The Effects of Business Incubator Services on Start-ups Development: A case study of iceaddis

Abstract

Business Incubation is a process of helping entrepreneurs in developing their business idea into a viable business. Even if the incubation industry began sixty years ago in the USA, it is at the infant stage in Ethiopia. Due to this newness, the availability of previous researches is very limited. Therefore, the main objective of this research paper is to investigate the effects of services of Business Incubator on the Startup's development. A single organization case study research method with multiple embedded subcases was used, and due to the smallness of the population and experts in the field, the sampling method was total population purposive sampling, then to accurately investigate such focused activity the data was analyzed qualitatively. Interview was the primary source for the research data. Application form and business canvas model were used as a secondary data to understand the strength of the startup before joining iceaddis. Selected startups and staff of iceaddis who closely work with the startups were interviewed to gather primary data. In order to generate a holistic answer for the main research question the analysis of the collected data was made in two ways. The first analysis per startup aimed at pointing out which provided service contributed the most. The second analysis per activity investigates which entrepreneurial activity was completed with the direct or indirect support of the incubation center. The analysis result of this research shows that about 80 percent of the entrepreneurial activities were completed by the direct or indirect contribution of the incubator, pointing that the service provided by the incubator are significantly important for the startup's development. The result of the first analysis indicates that business support service counted the most important service of incubation service for the startup’s development followed by shared physical space and infrastructure and access to network. The second analysis yielded 21 entrepreneurial activities that are being completed with the help of the incubator. The research concludes that the business incubation center has provided essential services that helps for the startups development. The research also recommends that the business incubator should give more emphasis on creating network resources especially for financing the startups and the government must put emphasis on funding, decrease taxes, improve infrastructure, as well as launch the training program in collaboration with the business incubators.