Travels of Business Incubators Exploring Entrepreneurship Support from an Embeddedness Perspective in Uganda and Tanzania

Doctoral thesis, 2016

This thesis contributes to business incubation research, focused on business environments in Uganda and Tanzania. Business incubation is not a new phenomenon and research began in earnest in the 1980s. Thus, there is a broad range of studies on business incubators, how they are defined and what they do to support entrepreneurs. Establishment of business incubators has also been increasingly common as a method of supporting entrepreneurs who are expected to increase regional and national economic growth through their activities. The phenomenon of business incubation originates in the US and Europe but has an increasing prevalence in the rest of the world. However, there is a gap in the literature regarding the understanding of how context impacts the establishment of business incubators, especially in African countries. The aim of this thesis is to develop a deeper understanding of business incubator establishment in selected African settings. Moreover, this thesis is based on a perspective of entrepreneurship as embedded in social and economic contexts. The aim is approached through three questions, delving into the expectations on and embodiments of the entrepreneurs, the role of context, and how theories of business incubation and its propagation may be adjusted based on the findings from this research. The theories chosen to understand business incubator propagation are institutional theory, actor network theory and a transfer model. The research conducted is qualitative with a design based on an interpretative approach. This approach is deemed appropriate as the research questions aim to explore business incubation and have developed over time through the process of the research. The empirical settings of Uganda and Tanzania are suitable for the study because they include a mix of formal and informal institutional environments and show a current increasing trend of business incubators. Other characteristics for these environments are a small private sector and an abundance of entrepreneurs. The thesis builds on empirical material from two field studies including interviews, participant observations, and secondary data. The findings indicate that a business incubator may be seen as a complement to a broader system of entrepreneurship support. However, business incubator establishment needs to include an increased awareness of prerequisites, limitations and consequences of such establishment. Prerequisites include how embeddedness in a mix of formal and informal institutions influences the performance of economic transactions for the entrepreneurs. Furthermore, business incubators have capacity limitations creating a difficult task for managers responsible for identifying promising entrepreneurs from the large variety of entrepreneurs found in the studied settings. These findings are consequential since the funding of business incubators could possibly be spent elsewhere. This thesis contributes to business incubator theories through an understanding of how business incubators are embedded in the studied contexts. Furthermore, the theories of propagation included in this thesis facilitate the understanding of how business incubators travel around the world, but need to be sensitised towards power asymmetries between countries. The analysis of managerial practices of business incubators contributes to business incubator policy by suggesting a deeper analysis of local needs and of how to compensate for contextual constraints.