The key success factors for business incubation in South Africa : the Godisa case study

Abstract

This dissertation is about the development of a set of key success factors for business incubation in South Africa and testing them on the Godisa case. It contains background information regarding the historical development and current state of business incubation in the world and in South Africa. A review of published literature provided a list of many different success factors that have been identified by researchers in other countries. These success factors were considered in terms of the current state of the business environment in South Africa and a group of twelve success factors were identified that are key for business incubation in South Africa. These success factors were then tested on the Godisa initiative. Godisa is a Sotho word, which means “nurturing and growing”, which is the main aim of Godisa for technology-intensive start-up businesses. Godisa is an initiative of the Department of Science and Technology (DST), the Department of Trade and Industry (DTI) and the European Union (EU). Initially there were eight centers under Godisa. The Department of Trade and Industry also decided that four of the incubators that were initiated under DTI should fall under Godisa. Godisa is an independent trust, which does not exercise direct control over the incubator centers, its role is to give them support (financial and non-financial) and advice. Most of these centers are registered either as section 21 companies or as trusts and have their own board of directors. In most cases there are other partners besides the government, which are also giving support (mostly in-kind). The research was conducted in twelve centers located in different provinces and focusing on different technological sectors. Ten of these centers are already incorporated into Godisa. The other two are still in the process of being incorporated. One of the centers is a demonstration center, another an innovation support center. Eight of the centers are pure incubators. The remaining two centers fall into the category of hybrid incubators, which means they do a combination of incubation, technology transfer, demonstration and research and development. Three sets of questionnaires were formulated in accordance with the study model. The first questionnaire was for the Godisa Manager, whose responses were of a qualitative nature to provide information about the overall programme. The second questionnaire was for the incubator managers, which required a combination of qualitative and quantitative responses. The third questionnaire was for the entrepreneurs: a combination of incubatees and graduates from the incubators, which also required both qualitative and quantitative responses. Descriptive statistics was utilized to analyse the results from the questionnaires. Furthermore bivariate statistics was used to test the relationship between success and the success factors. Each of the twelve success factors represented independent variables and success was the dependent variable. Success was measured in by sales per investment in the case of incubator centers and by sales per entrepreneur for entrepreneurs. Mann-Whitney and Kruskal Wallis tests were used to test the significance of the relationships. The final discovery was that seven of the twelve success factors also applied to the Godisa case study. Relevant conclusions and recommendations for policy makers were made.