Small Business Incubation and the Entrepreneurial Business Environment in South Africa: A Theoretical Perspective

Abstract

Small business entreprises and entrepreneurs face numerous challenges that include lack of managerial skills, financial challenges, lack of credit, lack of access to markets, usable technology, low production, lack of interest by employees, and inadequate institutional support. The paper presents various literary perspectives on small business incubation in South Africa, the state of innovation-oriented business environment and the significance of small business incubators for developing and promoting SMEs and entrepreneurship in South Africa. Business incubators provide a good platform for the convergence mechanisms for supporting knowledge-based enterprises, both before and after their incubation. Overall, it is worth noting that business incubators do not replace entrepreneurial initiatives, but create better conditions for entrepreneurship. Furthermore, the increasing number of business incubators in South Africa shows that the right kind of business environment is increasingly being acknowledged as an important factor contributing to the success of SMEs, entrepreneurship and the local economy. Conclusions and future studies are proposed.

DOI: 10.5901/mjss.2014.v5n23p264