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DISCUSSION OF RESULTS

Understanding Entrepreneurship in Business Incubation
Entrepreneurial Development Through Business Incubation

The discussion of results focuses on two areas: understanding entrepreneurship and the entrepreneurial development through business incubation. Throughout the discussion, the role of two-year colleges is highlighted to build an outline for the implications on postsecondary education which will be further developed after the discussion of results.

Understanding Entrepreneurship in Business Incubation

To build an understanding of entrepreneurship, a profile of respondent entrepreneurs is presented and discussed in light of the results. This profile describes personal characteristics, experiences, and perspectives of entrepreneurs on opportunities and limitations to start up and operate a business.

Background Characteristics

The results of this survey provide additional evidence to support the predominance of male Caucasian entrepreneurs in business incubation over any other group. This pattern of participation is consistent across business incubators. In terms of educational background, it appears that incubators supported by two-year colleges and other organizations in the community serve a slightly more diverse group than university-sponsored incubators. Given the nature and influence of university settings, incubators supported by four-year institutions appear to attract more educated entrepreneurs in comparison to the other two types of incubators. Overall, entrepreneurs are more likely to hold either a bachelor's or a master's degree and are mostly middle-age. Across business incubators, minority groups and females are represented below their rates of participation in the population at large. This is an indication that two-year colleges supporting business incubation are not making any progress in targeting minorities or females to foster diversity in entrepreneurship in the community. The same can be said for the two other types of business incubators.

Entrepreneurs reported gaining previous experience related to the activities and operations of their current business primarily through hands-on work in school, internships in similar businesses, and part-time jobs in related industry and mentor programs. Business and technical experiences appear to be further refined through work in industry and the corporate world and through undergraduate and graduate studies for the majority of respondent entrepreneurs. In comparison, the contribution of two-year technical colleges is extremely low in preparing and supporting individuals entering the business world through the establishment of their own businesses.

Opportunities and Limitations for Business Start-Ups

During earlier stages of business development, it appears that new entrepreneurs have an unrealistic view of their abilities to implement their business idea. Respondent entrepreneurs, for instance, reported having everything under control with the exception of adequate financial support (see Table 6). In general, managers agreed that entrepreneurs come into the incubator with a well-defined idea of their business, but they do not usually have a written business plan and need help in developing a sound plan. Across incubators, managers agreed entrepreneurs face inadequate financing and lack an understanding of all the implications for business start-ups. Provision of clear and well-defined consulting services and the development of the business plan appear to be key to support entrepreneurs at early stages of their business operation. These results were verified by the personal insights of entrepreneurs and managers who were interviewed for case studies.

Surviving in the Business World

Entrepreneurs encounter a different set of problems once they get their business in operation after having developed and tested an idea. At this point, the technical knowledge and a good business idea are not enough to guarantee success. Other elements of business operations such as business organization, personnel management, finances, marketing, and developing plans for expansion begin to hit all at once. Again, respondent entrepreneurs across types of incubators feel they are well-prepared to handle all these operations but recognize the need for further education and training. Concurrently, managers agreed entrepreneurs require assistance on all these aspects of business operations. In particular, managers indicated that entrepreneurs usually do not have written plans for expansion and growth, nor are they working toward the implementation of those plans. Entrepreneurs interviewed for case studies explain that surviving in the business world can be overwhelming, and sometimes they reach a point where further expansion and growth is not worth the effort.

It is at this stage, however, where assistance is required to help entrepreneurs make the transition from incubation to the outside world, to expand the business operation, or to cluster with other businesses in incubation or in the community.

Perspectives on Entrepreneurship

One school of thought in the field of entrepreneurship is that the intrinsic nature of it cannot be taught. The suggestion is to not waste time on classes on entrepreneurship, to ignore the business plan and market and global strategies, and to focus on just one sale at a time (Sudikoff, 1994). Another school of thought defines entrepreneurship as both born and made. As such, people who are exposed to entrepreneurship and the tools of the business trade can reduce the risks of venturing in business and are more likely to succeed (Goodman, 1994; Timmons, 1994). That is, an entrepreneurial program may not be able to teach entrepreneurship per se, but it can teach specific techniques and strategies which can complement the intrinsic character of this personal phenomenon. In essence, this thesis is central to the concept of business incubation. Survey results and personal insights gathered through case studies confirmed the value of this approach.

