Rationale behind adopting business incubation concept in Zim

HARARE - The recently announced 2013 National Budget expressed the inclusive government’s commitment towards the adoption and implementation of business incubation as an economic development strategy.

The National Business Incubation Association (NBIA) of the United States of America (US) defines incubation as “a comprehensive business-assistance programme targeted to help start-up firms with the goal of improving their chances and grow healthy companies.”

Finance minister Tendai Biti highlighted, under item 403 of the 2013 budget statement, that “the government of Zimbabwe, in partnership with government of India is promoting the transfer of technology to Small and Medium Enterprises (SMEs) through the establishment of incubation centres.

Item 404 of the same budget states that such centres in Zimbabwe are meant to provide working spaces, equipment, necessary technologies as well as mentors who provide technical assistance to SMEs in order for them to grow into larger enterprises. This is coming at the right time when Zimbabwe is looking for radical approaches and strategies to rejuvenate the economy.

The concept of business incubation helps the newly established entrepreneurs, especially during their nascent stages to reduce costs of launching the enterprise or business adventure.

Through incubation, the confidence of new entrepreneurs is enhanced and strengthened. Entrepreneurs can also be linked to resources that are required and pertinent for the viability of their business undertakings.

Unfortunately, the minister of Finance seemed to be having little confidence in the capacity of the business incubation concept to revamp the Zimbabwean economy.

Nevertheless, what he laid down is a good starting point for the nurturing and development of this concept as an engine for revitalising Zimbabwean economy.

Ensuing are some of the services that new enterprises are likely to benefit from business incubation centres.

Incubates (enterprises receiving assistance) may benefit from shared infrastructure such as office space, telecommunications, reliable electricity and in some environments security services.

Promotion of such services to new enterprises especially during their initial stages has proved to be vital to overcome the business tides and shocks that may retard the viability of SMEs.

About 80 percent of SMEs fail to survive such shocks without proper assistance.

The failure of co-operatives and similar initiatives in Zimbabwe is a case in point.

Incubation centres also provide advisory services such as business planning, financial systems, marketing and regulatory compliance on formal matters such as applications for registration and licensing.

In this regard, the government will benefit from guaranteed tax revenue since SMEs will be registered.

Advisory services can be derived from educational and technical institutions around the country.

The current situation in Zimbabwe is that such advisory services are being offered on private consultancy basis — a provision, which is beyond the reach of many.

The government can engage institutions that already have space and technical expertise at their disposal.

For instance, a partnership with the University of Zimbabwe is possible in areas of mining, pharmaceuticals, agriculture among other areas.

Other colleges such as Harare Polytechnic can aslo assist on other technical issues.  

Apart from assured revenue collections, other various benefits of business incubation include high economic growth rate. Since the concept will enhance the sustainability of SMEs, unemployment levels will be reduced as well leading to economic development and poverty alleviation at national level.

Incubation process also promotes innovation. As a result, Zimbabweans will have opportunities to unleash their capacities and rise above dogmatic accusations and prejudices.

The current political and economic environment is not in any way promoting the spirit of innovation.

It is disgusting to note that Zimbabweans continue to import toys from Asian countries.

The same is true to the importation of plastic materials and many other products that require simple technologies and simple machinery as well as very small working space.

While the Finance minister has set the tone for promoting business incubation, the realisation of the full benefits thereof requires a multi-stakeholder approach.

Without political will and stability, all these ideas will not yield any meaningful results yet in countries such as China, Tanzania, South Africa, and many more business incubation is becoming the most trusted engine for economic transformation and growth.

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