Entrepreneurship Development in Higher Education (EDHE) Lekgotla 2019
Theme: Entrepreneurship through the arts

Key considerations in setting up and running a student business incubator

At the annual EDHE Lekgotla 2019 that was held at the Durban International Convention Centre, incubation services were recognised as an essential element of an entrepreneurship ecosystem -- critical in enabling the initiation and growth of student businesses.

Mr. Brandon Paschal, General Manager at LaunchLab, an innovation company of Stellenbosch University, spoke to the Lekgotla 2019 about Key Considerations in Setting up and Running a Student Business Incubator. Simply defined, an incubator is a company that renders support services such as capacity building and management training; funding or office space to small and medium enterprises to enable their start-up or growth.

Paschal focused on three considerations for incubators, the first of which was the need for students to have an established ecosystem to support their business. He pleaded with those considering starting an incubation service to do basic research to first understand their business context. He said in that inquiry, the entity must first ask questions such as "What is the culture of the market we are speaking to?" He saw this as a fundamental question for the entity to not only convince funding houses, but also to understand where exactly the business products or services being proposed are likely to boom. Equally important was the need to evaluate the context within which to locate the incubator. For example, he mentioned that setting up a high-tech ICT incubator in Swellendam may not be the best use of resources.

Key considerations in setting up and running a student business incubator
Mr. Brandon Paschal (standing), General Manager of Stellenbosch University`s LaunchLab, speaks while Mr Tervern Jaftha and Ms Mandisa Tshikwatamba from the Small Enterprises Development Agency (SEDA) wait their turns to contribute.

As an example of a successful ecosystem that bloomed and continues to do so, Paschal spoke of the town of Stellenbosch, describing it as the base of 20% of the market capital of South Africa's JSE, thanks to a healthy ecosystem. He also mentioned active and successful technology transfer offices (TTO's) as being key in aiding the regional ecosystem that they operate in to be a healthy hub for entrepreneurship, both for students and the Stellenbosch community.

The second consideration he discussed was relevance. Too often incubators and accelerators copy and paste European and American models for programmes and content, while they ignore the differences in the ecosystems. "We need to focus on building the right skills, in other words soft skills in communication, networking and the ability to lead and sell; rather than the norm of writing business plans and courses on accounting and contracting."

The third consideration towards setting up a student business incubator was to not focus solely on students. As this caused an obvious stir in the Lekgotla 2019 audience, Paschal quickly explained that in a literature study that the Launchlab had conducted on how other universities in the world had sustained successful incubation programmes, they had learnt, particularly from the United States, that the biggest success in enterprises was evident in those whose owners were in their 40s. He used the LaunchLab as an example where 15% of their student-founded ventures share space and programme with high-tech university spinouts and other entrepreneurs that are more experienced and have a broader network. Not focusing only on students has actually led to more success in student ventures.

He also highlighted in successful start-up businesses, attributes of entrepreneurs, such as creativity, critical thinking, communication, problem-solving, commitment, humility and customer-centrism.

Also speaking at the EDHE Lekgotla, the Chief Executive Officer of the Small Enterprises Development Agency (SEDA), Ms Mandisa Tshikwatamba affirmed the need for business incubators as critical interventions -- specifically for educating youth on business. "When you talk to students, they say they are more interested in getting their product on the market than in money." She added that this mind set put young students at risk of surrendering all their intellectual property (IP) to potential investors.

Dr Chamunorwa Togo, General Manager: Innovation, Sectors & Industry Development at the Innovation Hub Management Company, an innovation agency of the Gauteng Province explained that students came to them with already developed products or concepts. Among other support interventions, the hub then guides them on how to protect their IP.

Ntokozo Thembela and Carissa Marnce, the co-writers, are 3rd year Journalism students in the Department of Media, Language and Communication in DUT's Faculty of Arts and Design.


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