Success Factors For Business Incubators In Developing Countries

Over the past twenty years,developing countries have been facing various economic challenges such as rising unemployment especially among the young university graduates,lack of opportunities to develop skills,the lack of an entrepreneurial culture,and the absence of a competitive manufacturing base as well as presence of poor infrastructural networks.Small and medium sized enterprises(SMEs)play a major role in fueling economic development particularly in creating employment opportunities as well as being a source of income generation.Nonetheless,SMEs face numerous challenges from poor management,lack of proper entrepreneurship skills to inadequate financial capital.In order to overcome such challenges facing SMEs,business incubators have been proved to be an effective tool.This study sought to define the success factors of business incubators in developing countries with Pakistan providing the sample population.A mixed method sequential exploratory approach was used by first collecting qualitative data and the adding the quantitative data in order to increase accuracy in findings.Compared with the existing research,the innovation points of this dissertation mainly are represented by the following aspects:(1)The available literature on success factors mostly explained the relation with developed countries.There is lot of space available for exploring the relation with developing countries.This study is an effort to contribute and fill this research gap and enrich the existing literature of success factors in developing countries.Success factors of business incubators in developing countries create chances of entrepreneurship and job creations.Specifically,this study shows how these factors are rejoining each other and how to enhance the entrepreneurial behavior in developing countries.The current research study also opens new opportunities for academicians in studying cross linkages among the various affecting performance.(2)We examined the success factors of business incubators in developing countries where these success factors are proved to be significant predicators of reducing unemployment and promotion of entrepreneurship.Hence findings of this study shows that entrepreneurial activity enhance the job creation and reduce the unemployment.This research aimed at understanding more of the situation in Pakistan,how success factors are playing role in creation of successfulbusiness incubators.A conceptual model of business incubator success factor is developed and empirically tested around data collected from business incubators in Pakistan.(3)The findings of this study additionally reveal that financial and technical support is very essential when it comes to the effectiveness of business incubators in Pakistan.In order for such resources or support to be properly harnessed and utilized,there is need for a multi-sectorial approach where both the public and private sector will have to work together.The private sector is known to have more financial resources than the public sector;hence,can help tremendously in building the capacity of business incubators.Public sector driven business incubators cannot be said to be as efficient as those facilitated by the private sector.This is because the public is known to have a lot of red tape,which tend to hinder efficiency in reaching the objectives of business incubators.Nonetheless,the presence of foreign direct investment in Pakistan has created the desire to advance the business incubators in the country.(4)An increase in the funding of business incubators and the proper use of such financial resources,can substantial help in the growth of business incubators in Pakistan by enabling them to provide more commercialization as well as increased entrepreneurial culture across the country.The current study identified that the model of business incubators whether it is for profit and not for profit fails to predict the effectiveness of business incubators in Pakistan.In Pakistan majority of the business incubators focus on working as not for profit,both in the public and private sector by providing services as well as facilitating free of costs.However,some private business incubators tend to demand a certain percentage of the startups' business once they successfully graduated.(5)This dissertation sought to examine the proposals put forward regarding initiating or improving incubator operations in Pakistan.Faced by many challenges,business incubators in Pakistan require a lot of work input in order to increase its intended impact on the business environment.Pakistan is a developing country,which means it faces a lot of financial constrains as evidenced by the lack of sufficient financial support to business incubators countrywide.As a result,majority of the young and productive Pakistanis tend to prefer employment,which is seen as offering steady and stable income stream even though it is inadequate in most cases.In comparison,employment is seen as being less risky than the option of venturing into entrepreneurship.Therefore,it is not that these young and productive Pakistanis lack the energyand creativity needed to venture into entrepreneurship,it is because they lack the proper awareness and capacity to understand how to effectively maneuver in the business world.This is where business incubators play a central role.