Incubation Centres and The Business Environment

Changes in the global economy ranging from technological advancements, innovations, globalisation, and the rise of eCommerce have led to a need to improve business activity levels and entrepreneurship skills. Business incubation centres aim to create an enabling environment that is conducive to help the growth of small businesses and startups. It helps by providing the infrastructure and framework development to build and maintain these businesses by supporting them with professional assistance, mentorship, and financing. There are often many entrepreneurs who have great business ideas but lack the finances to start a business. Incubation centres can help create partnerships with universities, government, and financial institutions to help such businesses kick off in their startup phase. Continue reading to understand the role of incubation centres in the business environment.

Incubation centres are responsible for generating employment, creating small businesses, and diversifying the local economy. Most of Pakistan’s population remains trapped in poverty due to weak economic development and a shortage of employment opportunities. In this regard, business development in Pakistan has always remained on the back foot until after international agencies came to highlight its importance. Incubation centres provide entrepreneurs with a wide variety of resources that are usually unavailable to the wider population. Financial resources, professional mentorship, and technological integration in the early stages of business development can make the difference between a good and a great business. As the quality of education in Pakistan is also seriously lacking with a huge divide between industry and academia, most young students are unprepared to tackle the challenges of the business environment in Pakistan. Receiving help from established entrepreneurs and financial experts in the early stages can help a startup strategise its future growth and trajectory more successfully. Incubation centres in Pakistan date back to 2005, with the first being set up in the National University of Science and Technology, Islamabad (Startups, 2020). Subsequently, in 2016, Pakistan experienced a surge in the growth of entrepreneurship, and many keen investors and mentors helped startups set up businesses.

The process of entrepreneurship requires an organised interaction between entrepreneurs, institutions, and multiple other stakeholders. In addition, the role of academia in promoting technological advancements and superior business strategies has also become an integral part of operating successful businesses. In this decade, the role of traditional universities has also evolved, and entrepreneurial universities are now needed to redirect new knowledge for economic development. The educational system needs to create an enabling environment that encourages young people to develop their mindset from employees to employers. They also need to be taught to improve their skills and knowledge for effective job creation. Non-profit and public-driven organisations manage most incubation centres; however, many are increasingly supported by universities. These incubators have also been shown to support entrepreneurs in terms of commercialisation, innovation, technology adoption, and competitiveness (Hassan, 2020). All these aspects are needed for economic growth and stability in the long term. Innovation is generally defined as finding new methods and opportunities that result in better goods and services, systems, and organisations. Business incubators can provide the physical space, human capital, and sources of funding that can help reinforce innovation and commercialisation in Pakistan.

Incubation centres need to follow best practices to be able to work efficiently. In the area of incubation centre development and monitoring, the incubator model’s position, methods, and durability must be considered. Incubators must also be linked to government and private organisations to ensure that input from these areas remains tied to the country’s future business leaders. The incubator must also determine the different set of outcomes depending on the industry it aims to target. The first step towards this process is to gain recognition and deploy outlet mechanisms for future business partners. Another vital aspect is presenting business ideas to future investors and how these presentations are monitored and checked by professionals. A major hurdle for incubation centres is that most of those who apply for the programme are first-time entrepreneurs. They often tend to jump from one incubation centre to another. Unless and until a mechanism is developed that can ensure a long-term commitment between help-seeking entrepreneurs and incubation centres, most of the efforts made to establish a business go in vain (Batada, 2021).

Creating a suitable environment for the growth of businesses by supporting innovation is the first step toward making business incubation centres more effective and successful. Businesses depend on effective networking between individuals and organisations. Therefore, an incubation centre must cater to the needs of its young entrepreneurs by providing exposure through mentorship programmes and training sessions, which also aim to serve as great avenues for networking. Providing initial startup finance is not enough; rather, incubation centres must also provide a low-cost working space that decreases the expenses of businesses in their initial stages while also helping them cope with management issues effectively. A major barrier to technology adoption is the high initial cost of the infrastructure involved. An incubation centre can provide free access and permits to devices and amenities like internet connections, administration support software, and production equipment. Lastly, entrepreneurial education has become an unavoidable necessity in modern times. Keeping in mind the gaps in Pakistan’s education system, incubation centres must also provide educational material and curriculums to universities and colleges to integrate with their ongoing courses and curriculums (Mahmood, 2017).

Incubation centres play an important role in educating and developing an entrepreneurial culture among students and young job seekers. the concept is to challenge the job-seeking mentality but encourage a job providing one. A country’s economic development highly depends on the level of employment it can generate for its youth. A higher rate of economic development can also help Pakistan fights its poverty crisis. Collaborations between multiple incubation centres can prove as a successful way of sharing knowledge and projects.

Batada, D. I. (2021). Incubation centres and the economy. Retrieved from https://www.thenews.com.pk/print/824466-incubation-centres-and-the-economy

Hassan, N. A. (2020). University business incubators as a tool for accelerating entrepreneurship: a theoretical perspective. Retrieved from https://www.emerald.com/insight/content/doi/10.1108/REPS-10-2019-0142/full/html

Mahmood, N. (2017). ROLE OF BUSINESS INCUBATORS IN ENTREPRENEURSHIP DEVELOPMENT IN PAKISTAN.

Startups. (2020). Top 10 Incubation Centres in Pakistan. Retrieved from https://startupsopportunity.com/top-10-incubation-centers-in-pakistan/#:~:text=TIC%20NUST%20is%20the%20first,product%20and%20final%20year%20project.