The impact of monitoring and business assistance intensity on Malaysian ICT incubatees’ performance

Abstract

Business incubation has been known in the literature as an economic development tool. Around the world, and in the developing countries particularly, business incubation is deployed to stimulate the growth of small-to-medium sized enterprises or SMEs, which are the lifeblood for many countries. Malaysia’s business incubation system has been established since the 1980s and in line with the country’s aspirations to become a developed nation by year 2020, much has been done by the government to catalyse the growth of SMEs, particularly, ICT SMEs. Despite establishing numerous ICT incubators over the two decades, the process involved in assisting new entrepreneurs in the incubators remains fragmented. This paper examines a component critical to the business incubation process: monitoring and business assistance intensity and its impact on the performance of incubates. Quantitative method was deployed with a total of 118 incubatees from ICT incubators in Malaysia responding to an online survey questionnaire. Multinomial logistic regression analysis revealed that monitoring and business assistance intensity is statistically significant in predicting incubatee performance. The findings will provide valuable information for entrepreneurs, business incubator managers, and policy-makers on best practices of incubation management and benchmarking towards fourth-generation incubators. This paper fills the gap in the current incubation literature, contributing in several aspects including empirical data, methodology, and noteworthy findings regarding the Malaysian incubation phenomenon.