Business incubation services and growth of startups in Nairobi City County, Kenya
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Date
2024-12
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Kenyatta University
Abstract
Startup businesses are essential for any nation's economic development worldwide. Despite the rapid growth of start-ups, their likelihood of success and viability remain low. Like Micro, Small, and Medium Enterprises (MSMEs), majority of startup businesses in Kenya fail to maintain market competition and growth. Hence, the purpose of this study was to determine how the business incubation services affect the growth of start-ups in Nairobi City County, Kenya. The specific objectives were to examine the effect of networking services, physical infrastructure, management advise, financial resources, and business planning on growth of startups. The study was grounded on the Firm theory, Stochastic Theory, Social Network Theory, Schumpeter theory of innovation and the Trait Theory of Entrepreneurship. Descriptive research design was used, the target population of the study was 567 startups companies that had been in an incubation process, however a sample of 227 respondents was obtained using proportionate stratified and random sampling techniques. Primary data was collected using a questionnaire and analyzed using descriptive and regression techniques where Statistical Packages for Social Sciences (SPSS) was utilized in the analysis. The descriptive statistics summarized the data while multiple linear regression was conducted to determine the effect of business incubation services on startup growth. The findings indicated that there was significant and positive effect between networking services, physical infrastructure, management advice, financial resources, and business planning and the growth of startups. In order to have access to physical infrastructure, startups are encouraged to join startups associations like the Associations of Startups and Small and medium-sized Enterprises (SME)Enablers of Kenya, the Association of Countrywide Innovation Hubs and other independent incubation facilities. A clear act governing startups can offer tax incentives to startups, reducing costs in the form of financing and providing tax breaks to startup investors to improving their financial standing. Incubator owners are encouraged to take startups through business planning courses that are critical ensuring they scale- up the businesses. Finally, through the triple helix model business incubators can partner with universities especially where deep research in such specialized areas like health, agriculture and climate change is required
Description
A research project submitted to School of Business, Economics and Tourism in partial fulfillment of the requirements for the award of degree of Master of business administration (entrepreneurship development) of Kenyatta University, December 2023
Supervisor: Stephen M.A. Muathe