Investigating the impact of entrepreneurial orientation on the performance of government funded incubators in South Africa

Abstract

The link between high Entrepreneurial Orientation (EO) and Performance is wellestablished. The objective of incubators is to drive entrepreneurship through supporting start-up businesses. The incubator manager is a key input in the process; hence the importance of the EO of the incubator alongside the managerÕs EO. Prior research on the role of EO has not focussed on its effect on incubation and how the EO abilities of the manager and the incubator contribute to the performance of incubateesÕ business during and post incubation in terms of improving the survival rate. The main aim of this research was to investigate the impact of EO both at individual and incubator level on the performance of incubators. EO can be defined as the strategic orientation or strategic posture that results in the creation of new businesses. The EO construct comprises of five components i.e. Ð (i) autonomy, (ii) innovativeness, (iii) risk taking, (iv) proactiveness, and (v) competitive aggressiveness. A quantitative study was carried out which used a questionnaire to determine the EO abilities of both managers and incubators as well as performance measures. The population of the study comprised 57 government funded incubator managers and a response rate of 53% was realised. The results indicated weak insignificant correlations at 1% level of significance for the majority of the EO components. Although EO abilities are cited as critical for performance, high EO may not necessarily improve performance in the incubator sector. Environmental context as well as incubator internal processes also play a huge part in driving performance. Certain components of the EO construct may need to be emphasised in the incubation model in order for it to be more effective.