Business Incubation in Agri-business: A Strategic Model for Critical Success Factors

Abstract

The present study analyses the critical success factors for agribusiness incubator. The main objective of such Business Incubators is to encourage entrepreneurship in the field of agribusiness so as to increase the productivity and profitability of the agribusiness. With exhaustive literature survey, critical success factors for successful business incubation were identified and considered in the present study. These are: i) Clear and Unambiguous Mission; ii) Entry and Exit policy; iii) Networking Strategy; iv) Assessment; V)Facilities; vi) Services assistance; vii) Manager’s skill. It was hypothesised that these Critical Success Factors are related with Business Incubation Performance. A Structured questionnaire was used for data collection from managers and managerial staff of different business incubators situated in India. The study has used Structural equation modelling, partial least square (PLS-SEM) to analyse the relation amongst Critical Success Factors and Business Incubation performance. The model developed highlight the existence of significant relationship between the Critical Success Factors identified and Business Incubation performance. All the critical success factors considered in the study influenced Business Incubation performance although the degree of influence varied. Facilities emerged as the strongest factor followed by networking and services. Managerial skills mediated between Assessment and Business Incubator performance. The challenges faced by the incubators were analysed. The candidate clients insufficient business skills was identified as the most critical challenge followed by difficulty in obtaining adequate funding for incubator operation. Competition from larger firms or big brands and finding appropriate candidate clients were other major challenges. Case study was done by covering 3 business incubators for validation of designed model. These are Agribusiness Incubator, Hyderabad, Business Planning and Development Unit, National Dairy Research Institute, Karnal and Science & Technology Entrepreneur’s’ Park at Thapar Institute of Engineering & Technology, Patiala. This study contributes to the literature on business incubation by designing a model for better understanding of business incubator performance. A focus on Facilities, Networking and services emerged as key critical success factors.