Strathmore University SU+ @ Strathmore University Library Electronic Theses and Dissertations 2016 Evaluating how industry collaboration affects growth of business incubators in Nairobi County Nyangau, I. N. Strathmore Business School Strathmore University Follow this and additional works at: https://su-plus.strathmore.edu/handle/11071/2474 Recommended Citation Nyangau, I. N. (2016). Evaluating how industry collaboration affects growth of business incubators in Nairobi County (Thesis). Strathmore University. Retrieved from http://su-plus.strathmore.edu/handle/11071/4775 This Thesis - Open Access is brought to you for free and open access by DSpace @Strathmore University. It has been accepted for inclusion in Electronic Theses and Dissertations by an authorized administrator of DSpace @Strathmore University. For more information, please contact [email protected] EVALUATING HOW INDUSTRY COLLABORATION AFFECTS GROWTH OF BUSINESS INCUBATORS IN NAIROBI COUNTY INNOCENT NYAKWARA NYANGAU MBA/2408/12 Submitted in partial fulfilment of the requirements for the degree of Masters of Business Administration at Strathmore University Strathmore Business School Strathmore University Nairobi, Kenya JUNE, 2016 This thesis is available for Library use on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement DECLARATION I declare that this work has not been previously submitted and approved for the award of a degree by this or any other University. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made in the thesis itself. Name: INNOCENT NYAKWARA NYANGAU Signed: _________________________ Date: __________________________ The thesis of Innocent NYAKWARA was reviewed and approved by the following; Supervisor: Dr. HELLEN NYOLO OTIENO Signed: Faculty: SCHOOL OF MANAGEMENT & COMMERCE STRATHMORE UNIVERSITY i ABSTRACT Business incubators play a great intermediation role that enable SMEs to thrive and meaningfully contribute to economic growth. Business incubators like other firms go through a process of growth moving from a formative to a transcendental stage where they greatly impact the society and industries they serve. This process of growth of the firms is influenced by a myriad of factors, among them is the level of collaboration between players in its industry. While the impact of collaboration on the growth of firms has been documented in Europe and the America’s this has not been articulated within African and/or Kenyan environment and in particular in the incubation industry context. The study objective was to establish both the forms of growth of business incubators within Nairobi and the nature of collaboration practiced by these incubators in order to evaluate the effect of collaboration on the growth of these business incubators. This study utilised a qualitative design and data was collected through structured interviews to gain an in-depth knowledge and understanding on how incubators were collaborating and the impact this had on their businesses. A total of 20 participants were contacted and data was collected from 17 respondents which corresponds to an 85% response rate. Through qualitative data analysis the study established that indeed collaboration was yielding growth for business incubators through the transfer of knowledge and capacity building, the creation of strategic alliances allowing incubators to diversify products and markets, to reduce cost of operation and increasing awareness of business incubations which has attracted resources to the industry. The immediate implications of these findings is the need to develop a clear and concise strategy that will promote business incubation as an avenue for socio-economic development enabled by the expansion of the operating environment further accelerating growth of business incubators. Keywords: Business incubation, growth of the firm, collaboration, ii Table of Contents CHAPTER ONE ..................................................................................................................................... 1 INTRODUCTION ................................................................................................................................... 1 1.1 Background ..................................................................................................................................... 1 1.2 Statement of the Problem ................................................................................................................ 5 1.3 Research objectives ......................................................................................................................... 6 1.4 Research Questions ......................................................................................................................... 6 1.5 Significance of the Study ................................................................................................................ 7 1.6 Scope of the study ........................................................................................................................... 8 CHAPTER TWO .................................................................................................................................... 9 LITERATURE REVIEW ...................................................................................................................... 9 2.1 Introduction ..................................................................................................................................... 9 2.2 Theoretical Framework ................................................................................................................... 9 2.3 Empirical review ........................................................................................................................... 14 2.4 Gaps in Research ........................................................................................................................... 22 2.5 Conceptual Framework ................................................................................................................. 22 CHAPTER THREE .............................................................................................................................. 26 RESEARCH METHODOLOGY ........................................................................................................ 26 3.1 Introduction ................................................................................................................................... 26 3.2 Research design ............................................................................................................................ 26 3.3 Population of the study ................................................................................................................. 27 3.4 Data collection .............................................................................................................................. 27 3.5 Data Analysis and Presentation ..................................................................................................... 29 3.6 Research Quality ........................................................................................................................... 29 3.7 Ethical Considerations .................................................................................................................. 30 CHAPTER FOUR ................................................................................................................................. 32 iii PRESENTATION OF FINDINGS ...................................................................................................... 32 4.1 Introduction ................................................................................................................................... 32 4.2 Firm Characteristics ...................................................................................................................... 32 4.3 Forms of growth for business incubators in Nairobi County ........................................................ 34 4.4 How collaboration in the Business Incubation industry in Nairobi has changed over time. ........ 39 4.5 How industry collaboration has affected the growth of business incubators in Nairobi ............... 45 CHAPTER FIVE .................................................................................................................................. 50 DISCUSSION OF FINDINGS ............................................................................................................. 50 5.1 Introduction ................................................................................................................................... 50 5.2 Discussion of the study findings as per the specific objectives .................................................... 50 5.2.1 Forms of growth of Business Incubators in Nairobi County ..................................................... 50 5.2.2 Factors that have Influenced growth of Business Incubators ..................................................... 52 5.2.3 Nature of collaboration in the business incubation industry in Nairobi ..................................... 53 5.2.4 How industry collaboration has affected the growth of business incubators ............................. 54 5.3 Recommendations ........................................................................................................................