Factors Affecting Entrepreneurs' Choice of Business Incubator: A Study of Indian Technology Entrepreneurs

Abstract

Technology startups have been mushrooming in India in the recent past. Several factors such as availability of well-trained IT professionals, the booming of e-commerce and supportive government policies have contributed to this phenomenon. They have contributed immensely to the startup scenario in India and contribute a fair share in wealth creation and employment generation. However, technology entrepreneurship needs a supportive ecosystem to grow and flourish such as proper mentoring, a strong network of business partners and other organizations.

In this scenario, the role of business incubators is crucial in supporting startups in their initial stages. Choosing a business incubator that is suitable to the business is a key managerial decision that has to be taken by an entrepreneur which can be crucial in the future success or failure of the enterprise. This decision becomes even more complex for technology entrepreneurs because of several sector specific issues. This research study identifies five key variables that are considered by Indian technology entrepreneurs while choosing a business incubator. The hypotheses are tested using Structural Equation Modeling. It was found that networking opportunities, sector focus and location of the program had an impact on the choice of business incubator while other factors like participant screening and support services did not have a significant impact.