DIVERSAS CLASES DE OCUPACIÓN.

Research questions and research objectives of the study were as follows:

5.2.1. RESEARCH QUESTIONS

5.2.1.1. Main research question

The research question that this project sought to address was why the enterprises in the Gauteng Business Incubators fail?

5.2.2. Sub-questions

(1) What were the incubation challenges that contribute to the high failure rate of the incubatees as experienced by the incubatees in Gauteng Business Incubators?

(2) What were the incubation challenges that contribute to the high failure rate of the incubatees as experienced by incubator managers in Gauteng Business Incubators?

5.3. RESEARCH OBJECTIVES

64 The primary objective was to determine the reasons why the incubatees of the Government funded business incubators fail.

5.3.2. Secondary Objectives

(1) To determine the incubation challenges that contributed to high failure rate of the incubatees as experienced by the incubatees in Gauteng Business Incubators. (2) To determine the incubation challenges that contributed to high failure rate of the

incubatees as experienced by the incubatees in Gauteng Business Incubators.

5.3 SUMMARY OF FINDINGS

There is the summary of the findings of the study

5.3.1. Funding

Lack of funding seemed to be the most important difficulty faced by incubatees in addition to insufficient support from stakeholders and incubators as well as inappropriate geographical location (in the case of Residentia that is far from the community). These findings agree with InfoDev’s (2010: 29) position that most business incubators do not have in-house seed funds and Lesakova’s (2012: 89) observation that BIs are affected by the economic characteristics of the geographical location.

In view of the fact that township enterprises are hindered by the stringent conditions for obtaining funding from banks or other funding institutions, Pillar 6 of the TER (2004:24) highlights the importance of alternative funding for SMMEs through Cooperative Financial Institutions among the small businesses.

5.3.2 Government Services

Despite government efforts to support SMMEs, small business failure is still prevalent in South Africa. The impact of business incubation programmes and organisations such as SEFA, SEDA and National Youth Development Agency (NYDA) may be limited owing to the

65 fact that, as this study has shown, many SMMEs are unaware of the existence of these programmes and agencies as well as the support they provide.

5.3.3. Operational plans

The Mamelodi, Pennyville, Residentia and Vosloorus incubators operate without operational plans that include an exit strategy. Although the Mohlakeng incubator has these plans, they are not being followed through by its managers. The objectives of a business incubator should be linked and should take into consideration the specific needs of the incubatees depending on its specific stage of development. This is particularly important since it has been established that incubator support is more appropriate in the early stages of a venture (Naude, 2010: 3).

Isabelle (2013:19) observed that incubators are most successful when their objectives and goals correspond with the entrepreneur’s and sponsoring organisations’ needs. In other words, it is important for entrepreneurs and business incubators to understand each stakeholder’s need. For entrepreneurs to gain fully from incubator programmes, Isabelle (2013:19) recommends that entrepreneurs consider the core activities of a BI before signing up for the programme.

5.3.4. Partnerships

This study found that there are no partnerships or collaborations among stakeholders of the selected business incubators. The SDBC only consulted with the different municipalities when land was needed to build the incubators. After that, there were no furt her communications between the two parties. The economic development units in municipalities are not aware of the incubators owned by SEFA and the Department of Economic Development only got involved when they decided to refurbish the incubators. Where there are collaborations, in the case of Mohlakeng, they are only on paper and not in practice. This situation is contrary to the ideals of LED regarding the importance of partnerships for the realisation of intended outcomes.

66

5.4 CONCLUSION

The conclusion is summarised as follows:

(1) Lack of monitoring and evaluation systems by either local , provincial or national government,

Government owned incubators function without any effective and efficient monitoring and evaluation systems. There is lack of coordination between the three spheres of government which has resulted in duplication of activities. It also reflects failures in the governance of government and all its spheres. The fact that incubatees have been in the incubators for a very long time is a clear indication that there is lack of monitoring and evaluation of government owned incubators. The incubators were established by national but there is no sign of involvement of municipalities in terms of the support and other services. Except for the Mohlakeng incubator where Randfontein local municipality is actively involved.

(2) Lack of accountability for the success of the incubators from the relevant government employees

Government employees who have been tasked with the role of managing the incubators cannot account in relation to the operations of the incubators. Gauteng Enterprise Propeller serves as a manager of the Mohlakeng incubator but the official did not seem to know what was happening in terms of the operations of the incubator. Randfontein Local Municipality did not have information regarding the operations of the incubator as well.

(3) Lack of communication and collaboration of the range of services and support available from agencies such as SEDA,GEP, municipalities and DTI

About 86% of the incubatees in this study are not aware of the services and support provided by agencies such as SEDA, GEP and the DTI while some of them claim that the government is unwilling to support them. The study found that there is no

67 communication and collaboration among stakeholders of the selected business incubators. The SDBC only consulted with the different municipalities when land was needed to build the incubators. After that, there were no further communicatio ns between the two parties.

(4) Lack of skills development of incubatees

The incubatees stated that they never received support or any capacity building from government since the inception of the incubators. This was evident because incubators operated because they had prior knowledge on the businesses they are involved in.

(5) Inadequate selection process of the incubator managers

The incubator managers mentioned that there was no selection process, incubatees had to meet the following criteria – their owners had to be South African citizens; the business had to be an emerging and/or survivalist business; and unregistered businesses or informal businesses were welcome.

(6) Inadequate selection process of incubatees.

All the incubatees mentioned that there was no selection process, incubatees had to meet the following criteria – their owners had to be South African citizens; the business had to be an emerging and/or survivalist business; and unregistered businesses or informal businesses were welcome.

5.5 RECOMMENDATIONS

5.5.2 Collaboration between Government and universities

• To develop appropriate incubatee selection criteria focusing on areas of industry shortage

68 • To offer skills development to incubatee to supplement skills shortages

• To train incubatee managers in incubation management.

5.5.3 Collaborations

Government cannot establish and manage incubators on its own. There is a need for collaboration with private and public sectors, institutions of higher learning and other important stakeholders (InfoDev, 2010: 18).

5.5.4 Current incubators

In relation to the existing incubators, government should develop strategies to refurbish infrastructure and develop programmes to enhance their employment creation potentials. To address the deficiencies of existing incubators, governments should benchmark with successful incubators.

5.5.5 Collaboration between government and industrial sector

In- joint collaboration establish incubatees in or near industrial parks to provide products and services needed by the companies in the industry park.