Surveyed entrepreneurs and managers agreed on the intrinsic nature of entrepreneurship but also recognized the complementary importance of business and technical skills, ability to gather information and resources for entrepreneurial purposes, and the interpersonal and cultural dimension. Overall, the following characteristics are consistently identified across incubators:

Personal characteristics. This is a consistent characteristic mentioned by survey respondents and by case study participants. In fact, 15.8% of respondent entrepreneurs (overall response) considered personal factors as the most important element to succeed in business (see Table 4)--more explicitly, the wish to be independent, take risks, and overcome obstacles found in their business career. The intrinsic ingredients of these personal characteristics also included a highly focused attitude of hard work, teamwork, and creativity to meet business goals.
Technical skills. Surveyed entrepreneurs considered this an essential component of entrepreneurship as one has to be technically competent to understand how to produce or deliver goods and services (see Table 4). Entrepreneurs recognized that technical knowledge in their intended business field is necessary before attempting to become independent. Incubator managers did not rate this element as high, perhaps because this is one of the least important reasons for business failures and because the need for further education and training is not that high (see Table 11).
Business skills. Across all business incubators, respondent managers were consistent in giving this element of entrepreneurship a balanced rating in comparison to other important factors (i.e., personal characteristics, and technical and interpersonal skills) (see Table 4). The majority of respondent managers across all incubators agreed that business skills are another critical element of entrepreneurship (Table 11). Evidently, the ability to successfully maintain daily operations--management, marketing, financial, decision making--is essential, and entrepreneurs confirmed that this is frequently the area where they need help. In fact, managers reported that the lack of business skills is one of the most important reasons for business failures.
Entrepreneurial vision. This is another intrinsic characteristic which can be more closely associated with entrepreneurship per se. It involves a business vision to succeed, expand, and grow, but it also includes thinking skills, problem solving, and creativity which was mentioned as a separate category (see Table 4). Respondent managers rated "entrepreneurial vision" in second place after business skills and further stressed that this is another important reason for business failures (see Table 11). It is clear that the creative utilization of information, services, and resources available is perhaps central to the development and maintenance of an entrepreneurial vision. Although managers agreed that entrepreneurs come into incubation with adequate technical expertise, they also indicated that entrepreneurs lack the entrepreneurial vision to recognize the importance of a marketing plan and the advantages of consulting opportunities. Based on these contrasting perspectives, it is evident entrepreneurs may not have a realistic assessment of how all the aspects of an enterprise function together to provide a coherent vision for survival and expansion at earlier stages of business development. To provide for an understanding of all aspects of business operations, a number of services are available for entrepreneurs in business incubation, but information and services may vary in quality and quantity. Nevertheless, one limitation for best utilization of these services is precisely the lack of entrepreneurial vision typical of the majority of business owners at the beginning of business development. For instance, it was mentioned that the main reason for joining an incubator is the low rent for working space, which represents a limited view of the advantages of being in business incubation. An entrepreneurial vision begins to develop when individuals recognize that the most important feature of an incubator is not low rent or working space, but the utilization of information, services, and other resources to support the development of their business.
Interpersonal skills. The ability to communicate clearly and effectively with clients, suppliers, creditors, and personnel is another area mentioned consistently across business incubators by respondent entrepreneurs (Table 4). Managers rated this aspect as of moderate importance but recognized the lack of interpersonal and communication skills as a reason for business failures (Table 11). On the average, entrepreneurs agreed they can communicate effectively with others and have no problems negotiating agreements and resolving conflicts. Entrepreneurs also felt there is no need to improve their skills to communicate in writing and believed that they are able to interact effectively with customers and employees (see Tables 6 and 7). An indirect benefit of business incubation is the establishment of personal and professional relationships among incubator clients. The interactions provided through the process of incubation help reduce anxiety and the isolation of entrepreneurs by providing opportunities to exchange ideas and services.

About Being a Minority or Female Entrepreneur

The profile of entrepreneurs in business incubation further confirms the predominance of male Caucasian entrepreneurs over minorities and females. The same profile was found for incubator managers which dramatizes the under-representation of minorities and females in business incubation as a whole, even though these groups participate actively in the economy and the workforce. Surveyed managers from incubators sponsored by two-year colleges and other organizations in the community believed that male minority-owned firms are more likely to fail than the average firm in business incubation. Overall, all managers felt they are well-prepared to service minority/female-owned businesses, but they do not appear to actively target these groups according to survey and case study findings (Hernández-Gantes, Sorensen, & Nieri, 1996a).

