Identifying critical success factors for university business incubators in Saudi Arabia

Abstract

Business incubators are a major tool in entrepreneurial eco-system of any country and forms the backbone of economic development initiatives. One of the greatest adaptations of business incubators came through universities especially public sector universities. This is due to the university's understood responsibility of supporting science and society development and ultimately providing all the new businesses' requirements in science and technology. Saudi Arabia has taken robust measures to develop and improve the local entrepreneurial eco-system by establishing and nurturing business incubators, especially university business incubators. In a small frame of time, Saudi business incubators have produced many innovate solutions for the technology, economic and social challenges. Due to multifaceted functionality and lack of standard evaluation criteria the business incubator performance became very important topic in Saudi Arabia. The purpose of this research is to develop critical success criteria for business incubators in Saudi Arabia. Survey methodology was employed to collect the data. Data were analyzed in many ways. Firstly, based on the survey results, list of success criteria for business incubators performance was presented. Secondly, descriptive analysis shows that top three critical factors include (a) coaching and mentoring hours, (b) number of services and supports offered; and (c) access to funds in terms of total attractive investment. While the least important factors considered were (a) affiliation with the university, (b) time limit to tenancy, and (c) numbers of IPOs launched. Thirdly, factor analysis summarizes all the critical success factors for university business incubators and culminates into five big factors, including (a) support services; (b) network support; (c) financial support; (d) economic development;(e) alumni success. Finally, cluster analysis shows there are two major cluster groups in the data: (a) ‘employees’ of the incubators and (b) 'incubatees'. This research provides guidelines and critical success criteria for business incubators operating in Saudi Arabia or elsewhere.