This chapter provides information of the conclusions of the study. It also discusses important observations for the results and includes research implications, practical implications, limitations and future research suggestions.
Conclusions
This research intended to find which aspect of performance is more likely to happen if any of the different service offerings (technology, financial, networking and training assistance) of the business incubators is provided to the MSMEs. Based on the results, the quality of product/service and the formal organization administration are more likely to happen if technology assistance is provided. If networking assistance is provided, the aspect of performance that is more likely to happen is formal organization administration. Finally, if training assistance is provided, innovation of product/service and formal organization administration is more likely to happen.
According to these results, technology assistance, networking assistance and training assistance might increase the performance of MSMEs in terms of formal organization administration. On the other hand, if the MSMEs want to improve the quality of product/service, technology assistance should be provided. And if they want to develop innovation, training assistance should be provided. Financial assistance did not seem to have any impact or influence on any of the indicators; however, it still represents a need for the MSMEs (Obregon & Yeh, 2013).
Other studies (Peña, 2004) have shown that the importance of training is vital for MSMEs endurance. These results confirm the findings for this research as training is one of the service offerings that enable SMEs performance.
It is also important to mention that the support provided by business incubators and programs of assistance do not guarantee the survival and development of MSMEs. There is still a long way to go in order for the MSMEs owners to be aware of their role in their businesses. Business Incubator directors or coordinators need to constantly re-evaluate and revise the design of their programs and selection processes based on empirical evidence.
Research Implications
Incubators are characterized according to the type of service they offer, the target they serve and the structure of their organization (NBIA, 2009a). In Nicaragua, the work of incubators started on 2010. Because it is a recent initiative, no study has been conducted on this sector before. It is of great importance to enhance, reinforce and draw attention to the work and impact incubators cause on MSMEs performance. As mentioned through this research, MSMEs represent a vital sector for developing economies. Incubators should design follow up programs that allow them to assess the impact of their assistance on the development of the SME. This research included all kind of MSMEs that participated in different programs, however, more personalized evaluations of MSMEs sector and types of assistance should be conducted to enrich the information regarding incubators and MSMEs in Nicaragua. The onsite assistance from incubator to MSMEs should be retaken in order to further develop MSMEs and evaluate their improvement compared to those who are not onsite. Also evaluating how incubators are selecting tenants and designing programs of assistance is very important for further reference. In the present time there is no research on evaluation of incubators either. To avoid response biases and confusion among the respondents, it should be considered conducting this type of research one on one and through a neutral channel. The sense of awareness on how important it is for MSMEs to collaborate with this type of research should be promoted by all types of institutions that provide any kind of assistance to MSMEs and for the government as well.
Practical Implications
This research aimed to find which aspect of the service offerings was more likely to positively affect the performance of MSMEs in Nicaragua. Although most of the assistance provided by incubator and programs of assistance seemed to have a positive effect on the performance of MSMEs, financial assistance was not related to any of the indicators of performance. According to the ECB (2012), MSMEs access to financing represents a significant obstacle especially for start-up SME´s since banks ask for conditions that go beyond start-ups’ capabilities. MSMEs need to have the monetary resources to invest, innovate, grow and take risks. Incubators and programs of assistance in Nicaragua must consider redesigning the way they are allocating financial assistance to MSMEs. MSMEs need to learn what to do with the resources they have, where to invest and when to do it. It represents a whole service to provide the resources to MSMEs and teach them how to use it.
Nevertheless, the benefits for MSMEs could be of great impact hence for the economy of the country. Because the incubator initiative has been recently introduced in Nicaragua as a way to help MSMEs, there are still some gaps in the way this assistance is delivered. The Nicaraguan government, private enterprise and non-governmental institutions must consider reinforcing the manpower of incubators. Although almost half of the incubators and programs of assistance that collaborated with this research represent public and private institutions, there is still an immense necessity for the MSMEs to be attended (Obregon & Yeh, 2012).
