Incubator services that small service organisations require from a university business incubator

PhD (Marketing Management)--North-West University, Vaal Triangle Campus, 2015.Over the past two decades, the South African economy has witnessed a decrease in its capacity to recruit new entrants into the formal labour market. South Africa’s economy is not producing enough employment opportunities to accommodate the influx of annual new entrants into the labour market, such as school leavers. As a result of the inadequate ability of South Africa’s formal labour market to absorb new entrants, coupled with the rising youth unemployment, the South African government has prioritised the development of small, medium and micro enterprises (SMMEs) and entrepreneurship as a means to combat these challenges. Entrepreneurship, as a recognised intervention for the development and growth of an economy through the creation of jobs and poverty alleviation, is an important topic in business literature. Many countries around the world are increasingly recognising the significant contributions that SMMEs make to the employment and income generation aspects of the economy. Despite the contributions that SMMEs and small organisations (SOs), including small service organisations (SSOs), make to the economy, they have multiple difficulties to overcome. While SOs are viewed as powerful mechanisms that contribute to economic development and growth through increasing employment opportunities and wealth, they face certain obstacles that impede their growth potential and, sometimes, even lead to failure. Business incubators are organisations established to support SOs and SMMEs and are recognised as making a significant contribution to reducing business failure. South Africa and countries all over the world are beginning to appreciate the value of incubators as salient institutions that support small organisations. Various forms of business incubators have been developed, including university business incubators (UBIs) which provide support for potential entrepreneurs through ensuring that mentoring, financing, networks and business training is available. Business incubators offer incubation programmes, which include a variety of services and networking resources, to incubates. Whilst numerous studies have been done on the services that incubators offer incubates in the international context, limited research has been conducted on the services that entrepreneurs require from a UBI in the South African context. The primary objective of this study was to determine the essential incubator services that small service organisations require from UBIs within the South African context in order to guide the formation of policy objectives, marketing strategies and marketing procedures. The target population relevant to this study was defined as owners/managers of small service organisations situated in the Vaal Triangle region of South Africa. The sampling frame for the study comprised a list of small service organisations situated in the Vaal Triangle region, as obtained from the Vaal Triangle Info Business Directory. From this sampling frame, a non-probability judgement sample of 125 owners/managers of SSOs in the auto, estate agents and property management, health care and beauty, hospitality and accommodation, and professional service industry sectors was drawn. An unsolicited calling approach was followed, whereby the researcher personally visited each small service organisation individually to request permission to partake in the study. Thereafter, self-administered questionnaires were delivered for completion by the relevant owners/managers of each participating SSO, which were collected thereafter. In order to measure their perceptions of essential UBI services, participants were requested to indicate on a six-point Likert scale the level of unimportance or importance of 41 services. The owners/managers‟ perceptions of the importance of the six UBI service constructs over the business life-cycle phases were measured using multiple-choice questions, whereby the participants were asked to choose one of the five alternatives provided. The owners/managers‟ perceived value of UBI services was measured using dichotomous questions. In addition, certain demographical data were requested from the participants. The findings of this study indicate that the owners/managers of SSOs perceive UBI services as being important. They indicated networking and professional services as the most important UBI services, followed by management services, general business services, physical facilities and financial consulting services, of which university services were perceived as being the least important. The findings suggest that the UBI services were mostly required in the pre-start-up, start-up and growth phases of the SSO‟s business life-cycle phases. While UBI services were deemed important by both young and mature organisations, the owners/managers of young organisations perceived management services as more important than those of more mature organisations. In terms of the perceived value of UBI services, the findings reveal that although owners/managers perceived the UBI services to be important, they expressed minimal interest in utilising those services. Based on the participants‟ level of agreement concerning the perceived importance of UBI services, cluster analysis revealed two clusters, namely Cluster 1 and Cluster 2. The participants in Cluster 1, comprising more female participants and young organisations, perceived the UBI services as more important than those participants in Cluster 2. Since the idea of UBIs is relatively new in South African, and given that they have yet to prove their value to industry, getting stakeholders to buy into the concept remains a daunting task. Insights gained from this study will help business incubators, universities, government and other stakeholders understand current entrepreneurs‟ perceptions towards the important UBI services required by SSOs. This, in turn, will help guide UBIs in the formation of their policy objectives, marketing strategies and marketing procedures.Doctora