMEs) has been widely acknowledged in the economic and entrepreneurship literature [40] [28] [1] [44]. [3] state that incubators are known for their role to accelerate the growth of new businesses and to create vast employment opportunities through the generation of new businesses. The increasingly important role of business incubation as a useful strategy and effective method to accelerate growth and development of technology-based small and medium sized enterprises (SMEs) has been widely acknowledged in the economic and entrepreneurship literature [40] [28] [1] [44]. Incubators have been suggested to reduce failure of new businesses. These are among the main agendas of business incubators that have been highlighted in extant entrepreneurship literature. According to [37], despite the growing body of business incubation research, literature on business incubation effectiveness suffers from several deficiencies, including definitional incongruence, descriptive accounts, fragmentation and lack of strong conceptual grounding. Given the importance of relational, intangible factors in business incubation and the critical role of business incubation management in orchestrating and optimising such factors, it is suggested that theorising efforts would benefit from a situated perspective
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