The incubators should focus on the short term needs of these MSMEs in Nicaragua. By strengthening the services incubators provide to this sector, those objectives can be accomplished.
Limitations
This study was supposed to be oriented to small and medium sized enterprises in Nicaragua. However, once the data was collected it was found that more than 50% of the participants are micro enterprises, almost 50% are small businesses and only 5% are medium enterprises. The majority of the participants that collaborated with this study are part of two incubators therefore this might have some influence in the results. Because this research was oriented to all type of MSMEs that receive different type of assistance, a category of “non applicable” had to be included in order to statistically register the data from those types of assistance not received by the MSMEs. One big constraint was that there are few incubators in Nicaragua and very few wanted to participate in this study. Also, some of the incubators have fewer tenants than they originally proclaim. Therefore, the researcher had to include some programs of assistance provided by public and private institutions in order to conduct the research. Hence, all of these reasons limit the results to be generalized to other segments or countries.
Future Research Suggestions
For future research, the researcher suggests to consider other indicators of performance in order to assess the impact of incubators service offerings. Also it is important that this type of research is conducted in other contexts, for example other countries in Latin America. As mentioned before, it could be very interesting to also evaluate the effectiveness of the incubator programs. How incubators are designing their programs, recruiting tenants, conducting follow-ups, etc. For this study it was convenient to focus on the technology, financial, networking and training assistance provided from incubators to MSMEs in Nicaragua, however, other service offerings should be considered for future studies.
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APPENDIX A: QUESTIONNAIRE
Questionnaire of the Impact of Service Offerings of Business Incubators on Performance of Micro, Small and Medium Sized Enterprises in Nicaragua Dear Respondent,
Please spare a few minutes to complete this questionnaire. Your participation in the Small and Medium sized Business Research Survey will help us to understand the impact of the Service Offerings from Incubators to business like yours. Please be assured that your responses will be treated with the strictest confidence. Your time and cooperation are highly appreciated!
PART I
General Information 1. Type of Industry
Food agribusiness Artesian Leather & footwear Furniture Textiles Baker Other
2. Number of full time employees:
1-5 6-30 31-100 3. Age of the business:
Less than 1 year Less than 2 years Less than 3 years Less than 4 years Less than 5 years 5 years or more
4. What best describes the status of your business?
Start up stage Growth stage Maturity stage Survival stage
5. What are the main objectives in starting up a small and medium sized business?
To be an entrepreneur Financial rewards Unemployed before start-up
Career progression Influence of family or friends other (specify) ________
6. Business Ownership:
Sole proprietorship Partnership Joint venture Subsidiary
Associate company other, please specify: ________
7. What were the sources of funds used by the principal business owner upon starting the business?
Personal savings Family and friends Commercial banks Incubator Government assistance programs Other: ____________
8. What is the relationship between your business and the incubator program?
Current tenant Graduated: 1 a 3 years more than 3 years Recently graduated (less than 1 year)
9. What type of assistance have you received from the incubator? You can choose more than one option.
Technological Networking Financing Training
10. If you are a current tenant, for how long have you been part of the incubator program?
1-6 months 7-12 months 13-18 months 19-24months 25-30months 31-36 months
Demographics
11. Gender: Male Female
12. Age: 19 or less 20-30 31-40 41-50 51-60 61 or more
32. Highest level of education:
Less than high school degree High school graduate Technical/vocational Some college but no degree granted College degree Post-graduate degree
14. How many years of experience do you have managing or owning a business, including this business?
less than 1 year 1 to 3 years 4 to 6 years 7 to 9 years 10 to 15 years more tan 15 years
Please answer the following questions based on the current status of your business. Use the scale below to determine the level of agreement with each one of the statements.
“Strongly Disagree meaning the less punctuation………Strongly Agree meaning the highest punctuation”
Not applicable means that you have no experience or information to reply to the item
PART II: 15. In the past year I have introduced at least one
PART II: 15. In the past year I have introduced at least one