Abstract:
Business incubators (BIs) are considered enablers of the entrepreneurial ecosystem, encouraging knowledge flows between institutions and business, and promoting new venture creation. Although incubators continue to proliferate, there remains a lack of consensus as to whether incubators are effective or even as to how incubator efficacy should be measured. This study seeks to address the latter of the two. Exploratory qualitative research methodology underpins this study. A sample of nine incubator managers were interviewed, representing a variety of incubator types, models, and contexts, demonstrating the breadth of the incubator industry in South Africa. Stakeholder theory is the underlying theoretical basis for understanding incubator efficacy used in this study. Considering incubator stakeholders, a framework comprising of two distinct but related perspectives on incubator efficacy – the business growth and economic development perspectives – is proposed. The source of incubator funding is suggested as having a moderating effect on the extent to which incubators focused on one perspective over the other. The study found an overwhelming reliance on government-linked funding to sustain incubator operations in South Africa. This, in addition to the substantial prevalence of metrics linked to the economic development perspective on incubator efficacy proposed in this study, supports the source of funding as a moderator of this relationship and helps explain the significant focus on economic development as a perspective on incubator efficacy. This study’s contribution lies in the development of a comprehensive stakeholder-based framework proposed for measuring incubator efficacy, applicable across incubator contexts.
