Business incubation practices and sustainability of incubatee start-up firms in Uganda

Abstract

The purpose of this study was to establish the relationship between business incubation practices and sustainability of incubatee start-up firms in Uganda using business incubation theory and network theory. A quantitative methodology is used for data collection based on 110 incubatee start-up firms from 8 incubators in Uganda. It is a cross-sectional descriptive study, which investigates the causal effect of variables at a definite point in time. A principal factor analysis was conducted to single out the particular constructs of business incubation practices and sustainability. Simple random sampling was used for selecting start-ups from the incubation centres. The sampling framework consists of the founders of the start-ups that have been previously incubated at any of the selected incubation centres. Data were analysed using Statistical Package for Social Sciences. Incubatee selection criteria, incubatee monitoring practices and resources have a positive and significant impact on sustainability of incubatee start-up firms. The study has emphasised good business incubation practices to enable sustainability of start-up firms in Uganda. This study was limited to only incubators in Uganda and it is possible that the results are only applicable in Uganda. This paper adds to the limited business incubation literature and provides the first empirical evidence of business incubation practices on sustainability of incubatee start-up firms in Uganda. Bob Ssekiziyivu ABOUT THE AUTHOR Bob Ssekiziyivu is a Lecturer in the Department of Business Administration, Makerere University Business School. He holds a degree of Master of Business Administration and Bachelor of Business Administration of Makerere University. Bob is currently undertaking his PhD studies from Makerere University. His research interests are in the areas of corporate governance, strategic management, Microfinance Management and Entrepreneurship. Yoram Banyenzaki is a customs officer in the customs department at Uganda Revenue Authority. He is holds a Masters of Science in entrepreneurship from Makerere University. His research interests are in areas of youth entrepreneurship and energy governance.

Strengthening business incubation practices among startup firms. Evidence from Ugandan communities

“…Like in other countries, the establishment of business incubators in Uganda has been steadily growing (Mutambi et al , 2010; Abaho and Nkambwe 2017; Tibaingana, 2019; Ssekiziyivu and Banyenzaki, 2021). These incubation centers have been set-up in universities and research institutions to help business start-ups while providing laboratories for students and entrepreneurs in which to experience the real world of business.…”

“…Surprisingly, these startups have persistently failed from within the incubator, either immediately after graduating from the incubators or even after some few years after graduation (Orobia et al , 2020). For instance, according to Ssekiziyivu and Banyenzaki (2021), out of the ten startups that joined Makerere University Business School Entrepreneurship Innovation and Incubation Centre program in October 2017, only one incubatee startup graduated from the incubator successfully and was able to stand freely. It is evident in Uganda that although business incubators exist to provide a variety of business support functions to startups, these operate without a national guideline on the minimum service standard (Private Sector Department Unit [PSDU], Ministry of Finance planning and Economic Development paper, 2018).…”

“…It is evident in Uganda that although business incubators exist to provide a variety of business support functions to startups, these operate without a national guideline on the minimum service standard (Private Sector Department Unit [PSDU], Ministry of Finance planning and Economic Development paper, 2018). Whereas Ssekiziyivu and Banyenzaki (2021) documented some BI practices such as incubatee selection criteria, incubatee monitoring and resources, little is known about the contribution of incubator practices and how they can strengthen the sustainability of startups in Uganda. Besides, to the best of our knowledge, there is no single study carried out in developing communities in Uganda focusing on how to strengthen the role of BI centers and the practices from a developing country perspective.…”