Entrepreneurial Development Through Business Incubation

Business incubation is one of the most dynamic strategies. It facilitates entrepreneurship in the community, helps to create jobs, and stimulates economic growth and revitalization of depressed communities and neighborhoods (National Council for Urban Economic Development, 1985; Smilor & Gill, 1986). The focus of this section is on the role of business incubation in fostering entrepreneurship and perspectives of entrepreneurs and incubator managers on services provided by business incubators with particular emphasis on education and training.

Business Incubator Managers' Background

The profile of business incubator managers conforms to demographic information reported previously (e.g., NBIA, 1991). That is, managers are largely Caucasian, middle-age, male individuals who hold either a bachelor's or a master's degree. This demographic profile is consistent across business incubators and closely resembles the profile of entrepreneurs in business incubation in terms of under-representation of minorities and women. Managers have a diverse background of previous experience--mostly management and business related--and have been in their current position an average of four years. The demographic profile and job focus may have implications for the lack of emphasis in targeting and/or interesting more minorities and women in business opportunities through business incubation. It appears that managers are so busy maintaining the support of the incubator and so involved in building maintenance that they do not have time to focus their attention in promoting entrepreneurship in the community. Under these circumstances, managers have little time for individual consulting services.

The Role of Business Incubators

Overall, the contribution of primary incubator sponsors is characterized by providing commercial space at low cost, clerical support, and business expertise to entrepreneurs in incubation. Across incubators, only 17% of the budget is directly funded by primary sponsors, which forces managers to be involved in fundraising activities, to find ways to bring support and resources to the incubator, and to get personally involved in building maintenance as described in the literature (e.g., NBIA 1991). Indeed, managers reported that affordable commercial space and clerical support are the services they are providing most effectively to new entrepreneurs. The majority of surveyed entrepreneurs clearly appreciated these services and indicated they were the primary motivation to move into the incubator.

Even though managers claim to be promoting entrepreneurship in business incubation through various services clearly explained to clients, entrepreneurs did not appear to be satisfied with the entrepreneurial aspect of their incubator, regardless of incubator type. Again, it appears that unless managers have the time to spend in direct consultation with clients, the role of incubators gets reduced to providing commercial space and clerical support at low cost.

Perspectives on Education and Training

Education and training activities are moderately emphasized across business incubators, two-year college-sponsored incubators included. In fact, only a fourth of respondent entrepreneurs felt that they have no need for education and training services. Entrepreneurs seemed to prefer direct individual consultation instead of formal and informal education and training services. Thus, although services such as seminars, workshops, and a series of training modules may be available at the incubator, attendance appears to be a problem. One strategy to overcome this problem is to build a coherent and meaningful education and training program into the business incubation enterprise. Further, incubator staff must stress the importance of being prepared in various entrepreneurial aspects and must use various techniques to reach and motivate entrepreneurs in and out of business incubation. Some guidelines to establish an effective education and training program are provided in a complementary guidebook (see Hernández-Gantes et al, 1996a).

Concurrently, the use of alternative materials and techniques (e.g., videotapes and interactive computer programs) may add flexible opportunities and self-paced instructional opportunities for entrepreneurs with time restrictions. Survey results suggested this is an area that has not received adequate consideration across all surveyed incubators as reported by both incubator managers and entrepreneurs in business incubation.

Further, the participation of educational institutions in education and training comes primarily from university faculty rather than two-year college personnel. Only in the case of two-year college-sponsored incubators is the contribution of university faculty absent, and in this circumstance the participation of two-year college faculty increases to a rather modest level (about 15% contribution). The problems associated with using two-year college faculty may include scheduling problems and higher fees due to requirements to meet college regulations on salary (e.g., benefits, release time) (see Hernández-Gantes et al, 1996a).

Areas where further education and training are needed included business skills, use of information and resources ("entrepreneurial"), technical expertise, and use of technology, according to respondent entrepreneurs across the three types of business incubators. It is worth noting here that due to the slightly higher educational level of entrepreneurs in incubators sponsored by universities, the need for education and training drops about twenty percentage points in comparison to the other two types of incubators.

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