Some attributes of South African incubators for new, independent, high-technology business ventures
- Authors: Maree, Carus
- Date: 2012-08-08
- Subjects: Business incubators , New business enterprises , Business failures
- Type: Thesis
- Identifier: uj:8964 , http://hdl.handle.net/10210/5435
- Description: M.Ing. , Sunter (1999:13) states "Unemployment is now the scourge of virtually every single nation." Sunter believes that unemployment or the creation of new jobs will be the responsibility of small businesses. If one however analyses the survival of new business ventures, failure is not the exception but the rule. According to literature 52% of all new business ventures are dissolved within the first four years of their existence and 63% within 6 years. Various publications on business incubators state that new business ventures that were incubated by business incubators demonstrated a success rate that is as high or higher than the failure rate of non-incubated new business ventures. A typical success rate of approximately 86% is quoted as the norm for these incubated ventures. The success rate can be attributed to the support provided by the incubators. The support and services provided by incubators consist typically of a range of products but the distinguishing attribute or feature is the support programme developed and tailored to meet the specific requirements of each individual organisation that joined the incubator. To ensure that jobs are created in South Africa it seems that incubators should be in a position to contribute much. The results of an evaluation of the achievements of seven of the highly visible incubators in South Africa, indicate that the flirtation with incubators resulted in very limited success. None of the seven examples were found to be very successful, but not all for the same reason. The aim of this dissertation is to identify some of the attributes that a high-technology incubator should possess to ensure success. The approach adopted was to: Define what a high-technology business incubator is. Identify the typical life-cycle of new ventures. Determine why new ventures fail. Determine the critical success factors of new ventures Determine the reasons for failure of South African high technology business ventures and incubators. Then based on the results of the above define some of the attributes a South African incubator should possess. The conclusion is that the attributes, excluding flexible lease space, shared business services and networking to the know-how network (technical) of the South African incubators are well developed. The following attributes were found lacking and should be fully developed: Education, training and information programmes; Networking to debt and equity capital and networking in general and Counselling and mentoring support. These attributes are those that will enable an incubator to develop and tailor support programmes to meet the specific requirements of individual firms. The South African environment is identified as being detrimental to the development of small new ventures and it was recommended that it should form the subject of further research.
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The use of corporate business incubators in the knowledge economy
- Authors: Steyn, Pieter Dirk
- Date: 2009-01-15T13:11:16Z
- Subjects: Business incubators , Knowledge management
- Type: Thesis
- Identifier: uj:14795 , http://hdl.handle.net/10210/1871
- Description: M.A. , The impact of the New Economy on the enterprise is major and the change drivers required for success are pervasive and significant. At the same time traditional geographic boundaries to the flow of information and commercial transactions disappear. To position for success, the requirement to develop the capability to manage risk and operate under high levels of uncertainty becomes as important as the capacity for change. This demands a paradigm shift in management’s approach away from “the answer” to an approach which allows for portfolio management and the ability to investigate, fund and manage approaches to multiple strategic and operational options. The strategic challenges lies in when to lead and when to follow, the organisational challenge then becomes building flexibility, environment-sensing capabilities and an internal capacity to develop, nurture and harness knowledge and innovation. Whilst the benefits of leveraging innovation as a strategic business growth driver is accepted, the management of the process of doing so is manifestly difficult in most enterprises. This is due to outdated management processes and organisational structures, cultural prejudices caused by the enterprise being more comfortable with core activities and a lack of adequate skills within the enterprise to research, develop and manage innovative ideas to fruition. Enterprises can manage this process of leveraging innovation in a number of ways by inter alia, staff management via continuing education and training, a corporate culture with such characteristics as: “Off-line” innovation time, internal competition, knowledge management tools, cross- functional meetings, a knowledge capture Intranet, etc. and an organisational accountability which relates to a well-defined process that affords the enterprise and its employees the opportunity to move ideas across organisational boundaries without being inhibited by the usual organisational politics and turf-protection. An approach to this is via strategic internal consulting groups or a “New Ventures” division – essentially entities set up to incubate and manage new business opportunities Such a new venture division or business incubator requires as a critical component an established process and evaluation methodology to effectively manage innovation initiatives. This research will focus on the development, application and management of such a new ventures division along the structure of a business incubator. It is an accepted adage that all “healthy” enterprises generate and use knowledge, but this is, as with the management of innovation, easier said than done. Whilst many enterprises will simply hire smart people and leave them to their own devices, research have indicated that successful knowledge generation initiatives not only address the processes but also focus on the team structure and the internally on the working circumstances. Businesses faced with disruptive technologies such as the Internet find it very difficult to redesign or rearrange their organisational structures to face the challenges of the New Economy. Also there has always been a measure of distinct tension, between the boardrooms of enterprise and the technical, scientific or other resources on which the former depends for the creation of new wealth – the net result is that the role of the traditional “Corporate R&D” is being diminished. There is a strong perception that views the arrival of the incubator as an approach for corporates / enterprises to set this mindset apart and to get some speed, vitality, action and urgency back into enterprises inhibited by, inter alia, excessive bureaucracy. Although the concept of incubators has now surfaced in Europe and in South Africa, it is not new. What today underscores the interest is the success that enterprises like Idealab!, eToys, GoTo.com and NetZero achieved. The more comprehensive intra-enterprise or corporate incubators offer a range of services that exceed that of the traditional venture capitalist. Corporate incubation grew out of the realisation that innovation and entrepreneurship were severely limited by the typical corporate environment. In addition enterprises realised that they were losing their brightest talent and best innovative ideas as people left to start their own businesses. To this threat they responded by offering employees’ incentives to either build their ideas as enhancements to the current business, extensions or entirely as new spin-offs. These incentives were modelled on share participation, a "safe" best practice rich environment and access to corporate resources that in many instances culminated in corporate business incubators. Corporate incubators constitute a logical extension to knowledge management, innovation and R&D, as a means of profiting from intellectual capital and extending competitive advantage. Indeed it has been said that the only sustainable competitive advantage is continuous innovation. Incubators of various types are sine qua non with the dot.com start-up ventures towards the latter part of the nineteen nineties. It was viewed as one of many approaches to capitalise on knowledge available and to allow for the fast tracking of innovative advances. Many of these start-up incubators failed and incubators became looked upon as not being the ideal vehicle for innovative quick-to-market and thus first mover advantage. Yet, the very nature of the approaches used in an incubator lends it to the harnessing of knowledge and innovation in an enterprise which can be applied as part of a process to gain a competitive advantage from engaging in such a process.
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