The efficacy of SMME incubation as a strategy for enterprise development in South Africa

Ntlamelle, Tshepo
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Since the promulgation of the enterprise development pillar of broad-based black economic empowerment, small business incubation has gained in prominence and popularity as a strategy to achieve the policy’s objectives. In the midst of continued popularity and investment in incubation programmes by both private and public organisations, the opportunity was taken to reflect on the efficacy with which incubation was adopted as a broad-based black economic empowerment strategy. A quantitative study was conducted, gauging the perceptions of incubated firms in South Africa, and assessing the efficacy of incubation across three important aspects, namely the efficacy of private incubation programmes as opposed to public incubation programmes and the perceived value add of incubation support services to black-owned businesses and female-owned businesses. The study revealed that an effective administration of incubation programmes is not dependent on whether an incubation programme is privately or publicly administered. The impact of incubation, framed within the broad-based black economic empowerment framework, for non-black owned businesses was examined. The findings echo the exclusionary effects of race-based affirmative action programmes, such as many of South Africa’s incubation programmes, on white-owned businesses. Lastly the perceived value add of business incubation support services for female-owned businesses was compared with male-owned businesses, and found that both groups derive similar value from incubation programmes. Assessing these three facets of incubation, the implications and insights for policy makers and practitioners of business incubation was provided as they seek to adopt business incubation as a strategy to achieve broad-based black economic empowerment.
Thesis (M.M. (Entrepreneurship and New Venture Creation))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2015.